Controlled-environment agriculture specialist Light Science Technologies said in a trading update on Friday that its sales pipeline of quoted work stood at more than £60m, of which forward orders and contracts totalled £18m, although it lowered its revenue expectations for the financial year just ended.
The AIM-traded firm put the “strong” pipeline down to the “pressing need” for food security, and to grow more produce locally, sustainably and energy efficiently.
It said group revenue grew by about 10.5% for the year ended 30 November.
However, the positive pipeline was negated by an elongation of the sales cycle, primarily driven by input inflation experienced by growers which could not currently be passed on to customers, leading to growers delaying capital expenditure.
Additionally, gross margins at the group’s custom electronics manufacturing division had been diluted through the second half, driven by “significant” price volatility in the global electronics component market.
“The group was anticipating certain revenue streams materialising before 30 November, which would have delivered financials in line with market forecasts for the period,” the board said in its statement.
“However, for the reasons mentioned above, these have been delayed.
“Whilst there is no guarantee, these revenue streams are now expected to materialise in the year ending 30 November 2023.”
As a result, for the year ended 30 November 2022, group revenue was now expected to be about 13% below market expectations, and the group loss before tax was expected to be around £0.85m higher than market forecasts.
“The benefit of the conversion of the pipeline will, in the board’s view, fall into the year ending 30 November 2023, accompanied by a return to normalised gross margins at the group’s contract electronics manufacturing division.
“Notwithstanding the challenges faced, the board will be building on the 10.5% revenue growth, and is confident the overall prospects for the company remain strong.”