Date: 27/1/12
Broker: finnCap
Company: Photonstar LED
Share price: 10.1p
Target price: 25.5p
Recommendation: Corporate
A trading update by LED lighting technology supplier PhotonStar LED illustrates significant progress, according to house broker finnCap.
The cash from a recent fundraising has been invested in a new 12,000 square feet manufacturing facility in South Wales which is already in operation, with full production expected in the first quarter of 2012. The ChromaWhite light engine will then begin production at Romsey.
PhotonStar made an operating loss of £1 million on more than doubled revenues of £6.1 million in 2011. The company's order book is worth £2.4 million.
Execution risks on the the new facilities are diminishing and customers are showing interest in the ChromaWhite light engine product, which provides high quality colour tuning at a competitive price.
PhotonStar should make its first profit this year and finnCap forecasts a 2012 profit of £500,000, down from £850,000 previously due to concerns about one customer. The shares trade on a 2012 P/E ratio of 18, falling to five in 2013.
