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Light Science Technologies designs, procures, and manufactures contract electronics manufacturing products. It offers printed circuit boards, used in various sectors, including audio, automotive, electronics, gas detection, lighting, and pest control. The company was incorporated in 2020 and is headquartered in Derby.
LST is developing and marketing advanced lighting and sensors to improve the energy efficiency of vegetables growing under cover. It was formed from an existing electronics assembly business, adding expertise in plant health and nutrition. The September 2023 Tomtech acquisition widened their product offering in horticulture and floriculture and brought them skilled staff and an established client base.
The Injecta purchase in November 2023 created a third division for “passive fire protection”. The company has said that the fire safety market in the UK, which has been galvanised by legislation following the Grenfell fire, is potentially worth £50bn though obviously they are only addressing a part of that. Almost 500 buildings were found to have the same cladding as the Grenfell tower, to give one example. They need to add new pumps to grow this business, but the costs (c. £30,000) are modest vs the potential revenues.. There are over 11,000 buildings in the UK which have been identified as representing a “critical risk” and which require remediation.
Long-term sectoral transformation in indoor farming is necessary to meet the UN sustainability goals, with modernising farming practices, reducing energy and other inputs, reducing environmental impacts (including food miles), and increasing productivity all government priorities in the UK (as witnessed by the March grant- but we shall need to see if the new administration continues to be committed). However, current revenues (£375,000 to May) indicate that this remains potential rather than actual business. The intention is to sign up more international distributors- a start has been made with South Africa.
The original UK Circuits business (CEM), is probably large enough to justify a significant proportion of the current market cap on its own: the business it most closely resembles is AIM-listed Solid State (at an earlier stage of Solid State’s growth). It is clearly already EBITDA positive though no numbers were given this year- though adding back D&A to the divisional operating profit shows an improvement from £349,000 in H1 2023 to £388,000. They are actively looking for further acquisitions, either to add business to the existing Manchester factory or to add a presence in the south of England.
Management subscribed for part of the most recent raise and own about 30% of the company. In early March the company appointed Dr Graham Cooley, who ran the fuel cell company ITM for some years, as Non-Executive Chairman, replacing the previous incumbent, and also replaced one of the non-executive directors. Cooley has built up a 7.12% stake in the company. The company has been using bank debt to help finance growth.
The company has not provided any specific guidance for 2024, and their brokers, Oberon, have not published forecasts. The company has however said that “we have seen significant progress – with strong revenue growth and a healthy committed order book, which is expected to increase in the coming months, currently worth nearly £5m, underpinning our goal of becoming an operationally self-funded, cash backed, group“. The £9-9.5m revenue guidance for the year to November for CEM seems as noted to be deliberately conservative. At the current 2.8p the market cap (£9.3m) is less than 1x the main division’s sales and the potential of the fire business looks as if it is in the price for nothing. Simon Deacon’s long term objective is to grow the business to a £100m turnover.
Last Updated: 21/10/2024
LST announced a further order from a construction services company based in Manchester for £1.17m to be completed in H1 2025, a follow-on from a £620,000 order from the same customer. The company commented that the division provided £300,000 of revenues in H1 of this year, should achieve £1.2-1.4m in H2, and clearly now has good visibility into 2025. In August we were told that the Fire Protection business had a quoted pipeline of £6.9m, and had invested in a third pump to handle potential demand.
On 12 September the CEM division announced a fourth order from a sports entertainment company, bringing the total from this customer to £537,000 this year.
In August the CEA division announced a £123k order from Richal Group, a global agricultural glasshouse specialist, for nurturGROW lighting for a customised aeroponic glasshouse in Germany, a substantial order for this division which delivered £500k of revenues in the eight months to 31 July. It is good to see some momentum building across divisions in the company.
We met CEO & founder Simon Deacon and CEO Jim Snooks on 6 August after H1 results to May were released on 31 July: H1 revenues were up 19% yoy to £5.2m, the pre-tax loss dropped from £809k to £334k, and group EBITDA was -£28,00. Deacon was very positive about both the lighting/horticutural CEA business, despite its current low turnover, as the fall back in energy prices has allowed horticulturalists to start investing again, as well as about the huge opportunity for the fire protection business driven by the post-Grenfell safety legislation. He gave some visibility on longer term ambitions to grow the company to £100m revenues, which would be partly through strategic acquisitions. He said that ultimately CEA should be the largest part of the business.
LGB & Co. Limited
Tintagel House, 92 Albert Embankment
London
SE1 7TY
Relationship Manager
Ellana joined LGB in March 2024 as a Relationship Manager for our investing clients. Prior to LGB, Ellana worked at Bellecapital, handling client relationships and supporting the portfolio management team. Ellana graduated with a First-Class in Mathematics from Cardiff University and has a Level 4 Investment Advice Diploma.
Adviser
Simon became an Advisor to the Board of LGB & Co. with a focus on business strategy and initiatives in March 2024. Simon has extensive experience debt capital markets and wealth management. He previously ran the client and then the investment business of Heartwood and became Chief Executive in 2008. He led its well-regarded acquisition by Handelsbanken in 2013. Simon subsequently became NED and Chair of AIM-listed WH Ireland Group PLC. He was also asked to represent the wealth management sector on the FCA Smaller Business Practitioner Panel from 2013-2016.
Finance Manager
Following a degree reading Chemistry at The Queen’s College, Oxford, Antonia trained to become a chartered accountant at a London-based audit firm. She then moved into the tax sector joining EY and completing the chartered tax adviser qualification. She then gained further experience working as a finance director within industry at a family office / hedge fund.
Founder and Chairman
Andrew founded LGB & Co. in 2005 and is the Chairman of the company. He has a particular focus on the development of strategic relationships with corporate clients and business partners. Prior to founding LGB & Co., Andrew was a Managing Director at Citigroup Global Markets, where he was responsible for its fixed-income business with private banks and retail institutions. Earlier in his career Andrew worked at Schroders in London and Tokyo. Andrew graduated from Oxford University with a degree in Modern History. He is a chartered member of the Chartered Institute for Securities & Investment.
Capital Markets Director
Fergus advises corporate clients looking to raise debt and equity capital. He is also responsible for the execution and ongoing management of LGB’s MTN Programmes. Fergus joined LGB in 2019 having started his career at Lloyds Banking Group on the graduate training programme, before moving to the Leveraged Finance division, where he focused on transactions with mid-market corporates and PE firms. Fergus holds an MSc in Petroleum Geology from the University of Aberdeen.
Adviser
Lisa has worked with LGB since 2015 in supporting the on-going cultural and organisational development of the firm, providing advice on strategic people matters. Since 2006, Lisa has been running her own consultancy and executive coaching business, People Possibilities Ltd. Her work is focused on supporting clients at an organisational, team and individual level to enable high performance,improve leadership capability and effect cultural and behavioural change. Previously Lisa has held senior HR leadership positions with Schroders, ABN AMRO and HSBC. Lisa graduated from the University of Birmingham with an honours degree in International Relations & French. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a qualified Executive Coach.
Adviser
Charles has played an important role in developing LGB & Co.’s investment approach by encouraging a focus on investing in businesses with strong IP or know-how with recurring revenue business models that can prosper throughout economic cycles. Charles brings over 30 years’ experience of investing in privately-owned and publicly-listed small and mid-market companies. He is a director of Larpent Newton & Co. and Hygea VCT plc. Charles qualified as a Chartered Accountant at Peat Marwick, now part of KPMG.
Programme size: £25m
Establishment Date: XX 2017
Number of issues: 20
Sector: Financial services
Focus: Loans and leasing
Programme size: £20m
Establishment Date: December 2017
Number of issues: 12
Sector: Marine tracking
Focus: Maritime surveillance and management
Associate
Ben joined LGB in October 2022 as an associate after spending three years as a credit analyst at 9fin, where he produced research on corporates in the European & US High Yield and distressed debt markets.Ben holds an MSc in Investment Management from Bayes Business School (formerly Cass) and is a CFA charter holder.
CEO
Cedric was appointed CEO in July 2022 after a period of 18 months as a COO. Cedric spent 15 years working on the energy and commodities sales and trading desks for global banks (BNP Paribas, BAML and MUFG). He gained extensive international exposure, being based in London and Singapore and covering transactions in all geographic regions. Cedric graduated from Global Executive MBA at INSEAD in 2018 and started working in the capital markets space for growth-stage companies. He is also a director of LGB.
Relationship Manager
Megan joined LGB in January 2021 as a Relationship Manager. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Megan worked at Puma Investments, a tax-efficient investment provider, in the sales and investor services team. Megan graduated from the University of Bath with a Bachelor of Science degree in Psychology. Megan obtained the CISI Level 4 Diploma in Investment Advice in October 2021.
Investment Director
Ivan is LGB’s Investment Director: he is responsible for developing LGB’s investment proposition in the context of the broader market and economic developments. He regularly meets individual company management teams to seek out and monitor investment opportunities. Ivan has served as a senior adviser to the Equity Division of Société Générale, and was previously Managing Director in charge of equity sales for them in London. Earlier in his career, Ivan worked at Morgan Stanley, Lazards and Schroders. He has degrees in history from Cambridge University & London University, and an MBA from Cass Business School.
Managing Director
Simone is responsible for LGB & Co.’s business with investing clients, who include institutional investors, wealth managers and sophisticated private investors. Simone’s team provides access to a range of compelling investment opportunities with a particular emphasis on proprietary medium term note and equity transactions. Simone manages the portfolios of clients who have entered into advisory or discretionary investment agreements with LGB Investments, and advises the fund managers of the Guernsey-based LGB SME Fund. Prior to joining LGB & Co., Simone worked in the institutional fixed income department of Citigroup Global Markets. She began her career at Citigroup Private Bank in Geneva. Simone graduated from the University of Lausanne with a degree in HEC, Business Administration. She is a Chartered Member of the Chartered Institute for Securities & Investments.