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Enfis Group

  • BY: Andrew Hore |
  • POSTED: 01/12/2010 |

PhotonStar LED is reversing into fellow LED lighting technology developer Enfis Group in an all-share deal.

AIM-quoted Enfis is paying £5.1 million in shares for PhotonStar, which was founded in 2007 by James McKenzie and Majd Zoorob. This will leave the shareholders of PhotonStar with 77.5% of the enlarged group. Romsey-based PhotonStar made an operating loss of £645,000 on revenues of £1.96m in the year to March 2010. The loss has declined since then. Growth has predominantly been organic, but some of the growth came from the acquisition of Architectural Lighting & Controls, which supplies traditional products, in May 2009.

The product range includes ‘Smart’ LED products with sensors and controls that enable them to be more energy efficient.

Enfis is also loss-making and has struggled in the past couple of years because of its small size. It focuses on niche markets including film, TV, and UV lighting. There will be opportunities to combine the companies’ technologies.

Enfis chief executive Ceri Jones will become finance director and James Mackenzie of PhotonStar will become chief executive.

Enfis is raising £1.6m net from a placing at 10p a share, which is the same as the share price before the deal was announced. At the placing price, the enlarged group would be worth £8.6m. At 10.5p a share, up 0.5p, Enfis is currently valued at £1.59m.

New house broker FinnCap predicted that Enfis would generate revenues of £1m in 2011 but the combined business is forecast to make revenues of £5.6m next year. That will still not be enough to move the business into profit but it is expected to make a profit of £1.4m on revenues of £10m in 2012. That is two years earlier than Enfis was originally expected to reach profitability.

There will be a cash outflow of £1m next year if the forecast is met but that much cash will generated in 2012 if things go to plan.

Philips has been a consolidator in the LED lighting sector and there are likely to be more acquisitions activity in the sector. 

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