Light Science Technologies Holdings PLC (AIM:LST) (LSTH) confirmed that revenue grew 22% in the first half of the year and losses were cut by 37%, with market conditions said to be gradually improving.

With £4.4 million of revenue generated in the six months to 31 May 2023, the controlled environment agriculture (CEA) technology and contract electronics manufacturing (CEM) group reported a half-year loss of £0.8 million, down from £1.3 million a year earlier.

This reflected management’s decision over the past 12 months to implement strategies to cut overheads, which resulted in a 20% reduction compared with the equivalent period last year, with ongoing savings said to be continuing in the second half.

Chief executive Simon Deacon said: “We continue to be excited by the growth potential across both divisions. With the CEM division continuing to be our predominant revenue generator, and the CEA division continuing to develop and market solutions to the unprecedented pressures affecting the agricultural sector, we are well placed to take advantage of growth opportunities.”

On the CEM division, he said market conditions are “gradually improving, with reduced supply chain constraints, although the division is still experiencing more trade friction than historically in pre-pandemic times”.

This division is now the manufacturing arm of sister company Light Science Technologies and produced the first production batch of SensorGROW from its UK Circuits’ facility during the period.

The CEA arm continues to experience an elongation of the sales cycle, Deacon said, particularly in the UK and certain European countries, due to input inflation experienced by growers.

On the outlook, he said the implementation of cost-cutting measures means LSTH is “now wholly focused on delivering top line revenue growth”.

He added: “Whilst we remain confident that those revenue opportunities will crystallise over time, we are unable to determine the exact timing, particularly within the CEA division.

“We are seeking to mitigate this risk by looking at other opportunities that could bridge any revenue gap that may arise, including acquisitions, and take confidence from the 2023 performance of the CEM division which is expected to exceed 2022’s performance.”

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