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Light Science Technologies shares jump on new South Africa distribution agreement

11:24, 9th May 2024
Victor Parker
Vox Newswire

Light Science Technologies (LSTFollow | LST, a specialist in controlled environment agriculture (CEA) technology, contract electronics manufacturing (CEM), and passive fire protection (PFP), announced an exclusive distribution agreement with agricultural automation provider AgriLogiq Technical Systems.

The agreement will enable LST to market and sell its nurturGROW lights in South Africa. The contract is for an initial period of 5 years, with exclusivity subject to performance targets being met. There is currently strong demand for innovative farming solutions in South Africa due to recent water shortages and overall harsh growing conditions.

LST said it is pursuing further distribution arrangements in "strategic high-growth geographies" with assistance from its Non-Executive Director Richard Mills who is leveraging his expertise and contact base to expand the group's pipeline of development opportunities. LST said the new global growth strategy will be developed over the coming months, with further trading updates to follow.

Simon Deacon, CEO of Light Science Technologies, commented: "We are delighted with this partnership, which is the first of many we look to implement globally. We believe there will continue to be a compelling backdrop for our solutions and look forward to targeting high-growth regions, especially where growers have been less impacted by high input costs and where demand is synergistic with our product base."

Joel van der Schyff, Managing Director at AgriLogiq, added: "We are excited to join forces with LST because their products excel in quality, modularity, and design, precisely aligning with our team's needs. Additionally, their exceptional service and agronomy support create a synergistic partnership, reassuring our customers that they're investing in the highest caliber product available for their green houses and growing operations. We look to a bright future, working closely with the LST staff to develop unique and innovative solutions for South Africa."


View from Vox

Light Science Technologies has announced a significant expansion of its CEA division's footprint, and first step in the group's new global partnerships strategy. The contract with AgriLogiq will extend LST's reach into the rapidly growing South African market where demand for innovative agricultural solutions - particularly vertical farming - is high as a result of currently harsh growing conditions.

According to Market Data Forecast, the vertical farming market in the Middle East and Africa is expected to reach US$3.71bn, up from US$1.15bn today. LST has launched its new global partnerships strategy to take advantage of this and similar trends indicating high global demand for its agricultural technology. The strategy aims for low-cost and low-risk entry into high-growth markets with partners already embedded in the industry, enabling LST to target global customer bases that are actively seeking CEA products and solutions.

LST shares jumped 15% on the news, adding to a significant rally over the past year that has seen LST shares climb 125%. Today's positive update adds to yesterday's upbeat final results where LST reported record revenues of £9.30m, up 13% year-on-year, with a significant improvement in margins to 23.4% from 17.7% in FY22. Additionally, loss before tax halved to £1.14m from £2.72m LY, and the group boosted its balance sheet with a £1.45m fundraise in April.

LST's CEM division continues to drive group revenue generation and growth, as evidenced by today's announcement. The division was strengthened last year with the £0.5m acquisition of Tomtech, a producer of monitoring and control systems for commercial greenhouses and polytunnels. Additionally, LST's smaller CEA and PFP divisions present separate growth and diversification opportunities in the medium to long term. The Passive Fire Protection (PFP) division was formed last year after LST's acquisition of Injecta Fire Barrier.

Overall, LST's portfolio of businesses has a market potential of over US$100bn. In the CEA sector alone, cumulative smart agriculture sales growth between 2023-2032 is projected to be US$55bn at 12% CAGR. In the PFP sector, the market is potentially worth £50bn. Currently, LST's quoted pipeline within its main CEA division is estimated at £40m, and over £9m has been identified in the PFP division.

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