Light Science Technologies backs stronger H2 after a loss-making first half

Light Science Technologies Holdings has reported a weaker first half, with revenue down, margins under pressure and the business returning to an operating loss.

That is only half the story, according to management. The company says April's acquisitions have transformed its operations, while faster order conversion and £2.15 million of post-period revenue provide early evidence that trading has picked up.

The key question for investors is whether this stronger momentum can turn an acquisition-heavy year into sustainable profits and cash generation.

The full figures are available in the original company announcement.

Light Science Technologies' key figures

Metric	H1 2026	H1 2025	Change
Revenue	£3.73 million	£5.06 million	Down 26.3%
Gross margin	30.5%	36.3%	Down 5.8 percentage points
Adjusted operating result	£0.69 million loss	£0.04 million profit	Deterioration
Adjusted loss before tax	£0.80 million	£0.16 million	Wider loss
Cash	£2.44 million	£1.07 million	Higher
Cash and undrawn facilities	£2.72 million	£1.77 million	Higher

These were unaudited results for the six months ended 31 May 2026. No interim dividend was declared.

Revenue fell because of delayed passive fire protection projects and lower sales from the contract electronics manufacturing division's largest pest-control customer, following a product reaching the end of its life during FY 2025.

Margins also weakened. Management attributed this mainly to thinner returns on one passive fire protection installation and Nottingham Trent University's Smart Agriculture Research Centre. Both are being treated as test-bed projects that could lead to wider opportunities, although those follow-on benefits are not guaranteed.

The acquisitions reshape the investment case

Light Science raised £6.6 million gross and £6.1 million net before completing three strategic transactions.

The most important was the purchase of RLUK Injection, which owns the patented Injectaclad fire-barrier system. Light Science can now earn revenue both by installing the system and by supplying materials to other installers.

That vertical integration could improve revenue visibility and margins. Injectaclad contributed £307,000 of revenue and £141,000 of profit between its acquisition on 14 April and the period end, although that covered only around six weeks.

The group also acquired the remaining 10% of UK Circuits and the remaining units at its Manchester property. This gives it full control of the contract electronics manufacturing division, removes rental costs and provides a northern Injectaclad distribution base.

Investors can review the company's broader history on the Light Science Technologies Holdings PLC share page and compare the update with its FY 2025 results and acquisition plans.

Why management expects a stronger second half

There are several tangible numbers behind management's confidence.

Light Science generated £2.15 million of revenue during June and July, equivalent to around 58% of the entire first-half total in only two months. Its committed forward order book stood at £3.09 million on 31 July, with most of that expected to be recognised during H2.

The order book does not include potential materials revenue from more than ten Injectaclad installations currently taking place through the wider installer network. Orders have yet to be placed for most of those projects, so they represent an opportunity rather than committed revenue.

The company also expects a full six-month contribution from Injectaclad during H2, compared with only a partial contribution during the first half. As materials supply is described as a higher-margin activity, this should improve the group's sales mix if orders arrive as anticipated.

Passive fire protection

Passive fire protection, or PFP, involves products and services designed to restrict the spread of fire without requiring active systems such as sprinklers.

PFP revenue fell to £0.46 million from £0.95 million after Building Safety Regulator approval delays held back project conversions. Those delays began to ease towards the end of the period.

Between completing the Injectaclad acquisition and 24 June, the division secured between £1.28 million and £1.66 million of orders and projects. Management expects that revenue to be recognised during FY 2026.

This division appears to be the main swing factor for H2. Faster approvals and materials orders could lift both revenue and margins, while renewed regulatory delays would threaten the recovery.

Contract electronics manufacturing

Contract electronics manufacturing, or CEM, remained the largest division, producing £2.42 million of revenue compared with £3.56 million a year earlier.

The division secured four clients with initial orders worth approximately £0.30 million. Management believes these relationships could generate up to £1 million over 12 months once supply handovers are completed.

The focus is shifting towards technically demanding and potentially higher-margin sectors, including healthcare, medical devices and defence. However, the £1 million figure is an estimate of potential revenue rather than a committed order value.

AgTech

AgTech revenue increased to £0.85 million from £0.55 million.

Delivery of Nottingham Trent University's approximately £0.60 million Smart Agriculture Research Centre was well advanced, with handover expected in August 2026. A separate Welsh university project is worth approximately £0.30 million.

Together, the university projects are expected to contribute approximately £0.90 million of revenue during FY 2026. Management sees scope to replicate the research-centre model elsewhere, but no further university contracts were disclosed.

The balance sheet is stronger, but dilution matters

Cash increased to £2.44 million at 31 May, while net assets rose to £7.00 million from £1.55 million at the November 2025 year-end.

However, that improvement followed a substantial equity raise. Light Science issued 660 million new shares at 1p, taking the total issued share count to 993 million. Existing shareholders therefore experienced significant dilution.

Operating activities used £0.36 million of cash during the first half. By 31 July, cash had fallen to £2.10 million, although increased undrawn facilities took total available cash and working-capital headroom to £2.93 million.

The going concern warning deserves attention

The directors believe Light Science has sufficient financing for at least 12 months and prepared the accounts on a going concern basis.

Nevertheless, the announcement identifies a material uncertainty that may cast significant doubt on the group's ability to continue as a going concern. If expected AgTech and PFP revenue does not materialise, the company may need to renegotiate borrowing terms or obtain a temporary covenant waiver.

This does not mean another fundraising or covenant problem is inevitable. It does mean that delivery, timing and cash conversion are important, particularly following the recent equity raise.

What investors should watch during H2 2026

The first-half accounts are clearly weak, but they cover a business partway through a substantial restructuring and include only a short contribution from Injectaclad.

The post-period revenue and order book make management's stronger-H2 argument more credible. The next evidence investors need is improved gross margin, continued PFP order conversion and a reduction in operating cash outflow.

Watch whether the uncommitted Injectaclad installations translate into materials orders, whether the four new CEM customers scale towards management's expectations, and whether the university AgTech projects are completed on schedule.

Light Science has built a broader platform with more routes to market. H2 now needs to demonstrate that this platform can produce profitable growth without placing fresh pressure on the balance sheet.