Beacon Lighting powers down energy solutions business
Written on the 9 December 2019 by David Simmons
Beacon Lighting (ASX: BLX) has announced the winding up of its energy solutions business and the sale of its Brisbane distribution centre, marking a major strategic shift for the company.
The closure related to the company failing to maintain a sustainable energy solutions company, according to Melbourne-based Beacon whose primary business is its retail lighting arm.
The group, which was most recently focused on sales and brand awareness in the solar market with its energy solutions business, will wind down the Beacon Energy Solutions by not seeking new sales.
Beacon says the one-off cost of winding up and closing Beacon Energy Solutions will be in the range of $3.4-$3.9 million.
Resources and capital currently invested in Beacon Energy Solutions will be redeployed into other opportunities that the group believes are better aligned to its core business activities.
"With the current market conditions, we were able to secure a substantial profit on the sale of our recently purchased distribution centre, generating valuable working capital to explore new business opportunities. The winding up of our Beacon Energy Solutions business will allow for the redirection of resources to support other opportunities for the Group."
During FY19 Beacon Energy Solutions actually recorded record sales, increasing by more than 50 per cent, and contributing to a group sales result of $246.3 million.
The company has also sold its Brisbane distribution centre for $28 million to Charter Hall under a sale and leaseback arrangement.
This is a significant profit on the $12.5 million Beacon paid for the site back in January this year.
Following construction works, the property was repurposed as a distribution centre to service the company's network in Queensland and NSW.
The group says the profitable sale of the centre will enable Beacon to reduce debt and generate additional capital for other business opportunities.
Business News Australia
Author: David Simmons