Business Review Lucy Controls

This is more evident in certain parts of the world, such as Europe and the UK, with other regions set to follow. While investments have faltered in some regions due to Covid, the trend is likely to gather pace as economies recover in a post-pandemic era.

Investment in new product development

winning new Distribution Network Operator (DNO) tenders in England and Northern Ireland, as well as new distribution partners in the Middle East.

Lucy Controls is made up of three electrical control businesses: Lucy Zodion, Lawson Fuses and Flashnet. Operating as separate entities, these businesses have much in common, contributing to smart city infrastructure and sharing markets, customers and suppliers.

Lucy Zodion is an industry leader in the design and manufacture of advanced street lighting control, power distribution and EV supply solutions in the UK. The business adds value for customers by improving energy efficiency and reducing carbon emissions.

Lawson Fuses specialises in the design, development and manufacture of low-voltage, HRC fuse links and fuse holders. With over 80 years’ experience, Lawson Fuses serves international markets, largely through distributors, utilities and OEMs.

Flashnet is our most recent acquisition, joining the Lucy Group in June 2022. Based in Romania, Flashnet designs, manufactures and distributes a portfolio of smart, IoT-connected lighting and power grid management systems. Flashnet complements our existing suite of smart lighting skills, equipment and technology, with a keen focus on 360˚ energy awareness. It also brings an established network of distribution in attractive international markets.

Where synergies exist across supply chains, products, sectors or customers, we encourage cross-business collaboration. A prime example is Lucy Zodion working closely with Lucy Electric in the EV sector, developing electric infrastructure solutions for low voltage EV feeder pillars. Such solutions also draw upon Lawson Fuses to provide the all-important fuse products that ensure reliable circuit protection.

Market overview

While good progress has been made, 2022 has had its challenges. We are still experiencing market demand issues related to Covid, not least some government authorities deferring capital expenditure on civic infrastructure. Supply chain constraints include an acute shortage of semiconductors, a vital component in the manufacture of equipment at Lucy Zodion and Flashnet; this has limited production output and curtailed the fulfilment of orders, denting profits and margins. Margins were further eroded by the unfavourable pound to dollar exchange rate, which amplified the cost of raw material imports.

Our products contribute to our customers’ global net zero targets. This is achieved primarily through intelligent usage patterns, whether that is optimised switching of energy sources when environmental sensors indicate demand, or by operating on lower power modes when safe and efficient to do so. With the rising global demand for safety and efficiency, our products provide innovative solutions as part of the wider growth for internet-connected, remotely managed control systems. The demand for energy efficiency is being exacerbated by the war in Ukraine, which is causing restricted supply and inflated pricing.

The Group has a long track record of manufacturing products to exacting specifications to meet international standards, and our collective knowledge and experience will continue to be invaluable as regulation evolves and innovations require certification.

Government investments in intelligent urban infrastructure and smart energy conservation continue to drive demand for Lucy Controls’ products and services.

We have begun work between Lucy Zodion and Flashnet to optimise product focus and minimise overlap. Lucy Zodion will focus on infrastructure products related to street lighting and electric vehicles, while Flashnet will focus on software, connectivity and technology applications, particularly for smart lighting. Strong collaboration between the respective business teams is essential to benefit from crossfertilisation opportunities and to ensure that we develop class-leading solutions that are fit for purpose in rapidly changing markets.

In response to the growth in solar power, Lawson Fuses introduced a new range of DC fuse links for PV applications. The products are designed to interrupt low overcurrents associated with faulted solar cell string arrays.

Manufacturing and supply chain

Where inflation increases have hit input prices, and contractual circumstances permit, these costs have been passed through.

Our Group-wide culture of continuous improvement leads to regular value engineering initiatives. At Lawson Fuses, investments were made at the UK manufacturing facility in Ponteland, while the new factory in India became fully operational. The focus on increased automation, optimised production cycles and improved product design has had a positive impact, enhancing overall competitiveness of the business. This has contributed to the business

Supply chain challenges have required Lucy Zodion and Flashnet to pivot production according to component availability: both businesses have fine-tuned their ability to dynamically redesign products when components are in limited supply and remain committed to capital investment where operational efficiencies can be found.

Our people

Our teams have done a sterling job in a demanding market environment. I would like to take this opportunity to thank every one of you for your contribution and commitment.

In October 2022, a new General Manager – Harsha Raghavan –was appointed at Lawson Fuses. The management, product and business development teams were also strengthened, with a view to identifying strategic market segments into which niche products can be sold, either direct or via distributors.

We strive to recruit the best talent and retain it through training, upskilling, reward and engagement. Recruitment in many countries has been challenging, and the demand for skilled labour remains a constraint to growth. We are confident that Lucy Controls remains an attractive employer that can offer long-term career opportunities.

Outlook

While 2022 has presented some challenges, we operate in attractive markets with long-term growth potential and our order pipeline is encouraging. Our unrelenting focus on leading-edge technology, value engineering, product evolution, internationalisation and strategic growth gives confidence in our future prospects.