Having never seen one, I assume that is a Ducellier dizzy (red cap)... but the principles hold true, you need a certain gap between the pointsotherwise you won't get a spark and it won't run
There should be a 4-lobed cam on the main shaft, which I can just make out in the photo, this pushes on the white plastic finger and opens the points. The cam in your photo looks VERY smooth, i.e. worn, but wait for confirmation as I said, I am not familiar with the Ducellier distributors...
To set the gap loosen the screw just beyond where your white arrow is pointing, and move the plate until you see a gap, your test bulb should go out now
To get the cam in the rightplace, turn the engine slowly by hand, the cam high spots should occur twice per engine rotation, watch to see the white plastic finger being pushed out by the cam, when at it's highest this is where you adjust the gap in the points, if they are still closed then your engine will have been having a hard time running
If you haven't adjusted them or replaced them, it could well be worth replacing them now with a new condensor at the same time -inspect the points surfaces for pitting and corrosion.