TIDMTFW
RNS Number : 8753M
Thorpe(F.W.) PLC
19 September 2019
Preliminary Results
for the year ended 30 June 2019 (Unaudited)
FW Thorpe Plc - a group of companies that design, manufacture
and supply professional lighting systems - is pleased to announce
its preliminary results for the year ended 30 June 2019.
Key points:
Continuing operations 2019 2018
-------------------------------- --------- --------- -------------
Revenue GBP110.6m GBP109.6m 0.9% increase
Operating profit (before profit GBP17.6m GBP19.5m 9.3% decrease
on disposal of property)
Operating profit GBP19.6m GBP19.5m 0.5% increase
Profit before tax GBP19.6m GBP19.6m -
Basic earnings per share 13.91p 13.91p -
-------------------------------- --------- --------- -------------
-- Total interim and final dividend of 5.53p (2018: 5.40p) - an increase of 2.4%
-- Overall, Group results were in line with management expectations
-- Strong recovery in the second half of the year following a
slow start by Thorlux, as previously reported
-- Improved results at Lightronics, Famostar and TRT
-- Profit before tax includes profit on disposal of GBP1.9m
following the sale of the Thorlux Portsmouth property
-- Strong net cash generated from operating activities -
GBP21.6m (2018: GBP20.7m), an increase of 4.1%
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information please contact:
FW Thorpe Plc
Mike Allcock - Chairman, Joint Chief Executive 01527 583200
Craig Muncaster - Joint Chief Executive, Group
Financial Director 01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley/James Moat 020 7496 3000
Chairman's statement
Despite a tremendous effort by Group employees, and as forecast
in the interim results announcement, operating profit before
disposals for the 2018/19 financial year took a step backwards when
compared with last year's record. As reported, UK operations
suffered from a significant general downturn in market conditions
in the first half of the year, and despite an excellent recovery of
orders in the second half and good contributions by Lightronics and
Famostar in the Netherlands, revenue increased only marginally over
the year. It is, however, pleasing to report that despite ongoing
uncertain economic conditions in the UK, orders closed ahead of the
previous year and the Group entered the new financial year with a
healthy order book.
GROUP RESULTS (unaudited)
In 2018/19, Group revenue reached GBP110.6m, an increase of
0.9%, but underlying operating profit was down by 9.3% to GBP17.6m.
A reduction in operating profit was experienced across a number of
our UK operations, but most notably at the Group's largest company,
Thorlux Lighting, as a result of costs associated with closing down
the Portsmouth factory, reduced efficiency due to managing the
slowdown followed by a sudden ramp-up of production, and a slight
squeeze on margins. Overall, Management are pleased with the
recovery and satisfied that, to the best of our judgement, the
Group has gained market share in tough trading conditions.
Both revenue and operating profit are supplemented by the first
full-year inclusion of Famostar; the prior year only represented
six months' results for the Netherlands business. Operating profit
and profit before tax were supported by the sale of the Thorlux
Portsmouth and Sugg Lighting factories for GBP4.8m, realising a
GBP1.9m gain on disposal. Revenue generated outside the UK was
GBP42m, or 38% of the total, the majority from European countries
served by Group acquisitions in the last few years. Organic growth
for exporting products from the Group's UK companies remains a firm
target, but this year took a step backwards despite the weak pound.
In particular, Australia and the UAE suffered from a lack of
significant projects, each region with its own unique set of
trading and economic difficulties. The pressure remains on, and I
remain committed to offsetting risk within the Group by ensuring
the companies are as multinational as practical in their
trading.
A detailed summary of each company's performance is included in
the Annual Report and Accounts when published, but I would like to
recognise the improvement in profitability at the Group's UK-based
street lighting producer, TRT Lighting (GBP0.8m, up 103%), further
improvements at Lightronics, and, after only a short time as part
of the Group, how Famostar has made an excellent contribution,
increasing its own profits considerably and making a real impact on
the overall figures.
During the year, numerous acquisition opportunities have
presented themselves. Each of these has been investigated, several
in some detail. Within the Board, we continue to try and find the
right companies that fit the Board's criteria, including for them
to be non-competing, complementary, and to have potential synergies
with other Group companies.
The Board has continued and committed to invest to underpin
Group companies and to support growth. To that end: the
construction of new facilities for Portland Lighting continues at
pace (GBP1.6m); the Group acquired the present factory and offices
for Famostar (GBP2.3m), after the year end, from the leaseholder,
together with a significant amount of adjoining land, in
anticipation of future expansion (GBP0.3m); the extension and
renovation of the Lightronics building was completed (GBP1.0m); and
the Group invested in the sheet metal factory at Thorlux Lighting,
with new state of the art metal-piercing machines (GBP1.6m). I am
proud to report that the roof of Thorlux Lighting's sheet metal
factory now supports 909 solar panels, contributing 225,000 kWh of
annual electricity, providing continuation of the Group's green
manufacturing and distribution policy, and even charging the hybrid
electric cars of myself and my colleagues with near zero-carbon
electricity during our working days.
Performance as a whole for the year to 30 June 2019 allows the
Board to recommend a final dividend of 4.10p per share (2018:
4.00p), which gives a total for the year of 5.53p (2018:
5.40p).
In recent years, I have reported on the difficulties in finding
organic revenue growth during tough trading conditions. I believe
the current challenges are caused by several factors. Among these,
of course, is the Brexit situation, which is hitting general
business confidence, as can be seen in our sales to certain sectors
in the UK. While the Brexit debate continues, the Government is not
focussed on general everyday tasks, which is also arguably
affecting an amount of potential revenue from customers reliant
upon government investment. Finally, customer interest in LED
luminaire technology has peaked because of the smaller improvements
in LED chip performance; in particular, short-payback retrofit
projects are fewer.
It is pleasing that in such changing times, the Group can still
produce a set of creditable figures.
The Group companies do, however, need to keep improving, and in
particular be more agile. All Group companies operate on annually
reviewed objectives and key performance indicators, set by each
board at the start of each financial year. In addition, the Group
Board has a longer term strategy and planning review.
The product life cycle of lighting products used to be long;
however, LED luminaires and control systems now need updating
regularly. The lighting industry should be proud of what it has
achieved in recent years, with LED luminaires and control systems
often using 70% less power than their conventional counterparts,
and as such making a real contribution to government
energy-reduction objectives. However, with such large reductions in
power usage, and associated environmental impacts, control system
effectiveness is less pronounced and monetary paybacks are
extended. Therefore, systems now need to provide greater benefits
in addition to energy saving alone.
Nowadays, within the Group we are changing our emphasis, and our
sales engineers talk far more about other factors as well as energy
saving. These changes are exciting whilst also a threat. If we
change and adapt, like we did for the "LED revolution" years ago
and the "wireless revolution" not so long ago, then our luminaires
can provide data and status information for numerous reasons,
including, for example, users' presence-detection profiling to
determine operational efficiency improvements, and automatic
emergency lighting testing to provide health and safety compliance.
We can also fine-tune lighting automatically, for example its
colour temperature, to follow a natural daylight rhythm. People in
the workplace are expensive; if we can help people be more
efficient and provide an environment in which they can be more
productive, through good quality lighting, then that can deliver a
return on investment more quickly than energy savings ever did.
The SmartScan emergency lighting system has found synergies
across most Group companies. Using a common software "backbone"
allows Thorlux to tailor the system to suit individual company
needs such as branding or local testing nuances. Philip Payne and
Solite already use SmartScan technology, and by the end of this
calendar year SmartScan will be launched at Famostar, TRT and
Lightronics. In the near future, there are plans to extend the
SmartScan platform further, to bring other non-lighting devices
into its web portal, for example to provide warehouse dock door
monitoring and solar panel energy logging.
Thorlux introduced its new Flex System last year, but full
production only started recently. This new range builds on the
theme of providing lighting for workplace well-being. Please see
the article in this year's Annual Report for details, or the
Thorlux website. The system has several patented elements and is a
rather radical approach to lighting a space. It certainly looks the
part in the newly refurbished Lightronics building, and I hope
customers will feel the same.
PERSONNEL
I would like to thank my whole team for their continued support
and diligence. We all have objectives to meet, and whilst these are
challenging, they are necessary to continue on the path of steady,
sustainable and profitable growth.
Andrew Thorpe retired from executive duties on 28 June 2019.
Further to my announcement at the time, I would like to repeat, on
behalf of the Board and all employees, our thanks to Andrew for his
diligence in his many years working for our company. Andrew will be
a welcome visitor every month for board meetings and at any time in
between.
I am also pleased to share with you that we have added two
relative "youngsters" to the Thorlux Board; one started with us as
an apprentice and the other as a trainee.
OUTLOOK
It has never been possible for the Board to predict order income
beyond the next few months; in the current climate, predictions
seem even more challenging. All we can do is to remain focussed and
capable to flex with the times.
I strongly believe that if we, within the Group, continue to
develop products that our customers desire, then that is a good
starting point. Beyond that, we then have to continually assess our
methods and routes to market and be prepared to change to suit the
times. We also need to ensure we are showing our wares to as many
customers as possible, through better marketing and targeted
sales.
The Group Board has targets and plans in place for all of the
Group's companies; Board members remain committed to resume a path
of steady growth. We are, at this moment, however, subject to
unpredictable economic conditions, particularly in the UK, with the
threat of a disorderly exit from the EU and the Government in
disarray. Whilst we have some plans in place to mitigate these
impacts, current uncertainty only serves to weigh on our customers'
confidence to invest in capital projects. We can only hope that,
whatever the outcome over the next few months, any downturn in some
sectors will be offset by some reinvigoration in government-led
investment.
M Allcock - Chairman
19 September 2019
Consolidated results (unaudited)
Consolidated income statement
For the year ended 30 June 2019
2019 2018
Notes GBP'000 GBP'000
--------------------------------------------- ----- ------------ ------------
Continuing operations
Revenue 2 110,643 109,614
Cost of sales (60,264) (58,305)
--------------------------------------------- ----- ------------ ------------
Gross profit 50,379 51,309
Distribution costs (13,182) (11,823)
Administrative expenses (19,840) (20,261)
Other operating income 292 241
--------------------------------------------- ----- ------------ ------------
Operating profit (before profit on disposal) 2 17,649 19,466
Profit on disposal of property 1,917 -
Operating profit 19,566 19,466
Finance income 1,049 819
Finance costs (1,046) (718)
Profit before income tax 19,569 19,567
Income tax expense 3 (3,429) (3,457)
--------------------------------------------- ----- ------------ ------------
Profit for the year 16,140 16,110
--------------------------------------------- ----- ------------ ------------
Earnings per share from continuing operations attributable to
the equity holders of the company during the year (expressed in
pence per share).
2019 2018
Basic and diluted earnings per share Notes Pence pence
------------------------------------- ----- ------ ------
- Basic 8 13.91 13.91
- Diluted 8 13.83 13.81
-------------------------------------- ----- ------ ------
Consolidated statement of comprehensive income
For the year ended 30 June 2019
2019 2018
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Profit for the year: 16,140 16,110
------------------------------------------------------- -------- --------
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets - 189
Exchange differences on translation of foreign
operations 153 119
Taxation - (32)
------------------------------------------------------- -------- --------
153 276
------------------------------------------------------ -------- --------
Items that will not be reclassified to profit or
loss
------------------------------------------------------ -------- --------
Revaluation of financial assets at fair value through
other comprehensive income (142) -
Actuarial (loss)/gain on pension scheme (374) 1,459
Movement on unrecognised pension scheme surplus 191 (1,615)
Taxation 24 -
------------------------------------------------------- -------- --------
(301) (156)
------------------------------------------------------ -------- --------
Other comprehensive income for the year, net of
tax (148) 120
------------------------------------------------------- -------- --------
Total comprehensive income for the year attributable
to equity shareholders 15,992 16,230
------------------------------------------------------- -------- --------
Consolidated STATEMENT OF financial position
As at 30 June 2019
Group
------------------
2019 2018
Notes GBP'000 GBP'000
------------------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 5 25,353 22,679
Intangible assets 6 21,687 21,596
Investment property 2,006 2,076
Loans and receivables 3,567 6,139
Equity accounted investments 936 936
Financial assets at fair value through
other comprehensive income 3,683 -
Available-for-sale financial assets - 3,820
Deferred tax assets - 8
------------------------------------------- ----- -------- --------
57,232 57,254
Current assets
Inventories 25,506 21,489
Trade and other receivables 21,502 23,416
Other financial assets at fair value
through profit or loss 387 389
Short-term financial assets 7 26,483 15,290
Cash and cash equivalents 30,807 28,668
------------------------------------------- ----- -------- --------
Total current assets 104,685 89,252
------------------------------------------- ----- -------- --------
Total assets 161,917 146,506
------------------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables (21,912) (19,253)
Current income tax liabilities (1,935) (1,853)
------------------------------------------- ----- -------- --------
Total current liabilities (23,847) (21,106)
------------------------------------------- ----- -------- --------
Net current assets 80,838 68,146
------------------------------------------- ----- -------- --------
Non-current liabilities
Other payables (12,804) (10,329)
Provisions for liabilities and charges (2,404) (2,164)
Deferred income tax liabilities (699) (655)
------------------------------------------- ----- -------- --------
Total non-current liabilities (15,907) (13,148)
------------------------------------------- ----- -------- --------
Total liabilities (39,754) (34,254)
------------------------------------------- ----- -------- --------
Net assets 122,163 112,252
------------------------------------------- ----- -------- --------
Equity attributable to the owners of
the company
Share capital 1,189 1,189
Share premium account 1,266 1,017
Capital redemption reserve 137 137
Foreign currency translation reserve 2,535 2,382
Retained earnings
------------------------------------------- ----- -------- --------
At 1 July 107,527 97,047
Profit for the year attributable to owners 16,140 16,110
Other changes in retained earnings (6,631) (5,630)
------------------------------------------- ----- -------- --------
117,036 107,527
------------------------------------------- ----- -------- --------
Total equity 122,163 112,252
------------------------------------------- ----- -------- --------
Consolidated statement of changes in equity
For the year ended 30 June 2019
Share Capital
Share premium redemption Retained Total
capital account reserve Foreign currency earnings equity
Notes GBP'000 GBP'000 GBP'000 translation reserve GBP'000 GBP'000 GBP'000
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 1 July 2017 1,189 656 137 2,263 97,047 101,292
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Comprehensive income
Profit for the year to 30
June 2018 - - - - 16,110 16,110
Actuarial gain on pension
scheme - - - - 1,459 1,459
Movement on unrecognised
pension scheme surplus - - - - (1,615) (1,615)
Revaluation of
available-for-sale
financial assets - - - - 189 189
Movement on associated
deferred tax - - - - (32) (32)
Exchange differences on
translation of foreign
operations - - - 119 - 119
Total comprehensive income - - - 119 16,111 16,230
Transactions with owners
Shares issued from exercised
options - 361 - - - 361
Dividends paid to
shareholders 4 - - - - (5,737) (5,737)
Share based payment charge - - - - 106 106
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total transactions with
owners - 361 - - (5,631) (5,270)
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 30 June 2018 1,189 1,017 137 2,382 107,527 112,252
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Comprehensive income
Profit for the year to 30
June 2019 - - - - 16,140 16,140
Actuarial loss on pension
scheme - - - - (374) (374)
Movement on unrecognised
pension scheme surplus - - - - 191 191
Revaluation of financial
assets at fair value
through other comprehensive
income - - - - (142) (142)
Movement on associated
deferred tax - - - - 24 24
Exchange differences on
translation of foreign
operations - - - 153 - 153
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total comprehensive income - - - 153 15,839 15,992
Transactions with owners
Shares issued from exercised
options - 249 - - - 249
Purchase of own shares - - - - (117) (117)
Dividends paid to
shareholders 4 - - - - (6,299) (6,299)
Share based payment charge - - - - 86 86
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total transactions with
owners - 249 - - (6,330) (6,081)
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 30 June 2019 1,189 1,266 137 2,535 117,036 122,163
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Consolidated statement of cash flows
For the year ended 30 June 2019
Group
------------------
2019 2018
Notes GBP'000 GBP'000
----------------------------------------- ----- -------- --------
Cash flows from operating activities
Cash generated from operations 9 25,038 23,998
Tax paid (3,476) (3,291)
----------------------------------------- ----- -------- --------
Net cash generated from operating
activities 21,562 20,707
----------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and
equipment (6,852) (6,049)
Proceeds from sale of property, plant
and equipment 3,796 197
Purchase of intangibles (2,417) (1,967)
Purchase of subsidiary (net of cash
acquired) - (6,313)
Sale of investment property 12 67
Net sale of financial assets 70 -
Property rental and similar income 205 190
Dividend income 225 190
Net (deposit)/withdrawal of short-term
financial assets (11,193) 1,691
Interest received 403 388
Net receipt/(issue) of loan notes 2,575 (2,022)
----------------------------------------- ----- -------- --------
Net cash used in investing activities (13,176) (13,628)
----------------------------------------- ----- -------- --------
Cash flows from financing activities
Net proceeds from the issuance of
ordinary shares 249 361
Purchase of own shares (117) -
Proceeds from loans - 2,337
Repayments of borrowings (197) -
Dividends paid to company's shareholders 4 (6,299) (5,737)
Net cash used in financing activities (6,364) (3,039)
----------------------------------------- ----- -------- --------
Effects of exchange rate changes
on cash 117 (50)
Net increase in cash in the year 2,139 3,990
Cash and cash equivalents at beginning
of year 28,668 24,678
----------------------------------------- ----- -------- --------
Cash and cash equivalents at end
of year 30,807 28,668
----------------------------------------- ----- -------- --------
Notes (unaudited)
1 Basis of preparation
The financial information set out above has been prepared in
accordance with International Financial Reporting Standards adopted
by the European Union and the IFRS interpretations committee (IFRS
IC) though does not constitute the Group's statutory accounts for
the year ended 30 June 2019. The financial information has been
prepared on a going concern basis, under the historical cost
convention, as modified by available-for-sale financial assets,
financial assets and financial liabilities (including derivative
instruments) at fair value through the profit and loss.
The Company and Group has adopted all IAS and IFRS adopted in
the EU except for IAS 34, as AIM-listed companies are not required
to adopt IAS 34. The Company and Group has not early adopted any
other standards or interpretations not yet endorsed by the EU.
New or amended standards adopted for the year ending 30 June
2019 are:
IFRS 9 "Financial Instruments" (effective 1 January 2018)
IFRS 15 "Revenue from contracts with customers" (effective 1
January 2018)
Amendments to IFRS 2, "Share based payments" - Classification
and measurement (effective 1 January 2018)
Amendments to IFRS 4, Amendments regarding implementation of
IFRS 9 (effective 1 January 2018)
Amendment to IFRS 9, "Financial instruments", on general hedge
accounting (effective date 1 January 2018)
IFRS 9 replaces IAS 39 "Financial Instruments: Recognition &
Measurement" and the changes introduced by the new standard can be
grouped into the following three categories - Classification &
Measurement, Impairment, and Hedging. The impact of the new
standard in the Group was the following:
-- Classification and measurement: IFRS 9 contains three
principal classification categories for financial assets which are
amortised cost, fair value through other comprehensive income
("FVOCI") and fair value through profit or loss ("FVTPL"). The
standard eliminates the existing IAS 39 categories of
held-to-maturity, loans and receivables and available-for-sale
financial assets. The Group included the new classification
categories for financial assets in the Statement of Financial
Position. Equity financial instruments previously classified as
available-for-sale assets have been classified as Financial assets
at fair value through other comprehensive income.
-- Impairment: IFRS 9 introduces an expected credit loss model
which requires expected credit losses and changes to expected
credit losses at each reporting date to reflect changes in credit
risk since initial recognition. Financial assets measured at
amortised cost or FVOCI are subject to the impairment provisions of
IFRS 9. The adoption of this standard has not resulted in any
material changes in the level of provision for financial
assets.
-- Hedging: IFRS 9 introduces new hedge accounting requirements.
IFRS 9 aligns hedge accounting relationships with the Group's risk
management objectives and strategy. The Group does not apply hedge
accounting, therefore there were no changes arising from the new
standard.
IFRS15 requires entities to apportion revenue earned from
contracts to individual performance obligations based on a
five-step model. The adoption of this standard has not resulted in
any material impact on reported profits.
The Group is currently evaluating the effect of the new leasing
standard IFRS16 that will be adopted for the financial year
commencing 1 July 2019. The Group does not have many leasing
agreements, with the majority being for vehicles in the
Netherlands, subsequently the adoption of this standard is not
expected to have a material impact on reported profits.
The results and financial information for the year ended 30 June
2019 is unaudited but the statutory accounts for the year then
ended will be delivered to the Registrar of Companies in due
course, and expect the auditors' report to be unqualified and will
not contain a statement under section 498(2) and (3) of the
Companies Act 2006.
The financial statements are presented in Pounds Sterling,
rounded to the nearest thousand.
2 Segmental analysis
(a) Business segments
The segmental analysis is presented on the same basis as that
used for internal reporting purposes. For internal reporting FW
Thorpe is organised into ten operating segments, based on the
products and customer base in the lighting market - the largest
business is Thorlux, which manufactures professional lighting
systems for the industrial, commercial and controls markets. The
Lightronics business is a material subsidiary and therefore
disclosed separately.
The eight remaining continuing operating segments have been
aggregated into the 'other companies' segment based on their size,
comprising the entities Philip Payne Limited, Solite Europe
Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux
Lighting LLC, Thorlux Australasia PTY Limited, Thorlux Lighting
GmbH and Famostar B.V.
FW Thorpe's chief operating decision-maker (CODM) is the Group
board. The Group board reviews the Group's internal reporting in
order to monitor and assess the performance of the operating
segments for the purpose of making decisions about resources to be
allocated. Performance is evaluated based on a combination of
revenue and operating profit. Assets and liabilities have not been
segmented which is consistent with the Group's internal
reporting.
Inter- Total
Other segment continuing
Thorlux Lightronics companies adjustments operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2019
Revenue to external customers 62,304 23,154 25,185 - 110,643
Revenue to other group companies 3,551 366 3,573 (7,490) -
----------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 65,855 23,520 28,758 (7,490) 110,643
----------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit (before profit on
disposal) 11,578 2,357 3,661 53 17,649
----------------------------------- -------- ----------- ---------- ------------ -----------
Profit on disposal of property 1,917
----------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 19,566
----------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income 3
Profit before income tax 19,569
----------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2018
Revenue to external customers 64,645 20,860 24,109 - 109,614
Revenue to other group companies 3,930 196 2,956 (7,082) -
----------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 68,575 21,056 27,065 (7,082) 109,614
----------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 13,611 2,050 3,407 398 19,466
----------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income 101
Profit before income tax 19,567
----------------------------------- -------- ----------- ---------- ------------ -----------
Inter segment adjustments to operating profit consist of
property rentals on premises owned by FW Thorpe Plc, adjustments to
profit related to stocks held within the Group that were supplied
by another segment and elimination of profit on transfer of assets
between Group companies.
(b) Geographical analysis
The Group's business segments operate in four main areas, the
UK, the Netherlands, the rest of Europe and the rest of the World.
The home country of the company, which is also the main operating
company, is the UK.
2019 2018
GBP'000 GBP'000
------------------ -------- --------
UK 68,706 70,652
Netherlands 28,227 22,713
Rest of Europe 11,185 10,726
Rest of the World 2,525 5,523
------------------ -------- --------
110,643 109,614
------------------ -------- --------
3 Income tax expense
Analysis of income tax expense in the year:
2019 2018
GBP'000 GBP'000
-------------------------------------------------- -------- ---------
Current tax
Current tax on profits for the year 3,963 3,930
Adjustments in respect of prior years (609) (170)
-------------------------------------------------- -------- ---------
Total current tax 3,354 3,760
-------------------------------------------------- -------- ---------
Deferred tax
Origination and reversal of temporary differences 75 (303)
-------------------------------------------------- -------- ---------
Total deferred tax 75 (303)
-------------------------------------------------- -------- ---------
Income tax expense 3,429 3,457
-------------------------------------------------- -------- ---------
The tax assessed for the year is lower (2018: lower) than the
standard rate of corporation tax in the UK of 19.00% (2018:
19.00%). The differences are explained below:
2019 2018
GBP'000 GBP'000
--------------------------------------------------------- -------- ---------
Profit before income tax 19,569 19,567
--------------------------------------------------------- -------- ---------
Profit on ordinary activities multiplied by the standard
rate in the UK of 19.00% (2018: 19.00%) 3,718 3,718
Effects of:
Expenses not deductible for tax purposes 881 648
Accelerated tax allowances and other timing differences 55 (383)
Adjustments in respect of prior years (609) (170)
Chargeable gains (352) -
Patent box relief (597) (641)
Foreign profit taxed at higher rate 333 285
Tax charge 3,429 3,457
--------------------------------------------------------- -------- ---------
The effective tax rate was 17.52% (2018: 17.67%). Adjustments in
respect of prior years relates to refunds received for additional
investment allowances and patent box relief.
The change to the UK corporation tax rate from 19% to 17% from 1
April 2020 was substantively enacted on 6 September 2016 with the
appropriate rate reflected within these financial statements.
4 Dividends
Dividends paid during the year are outlined in the tables
below:
Dividends paid (pence per share) 2019 2018
--------------------------------- ---- ----
Final dividend 4.00 3.55
Interim dividend 1.43 1.40
--------------------------------- ---- ----
Total 5.43 4.95
--------------------------------- ---- ----
A final dividend in respect of the year ended 30 June 2019 of
4.10p per share, amounting to GBP4,763,000 is to be proposed at the
Annual General Meeting on 21 November 2019 and, if approved, will
be paid on 29 November 2019 to shareholders on the register on 1
November 2019. The ex-dividend date is 31 October 2019. These
financial statements do not reflect this dividend payable.
Dividends proposed (pence per share) 2019 2018
------------------------------------- ---- ----
Final dividend 4.10 4.00
------------------------------------- ---- ----
2019 2018
Dividends paid GBP'000 GBP'000
----------------- -------- --------
Final dividend 4,638 4,114
Interim dividend 1,661 1,623
----------------- -------- --------
Total 6,299 5,737
----------------- -------- --------
2019 2018
Dividends proposed GBP'000 GBP'000
------------------- -------- --------
Final dividend 4,763 4,639
------------------- -------- --------
5 Property, plant and equipment
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- --------
Cost
At 1 July 2018 18,676 21,328 40,004
Additions 3,176 3,616 6,792
Disposals (2,199) (1,116) (3,315)
Currency translation 67 23 90
At 30 June 2019 19,720 23,851 43,571
------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2018 3,829 13,496 17,325
Charge for the year 546 1,962 2,508
Disposals (673) (962) (1,635)
Currency translation 10 10 20
At 30 June 2019 3,712 14,506 18,218
------------------------- -------------- ---------- --------
Net book amount
------------------------- -------------- ---------- --------
At 30 June 2019 16,008 9,345 25,353
------------------------- -------------- ---------- --------
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ---------- --------
Cost
At 1 July 2017 14,556 18,990 33,546
Acquisition of a subsidiary 528 1,323 1,851
Additions 3,301 2,558 5,859
Disposals - (1,247) (1,247)
Transfers 294 (294) -
Currency translation (3) (2) (5)
At 30 June 2018 18,676 21,328 40,004
---------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2017 2,789 11,920 14,709
Acquisition of a subsidiary 435 1,188 1,623
Charge for the year 464 1,672 2,136
Disposals - (1,139) (1,139)
Transfers 141 (141) -
Currency translation - (4) (4)
At 30 June 2018 3,829 13,496 17,325
---------------------------- -------------- ---------- --------
Net book amount
---------------------------- -------------- ---------- --------
At 30 June 2018 14,847 7,832 22,679
---------------------------- -------------- ---------- --------
6 Intangible assets
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2018 14,786 6,779 2,924 1,291 1,789 150 182 27,901
Additions - 1,791 - - 592 - - 2,383
Write-offs and
transfers - (1,293) - - (178) - - (1,471)
Currency translation 135 15 32 13 (1) - - 194
At 30 June 2019 14,921 7,292 2,956 1,304 2,202 150 182 29,007
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated amortisation
At 1 July 2018 249 3,062 1,117 599 1,128 150 - 6,305
Charge for the
year - 1,662 372 193 229 - - 2,456
Write-offs and
transfers - (1,293) - - (178) - - (1,471)
Currency translation (3) 10 15 9 (1) - - 30
At 30 June 2019 246 3,441 1,504 801 1,178 150 - 7,320
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2019 14,675 3,851 1,452 503 1,024 - 182 21,687
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Write-offs relate to development assets where no further
economic benefits are expected obtained.
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2017 10,282 6,448 1,875 768 1,528 150 182 21,233
Acquisition of
a subsidiary 4,490 - 1,040 520 - - - 6,050
Additions - 1,605 - - 376 - - 1,981
Write-offs and
transfers - (1,281) - - (116) - - (1,397)
Currency translation 14 7 9 3 1 - - 34
At 30 June 2018 14,786 6,779 2,924 1,291 1,789 150 182 27,901
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated
amortisation
At 1 July 2017 262 2,588 814 442 1,050 150 - 5,306
Charge for the
year - 1,753 299 157 191 - - 2,400
Write-offs and
transfers - (1,281) - - (113) - - (1,394)
Currency translation (13) 2 4 - - - - (7)
At 30 June 2018 249 3,062 1,117 599 1,128 150 - 6,305
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2018 14,537 3,717 1,807 692 661 - 182 21,596
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
7 Short-term financial assets
2019 2018
GBP'000 GBP'000
--------------------------- -------- --------
Beginning of year 15,290 16,981
Net deposits/(withdrawals) 11,193 (1,691)
--------------------------- -------- --------
End of year 26,483 15,290
--------------------------- -------- --------
The short-term financial assets consist of term cash deposits in
sterling with an original term in excess of three months.
8 Earnings per share
Basic and diluted earnings per share for profit attributable to
equity holders of the company
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the year,
excluding ordinary shares purchased by the company and held as
treasury shares.
Basic 2019 2018
--------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue 116,060,378 115,834,897
--------------------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the company (GBP'000) 16,140 16,110
--------------------------------------------------------------- ----------- -----------
Basic earnings per share (pence per share) total 13.91 13.91
--------------------------------------------------------------- ----------- -----------
Diluted 2019 2018
--------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue (diluted) 116,689,595 116,692,591
--------------------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the company (GBP'000) 16,140 16,110
--------------------------------------------------------------- ----------- -----------
Diluted earnings per share (pence per share) total 13.83 13.81
--------------------------------------------------------------- ----------- -----------
9 Cash generated from operations
Group
2019 2018
Cash generated from continuing operations GBP'000 GBP'000
-------------------------------------------- -------- ---------
Profit before income tax 19,569 19,567
Depreciation charge 2,508 2,136
Amortisation of investment property 58 59
Amortisation/impairment of intangibles 2,456 2,400
Profit on disposal of property, plant and
equipment (2,116) (125)
Net finance expense/(income) (3) (101)
Retirement benefit contributions in excess
of current and past service charge (183) (156)
Share based payment charge 855 533
Research and development expenditure credit (292) (237)
Effects of exchange rate movements (48) 163
Changes in working capital
- Inventories (4,025) 1,954
- Trade and other receivables 2,428 (3,610)
- Payables and provisions 3,831 1,415
Cash generated from continuing operations 25,038 23,998
--------------------------------------------- -------- ---------
10 Cautionary statement
Sections of this report contain forward looking statements that
are subject to risk factors including the economic and business
circumstances occurring from time to time in countries and markets
in which the Group operates. By their nature, forward looking
statements involve a number of risks, uncertainties and future
assumptions because they relate to events and/or depend on
circumstances that may or may not occur in the future and could
cause actual results and outcomes to differ materially from those
expressed in or implied by the forward looking statements. No
assurance can be given that the forward looking statements in this
preliminary announcement will be realised. Statements about the
Chairman's expectations, beliefs, hopes, plans, intentions and
strategies are inherently subject to change and they are based on
expectations and assumptions as to future events, circumstances and
other factors which are in some cases outside the Company's
control. Actual results could differ materially from the Company's
current expectations. It is believed that the expectations set out
in these forward looking statements are reasonable but they may be
affected by a wide range of variables which could cause actual
results or trends to differ materially, including but not limited
to, changes in risks associated with the Company's growth strategy,
fluctuations in product pricing and changes in exchange and
interest rates.
11 Annual report and accounts
The annual report and accounts will be sent to shareholders on
24 October 2019 and will be available, along with this
announcement, on the Group's website (www.fwthorpe.co.uk) from that
time. The Group will hold its AGM on 21 November 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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