TIDMTFW
RNS Number : 6243H
Thorpe(F.W.) PLC
25 March 2020
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2019
FW Thorpe Plc - a group of companies that design, manufacture
and supply professional lighting systems - is pleased to announce
its interim results for the six months ended 31 December 2019.
Financial highlights:
Interim Interim
2020 (unaudited) 2019 (unaudited)
--------------------------- ------------------ ------------------ -------
Revenue GBP57.4m GBP52.7m +9.0%
Operating profit (before
profit on disposal)* GBP7.5m GBP7.0m +6.7%
Profit before tax (before
profit on disposal)* GBP7.4m GBP6.9m +7.2%
Profit before tax GBP7.4m GBP8.8m -16.1%
Basic earnings per share 5.04p 6.14p -17.9%
--------------------------- ------------------ ------------------ -------
*Interim 2019 Profit before tax includes profit on disposal
of property of GBP1.9m
-- Strong start to the year by Thorlux, supported by larger scale orders
-- Other Group companies' results improved by positive TRT and
Famostar performance, dampened by smaller companies
-- Thorlux operating margin slightly impacted by larger scale orders and services
-- Interim dividend 1.46p (Interim 2019: 1.43p) - 2.1% increase
-- Strong balance sheet to support through Covid-19 disruption -
GBP51.9m in cash/short term financial assets at period end
Note: This announcement contains inside information for the
purposes of Article 7 of Regulation 596/2014 (MAR).
For further information, please contact:
FW Thorpe Plc
Mike Allcock - Chairman and Joint Chief Executive 01527 583200
Craig Muncaster - Joint Chief Executive and
Group Financial Director 01527 583200
N+1 Singer - Nominated Adviser
Steve Pearce/James Moat 020 7496 3000
CHAIRMAN'S INTERIM STATEMENT
Against a backdrop of continuing uncertainty after the UK's exit
from the EU and now the unfortunate ongoing coronavirus (Covid-19)
pandemic, I am pleased to report an excellent ongoing order book at
the Group's main division, Thorlux Lighting, and improved
performance at both TRT and Famostar.
Orders at Thorlux remain hard-fought; however, underlying
revenue is good, and some additional one-off project work has been
completed which has provided a welcome boost. The larger size of
projects has consequently led to tighter margins. In some cases,
projects involve services including survey work and project
management, leading to increased overheads.
Group operating profit (before profit on disposal) rose from
GBP7.0m to GBP7.5m (+6.7%) and actions have been taken to improve
margins in the second half of the financial year.
Revenue generated from outside the UK remains strong, at around
40% of Group revenue.
As a result of this solid performance, and many years of prudent
financial management, we feel our robust balance sheet is
structured more than adequately to deliver an increased interim
dividend of 1.46p (Interim 2019: 1.43p) for the six months to 31
December 2019.
Investment within the Group continues, and I can report that
previously initiated projects have completed successfully. The
Portland factory in Walsall is now fully operational. It is an
impressive but appropriately proportioned facility, which will
serve the Group efficiently for decades. The European Application
Centre at Lightronics in Waalwijk has opened and showcases both
Lightronics and Group products to customers on a frequent basis.
TRT's new extension now houses a fully functional semi-automatic
powder coating line, releasing Thorlux capacity and providing a
measure of disaster recovery. Thorlux's new state of the art sheet
metal forming machinery is firing on all cylinders - which is
certainly welcome, due to the size of the company's current order
book. Finally, early in March, Thorlux opened its new Quality of
Light Experience room at the Group's main facility in Redditch.
Interactive demonstrations will show how the quality of the
spectrum of light that a luminaire produces can alter a person's
health and wellbeing and attention to detail - especially important
in the workplace.
The current coronavirus situation provides us with further
challenges that had not been anticipated at the time of previous
announcements. The initial impact related to concerns from within
the supply chain. Most Group companies are in a relatively good
stock position, as they increased stocks significantly during the
autumn to help mitigate any Brexit-related risk. Group companies
also reacted early and took proactive measures to reduce infection
risk within the workplace for the good of the employees and the
business; these measures are under constant review.
At the time of writing, the situation is dynamic and uncertain,
but we continue to support our customers where practical, whilst
being mindful of employee wellbeing and government guidance. It is
highly likely however that Group companies will see considerable
disruption to delivery schedules due to customers' and government
containment actions, for at least the next few months. The extent
of this disruption and the period over which the impact is felt,
cannot be estimated at this time. We are prioritising the safety of
our employees, suppliers and customers and acting within government
advice whilst reacting swiftly to minimise the impact where
possible.
It is therefore difficult for us to determine the impact on
second half performance and beyond. However, the Group has always
maintained a strong balance sheet with sufficient cash and other
liquid assets to protect business continuity from the impact of
sudden economic impacts and unforeseen risks. Although the impact
of the current crisis is uncertain, we cannot foresee a downside
scenario where we are unable to manage business continuity for the
foreseeable future by utilising our current resources.
Group performance in the second half of 2019 was strong and
will, due to the latest circumstances, prove challenging and
unlikely to improve upon in 2020. However, having a strong order
book provides an excellent reservoir to smooth current turbulence.
Recent investments outlined above give a significant capacity boost
ready for us to satisfy those customers who can accept deliveries
and for us to fulfil any pent-up future demand. Our local
manufacturing capabilities, stock situation and customer portfolio
give us a solid platform to perform to the extent we are able
during the current turbulence and then build swiftly on when a
level of trading normality returns.
I would like to wish all of our staff, shareholders and other
stakeholders good health, and I hope that the country can return to
normality as quickly as possible.
Mike Allcock
Chairman
25 March 2020
FW Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2019
31.12.19 31.12.18 30.06.19
(six months (six months (twelve
to) to) months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 57,412 52,669 110,643
------------- ------------- ----------
Operating Profit (before profit
on disposal) 7,489 7,019 17,649
Profit on disposal of property - 1,917 1,917
------------- ------------- ----------
Operating Profit 7,489 8,936 19,566
Finance income 402 416 1,049
Finance costs (527) (574) (1,046)
Profit before tax expense 7,364 8,778 19,569
Tax expense (1,505) (1,652) (3,429)
------------- ------------- ----------
Profit for the period 5,859 7,126 16,140
Dividend rate per share:
------ ------ ------
Interim 1.46p 1.43p 1.43p
Final - - 4.10p
------ ------ ------
Earnings per share - basic 5.04p 6.14p 13.91p
- diluted 5.02p 6.10p 13.83p
-------------------------------- ------ ------ -------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2019
31.12.19 31.12.18 30.06.19
(six months (six months
to) to)
(twelve
months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit for the period 5,859 7,126 16,140
Other comprehensive income
Items that may be reclassified
to profit or loss
Changes in the fair value of available-for-sale - - -
financial assets
Exchange rate differences on translation
of foreign operations (558) 168 153
Taxation - - -
(558) 168 153
------------- ------------- ----------
Items that will not be reclassified
to profit or loss
Revaluation of financial assets
at fair value through other comprehensive
income * 168 (529) (142)
Actuarial loss on pension scheme - - (374)
Movement on unrecognised pension
surplus - - 191
Taxation (29) 90 24
139 (439) (301)
------------- ------------- ----------
Other comprehensive income for
the year, net of tax (419) (271) (148)
Total comprehensive income for
the year 5,440 6,855 15,992
------------- ------------- ----------
All comprehensive income is attributable to the owners of the
company.
* The gain on the revaluation of financial assets at fair value
through other comprehensive income of GBP168,000 is due to the
increase in market value of these investments.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2019
As at As at As at
31.12.19 31.12.18 30.06.19
(unaudited) (unaudited) (audited)
Assets GBP'000 GBP'000 GBP'000
Non-Current Assets
Property, plant and equipment 30,317 21,157 25,353
Intangible assets 20,811 21,738 21,687
Investment property 1,997 2,047 2,006
Loans and receivables 2,919 4,101 3,567
Equity accounted investments 936 936 936
Financial assets at fair value
through other comprehensive income 3,838 3,220 3,683
Deferred tax assets 2 - -
------------ ------------ ----------
60,820 53,199 57,232
Current assets
Inventories 25,121 22,018 25,506
Trade and other receivables 21,568 22,117 21,502
Financial assets at fair value
through profit or loss - 389 387
Short-term financial assets 24,542 16,837 26,483
Cash and cash equivalents 27,438 36,111 30,807
------------ ------------ ----------
Total current assets 98,669 97,472 104,685
Total Assets 159,489 150,671 161,917
------------ ------------ ----------
Liabilities
Current liabilities
Trade and other payables (19,102) (19,512) (21,912)
Lease liabilities (82) - -
Current tax liabilities (274) (2,499) (1,935)
------------ ------------ ----------
Total current liabilities (19,458) (22,011) (23,847)
Net current assets 79,211 75,461 80,838
Non-current liabilities
Other payables (13,442) (11,237) (12,804)
Lease liabilities (565) - -
Provisions for liabilities and
charges (2,375) (2,195) (2,404)
Deferred tax liabilities (786) (584) (699)
------------ ------------ ----------
Total non-current liabilities (17,168) (14,016) (15,907)
------------ ------------ ----------
Total liabilities (36,626) (36,027) (39,754)
------------ ------------ ----------
Net assets 122,863 114,644 122,163
------------ ------------ ----------
Equity attributable to owners of
the company
Issued share capital 1,189 1,189 1,189
Share premium account 1,526 1,266 1,266
Capital redemption reserve 137 137 137
Foreign currency translation reserve 1,977 2,550 2,535
Retained earnings
-------------------------------------- ------------ ------------ ----------
At 1 July 117,036 107,527 107,527
Profit for the year attributable
to owners 5,859 7,126 16,140
Other changes in retained earnings (4,861) (5,151) (6,631)
-------------------------------------- ------------ ------------ ----------
118,034 109,502 117,036
------------ ------------ ----------
Total equity 122,863 114,644 122,163
------------ ------------ ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2019
Share Share Capital Foreign Retained Total
Capital Premium Redemption Currency Earnings Equity
Reserve Translation
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 June 2018 1,189 1,017 137 2,382 107,527 112,252
Comprehensive income
Profit for six months
to 31 December 2018 - - - - 7,126 7,126
Other comprehensive income - - - 168 (439) (271)
Total comprehensive income - - - 168 6,687 6,855
Transactions with owners
Share options exercised - 249 - - - 249
Purchase of own shares - - - - (117) (117)
Dividends paid to shareholders - - - - (4,639) (4,639)
Share-based payment charge - - - - 44 44
Total transactions with
owners - 249 - - (4,712) (4,463)
Balance at 31 December
2018 1,189 1,266 137 2,550 109,502 114,644
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Comprehensive income
Profit for six months
to 30 June 2019 - - - - 9,014 9,014
Actuarial loss on pension
scheme - - - - (374) (374)
Movement on unrecognised
pension surplus - - - - 191 191
Revaluation of financial
assets at fair value through
other comprehensive income - - - - 387 387
Movement on associated
deferred tax - - - - (66) (66)
Exchange rate differences
on translation of foreign
operations - - - (15) - (15)
Total comprehensive income - - - (15) 9,152 9,137
Transactions with owners
Dividends paid to shareholders - - - - (1,660) (1,660)
Share-based payment charge - - - - 42 42
Total transactions with
owners - - - - (1,618) (1,618)
Balance at 30 June 2019 1,189 1,266 137 2,535 117,036 122,163
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Adjustment on first time
adoption of IFRS16 (net
of tax) - - - - (265) (265)
Restated balance at 30
June 2019 1,189 1,266 137 2,535 116,771 121,898
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Comprehensive income
Profit for six months
to 31 December 2019 - - - - 5,859 5,859
Other comprehensive income - - - (558) 139 (419)
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Total comprehensive income - - - (558) 5,998 5,440
Transactions with owners
Share options exercised - 260 - - - 260
Dividends paid to shareholders - - - - (4,770) (4,770)
Share-based payment charge - - - - 35 35
Total transactions with
owners - 260 - - (4,735) (4,475)
Balance at 31 December
2019 1,189 1,526 137 1,977 118,034 122,863
-------------------------------- --------- --------- ------------ ------------- ---------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2019
31.12.19 31.12.18 30.06.19
(six months (six months (twelve months
to) to) to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash generated from operations
Profit before income tax 7,364 8,778 19,569
Adjustments for
- Depreciation charge 1,491 1,270 2,508
- Depreciation of investment property 9 29 58
- Amortisation of intangibles 1,276 1,203 2,456
- Profit on disposal of property,
plant and equipment (41) (2,150) (2,116)
- Net finance expense/(income) 125 157 (3)
- Retirement benefit contributions
in excess of current and past service
charge (124) (80) (183)
- Share-based payment charge 419 362 855
- Research and development expenditure
credit (149) (144) (292)
- Effects of exchange rate movements 537 (76) (48)
Changes in working capital
- Inventories 387 (534) (4,025)
- Trade and other receivables 49 1,860 2,428
- Payables and provisions (2,178) 214 3,831
-------------------------------------------- ------------- ------------- ---------------------
Cash generated from operations 9,165 10,889 25,038
Tax paid (2,958) (1,329) (3,476)
Cash flow from investing activities
Purchase of property, plant and equipment (5,521) (1,265) (6,852)
Proceeds from sale of property, plant
and equipment 83 3,796 3,796
Purchase of intangibles (1,099) (1,145) (2,417)
Disposal of investment property - - 12
(Purchase)/sale of financial assets
at fair value through other comprehensive
income (61) 71 70
Proceeds from sale of other financial 387 - -
assets at fair value through profit
and loss
Property rental and similar income 6 10 205
Dividend income 111 106 225
Net withdrawal/(deposit) of short-term
financial assets 1,941 (1,547) (11,193)
Interest received 164 180 403
Net receipt of loan notes 597 2,072 2,575
--------------------------------------------
Net cash generated from/(used in)
investing activities (3,392) 2,278 (13,176)
Cash flow from financing activities
Net proceeds from the issuance of
ordinary shares 260 249 249
Purchase of own shares - (117) (117)
Proceeds from loans 121 - -
Repayment of borrowings (1,124) - (197)
Dividends paid to company shareholders (4,770) (4,639) (6,299)
--------------------------------------------
Net cash used in financing activities (5,513) (4,507) (6,364)
-------------------------------------------- ------------- ------------- ---------------------
Effects of exchange rate changes on
cash (671) 112 117
-------------------------------------------- ------------- ------------- ---------------------
Net increase/(decrease) in cash and
cash equivalents (3,369) 7,443 2,139
Cash and cash equivalents at the beginning
of the period 30,807 28,668 28,668
--------------------------------------------
Cash and cash equivalents at the end
of the period 27,438 36,111 30,807
-------------------------------------------- ------------- ------------- ---------------------
Notes to the Interim Financial Statements
1. Basis of Preparation
The consolidated interim financial statements for the six months
to 31 December 2019 have been prepared in accordance with the
recognition and measurement principles of applicable International
Financial Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU), IFRIC interpretations and the AIM
Rules for Companies.
The figures for the period to 31 December 2019 and the
comparative period to 31 December 2018 have not been audited or
reviewed and are therefore disclosed as unaudited. The figures for
30 June 2019 have been extracted from the financial statements for
the year to 30 June 2019, which have been delivered to the
Registrar of Companies. The interim financial statements do not
constitute statutory accounts within the meaning of the Companies
Act 2006.
The financial statements are presented in Pounds Sterling,
rounded to the nearest thousand.
The interim financial statements are prepared under the
historical cost convention, modified by the revaluation of certain
current and non-current investments at fair value through profit or
loss.
The accounting policies set out in the financial statements for
the year ended 30 June 2019 have been applied consistently
throughout the Group during the period, except for the adoption of
the new pronouncement IFRS 16 "Leases".
The Group has adopted IFRS16, "Leases", from 1 July 2019
applying the simplified transition approach, but it has not
restated comparatives for the reporting period ended 30 June 2019,
as permitted under the specific transitional provisions in the
standard. The reclassifications and the adjustments arising from
the new leasing rules are therefore recognised in the opening
balance sheet on 1 July 2019. Note 4 explains the impact on the
Group's financial statements. The adoption of this standard has not
resulted in any material impact on reported profits.
2. Segmental analysis
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
L.L.C, 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. The CODM reviews the performance of the business by
considering the key profit measure of operating profit, including
the impact of associated contingent consideration arrangements, and
considers that none of the other operating segments are of
sufficient size and distinction to be reviewed separately when
making Group wide strategic decisions. Assets and liabilities have
not been segmented which is consistent with the Group's internal
reporting.
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.
2. Segmental analysis (continued)
Thorlux Lightronics Other Inter- Total
Companies Segment Continuing
Adjust- Operations
ments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months to 31 December
2019
Revenue to external customers 32,363 11,147 13,902 - 57,412
Revenue to other Group
companies 1,740 86 1,931 (3,757) -
------------------------------- -------- ------------ ---------- -------- --------------
Total revenue 34,103 11,233 15,833 (3,757) 57,412
------------------------------- -------- ------------ ---------- -------- --------------
Operating Profit 4,839 1,074 1,347 229 7,489
------------------------------- -------- ------------ ---------- -------- --------------
Finance income 402
Finance expense (527)
------------------------------- -------- ------------ ---------- -------- --------------
Profit before tax expense 7,364
=============================== ======== ============ ========== ======== ==============
6 months to 31 December
2018
Revenue to external customers 28,442 11,869 12,358 - 52,669
Revenue to other Group
companies 1,161 - 1,206 (2,367) -
------------------------------- -------- ------------ ---------- -------- --------------
Total revenue 29,603 11,869 13,564 (2,367) 52,669
------------------------------- -------- ------------ ---------- -------- --------------
Operating Profit (before
profit on disposal) 4,659 1,066 1,220 74 7,019
Profit on disposal of
property 1,917
------------------------------- -------- ------------ ---------- -------- --------------
Operating Profit 8,936
------------------------------- -------- ------------ ---------- -------- --------------
Finance income 416
Finance expense (574)
------------------------------- -------- ------------ ---------- -------- --------------
Profit before tax expense 8,778
=============================== ======== ============ ========== ======== ==============
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 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 tax expense 19,569
=============================== ======== ============ ========== ======== ==============
3. Property, plant and equipment
The Group has invested GBP5.4 million in property, plant and
equipment during the period. The largest investments were:
-- GBP2.4 million in plant and machinery;
-- A further GBP1.1million in the purpose built property for Portland Lighting; and
-- GBP2.3 million for the property occupied by Famostar, of
which GBP0.9 million was recognised as a right of use asset on
adoption of IFRS16 on 1 July 2019. Resulting in a GBP1.4 million
net addition to property, plant and equipment, for which the lease
agreement was subsequently settled.
4. Adjustments recognised on adoption of IFRS16
On adoption of IFRS16, the Group recognised lease liabilities in
relation to leases which had previously been classified as
'operating leases' under the principles of IAS17. These liabilities
were measured at the present value of the remaining lease payments,
discounted using the borrowing rate implied in the leases of
5.5%.
Right-of-use assets have been measured on transition as if the
new rules had always been applied with the difference to the lease
liability value recognised as an adjustment to opening retained
earnings at 1 July 2019.
Right of use assets recognised 31 December 1 July 2019
2019 GBP'000 GBP'000
Properties - 929
Equipment 76 31
Motor vehicles 333 397
--------------
Total right of use assets 409 1,357
-------------- ------------
Lease liabilities recognised on adoption GBP'000
Operating lease commitments disclosed as at 30
June 2019 2,245
Discounted using the borrowing rate (483)
Less: short-term and low value leases recognised
on a straight-line basis as expense (52)
Lease liability recognised at 1 July 2019 1,710
--------
Of which are:
Current lease liabilities 373
Non-current lease liabilities 1,337
--------
1,710
--------
5. Earnings per share
The basic earnings per share is calculated on profit after
taxation and the weighted average number of ordinary shares in
issue of 116,215,549 (Interim 2019: 116,001,173) during the
period.
The diluted earnings per share is calculated on profit after
taxation and the weighted average number of potentially dilutive
ordinary shares in issue of 116,779,815 (Interim 2019: 116,764,548)
during the period.
6. Dividend
The interim dividend is at the rate of 1.46p per share (Interim
2019: 1.43p), and based on 116,330,497 shares in issue at the
announcement date the dividend will amount to GBP1,698,000 (Interim
2019: GBP1,661,000). The interim dividend will be paid on 21 April
2020 to shareholders on the register at the close of business on 3
April 2020, and the shares become ex-dividend on 2 April 2020.
A final dividend for the year ended 30 June 2019 of 4.10p (2018:
final of 4.00p) per share, amounting to GBP4,770,000 (2018:
GBP4,639,000) was paid on 29 November 2019.
7. Availability of interim statement
Copies of the interim report are being sent to shareholders and
will also be available from the company's registered office or on
the company's website ( www.fwthorpe.co.uk ) from 3 April 2020.
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END
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