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Thorpe(F.W.) PLC   -  TFW   

Interim Results

Released 07:00 21-Mar-2019

RNS Number : 5077T
Thorpe(F.W.) PLC
21 March 2019
 

 

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2018

 

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 2018.

 

Key points:

 

Interim

2019

Interim

2018

 

Revenue

£52.7m 

£53.2m 

1.0% decrease

Operating profit (before profit on disposal of property)

£7.0m 

£7.8m 

10.3%  decrease

Profit before tax

£8.8m 

£7.9m 

11.4%  increase

Basic earnings per share

6.14p

5.43p

13.1%  increase

 

·      Group results were affected by a slow start to the year by Thorlux, with operating profit in line with management's guidance in the November AGM trading statement

·      Thorlux's order income is now back to 2018 levels after record orders for the last few months

·      The majority of other Group companies' results are similar to those at the Interim 2018 - with improved results at Lightronics and TRT, but disappointing results for some international sales offices

·      Results include Famostar, acquired in December 2017, which was not included in the Interim 2018 figures

·      Profit before tax includes profit on disposal of £1.9m following the sale of the Thorlux Portsmouth property

·      Interim dividend 1.43p (Interim 2018: 1.40p)

 

Note: This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 (MAR).

For further information, please contact:                    

                                                       

F W 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

 

Richard Lindley/James Moat

 

020 7496 3000

 

CHAIRMAN'S INTERIM STATEMENT

 

As indicated in the 2018 annual report statement and AGM update, the Group is finding it difficult to match the results of last year due to challenging trading conditions at the start of the year. Comparing interim 2019 and 2018 figures, Group revenue for the period is lower by 1.0% with operating profit lower by 10.3% before the profit on disposal. Revenue and operating profit are supplemented by the inclusion of Famostar, adding £3.6m in revenue and £0.4m in operating profit, which was not part of the interim 2018 Group results.

 

The Group's overall UK revenue is down by £4.0m at the half-year point, mainly due to the performance of Thorlux. Revenue from the Group's international sales offices is also down, by £1.5m. These reductions are mostly offset by revenue from overseas acquisitions, i.e. Lightronics and the inclusion of Famostar, albeit with a lower operating profit margin. There was also an improvement at TRT, the Group's street lighting business.

 

I am pleased to report that revenue generated from overseas operations now represents 41% of the total, providing risk mitigation in case of further turbulent economic and political times in the UK. The management team meet regularly to discuss and plan for the potential impacts arising from Brexit. We wait anxiously for matters to be resolved and business confidence to return to more normal levels.

 

As mentioned in the autumn AGM statement, despite a challenging start to the year, orders in October and November improved at the Group's main lighting division, Thorlux. Since then, orders have continued at record levels, which will give a much-needed boost through to the financial year-end. Overhead cost reductions made during the autumn are now expected to start flowing through to operating profit in the second half of the year.

 

The Thorlux Portsmouth and Sugg Lighting factories were sold in November for £4.8m, realising a £1.9m profit on disposal and supporting the increased reported profit before tax from £7.9m to £8.8m.

 

The Group continues to invest for the future. This includes the imminent delivery of new laser cutting metalworking machinery at Thorlux, a property extension underway at TRT to provide pre-treatment and powder coating facilities (and as a Group disaster recovery backup resource), a new factory has also been approved for Portland Lighting, and works, which are well advanced, on the Lightronics factory extension.

 

Thorlux Lighting has recently launched a new range of innovative lighting to reinvigorate the workplace; more detail on this will be included in the annual report later this year. Famostar is working hard to adopt SmartScan, our wireless lighting control system, into its product portfolio and TRT is set to launch two product innovations supported by Luxintec, the Group's lens specialist in Spain.

 

Despite the difficult trading conditions for the six months to 31 December 2018, I am pleased to announce an interim dividend of 1.43p (Interim 2018: 1.40p).

 

Looking forward, within the Group we remain concerned about the stability of the UK market; however, present trading conditions are more buoyant than we previously predicted, and stronger than the first half performance.  Whilst our improved order book gives us confidence that we will have a strong finish to the year, underlying operating profit is still expected to be below the record operating figures of the last financial year.

 

 

Mike Allcock

Chairman

 

21 March 2019

FW Thorpe Plc

 

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2018

 

 

 

 

 

 

31.12.18

(six months to)

31.12.17 

(six months to)

30.06.18 

(twelve months to)

 

 

 

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

£'000 

£'000 

£'000 

 

 

 

 

Revenue

52,669  

53,170  

109,614 

 

 

 

 

Operating Profit (before profit on disposal)

7,019  

7,829  

19,466 

 

 

 

 

Profit on disposal of property

1,917  

 

 

 

 

Operating Profit

8,936  

7,829  

19,466 

 

 

 

 

Finance income

416  

338  

819 

Finance costs

  (574) 

  (285) 

(718)   

 

 

 

 

Profit before tax expense

8,778  

7,882  

19,567 

 

 

 

 

Tax expense

  (1,652) 

  (1,598) 

(3,457)

 

 

 

 

Profit for the period

7,126  

6,284  

16,110 

 

 

 

 

 

 

 

Dividend rate per share:

 

 

 

     Interim

1.43p

1.40p

1.40p

     Final

4.00p

 

 

                                                                                                           

 

 

Earnings per share

- basic

6.14p

5.43p

13.91p

 

- diluted

6.10p

5.39p

13.81p

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2018

 

 

 

 

 

 

31.12.18    (six months to)

31.12.17    (six months to)

30.06.18 

(twelve months to)

 

 

 

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

£'000 

£'000 

£'000 

 

 

 

 

Profit for the period

7,126 

6,284 

16,110 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

Items that may be reclassified to profit or loss

 

 

 

 

 

 

 

Revaluation of available-for-sale financial assets

263

189

 

 

 

 

Exchange rate differences on translation of foreign operations

168

159

119

 

 

 

 

Taxation

(45)

(32)

 

 

 

 

 

168 

377 

276  

 

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

 

 

 

 

Revaluation of financial assets at fair value through other comprehensive income *

(529)

 

 

 

 

Actuarial loss on pension scheme

1,459

 

 

 

 

Movement on unrecognised pension surplus

(1,615)

 

 

 

 

Taxation

90

 

 

 

 

 

(439)

(156)

 

 

 

 

Other comprehensive income for the year, net of tax

(271)

377 

120

 

 

 

 

 

 

 

 

Total comprehensive income for the year

6,855 

6,661 

16,230

 

 

 

 

 

 

All comprehensive income is attributable to the owners of the company.

 

* The loss on the revaluation of financial assets at fair value through other comprehensive income of £529,000 is due to the decrease in market value of these investments.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2018

 

As at 

As at 

As at 

 

31.12.18 

31.12.17 

30.06.18 

 

 

 

 

 

(unaudited)

(unaudited)

(audited)

Assets

£'000 

£'000 

£'000 

Non-Current Assets

 

 

 

Property, plant and equipment

21,157 

19,666 

22,679 

Intangible assets

21,738 

22,873 

21,596 

Investment property

2,047 

2,133 

2,076 

Loans and receivables

4,101 

6,306 

6,139 

Equity accounted investments

936 

936 

936 

Financial assets at fair value through other comprehensive income

3,220 

Available-for-sale financial assets

3,893 

3,820 

Deferred tax assets

 

53,199 

55,816 

57,254 

Current assets

 

 

 

Inventories

22,018 

20,913 

21,489 

Trade and other receivables

22,117 

22,607 

23,416 

Other financial assets at fair value through profit or loss

389 

389 

389 

Short-term financial assets

16,837 

9,856 

15,290 

Cash and cash equivalents

36,111 

28,417 

28,668 

Total current assets

97,472 

82,182 

89,252 

 

 

 

 

 

 

 

 

Total Assets

150,671 

137,998 

146,506

 

 

 

 

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

(19,512)

(18,056)

(19,253)

Current tax liabilities

(2,499)

(2,015)

(1,853)

Total current liabilities

(22,011)

(20,071)

(21,106)

 

 

 

 

Net current assets

75,461 

62,111 

68,146 

 

 

 

 

Non-current liabilities

 

 

 

Other payables

(11,237)

(11,463)

(10,329)

Provisions for liabilities and charges

(2,195)

(1,619)

(2,164)

Deferred tax liabilities

(584)

(706)

(655)

Total non-current liabilities

(14,016)

(13,788)

(13,148)

Total liabilities

(36,027)

(33,859)

(34,254)

 

 

 

 

 

 

 

 

Net assets

114,644 

104,139 

112,252 

 

 

 

 

Equity attributable to owners of the company

 

 

 

Issued share capital

1,189 

1,189 

1,189 

Share premium account

1,266 

902 

1,017 

Capital redemption reserve

137 

137 

137 

Foreign currency translation reserve

2,550 

2,422 

Retained earnings

 

 

At 1 July

107,527

97,047

Profit for the year attributable to owners

7,126

6,284

Other changes in retained earnings

(5,151)

(3,842)

 

109,502 

99,489 

107,527 

 

 

 

 

Total equity

114,644 

104,139 

112,252 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2018

 

 

Share Capital

Share Premium

Capital Redemption Reserve

Foreign Currency Translation Reserve

Retained Earnings

Total Equity

 

£'000 

£'000 

£'000 

£'000 

£'000 

£'000 

Balance at 30 June 2017

1,189

656

137

2,263

97,047

101,292

Comprehensive income

 

 

 

 

 

 

Profit for six months to 31 December 2017

-

-

-

-

  6,284

6,284 

Other comprehensive income

-

-

-

159

218

377 

Total comprehensive income

-

-

-

159

6,502

6,661 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

Share options exercised

246

-

-

-

248 

Shares transferred from treasury

(2)

-

-

-

-

 (2)

Dividends paid to shareholders

-

-

-

-

(4,114)

(4,114)

Share-based payment charge

-

-

-

-

54 

54 

Total transactions with owners

-

246

-

-

(4,060)

(3,814)

 

 

 

 

 

 

 

Balance at 31 December 2017

1,189

902

137

2,422

99,489 

104,139 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

Profit for six months to 30 June 2018

-

-

-

-

9,826 

9,826

Actuarial loss on pension scheme

-

-

-

-

1,459

 1,459

Movement on unrecognised pension surplus

-

-

-

-

(1,615)

(1,615)

Revaluation of available-for-sale financial assets

-

-

-

-

(74)

(74)

Movement on associated deferred tax

-

-

-

-

13

 13

Exchange rate differences on translation of foreign operations

-

-

-

(40)

-

(40)

Total comprehensive income

-

-

-

(40)

9,609

9,569

Transactions with owners

 

 

 

 

 

 

Share issued from exercised options

-

115

-

-

-

115

Dividends paid to shareholders

-

-

-

-

(1,623)

(1,623)

Share-based payment charge

-

-

-

-

52 

52 

Total transactions with owners

-

115

-

-

(1,571)

(1,456)

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months to 31 December 2018

 

 

31.12.18 

(six months to)

31.12.17 

(six months  to)

30.06.18

(twelve months to)

 

 

 

 

 

(unaudited)

(unaudited)

(audited)

 

£'000 

£'000 

£'000 

Cash generated from operations

 

 

 

Profit before income tax

8,778 

7,882 

19,567      

Adjustments for

 

 

 

- Depreciation charge

1,299 

997 

2,195

- Amortisation of intangibles & investment property

1,203 

1,313 

2,400

- Profit on disposal of property, plant and  equipment

(2,150)

(45)

    (125)

- Finance expense/(income)

157

(53)

(101)

- Retirement benefit contributions in excess of current and past service charge

(80)

(53)

(156)

- Share-based payment expense

362 

166 

533

- Research and development expenditure credit

(144)

(123)

(237)

- Effects of exchange rate movements

(76) 

120 

163

Changes in working capital

 

 

 

- Inventories

(534)

2,623 

1,954

- Trade and other receivables

1,860 

(2,469)

(3,610)

- Payables and provisions

214 

(94)

1,415 

Cash generated from operations

10,889 

10,264 

23,998 

 

 

 

 

Tax paid

(1,329)

(1,351)

(3,291)

 

 

 

 

Cash flow from investing activities

 

 

 

Purchase of property, plant and equipment

(1,265)

(1,848)

(6,049)

Proceeds from sale of property, plant and equipment

3,796 

79 

197 

Purchase of intangibles

(1,145)

(939)

(1,967)

Purchase of subsidiary (net of cash acquired)

(5,922)

(6,313)

Disposal of investment property

                   67

Net sale of financial assets at fair value through other comprehensive income

71 

Property rental and similar income

10 

27 

190 

Dividend income

106 

94 

190 

Net (purchase)/sale of short-term financial assets

(1,547) 

7,125 

1,691

Interest received

180 

202 

388 

Net receipt/(issue) of loans notes

2,072 

(118)

(2,022) 

Net cash generated from/(used in) investing activities

2,278 

(1,300)

(13,628)

 

 

 

 

Cash flow from financing activities

 

 

 

Net proceeds from the issuance of ordinary shares

249 

248 

361 

Purchase of own shares

(117)

Proceeds from loans

2,337 

Dividends paid to company shareholders

(4,639)

(4,114)

(5,737)

Net cash used in financing activities

(4,507)

(3,866)

(3,039)

 

 

 

 

Effects of exchange rate changes on cash

112 

(8)

(50) 

 

 

 

 

Net increase in cash and cash equivalents

7,443 

3,739 

3,990 

 

 

 

 

Cash and cash equivalents at the beginning of the period

28,668 

24,678 

24,678 

Cash and cash equivalents at the end of the period

36,111 

28,417 

28,668 

      

 

Notes to the Interim Financial Statements

 

1.   Basis of Preparation

       The consolidated interim financial statements for the six months to 31 December 2018 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 2018 and the comparative period to 31 December 2017 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2018 have been extracted from the financial statements for the year to 30 June 2018, 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 2018 have been applied consistently throughout the Group during the period, except for the adoption of the new pronouncements IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from contracts with customers".

IFRS 9 "Financial Instruments" is effective for accounting periods beginning on or after 1 January 2018, and was adopted by the Group for the accounting period beginning 1 July 2018. The new standard 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 and there were no changes to net assets from changes in the measurement basis of financial assets.

 

·      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 is effective for accounting periods beginning on or after 1 January 2018, and was adopted by the Group for the accounting period beginning 1 July 2018. The standard 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 and a building in the Netherlands, subsequently the adoption of this standard is not expected to have a 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 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-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.

 

The profit on disposal relates to the profit generated by the sale of the property the company owned in Portsmouth, formerly occupied by Compact Lighting Limited.

 

 

 

Thorlux

Lightronics

Other

Inter-

Total

 

 

 

Companies

Segment

Continuing

 

 

 

 

Adjust-

Operations

 

 

 

 

ments

 

 

£'000 

£'000 

£'000 

£'000 

£'000 

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 

 

 

 

 

 

 

 

6 months to 31 December 2017

 

 

 

 

 

Revenue to external customers

32,298

10,210

10,662

53,170

Revenue to other Group companies

2,307

57

1,114

(3,478)

 

 

 

 

 

 

Total revenue

34,605

10,267

11,776

(3,478)

 53,170 

 

 

 

 

 

 

Operating Profit

5,948

1,102

782

(3)

7,829 

 

 

 

 

 

 

Finance income

 

 

 

 

338 

Finance expense

 

 

 

 

(285)

 

 

 

 

 

 

Profit before tax expense

 

 

 

 

7,882 

 

 

 

 

 

 

 

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 tax expense

 

 

 

 

19,567

 

 

 

 

 

 

 

 

3.   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 116,001,173 (Interim 2018: 115,750,590) 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 116,764,548 (Interim 2018: 116,502,118) during the period.

      

4.   Dividend

       The interim dividend is at the rate of 1.43p per share (Interim 2018: 1.40p), and based on 116,120,658 shares in issue at the announcement date the dividend will amount to £1,661,000 (Interim 2018: £1,623,000).  The interim dividend will be paid on 18 April 2019 to shareholders on the register at the close of business on 29 March 2019, and the shares become ex-dividend on 28 March 2019.

A final dividend for the year ended 30 June 2018 of 4.00p (2017: final of 3.55p) per share, amounting to £4,639,000 (2017: £4,114,000) was paid on 29 November 2018.

 

5.   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 29 March 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.
 
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Interim Results - RNS