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Thorpe(F.W.) PLC   -  TFW   

Final Results

Released 07:00 19-Sep-2019

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

£110.6m

£109.6m

0.9% increase

 

Operating profit (before profit on disposal of property)

£17.6m

£19.5m

9.3% decrease

 

Operating profit

£19.6m

£19.5m

0.5% increase

 

Profit before tax

£19.6m

£19.6m

-

 

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 £1.9m following the sale of the Thorlux Portsmouth property

·      Strong net cash generated from operating activities - £21.6m (2018: £20.7m), 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 £110.6m, an increase of 0.9%, but underlying operating profit was down by 9.3% to £17.6m. 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 £4.8m, realising a £1.9m gain on disposal. Revenue generated outside the UK was £42m, 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 (£0.8m, 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 (£1.6m); the Group acquired the present factory and offices for Famostar (£2.3m), after the year end, from the leaseholder, together with a significant amount of adjoining land, in anticipation of future expansion (£0.3m); the extension and renovation of the Lightronics building was completed (£1.0m); and the Group invested in the sheet metal factory at Thorlux Lighting, with new state of the art metal-piercing machines (£1.6m). 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

 

Notes

2019

£'000

2018
£'000

 

 

 

Revenue

2

110,643

109,614 

Cost of sales

 

     (60,264)

     (58,305)

 

50,379

51,309

Distribution costs

 

(13,182)

(11,823)

Administrative expenses

 

(19,840)

(20,261)

Other operating income

 

292

241

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).

Basic and diluted earnings per share

 

Notes

2019

Pence


2018
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

£'000


2018
£'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

 

Notes

2019

£'000

2018
£'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

 

Notes

Share
capital
£'000

Share
premium
account
£'000

Capital
redemption
reserve
£'000

Foreign currency translation reserve £'000

Retained
earnings
£'000

Total
equity
£'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

 

Notes

2019

£'000

2018
£'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.

 

Thorlux
£'000

Lightronics

£'000

Other
companies
£'000

Inter-
segment
adjustments
£'000

Total
continuing
operations
£'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

£'000

2018

£'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

£'000

 

2018

£'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

£'000

 

2018

£'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 £4,763,000 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

 

Dividends paid

2019

£'000

2018

£'000

Final dividend

4,638

4,114

Interim dividend

1,661

1,623

Total

6,299

5,737

 

Dividends proposed

2019

£'000

2018

£'000

Final dividend

4,763

4,639

 

5 Property, plant and equipment

 

Group

 

Freehold land

and buildings

£'000

Plant and
equipment
£'000

Total
£'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 land

and buildings

£'000

Plant and
equipment
£'000

Total
£'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

Group 2019

Goodwill

£'000

Development
costs
£'000

Technology
£'000

Brand name
£'000

Software
£'000

Patents
£'000

Fishing rights
£'000

Total
£'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.

 

Group 2018

Goodwill

£'000

Development
costs
£'000

Technology
£'000

Brand name
£'000

Software
£'000

Patents
£'000

Fishing rights
£'000

Total
£'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
£'000

2018
£'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 (£'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 (£'000)

16,140

16,110

Diluted earnings per share (pence per share) total

13.83

13.81

 

 

 

 

 

 

9 Cash generated from operations

 

 

Group

Cash generated from continuing operations

 

2019
£'000

 

2018
£'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.

 


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