Final Results
Thorpe(F.W.) PLC
21 September 2006
F W THORPE PLC
PRELIMINARY RESULTS
for the year ended 30 June 2006
FW Thorpe plc, designer and manufacturer of professional lighting equipment for
the specification market, is pleased to announce its preliminary results for the
year ended 30 June 2006.
Highlights:
* Turnover £44.2m (2005: £41.6m)
* Profit before exceptional items of £7.3m (2005: £5.8m) 26% increase
* Profit before tax of £7.4m (2005: £5.7m)
* Basic earnings per share 43.8p (2005: 35.8p) 22% increase
* Strong operating cash flow.
* Total interim and final dividend 12p (2005: 10p) 20% increase
* Special dividend 12p
* Pension scheme deficit reduced to £1.3m (2005: £3.3m)
* £1m investment in factory premises
On prospects, Andrew Thorpe, Chairman said:
'Our markets appear to be fairly stable at the present time .........each
company in the Group is pursuing ideas to carefully expand its product
offering......whilst particular companies pursue growth by serving new markets'
For further information, please contact:
Andrew Thorpe on: 01527 583200
FW Thorpe plc
CHAIRMAN'S STATEMENT
The financial year 2006 produced a turnover of £44.2M for the Group, an increase
of 6% compared to the previous year. Operating profit for the same period, after
accounting for exceptional costs at Sugg Lighting (note 3), rose from £5.3M in
2005 to £6.9M in 2006, a 29% increase. Investment income improved by 44%, due
to higher cash reserves, to bring a resultant profit before tax of £7.4M, a 30%
increase.
In general, trading throughout the year was more buoyant than had been expected
with all Group Companies turning in an improved performance over the previous
year and making further progress in their own individual market sectors. The
concern expressed in the half yearly report in regard to the retail sector was
not really realised as any down turns in this market area were patchy and not
generally felt.
There have been a number of new product introductions during the year from
various members of the Group; very important as such a high proportion of Group
sales emanates from relatively new designs. In lighting, nowadays it is not
always the fitting that is important, however, but with increasing frequency the
electronic control system behind it. Through work carried out during this
financial year, before it and after it your Company will soon introduce a
lighting system which if installed anywhere in the world can, via GPRS
technology, be monitored from anywhere else in the world. This system will
provide the possibility of an ongoing income stream from any such installation.
Investment during the year continued at a moderate level as regards plant and
machinery but some human and 'green' credentials emerged with the installation
of a roof air venting system at the Thorlux works as well as the installation of
cardboard and general waste compacting equipment. The largest investment took
place on the last day of the financial year in the outright purchase of a £1M+
factory for Philip Payne. This factory will replace their current leased
premises.
The Company, as was mentioned in the half yearly statement, transferred the
trading of its shares to the Alternative Investment Market of the London Stock
Exchange (AIM) on 6th January 2006 and we are pleased to report that after the
initial dip the share price has continued to make strong progress.
The results detailed at the start of this report lead your Board to recommend a
final dividend of 9p (2005: 7.5p) which, taken with the interim dividend,
already paid, makes a total dividend for the year of 12p (2005: 10p) being a 20%
increase compared to last year.
At this time it is the opinion of your Directors that cash reserves are more
than sufficient for the current needs of the business even after taking into
account possible requirements for organic and non-organic growth. Your Board
has, therefore, decided to propose a special cash distribution of 12p per share
to be paid in conjunction with the final dividend making a total dividend
payment of 21p per share to be paid on 16th November 2006 (note 4).
Thorlux
Thorlux enjoyed another good year boosting turnover by 6% and operating profit
by 17% compared to the previous year.
Incremental improvements in manufacturing performance have been made by the
increased utilisation of equipment, especially £1M + Salvagnini sheet metal
punching and bending line purchased some eighteen months ago. The wider range
of products developed by Thorlux in recent years has led to a higher level of
business during the previously quieter winter months and encouraged the Company
to maintain a higher trained work force during these months. Maintenance of
this higher level of staff has greatly assisted in the preparation for the
normally expected 'bulge' in output requirement during the summer months caused
by the Thorlux customer profile.
The concentration of effort on the export side also seems to be paying dividends
with Thorlux, for the first time in some years, increasing the amount of export
business as a percentage of total turnover from 6% in 2005 to 7% in 2006. In the
year to June 30th 2006, total export output was up 17%, European export output
was up 11% and our two people in Munich managed an output increase of 107%. In
regard to the German Operation, growth rather than profit is the motive
currently and Thorlux is actively trying to bolster the team by one full time
Sales Representative. The return to a Thorlux employed Sales Engineer in the
Republic of Ireland is bolstering sales and the Company is looking to employ its
own representative in one further mainland European market. Far East markets
continued to become more difficult and although Middle East sales increased,
this is probably as much to do with their being awash with petro-money as to the
market becoming easier for us.
Mackwell
Mackwell, the Group's manufacturer of emergency lighting control gear and
systems also had another successful year increasing turnover by 7% and profit by
13% compared to the previous financial year. It was mentioned last year that
Mackwell's product direction was re-focused and concentration during this period
has remained on suitably profitable medium volume production traditional
products whilst at the same time the company has been keeping abreast of
possible changes in the technology of emergency lighting in general. A growing
percentage of Mackwell's turnover is now products for LED (rather than
fluorescent) emergency lighting systems. During this financial year the company
also introduced new manufacturing equipment some of which has assisted Mackwell
in its meeting the European ROSH Directive requirements to become a ' lead free'
product supplier.
Compact Lighting
Compact Lighting being a manufacturer of retail space lighting started the year
with trepidation as to the impending fate of the retail sector. The downturn in
this area has been patchy and although some of Compact's customers curtailed
their shop refurbishment programmes others did not and further new customers
were found amongst those still investing. Compact Lighting finished the year
with creditable performance of an operating profit increase of 9% on reduced
turnover.
Philip Payne
Philip Payne the manufacturer of quality specialist exit signage and specialist
hospital signage returned to a year of buoyant trading unlike the somewhat
patchy previous year. Results recovered as if last year had not happened to
give a record year of turnover and operating profit up by 27% and 68%
respectively. The company currently occupies leased premises and so, to take
advantage of a break in the lease, the Group has been looking for suitable
premises to purchase in its stead. Payne's has a particularly 'green' work
force with numbers walking to work and it has been fortuitous that a suitable
building became available across the road from the current premises. The
building, as was mentioned earlier, was purchased on the last day of the
financial year and is currently being fitted out to suit Payne's requirements.
The company will move to the new premises in October 2006.
Sugg Lighting
Heritage lighting manufacturer and refurbisher Sugg Lighting improved turnover
in the year to June 30th 2006 by 21% and this performance coupled with a further
reduction in the work force and improved productive capacity allowed the company
to run at only a small operating loss during the period. Work continues
improving, still further, the performance at Sugg Lighting and meanwhile the
Group's considerations as to a more stable platform for Sugg's future are moving
to a conclusion.
People
Again, we owe a lot to our people who have been loyal and hard working
throughout the year. We have quite a number of nationalities on our work force
currently which made for quite an interesting time during the 2006 World Cup
football tournament!
May I take this opportunity to thank all F W Thorpe Plc employees of all
nationalities for their help and further diligence throughout the year.
The Future
Our markets appear to be fairly stable at the present time and although it seems
unlikely that higher Government spending will be forthcoming to fuel further
growth, the impending general reduction in fuel prices should assist. In the
main growth must, therefore, come from our own efforts to produce more products
that our customers want to buy and for us to be there to service those
customers. Each company in the Group is pursuing ideas to carefully expand its
product offering whilst particular companies in the business continue to pursue
growth by serving new markets in a more direct manner. We will continue to try
and offer more customers better, and more.
A B Thorpe
Chairman
21 September, 2006
CONSOLIDATED RESULTS (UNAUDITED)
GROUP PROFIT AND LOSS ACCOUNT
Year ended Year ended
30 June 06 30 June 05
Restated - Note 1
£'000 £'000
Turnover 44,204 41,572
______ ______
Operating Profit - before exceptional items 7,272 5,760
Exceptional items (Note 3) (395) (422)
______ ______
Operating Profit 6,877 5,338
Interest receivable and other income 543 378
______ ______
Profit on ordinary activities before taxation 7,420 5,716
Taxation on profit on ordinary activities (2,224) (1,479)
______ ______
Profit on ordinary activities after taxation 5,196 4,237
Dividends paid (1,247) (1,054)
______ ______
Retained profit for the year 3,949 3,183
______ ______
Earnings per share - basic 43.8p 35.8p
- diluted 43.5p 35.5p
Dividends paid - rate per share: 10.5p 8.9p
All of the above results were from continuing operations
CONSOLIDATED RESULTS (UNAUDITED)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended Year ended
30 June 06 30 June 05
Restated - Note 1
£'000 £'000
Profit for the financial year 5,196 4,063
Actuarial gain/(loss) on pension scheme 1,414 (1,991)
Movement on associated deferred tax asset (424) 597
______ ______
Total recognised gains and losses for the period 6,186 (1,394)
______ ______
Prior period adjustments
Pension scheme deficit (FRS 17) (3,296)
Pension scheme prepayment (FRS 17) (475)
Dividends proposed (FRS 21) 888
______
Total prior year adjustments (2,883)
______
Total gains and losses recognised since the last annual report 3,303
______
CONSOLIDATED RESULTS (UNAUDITED)
GROUP BALANCE SHEET
As at As at
30 June 06 30 June 05
Restated - Note 1
£'000 £'000
Fixed assets
Tangible assets 9,907 9,335
Investments 258 258
______ ______
10,165 9,593
Current assets
Stocks 7,005 7,267
Debtors 10,075 9,945
Investments 70 70
Cash at bank and in hand 11,848 8,414
______ ______
28,998 25,696
Creditors:
Amounts falling due within one year (6,851) (6,168)
______ ______
Net current assets 22,147 19,528
______ ______
Total assets less current liabilities 32,312 29,121
Provisions for liabilities and charges
Onerous lease obligation (471) (200)
Deferred taxation 412 (509)
______ ______
Net assets excluding pension liability 31,429 28,412
Pension liability (note 5) (1,329) (3,296)
______ ______
Net assets 30,100 25,116
______ ______
Capital and reserves
Called up share capital 1,188 1,184
Capital Redemption Reserve 135 135
Share premium account 586 545
Profit and loss account 28,191 23,252
______ ______
Equity shareholders' funds 30,100 25,116
______ ______
CONSOLIDATED RESULTS (UNAUDITED)
GROUP CASH FLOW STATEMENT
Year ended Year ended
30 June 06 30 June 05
Restated - Note 1
£'000 £'000
Net cash inflow from operating activities
Operating profit 6,877 5,338
Depreciation 1,216 1,148
Profit on sale of fixed assets (31) (31)
Pension Scheme excess contributions (1,450) (615)
Movements in working capital 522 (1,601)
______ ______
7,134 4,239
Returns on investments and servicing of finance
Interest and dividends received 597 440
Taxation - UK Corporation Tax paid (1,338) (1,758)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,828) (1,170)
Sale of tangible fixed assets 71 56
Sale of fixed asset investments - 28
______ ______
Net cash outflow for capital expenditure (1,757) (1,086)
and financial investments ______ ______
Equity dividends paid (1,247) (1,054)
______ ______
Cash inflow before financing 3,389 781
Financing - Issue of shares 45 79
______ ______
Increase in cash in the period 3,434 860
______ ______
Reconciliation of net cashflow to movement
in net funds
Increase in net cash 3,434 860
Net funds at the beginning of the period 8,484 7,624
______ ______
Net funds at the end of the period 11,918 8,484
______ ______
Notes
1. The Accounts for the year ended 30 June 2005 have been adjusted to
reflect the adoption of FRS 17 and FRS 21.
2. The earnings per share is calculated on profit on ordinary activities
after taxation and the weighted average number of ordinary shares in issue of
11,869,244 (2005: 11,825,715) during the period. For diluted earnings per share
the weighted average of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares. The adjusted weighted
average number of ordinary shares is calculated at 11,943,559 (2005:
11,943,559).
3. Due to the trading difficulties experienced at Sugg Lighting Ltd,
management has undertaken a review of the business. This has resulted in an
exceptional stock provision of £12,000 (2005: £195,000) and an impairment of
£383,000 (2005: 227,000), of which £271,000 (2005: £200,000) is treated as an
onerous lease provision and the remaining impairment of £112,000 (2005: £27,000)
relates to fixed assets.
4. A final dividend of 9p (2005: 7.5p) per share and a special dividend of
12p (2005: nil) per share are proposed and, if approved, will be paid together
on 16th November 2006.
2006 2005
£'000 £'000
Dividends proposed
Final dividend for 2006 of 9p per share (2005: 7.5p per share) 1,069 888
Special dividend for 2006 of 12p per share (2005: nil) 1,425 -
2,494 888
5. A lump sum contribution of £1,450,000 (2005: £500,000) was made to the
pension scheme during the year. This payment was in addition to the
contributions recommended by the scheme actuary.
6. The unaudited preliminary information above has been prepared on the
basis of the accounting policies set out in the annual financial statements for
the year ended 30 June 2005, with the exception of the adoption of FRS 17 and
FRS 21. The auditors have given an unqualified report on those statutory
accounts.
7. The above financial information does not constitute statutory accounts
within the meaning of Section 240(5) of the Companies Act 1985. The statutory
accounts have not been delivered to the Registrar of Companies, but will be
delivered in due course.
Dates:
AGM: 9 November 2006
Dividend payment date: 16 November 2006
Ex-dividend date: 11 October 2006
Record date: 13 October 2006
This information is provided by RNS
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