Half Yearly Report

RNS Number : 8376H

Thorpe(F.W.) PLC

19 March 2015

 



F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2014

Key highlights (continuing operations):

	Interim 2015	Interim 2014
Revenue	£32.6m	£29.6m	10% increase
Operating profit	£5.5m	£5.1m	8%  increase
Profit before tax	£5.8m	£5.4m	7%  increase
Basic earnings per share	3.92p	3.59p	9%  increase

Growth in LED product sales continues, now 58% of revenue

Sugg Lighting disposal effective 6 February 2015

TRT Lighting profitable year to date

Continued investment in manufacturing facilities

Interim dividend increased to 1.10p (Interim 2014: 1.05p) - 5% increase

For further information please contact:                                                                            

F W Thorpe Plc
Andrew Thorpe - Chairman and Joint Chief Executive	01527 583200
Craig Muncaster - Financial Director	01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley	0113 388 4789

CHAIRMAN'S INTERIM STATEMENT

The half year to 31 December 2014 produced revenues up 10% with an increase in operating profit of 8% from continuing operations resulting, after taking into account investment income and taxation, in an increase of earnings per share of 9%.

These figures reflect your company's success in achieving a continued upward trajectory in its activities with most subsidiaries performing well and building further on the strengthened foundations put in place in recent years in regards to sales penetration capacity and the upgrading of product ranges.

Forward momentum has, however, continued to prove difficult at one subsidiary, its products being "retro" in nature and at odds with the company's forward-looking philosophy.  I must, therefore, report that Sugg Lighting was sold for a nominal consideration on 6 February 2015 and is no longer part of your group.  Sugg Lighting has been purchased by a company specialising in traditional English heritage brands.

This sale should hold advantage for Sugg Lighting and allow your own company's directors to devote more time to future projects.

LED products now represent around 58% of group revenues but Thorlux Lighting, in particular, still suffers from the parallel demand for substantial quantities of "old technology" products.  Measured and careful steps are being taken to withdraw these older products where possible without disruption to customer sentiment or causing stock obsolescence.

Investment has continued on funding growth rather than start-up costs at street and road tunnel lighting company TRT Lighting, the completion of the now occupied new factory for Solite Europe, costing £1.4m, and the installation of the second new LED circuit board line at Thorlux.  This latter investment increases board assembly capacity by 100%, notwithstanding the ability to make larger more cost effective units.

On a more sombre note it is with regret that I must, at this time, report the death of ex-Chairman, Mr Ernest Thorpe, aged 97.  "EGT" as he was known was a co-founder of F W Thorpe Plc and devoted in excess of 55 years' service broken only by such necessary requirements as his participation in the Second World War.  We hope his light shines on elsewhere.

Group performance outlined at the beginning of this report allows your company to pay a dividend for the half year to 31 December 2014 of 1.10p per share (Interim 2014: 1.05p), an increase of 5%.

Andrew Thorpe

Chairman

19 March 2015

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2014

	Six months to	Six months to	Twelve months to
Continuing Operations	31.12.14	31.12.13	30.06.14
	(unaudited)	(restated unaudited)	(restated unaudited)
	£'000	£'000	£'000
Revenue	32,629	29,584	61,352
Operating Profit	5,510	5,096	11,752
Finance income	315	322	763
Share of (loss)/profit of joint venture	(4)	-	37
Profit before tax expense	5,821	5,418	12,552
Tax expense	(1,283)	(1,216)	(2,233)
Profit for the period from continuing operations	4,538	4,202	10,319
Loss for the period from discontinued operations	(104)	(4)	(130)
Loss on disposal of subsidiary	(120)	-	-
Profit for the period	4,314	4,198	10,189

Dividend rate per share:
Interim	1.10p	1.05p	1.05p
Final	-	-	2.20p
Special	-	-	1.50p

Earnings per share	- basic	3.92p	3.59p	8.72p
(continuing operations)	- diluted	3.90p	3.59p	8.72p

Earnings per share	- basic	3.73p	3.59p	8.72p
	- diluted	3.71p	3.59p	8.72p

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2014

	Six months to	Six months to	Twelve months to
	31.12.14	31.12.13	30.06.14
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit for the year	4,314	4,198	10,189
Other comprehensive income
Items that may be reclassified to profit or loss
- Arising in period	(46)	201	276
- Reclassified in period	-	-	-
Exchange rate movement on investment in joint venture
- Arising in period	(3)	(2)	(2)
- Reclassified in period	-	-	-
Taxation	9	-	72
	(40)	199	346
Items that will not be reclassified to profit or loss
Actuarial gain on pension scheme	-	-	624
Movement on unrecognised pension surplus	-	-	(1,216)
	-	-	(592)
Other comprehensive income for the year, net of tax	(40)	199	(246)
Total comprehensive income for the year	4,274	4,397	9,943

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

CONSOLIDATED BALANCE SHEET

as at 31 December 2014

	As at	As at	As at
	31.12.14	31.12.13	30.06.14
	(unaudited)	(unaudited)	(audited)
Assets	£'000	£'000	£'000
Non-Current Assets
Property, plant and equipment	13,190	12,495	13,088
Intangible assets	6,678	6,550	6,722
Investment property	2,135	2,102	2,135
Loans and receivables	1,340	1,278	1,340
Investment in joint venture	50	20	57
Available for sale financial assets	3,124	2,917	3,441
Deferred tax assets	26	-	36
	26,543	25,362	26,819
Current assets
Inventories	13,794	12,307	14,404
Trade and other receivables	13,513	11,037	14,882
Other financial assets at fair value through profit or loss	388	388	388
Short term financial assets - deposits	14,605	20,265	15,638
Cash and cash equivalents	19,341	14,443	17,911
Total current assets (excluding non-current assets and disposal groups held for sale)	61,641	58,440	63,223
Non-current assets and disposal groups held for sale	1,772	-	-
	63,413	58,440	63,223
Total Assets	89,956	83,802	90,042
Liabilities
Current liabilities
Trade and other payables	(9,258)	(7,164)	(11,012)
Current tax liabilities	(1,717)	(991)	(718)
Total current liabilities (excluding liabilities associated with non-current assets and disposal groups held for sale)	(10,975)	(8,155)	(11,730)
Liabilities associated with non-current assets and disposal groups held for sale	(553)	-	-
	(11,528)	(8,155)	(11,730)
Net current assets	51,885	50,285	51,493
Non-current liabilities
Provisions for liabilities and charges	(222)	(102)	(102)
Deferred tax liabilities	(911)	(948)	(923)
Total liabilities	(12,661)	(9,205)	(12,755)
Net assets	77,295	74,597	77,287
Equity attributable to owners of the company
Issued share capital	1,189	1,189	1,189
Share premium account	656	656	656
Capital redemption reserve	137	137	137
Retained earnings	75,313	72,615	75,305
Total equity	77,295	74,597	77,287

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2014

	Share	Share	Capital	Retained	Total
	Capital	Premium	Redemption	Earnings	Equity
			Reserve
	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2013	1,189	656	137	70,558	72,540
Comprehensive income
Profit for six months to 31 December 2013	-	-	-	4,198	4,198
Other comprehensive income	-	-	-	199	199
Total comprehensive income	-	-	-	4,397	4,397
Transactions with owners
Dividends paid to shareholders	-	-	-	(2,340)	(2,340)
Total transactions with owners	-	-	-	(2,340)	(2,340)
Balance at 31 December 2013	1,189	656	137	72,615	74,597
Comprehensive income
Profit for six months to 30 June 2014	-	-	-	5,991	5,991
Actuarial gain on pension scheme	-	-	-	624	624
Movement on unrecognised pension surplus	-	-	-	(1,216)	(1,216)
Revaluation of available-for-sale financial assets	-	-	-	75	75
Movement on associated deferred tax	-	-	-	(47)	(47)
Impact of deferred tax rate change	-	-	-	119	119
Exchange rate movement on joint venture	-	-	-	-	-
Total comprehensive income	-	-	-	5,546	5,546
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,228)	(1,228)
Purchase of shares	-	-	-	(1,628)	(1,628)
Total transactions with owners	-	-	-	(2,856)	(2,856)
Balance at 30 June 2014	1,189	656	137	75,305	77,287
Comprehensive income
Profit for six months to 31 December 2014	-	-	-	4,314	4,314
Other comprehensive income	-	-	-	(40)	(40)
Total comprehensive income	-	-	-	4,274	4,274
Share-based payment expense	-	-	-	14	14
Transactions with owners
Dividends paid to shareholders	-	-	-	(4,280)	(4,280)
Total transactions with owners	-	-	-	(4,280)	(4,280)
Balance at 31 December 2014	1,189	656	137	75,313	77,295

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2014

	Six months to	Six months to	Twelve months to
	31.12.14	31.12.13	30.06.14
	(unaudited)	(restated unaudited)	(restated unaudited)
	£'000	£'000	£'000
Cash generated from operations
Profit before income tax	5,821	5,418	12,552
Adjustments for
- Depreciation charge	709	593	1,255
- Amortisation of intangibles	651	660	1,439
- Profit on disposal of property, plant and  equipment	(16)	(23)	(70)
- Share-based payment expense	14	-	-
- Finance income	(315)	(322)	(763)
- Retirement benefit contributions in excess of current and past service charge	(77)	(170)	(403)
- Share of(profit)/ loss from joint venture	4	2	(37)
Changes in working capital
- Inventories	406	(328)	(2,481)
- Trade and other receivables	1,107	1,131	(2,640)
- Trade and other payables	(1,422)	(1,814)	1,881
Discontinued operations	7	15	29
Cash generated from operations	6,889	5,162	10,762
Tax paid	(184)	(784)	(2,009)
Cash flow from investing activities
Purchase of property, plant and equipment	(1,976)	(822)	(2,087)
Proceeds of sale of property, plant and equipment	63	46	153
Purchase of intangibles - development costs and software	(623)	(540)	(1,473)
Purchase of subsidiary net of cash acquired	-	-	(390)
Purchase of investment property	-	-	(33)
Sale/(Purchase) of available for sale financial assets	271	(201)	(707)
Property rental and similar income	78	133	157
Dividend income	69	63	169
Net sale/(purchase) of deposits	1,033	(117)	4,510
Interest received	90	153	365
Receipt of loans notes	-	450	450
Net cash (used in)/generated from investing activities	(995)	(835)	1,114
Cash flow from financing activities
Dividends paid to company shareholders	(4,280)	(2,340)	(3,568)
Purchase of own shares	-	-	(1,628)
Net cash used in financing activities	(4,280)	(2,340)	(5,196)
Net increase in cash and cash equivalents	1,430	1,203	4,671
Cash and cash equivalents at the beginning of the period	17,911	13,240	13,240
Cash and cash equivalents at the end of the period	19,341	14,443	17,911

       Notes to the Interim Financial Statements

1.   Basis of Preparation

       The consolidated interim financial statements for the six months to 31 December 2014 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board and the AIM Rules for Companies. 

       The figures for the period to 31 December 2014 and the comparative period to 31 December 2013 have not been audited or reviewed and are therefore disclosed as unaudited.  The figures for 30 June 2014 have been extracted from the financial statements for the year to 30 June 2014, 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. 

Prior period figures on the Income Statement and Cash Flow Statement have been restated to disclose the results of Sugg Lighting Limited as discontinued operations.

       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 2014 have been applied consistently throughout the group during the period.

2.   Segmental analysis

       The segmental analysis is presented on the same basis as that used for internal reporting purposes.  For internal reporting F W Thorpe is organised into seven continuing operating segments, and one discontinued operation, 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 market.  The six remaining continuing operating segments have been aggregated into the 'other companies' segment based on their size and comprise Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited and Thorlux LLC.

       Sugg Lighting Limited is a discontinued operation, and its results are not included in the segmental analysis.

       F W 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.

       2.     Segmental analysis (continued)

	Thorlux	Other	Inter-	Total
		Companies	Segment	Continuing
			Adjust-	Operations
			ments
	£'000	£'000	£'000	£'000
6 months to 31 December 2014
Revenue to external customers	26,601	6,028	-	32,629
Revenue to other group companies	572	831	(1,403)	-
Total revenue	27,173	6,859	(1,403)	32,629
Operating Profit	5,105	283	122	5,510
Net finance income				315
Share of loss in joint venture				(4)
Profit before tax expense				5,821
6 months to 31 December 2013
Revenue to external customers	24,637	4,947	-	29,584
Revenue to other group companies	296	451	(747)	-
Total revenue	24,933	5,398	(747)	29,584
Operating Profit	4,846	153	97	5,096
Net finance income				322
Share of profit in joint venture				-
Profit before tax expense				5,418
Year to 30 June 2014
Revenue to external customers	49,657	11,695	-	61,352
Revenue to other group companies	650	1,146	(1,796)	-
Total revenue	50,307	12,841	(1,796)	61,352
Operating Profit	10,593	961	198	11,752
Net finance income				763
Share of profit in joint venture				37
Profit before tax expense				12,552

       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 adjustments to investment provisions relating to group companies.

3.  Discontinued operations

       At the balance sheet date, the group had entered substantive discussions and was committed to a plan to dispose of its' subsidiary Sugg Lighting Limited. The disposal was concluded on 6 February 2015.

       The results of Sugg Lighting Limited for the current and prior periods are disclosed as discontinued operations.

A loss on disposal of subsidiary of £120,000 has been provided, representing the excess of net assets disposed over consideration receivable. The assets disposed of include the freehold of the premises occupied by Sugg Lighting Limited.

4.  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 115,675,590 (Interim 2014: 116,975,590) 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 116,313,090 (Interim 2014: 116,975,590) during the period.

5.  Dividend

       The interim dividend is at the rate of 1.10p per share (Interim 2014: 1.05p), and based on 115,675,590 shares in issue at the announcement date the dividend will amount to £1,272,000 (Interim 2014: £1,228,000).  The interim dividend will be paid on 2 April 2015 to shareholders on the register at the close of business on 27 March 2015, and the shares become ex-dividend on 26 March 2015.

       A final dividend for the year ended 30 June 2014 of 2.20p (2013: final of 2.00p) per share, amounting to £2,545,000 (2013: £2,340,000), and a special dividend of 1.50p per share (2013: nil) amounting to £1,735,000 (2013: nil) was paid on 20 November 2014.

6.  Share-based payment expense

       During the period, the company introduced an Executive Share Ownership Plan ('ESOP'), under which 1.7 million share options were granted on 24 October 2014 at an exercise price of 124p per share each.

Under IFRS2 an expense is recognised in the Income Statement, calculated on the fair value at the date of grant. The application of IFRS2 gave rise to a charge of £14,000 (2013: nil) for the period ended 31 December 2014, using a Black Scholes valuation model.

7.  Availability of interim statement

       Copies of this 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 7 April 2015.

 

END

 

 

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