Final Results

Thorpe(F.W.) PLC 20 September 2007 PRELIMINARY RESULTS for the year ended 30 June 2007 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 2007. Highlights: * Turnover Â£46.5m (2006: Â£44.2m) 5% increase * Export sales Â£7.3m (2006: Â£6.1m) 19% increase * Operating profit before exceptional items of Â£8.1m (2006: Â£7.3m) 12% increase * Profit before tax of Â£9.1m (2006: Â£7.4m) 22% increase * Basic earnings per share 57.9p (2006: 43.8p) 32% increase * Strong operating cash flow * Total interim and final dividend 13.25p (2006: 12p) 10.4% increase * Pension scheme deficit eliminated at 30 June 2007 Andrew Thorpe, Chairman said: 'The strength of our market depends on others having money to spend on new health centres, office buildings, schools etc ......... we have the products and the enthusiasm ..' For further information, please contact: Andrew Thorpe on: 01527 583200 FW Thorpe Plc Ian Stanway on: 0121 236 7000 Brewin Dolphin (Nomad) CHAIRMAN'S STATEMENT Turnover for the year ended 30 June 2007 was Â£46.5m as compared to Â£44.2m for the corresponding period last year, an increase of 5%. Operating profit after exceptional items was Â£8.2m, this being a rise of 20% over last year's Â£6.9m. Interest receivable and other income also improved 53% to deliver a resultant profit before tax of Â£9.1m, being an increase of 22% compared to the year ended 30 June 2006. Trading throughout the year has been encouraging with all Group companies, bar Sugg Lighting Ltd, turning in improved performances. Performance drivers remain the development of good new innovative products and their availability for our Sales Force to sell, together with a desire to broaden the markets in which we can operate successfully. We have many and varied good lighting products and systems but need to establish a greater coverage of existing sales areas and develop more new territories to capitalise on the market potential of these products. If we are not there to sell them, customers cannot buy them! The two largest companies in the Group, Thorlux and Mackwell, generate relatively strong export sales and steps are being taken by both companies to widen their coverage. The smaller companies in the Group export little but have made progress in improving coverage within the UK. In general, our companies continue also to formulate, design, manufacture and market new products. Some new designs are updates of existing products, some are new products to capitalise on new lighting technologies such as LED (light emitting diode) light sources, and some are more 'euro style' product ranges not only to assist with our drive abroad but also to 'europeanise' our general product offering. More competition on our own UK market now originates from within greater Europe, and this competition has successfully been implanting European ideas on lighting into the UK market. Investment during the year has, as last year, been at a moderate level with Thorlux investing some Â£130k in powder paint plant improvements, Mackwell spending some Â£196k improving their manufacturing processes and Philip Payne fitting out their new factory purchased just at the end of the last financial year. Fitting out has also taken place of the small 60 square metre office block at the back of the Philip Payne factory which is currently being marketed as rentable office space. In last year's report I mentioned that our Group had moved to AIM in January 2006 and I would like to report that we are now firmly established on the AIM market. In view of the results detailed at the beginning of this report, your Board recommends a final dividend of 10p per share (2006: 9.0p) which when added to the interim dividend, already paid, makes a total dividend per share for the year of 13.25p (2006: 12p - total interim and final dividend, excluding the special dividend). This is an increase of 10.4% excluding the special dividend of 12p per share. Thorlux Lighting Thorlux, being the Group's largest company producing 'mainline' commercial and industrial lighting equipment and systems, progressed to another record turnover and profit, up 4% and 10% respectively on last year. Improved sales performances have been achieved at Thorlux in both home and export, of which the latter now represents 9% of total turnover up from 7% in the last financial year. Worldwide sales rose 34%, Republic of Ireland sales increased by 190% and Germany sales by 140%. Our German office has increased to a strength of three due to the addition of one full time Salesman and with the recent introduction of a full German language catalogue, our quest for greater market recognition and further sales in Germany continues. The wish to position another Thorlux employed Salesman in another European territory has not yet happened but the intention is crystallized and action is imminent. The new lighting system communicating via GPRS, and mentioned as an imminent product addition in last year's report, has been introduced as the Thorlux ' Scanlight AT' emergency lighting system. The system has, primarily, been designed to use LED light sources for emergency lighting in a system which can fulfill legal testing obligations by interrogation for operational functionality via GPRS from anywhere with communications access. That is, that if a worldwide organisation equipped all its facilities with Scanlight AT, the whole worldwide system could be interrogated from a laptop computer on a beach in Barbados with no requirement for costly local onsite inspection, testing, logging etc. This new product has taken to the market well and is virtually 'fit and forget' emergency lighting. Mackwell The Group's manufacturer of emergency lighting control gear and systems also provided a record year with turnover up 11% and profit up 43% compared to the previous year ending 30 June 2006. Current output is stretching fixed capacity despite the installation of some new additional plant and some more efficient replacement plant. Further investment may be required next year. Mackwell's home and export markets for traditional emergency lighting control gear remains strong although certain markets, as expected, are showing an increasing demand for LED emergency lighting products. Last year LED products accounted for 1% of Mackwell's total turnover compared to a figure of 7% of total turnover for this year. The company will continue to seek product opportunities using LED technology and in other market areas outside the normal limits of traditional emergency lighting control gear. Compact Lighting Compact Lighting , manufacturers of retail space lighting, also achieved a record year with sales up 19% on the previous year and profit up 66%. The market for retail lighting is, as I have explained previously, somewhat volatile and can change quicker than most other areas of lighting. If retail spending slows, store groups can quickly slow or stop investment in store refurbishments! This is a creditable performance and continues the general growth pattern of Compact's business. Philip Payne As mentioned in last year's report Philip Payne moved into its new Group owned premises in Thornhill Road, Solihull, across the road from its previous rented building. This move unfortunately coincided with five of the total of seventeen staff wishing to move on, and on this point I would like to express my thanks to the core team at Payne's for weathering this storm and emerging into the current comparatively blue skies. Such times tend to avert the eye from future planning, however, the return of stability has allowed Payne's to move forward again and with two new exciting products about to be launched and a 100% increase to two members of the external sales team, the possibilities for the coming year look encouraging. Sugg Lighting Sugg Lighting, our troubled heritage lighting manufacturer, has undergone another restructuring programme and now consists of eleven people, down from 33 people at 30 June 2006. The product range on offer has also been dramatically curtailed and the pricing structure optimised. Attributing an 'actually used' proportion of the existing factory to the Sugg management accounts and with the target sales output being met or exceeded, indications are that Sugg Lighting has been performing profitably for the first two months of the new financial year where a period of profitable stability would allow us to plan forward. People I would this time not only like to thank all our F W Thorpe Plc staff for their continued loyalty and diligence throughout the last year but also I would like to express my regret to those Sugg Lighting staff who the company has had to make redundant. I wish them fair weather. The Future The strength of our market depends on others having money to spend on new health centres, office buildings, schools etc and as long as money availability remains, then our potential market remains. Currently there appears to be a large black cloud somewhere in the vicinity called the 'Sub-prime mortgage market'. If this cloud goes overhead then things may get difficult but should it miss us then we have the products and the enthusiasm for another satisfactory year. A B Thorpe - Chairman 20 September, 2007 CONSOLIDATED RESULTS (UNAUDITED) GROUP PROFIT AND LOSS ACCOUNT Year ended Year ended 30 June 07 30 June 06 Â£'000 Â£'000 (audited) Turnover 46,508 44,204 ______ ______ Operating Profit - before exceptional items 8,130 7,272 Exceptional items (note 2) 91 (395) ______ ______ Operating Profit 8,221 6,877 Interest receivable and other income 833 543 ______ ______ Profit on ordinary activities before taxation 9,054 7,420 Taxation on profit on ordinary activities (2,168) (2,224) ______ ______ Profit on ordinary activities after taxation 6,886 5,196 ______ ______ Earnings per share (note 1)- basic 57.9p 43.8p - diluted 57.7p 43.5p 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 07 30 June 06 Â£'000 Â£'000 (audited) Profit for the financial year 6,886 5,196 Actuarial gain on pension scheme 446 1,414 Movement on associated deferred tax asset (202) (424) ______ ______ Total recognised gains and losses for the period 7,130 6,186 ______ ______ CONSOLIDATED RESULTS (UNAUDITED) GROUP BALANCE SHEET As at As at 30 June 07 30 June 06 Â£'000 Â£'000 Fixed assets (audited) Tangible assets 10,114 9,907 Investments 258 258 ______ ______ 10,372 10,165 Current assets Stock 8,562 7,005 Debtors 9,663 10,075 Investments 70 70 Cash at bank and in hand 12,581 11,848 ______ ______ 30,876 28,998 Creditors: Amounts falling due within one year (7,091) (6,851) ______ ______ Net current assets 23,785 22,147 ______ ______ Total assets less current liabilities 34,157 32,312 Provisions for liabilities and charges Onerous lease obligation (331) (471) Deferred taxation (92) (412) ______ ______ Net assets excluding pension surplus/(deficit) 33,734 31,429 Pension surplus/(deficit) (note 4) 634 (1,329) ______ ______ Net assets 34,368 30,100 ______ ______ Capital and reserves Called up share capital 1,190 1,188 Capital redemption reserve 135 135 Share premium account 607 586 Profit and loss reserve 32,436 28,191 ______ ______ Total shareholders' funds 34,368 30,100 ______ ______ CONSOLIDATED RESULTS (UNAUDITED) GROUP CASH FLOW STATEMENT Year ended Year ended 30 June 07 30 June 06 Â£'000 Â£'000 Net cash inflow from operating activities (audited) Operating profit 8,221 6,877 Depreciation 1,107 1,216 Profit on sale of fixed assets (62) (31) Pension Scheme contributions in excess of charge (2,249) (1,450) Movements in working capital (780) 522 ______ ______ 6,237 7,134 Returns on investments and servicing of finance Interest and dividends received 685 597 Taxation - UK Corporation Tax paid (2,075) (1,338) Capital expenditure and financial investment Purchase of tangible fixed assets (1,340) (1,828) Sale of tangible fixed assets 88 71 ______ ______ Net cash outflow for capital expenditure (1,252) (1,757) and financial investments ______ ______ Equity dividends paid (2,885) (1,247) ______ ______ Cash inflow before financing 710 3,389 Financing - Issue of shares 23 45 ______ ______ Increase in cash in the period 733 3,434 ______ ______ Reconciliation of net cash flow to movement in net funds Increase in net cash 733 3,434 Net funds at the beginning of the period 11,848 8,414 ______ ______ Net funds at the end of the period 12,581 11,848 ______ ______ Notes 1. Basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Company and held as treasury shares. Diluted earnings per share are calculated by adjusting the weighted average of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares; share options. Earnings per share are computed as follows: 2007 2006 Weighted average number of ordinary shares 11,892,834 11,869,244 Basic earnings per share 57.9p 43.8p Adjusted weighted average number of ordinary shares 11,926,194 11,943,559 Diluted earnings per share 57.7p 43.5p 2. Due to the trading difficulties experienced at Sugg Lighting Ltd, management has continued to review the business, and this has resulted in exceptional items as follows: 2007 2006 Â£'000 Â£'000 Onerous lease provision 140 (271) Stock provision (5) (12) Fixed asset impairment (6) (112) Redundancy costs (38) - ___________ ___________ Total 91 (395) 3. Dividends paid during the year are outlined in the table below: A final dividend of 10p (2006: final of 9p and special of 12p) per share is proposed and, if approved, will be paid on 22nd November 2007. 2007 2006 Dividends paid (per share) Final dividend 2006 9.00p 7.50p Special dividend 2006 12.00p - Interim dividend 2007 3.25p 3.00p ________ ________ Total 24.25p 10.50p ________ ________ Dividends proposed (per share) Final dividend 2007 10.00p 9.00p 2007 2006 Â£'000 Â£'000 Dividends paid Final dividend 2006 1,069 891 Special dividend 2006 1,425 - Interim dividend 2007 391 356 _______ _______ Total 2,885 1,247 _______ _______ Dividends proposed Final dividend (2006: final and special dividend) 1,190 2,494 4. A lump sum contribution of Â£2,000,000 (2006: Â£1,450,000) was made to the pension scheme during the year. This payment was in addition to the contributions recommended by the scheme actuary. 5. The effective tax rate is 23.9% due to taxable deductions primarily in relation to industrial buildings allowance, research and development and the reduction in the standard rate of taxation resulting from reduced deferred taxation liabilities. 6. The movement on share capital and reserves during the year is as follows: Share capital at 1 July 2006 1,188 Shares issued 2 ______ Share capital at 30 June 2007 1,190 ______ Share Capital Profit and Premium Redemption Loss reserve Account Reserve Â£'000 Â£'000 Â£'000 At 1 July 2006 586 135 28,191 Shares issued 21 - - Net actuarial gain on pension scheme - - 244 Profit for the year after taxation - - 6,886 Dividends paid - - (2,885) _________________________________________ At 30 June 2007 607 135 32,436 _________________________________________ 7. 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 2006 8. F W Thorpe Plc's accounts for the preliminary results for the year ended 30 June 2007 are unaudited. The financial information set out in the announcement does not constitute the Company's statutory accounts for the years ended 30 June 2007 or 30 June 2006. The financial information for the year ended 30 June 2006 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement either Section 237 (2) or Section (3) of the Companies Act 1985. The statutory accounts for the year ended 30 June 2007 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General meeting. Dates: AGM: 15 November 2007 Dividend payment date: 22 November 2007 Ex-dividend date: 10 October 2007 Record date: 12 October 2007 This information is provided by RNS The company news service from the London Stock Exchange

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