Half Yearly Report

RNS Number : 3674Z

Thorpe(F.W.) PLC

15 March 2012

 



F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2011

KEY POINTS:

·      Revenue increased by 12.1% to £29.9m (2010: £26.7m)  

·      Operating profits up by 18.9% to £5.4m (2010: £4.5m) 

·      Profit before exceptional item up by 21.2% to £5.7m (2010: £4.7m) 

·      Interim dividend up by 11.6% to 4.8p (2010: 4.3p)

·      Basic earnings per share before exceptional item 36.6p (2010: 30.9p) up 18.4%  

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 Brewin - Nominated Adviser
Nick Tulloch	0131 529 0356

CHAIRMAN'S INTERIM STATEMENT

Your Chairman is pleased to report that, in the half year to December 2011, revenue for your company increased to £29.9m, an increase of 12% compared to the first half of last financial year which stood at £26.7m.  Profitability also increased from £4.5m for the first half of the financial year 2010/11 to £5.4m this time, an increase of 19%.  This represents a 10% increase when compared to the interim results of 2010/2011 prior to restatement.  Investment income improved by £0.1m, due to a higher cash balance and a modest change in investment style.

The above performance allows your company to pay an interim dividend of 4.8p per share to shareholders on the register on 13 April 2012, this being an increase of 12% on last financial year's interim.

Despite hard trading conditions the driver of energy saving remains to be of great benefit in most areas of the business.  Government backed finance schemes for energy saving projects such as the Salix scheme is of great benefit not only to us as energy saving product providers but also to those wishing to save energy and reduce their CO₂ emissions.

The growing pace of LED light source development has required a torrent of product development within the lighting industry and I am pleased to say that your company is well technically capable in this new technology with regular introductions of LED modified and brand new LED designs.

Investment in the business continues with, amongst other things, the purchase of a 12,000 square foot factory unit on a 999 year lease to house a new venture, being TRT Lighting which will concentrate on the design and manufacture of outdoor LED lighting solutions.

Export remains a key factor in our endeavours with orders showing a 19% increase at this stage compared to last year.  This forward motion has been maintained despite some slackening in mainland Europe.

The last six months has seen F W Thorpe Plc return to a pure lighting fittings and systems company with the sale of Mackwell Electronics Ltd being completed and, at this time, the Board would like to wish Mackwell every success in the future.

Without repeating sentiments about the difficulty-to-forecast future your company will continue to offer its customers honest advice, industry leading products, and the service they deserve.

Andrew Thorpe

Chairman

15 March 2012

F W Thorpe Plc

Merse Road

North Moons Moat

Redditch

Worcs.

B98 9HH

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2011

	Half year to	Half year to	Full year to
Continuing Operations	31.12.11	31.12.10	30.6.11
		(restated)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Revenue	29,924	26,695	52,833
Operating Profit	5,388	4,532	11,252
Finance income	278	162	372
Share of loss of joint venture	-	(20)	(11)
Profit before exceptional item	5,666	4,674	11,613
Exceptional item
Profit on disposal of subsidiary	1,377	-	-
Profit before income taxation	7,043	4,674	11,613
Income taxation	(1,379)	(1,300)	(3,201)
Profit for the period from continuing operations	5,664	3,374	8,412
Profit for the period from discontinued operations	-	248	999
Profit for the period	5,664	3,622	9,411

Dividend rate per share:
Interim	4.8p	4.3p	4.3p
Final	-	-	13.3p

Earnings per share for profit attributable to the equity holders of the company during the period

Earnings per share (before exceptional item)	- basic	36.6p	30.9p	80.3p
Earnings per share (before exceptional item)	- diluted	36.6p	30.9p	80.3p
Earnings per share (after exceptional item)	- basic	48.3p	30.9p	80.3p
Earnings per share (after exceptional item)	- diluted	48.3p	30.9p	80.3p

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2011

	Half year to	Half year to	Full year to
	31.12.11	31.12.10	30.6.11
		(restated)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit for the period	5,664	3,622	9,411
Actuarial gain on pension scheme	-	-	1,054
Movement on associated deferred tax asset relating to the pension scheme	-	-	(274)
Restriction of pension scheme surplus	-	-	(483)
Deferred tax not recognised relating to the restriction of the pension scheme surplus	-	-	126
Revaluation of available for sale assets	(5)	16	37
Movement on associated deferred tax	-	(3)	(10)
Impact of deferred tax rate change	-	-	(24)
Exchange rate movement on investment in joint venture	-	(11)	(9)
Other comprehensive income for the period net of tax	(5)	2	417
Total comprehensive income for the period	5,659	3,624	9,828

CONSOLIDATED BALANCE SHEET

as at 31 December 2011

	As at	As at	As at
	31.12.11	31.12.10	30.6.11
	(unaudited)	(unaudited)	(audited)
Assets	£'000	£'000	£'000
Non-Current Assets
Property, plant and equipment	11,878	11,280	11,109
Intangible assets	5,172	2,716	2,533
Investment property	1,037	1,011	1,037
Investment in joint venture	135	125	136
Available for sale financial assets	1,300	94	1,105
Non-current receivables	1,828	-	-
Deferred tax assets	27	620	27
	21,377	15,846	15,947
Current assets
Inventories	10,275	12,606	11,297
Trade and other receivables	10,244	10,588	11,377
Other financial assets at fair value through profit or loss	387	386	387
Short term financial assets - deposits	13,971	16,146	11,616
Cash and cash equivalents	16,066	8,001	14,236
Total current assets (excluding non-current assets and disposal groups held for sale)	50,943	47,727	48,913
Non-current assets and disposal groups held for sale	-	-	5,823
	50,943	47,727	54,736
Total Assets	72,320	63,573	70,683
Liabilities
Current liabilities
Trade and other payables	(7,461)	(7,384)	(8,199)
Current tax liabilities	(1,409)	(1,641)	(1,564)
Total current liabilities (excluding liabilities directly associated with non-current assets and disposal groups for sale)	(8,870)	(9,025)	(9,763)
Liabilities directly associated with non-current assets and disposal groups held for sale	-	-	(1,634)
		(9,025)	(11,397)
Net current assets	42,073	38,702	43,339
Non-current liabilities
Retirement benefit deficit	-	(960)	-
Provisions for liabilities and charges	(102)	(102)	(102)
Deferred tax liabilities	(763)	(701)	(699)
Total liabilities	(9,735)	(10,788)	(12,198)
Net assets	62,585	52,785	58,485
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	60,603	50,803	56,503
Total equity	62,585	52,785	58,485

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2011

	Share	Share	Capital	Retained	Total
	Capital	Premium	Redemption	Earnings	Equity
			Reserve
	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2010	1,189	656	137	48,656	50,638
Comprehensive income
Profit for six months to 31 December 2010	-	-	-	3,622	3,622
Revaluation of available for sale assets	-	-	-	16	16
Movement on associated deferred tax	-	-	-	(3)	(3)
Exchange rate movement on joint venture	-	-	-	(11)	(11)
Other comprehensive income	-	-	-	2	2
Total comprehensive income	-	-	-	3,624	3,624
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,477)	(1,477)
Total transactions with owners	-	-	-	(1,477)	(1,477)
Balance at 31 December 2010	1,189	656	137	50,803	52,785
Comprehensive income
Profit for six months to 30 June 2011	-	-	-	5,789	5,789
Other comprehensive income
Actuarial gain on pension scheme	-	-	-	1,054	1,054
Movement on associated deferred tax asset relating to the pension scheme	-	-	-	(274)	(274)
Restriction of pension scheme surplus	-	-	-	(483)	(483)
Movement on associated deferred tax	-	-	-	126	126
Revaluation of available for sale assets	-	-	-	21	21
Movement on associated deferred tax	-	-	-	(7)	(7)
Impact of deferred tax rate change	-	-	-	(24)	(24)
Exchange rate movement on joint venture	-	-	-	2	2
Other comprehensive income	-	-	-	415	415
Total comprehensive income	-	-	-	6,204	6,204
Transactions with owners
Dividends paid to shareholders	-	-	-	(504)	(504)
Total transactions with owners	-	-	-	(504)	(504)
Balance at 30 June 2011	1,189	656	137	56,503	58,485
Comprehensive income
Profit for six months to 31 December 2011	-	-	-	5,664	5,664
Other comprehensive income
Revaluation of available for sale assets	-	-	-	(5)	(5)
Other comprehensive income	-	-	-	(5)	(5)
Total comprehensive income	-	-	-	5,659	5,659
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,559)	(1,559)
Total transactions with owners	-	-	-	(1,559)	(1,559)
Balance at 31 December 2011	1,189	656	137	60,603	62,585

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2011

	Half year to	Half year to	Full year to
	31.12.11	31.12.10	30.6.11
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash generated from operations
Profit before income tax	7,043	4,674	11,613
Adjustments for
- Depreciation charge	514	414	913
- Amortisation of intangibles	405	347	733
- Profit on disposal of property, plant and  equipment	(27)	(32)	(42)
- Finance income - net	(278)	(111)	(372)
- Retirement benefit contributions in excess of current and past service charge	(348)	(328)	(776)
- Share of loss from joint venture	-	20	11
Changes in working capital
- Inventories	1,173	(507)	(2,843)
- Trade and other receivables	1,562	(155)	(2,424)
- Trade and other payables	(2,054)	(635)	2,292
Profit on disposal of subsidiary	(1,377)	-	-
Discontinued operations	-	8	756
Cash generated from operations	6,613	3,695	9,861
Tax paid	(1,637)	(1,396)	(2,901)
Cash flow from investing activities
Purchase of property, plant and equipment	(524)	(1,179)	(2,209)
Proceeds of sale of property, plant and equipment	46	49	112
Purchase of intangibles - development costs and software	(484)	(498)	(1,116)
Purchase of subsidiary net of cash acquired	(2,530)	-	-
Purchase of available for sale financial assets	(198)	-	(990)
Purchase of investment property	-	(5)	(31)
Property rental and similar income	121	37	65
Net purchase of deposits	(2,355)	(88)	4,442
Interest received	141	109	230
Net proceeds of disposal of subsidiary	6,196	-	-
Issue of Loan Notes	(2,000)	-	-
Net cash outflow from investing activities	(1,587)	(1,575)	503
Cash flow from financing activities
Dividends paid to company shareholders	(1,559)	(1,477)	(1,981)
Net cash outflow from financing activities	(1,559)	(1,477)	(1,981)
Net (decrease)/ increase in cash and cash equivalents	1,830	(753)	5,482
Cash and cash equivalents at the beginning of the period	14,236	8,754	8,754
(Decrease)/increase in cash and cash equivalents	1,830	(753)	5,482
Cash and cash equivalents at the end of the period	16,066	8,001	14,236

Notes to the Interim Financial Statements

1.    Basis of Preparation

       The consolidated interim financial statements for the six months to 31 December 2011 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 Alternative Investment Market (AIM) Rules for Companies. 

The figures for the period to 31 December 2011 and the comparative period to 31 December 2010 have not been audited or reviewed and are therefore disclosed as unaudited.  The figures for 30 June 2011 have been extracted from the financial statements for the year to 30 June 2011, 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 2011 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 six 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 market.  The five remaining operating segments have been aggregated into the 'other companies' segment based on their size and comprise Compact Lighting, Philip Payne, Sugg Lighting, Solite Europe and Portland Lighting.

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 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
			Adjust-
			ments
	£'000	£'000	£'000	£'000
6 months to 31 December 2011
Revenue to external customers	24,363	5,561	-	29,924
Revenue to other group companies	65	287	(352)	-
Total revenue	24,428	5,848	(352)	29,924
Operating Profit	4,757	459	172	5,388
Net finance income				278
Share of loss in joint venture				-
Profit on disposal of subsidiary				1,377
Profit before tax expense				7,043
6 months to 31 December 2010
Revenue to external customers	22,045	4,650	-	26,695
Revenue to other group companies	97	271	(368)	-
Total revenue	22,142	4,921	(368)	26,695
Operating Profit	4,244	212	76	4,532
Net finance income				162
Share of loss in joint venture				(20)
Profit before tax expense				4,674
Year to 30 June 2011
Revenue to external customers	43,909	8,924	-	52,833
Revenue to other group companies	145	619	(764)	-
Total revenue	44,054	9,543	(764)	52,833
Operating Profit	10,407	649	196	11,252
Net finance income				372
Share of loss in joint venture				(11)
Profit before tax expense				11,613

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.    Acquisition of Portland Lighting Ltd

On 1 July 2011 the group acquired 100% of the share capital of Portland Lighting Ltd for an initial amount of £2,500,000.  A further amount has been paid of £204,000 and a provision has been made for a further £250,000 based on the likely profitability of Portland Lighting Ltd this year.  There is also potential deferred consideration payable which is dependant upon the ongoing profitability of the company next year.  The net assets acquired amount to £473,000, although the group has not finalised a fair value exercise over the acquired assets and liabilities of the company.  This exercise will be completed during the financial year.

4.    Disposal of Mackwell Electronics Ltd

On 2 December 2011 a resolution was passed at an Extraordinary General Meeting to approve the sale of Mackwell Electronics Ltd to Mr N A Brangwin.  The consideration amounted to £6,500,000 of which £4,500,000 was in cash and £2,000,000 in loan notes.  The profit on sale amounted to £1,377,000.  No provision for tax has been made on the basis of substantial shareholder exemption relief.  We have reduced the carrying value of the loan notes on the basis of a fair value adjustment.

5.    Earnings per share

The earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 11,723,559 (2010: 11,723,559) 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 11,723,559 (2010: 11,723,559) as there are no dilutive potential ordinary shares.

6.    Dividend

The interim dividend is at the rate of 4.8p per share (2010: 4.3p), and based on 11,723,559 shares in issue at the announcement date the dividend will amount to £563,000 (2010: £504,000).  The interim dividend will be paid on Tuesday 8 May 2012 to shareholders on the register at the close of business on 13 April 2012 and the shares become ex-dividend on 11 April 2012.

A final dividend for the year ended 30 June 2011 of 13.3p (2010: final of 12.6p) per share, amounting to £1,559,000 (£1,477,000) was paid on 17 November 2011.

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 from 23 March 2012.

 

END

 

 

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