Interim Results

RNS Number : 6114Z

Thorpe(F.W.) PLC

16 March 2017

 

F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2016

F W Thorpe Plc, designers, manufacturers and suppliers of professional lighting systems for the specification market is pleased to announce its interim results for the six months ended 31 December 2016.

Key points:

	Interim 2017	Interim 2016
Revenue	£51.2m	£41.4m	23.8% increase
Operating profit	£7.8m	£6.5m	19.7%  increase
Profit before tax	£7.8m	£6.6m	18.0%  increase
Basic earnings per share	5.38p	4.47p	20.3%  increase

·       Revenue and operating profit growth at Thorlux drives positive interim result

·       Lightronics continues to perform well, driven by one off projects

·       Interim dividend increased to 1.35p (Interim 2016: 1.20p)

For further information please contact:    

F W Thorpe Plc
Andrew Thorpe - Chairman	01527 583200
Craig Muncaster - Group Financial Director	01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley	020 7496 3000

This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).

CHAIRMAN'S INTERIM STATEMENT

I am pleased to be able to report a successful first half of the 2016/17 financial year with Group revenues increased by 23.8% and operating profit increased by 19.7%.

Whilst normally expecting a higher level of profit attainment on raised revenues the exceptionally buoyant first half at our largest entity, Thorlux Lighting, had to be met by the imposition of high levels of overtime, shift working etc. which inevitably has led to a higher cost of production than we would have liked.  These actions were necessary to satisfy spikes in customer demand but it is unlikely that the need for such levels of activity will persist.

Generally, throughout the Group, the performances in both revenue and profit have improved with the exception of Compact Lighting which is still in a transitory state of merging many product ranges and sales platforms with Thorlux Lighting.

Offices abroad have also performed well with renewed optimism at the, now 100% owned, Australian office. Our UAE office is still finding its way, however.

Investments throughout the Group continue as desired where decided as prudent by your Board. Product investment, of course, continues not least with the notable recent introduction of "SmartScan" a new highly advanced wireless lighting control system, which has immediately found favour with many of our customers. Hardware investment also continues and this has most recently included the purchase, in Redditch, of a modern 1,800 square metre freehold factory unit for Group firm, TRT Lighting which, as mentioned in my last report, was being constrained through lack of space.

This new space will not only increase manufacturing capacity at TRT Lighting but will also house a new paint plant serving not only TRT but for use as a back-up facility in case of paint plant problems at nearby Thorlux where current capacity is stretched. In the same vein, it will house a new surface mount circuit board production line again for TRT use and as a Group back-up facility.

The Group carbon offsetting project in Devauden, Monmouthshire has recently partaken of an over doubling of tree stock to a total of some 150,000 plantings. This puts the company somewhat in advance of its carbon offsetting requirements.

Group performance for the "first half", therefore, allows your company to pay a dividend for the six months to 31^st December 2016 of 1.35p (Interim 2015 1.20p) this being a 12.5% increase.

We remain optimistic of a satisfactory overall result for the year.

Andrew Thorpe

Chairman

16 March 2017

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2016

	31.12.16 (six months to)	31.12.15  (six months to)	30.06.16  (twelve months to)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Revenue	51,236	41,370	88,946
Operating Profit	7,775	6,494	16,195
Finance income	307	383	702
Finance costs*	(272)	(257)	(627)
Share of loss of joint venture	(-)	(-)	(1)
Profit before tax expense	7,810	6,620	16,269
Tax expense	(1,588)	(1,446)	(3,270)
Profit for the period from continuing operations	6,222	5,174	12,999
Profit for the period	6,222	5,174	12,999

*Finance costs represents payments made in relation to the acquisition of Lightronics Participaties BV.

Dividend rate per share:
Interim	1.35p	1.20p	1.20p
Final	-	-	2.85p
Special	-	2.00p	2.00p

Earnings per share	- basic	5.38p	4.47p	11.24p
	- diluted	5.35p	4.47p	11.21p

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2016

	31.12.16    (six months to)	31.12.15    (six months to)	30.06.16  (twelve months to)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit for the year	6,222	5,174	12,999
Other comprehensive income
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
- Arising in period*	227	(207)	(74)
- Reclassified in period	-	-	-
Exchange rate differences on translation of foreign operations
- Arising in period	192	58	1,627
- Reclassified in period	-	-	-
Taxation	(43)	103	60
	376	(46)	1,613
Items that will not be reclassified to profit or loss
Actuarial loss on pension scheme	-	-	(1,285)
Movement on unrecognised pension surplus	-	-	1,095
	-	-	(190)
Other comprehensive income for the year, net of tax	376	(46)	1,423
Total comprehensive income for the year	6,598	5,128	14,422

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

* The profit on items that may be reclassified to profit or loss of £227,000 is due to the increase in market value of available for sale financial assets.

CONSOLIDATED BALANCE SHEET

as at 31 December 2016

	As at	As at	As at
	31.12.16	31.12.15	30.06.16
	(unaudited)	(unaudited)	(audited)
Assets	£'000	£'000	£'000
Non-Current Assets
Property, plant and equipment	17,570	14,192	14,900
Intangible assets	15,465	14,160	15,183
Investment property	2,219	2,140	2,131
Loans and receivables	4,340	4,968	4,980
Equity accounted investments	936	-	936
Available for sale financial assets	3,574	3,218	3,348
Deferred tax assets	32	26	27
	44,136	38,704	41,505
Current assets
Inventories	20,847	16,813	18,863
Trade and other receivables	17,210	13,908	21,914
Other financial assets at fair value through profit or loss	389	389	389
Short term financial assets - deposits	12,767	12,560	14,910
Cash and cash equivalents	22,957	21,606	18,295
Total current assets	74,170	65,276	74,371
Total Assets	118,306	103,980	115,876
Liabilities
Current liabilities
Trade and other payables	(15,804)	(11,545)	(16,700)
Current tax liabilities	(1,667)	(2,197)	(1,963)
Total current liabilities	(17,471)	(13,742)	(18,663)
Net current assets	56,699	51,534	55,708
Non-current liabilities
Retirement benefit deficit	-	-	-
Other payables	(4,811)	(4,044)	(4,619)
Provisions for liabilities and charges	(1,171)	(259)	(1,088)
Deferred tax liabilities	(785)	(857)	(799)
Total liabilities	(24,238)	(18,902)	(25,169)
Net assets	94,068	85,078	90,707
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
Foreign currency translation reserve	1,798	-	1,606
Retained earnings	90,288	83,096	87,119
Total equity	94,068	85,078	90,707

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2016

	Share Capital	Share Premium	Capital Redemption Reserve	Foreign Currency Translation Reserve	Retained Earnings	Total Equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2015	1,189	656	137	-	80,882	82,864
Comprehensive income
Profit for six months to 31 December 2015	-	-	-	-	5,174	5,174
Other comprehensive income	-	-	-	-	(46)	(46)
Total comprehensive income	-	-	-	-	5,128	5,128
Transactions with owners
Dividends paid to shareholders	-	-	-	-	(2,950)	(2,950)
Share-based payment charge					36	36
Total transactions with owners	-	-	-	-	(2,914)	(2,914)
Balance at 31 December 2015	1,189	656	137	-	83,096	85,078
Comprehensive income
Profit for six months to 30 June 2016	-	-	-	-	7,825	7,825
Actuarial loss on pension scheme	-	-	-	-	(1,285)	(1,285)
Movement on unrecognised pension surplus	-	-	-	-	1,095	1,095
Revaluation of available-for-sale financial assets	-	-	-	-	133	133
Movement on associated deferred tax	-	-	-	-	(43)	(43)
Transfer to foreign currency translation reserve				(21)	21	-
Exchange rate differences on translation of foreign operations	-	-	-	1,627	(58)	1,569
Total comprehensive income	-	-	-	1,606	7,688	9,294
Transactions with owners
Dividends paid to shareholders	-	-	-	-	(3,701)	(3,701)
Share-based payment charge	-	-	-	-	36	36
Total transactions with owners	-	-	-	-	(3,665)	(3,665)
Balance at 30 June 2016	1,189	656	137	1,606	87,119	90,707
Comprehensive income
Profit for six months to 31 December 2016	-	-	-	-	6,222	6,222
Other comprehensive income	-	-	-	192	184	376
Total comprehensive income	-	-	-	192	6,406	6,598
Transactions with owners
Dividends paid to shareholders	-	-	-	-	(3,297)	(3,297)
Share-based payment charge	-	-	-	-	60	60
Total transactions with owners	-	-	-	-	(3,237)	(3,237)
Balance at 31 December 2016	1,189	656	137	1,798	90,288	94,068

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2016

	31.12.16  (six months to)	31.12.15  (six months to)	30.06.16 (twelve months to)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash generated from operations
Profit before income tax	7,810	6,620	16,269
Adjustments for
- Depreciation charge	781	705	1,523
- Amortisation of intangibles & investment property	947	1,085	2,277
- Profit on disposal of property, plant and  equipment	(44)	(48)	(89)
- Finance expense	(35)	(383)	(75)
- Retirement benefit contributions in excess of current and past service charge	(73)	(85)	(190)
- Share of loss from joint venture	-	-	1
- Share-based payment expense	122	88	193
- Research and development expenditure (credit)/charge	(126)	-	(236)
- Effects of exchange rate movements	(78)	110	182
Changes in working capital
- Inventories	(1,919)	949	(1,128)
- Trade and other receivables	4,116	5,799	(2,094)
- Trade and other payables	(1,042)	(2,838)	2,313
Cash generated from operations	10,459	12,002	18,946
Tax paid	(1,823)	(1,374)	(3,323)
Cash flow from investing activities
Purchase of property, plant and equipment	(3,302)	(1,113)	(2,543)
Proceeds from sale of property, plant and equipment	134	71	122
Purchase of intangibles	(782)	(836)	(1,764)
Purchase of investment property	(122)	(19)	(28)
Net sale/(purchase) of available for sale financial assets	1	(407)	(404)
Equity accounted investments acquired	-	-	(936)
Property rental and similar income	29	40	74
Dividend income	104	93	177
Net sale/(purchase) of deposits	2,143	(3,202)	(5,552)
Interest received	124	114	314
Receipt of loans notes	710	11	200
Net cash (used in)/generated from investing activities	(961)	(5,248)	(10,340)
Cash flow from financing activities
Dividends paid to company shareholders	(3,297)	(2,950)	(6,651)
Net cash used in financing activities	(3,297)	(2,950)	(6,651)
Effects of exchange rate changes on cash	284	-	487
Net increase in cash and cash equivalents	4,662	2,430	(881)
Cash and cash equivalents at the beginning of the period	18,295	19,176	19,176
Cash and cash equivalents at the end of the period	22,957	21,606	18,295

Notes to the Interim Financial Statements

1.   Basis of Preparation

       The consolidated interim financial statements for the six months to 31 December 2016 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 2016 and the comparative period to 31 December 2015 have not been audited or reviewed and are therefore disclosed as unaudited.  The figures for 30 June 2016 have been extracted from the financial statements for the year to 30 June 2016, 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 2016 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 nine 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 seven remaining continuing operating segments have been aggregated into the 'other companies' segment based on their size, comprising the entities Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux LLC and Thorlux Australasia PTY Limited.

       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	Lightronics	Other	Inter-	Total
			Companies	Segment	Continuing
				Adjust-	Operations
				ments
	£'000	£'000	£'000	£'000	£'000
6 months to 31 December 2016
Revenue to external customers	31,470	9,713	10,053	-	51,236
Revenue to other Group companies	1,530	136	1,913	(3,579)	-
Total revenue	33,000	9,849	11,966	(3,579)	51,236
Operating Profit	5,933	1,104	620	118	7,775
Finance income					307
Finance expense					(272)
Share of loss in joint venture					-
Profit before tax expense					7,810
6 months to 31 December 2015
Revenue to external customers	26,846	7,027	7,497	-	41,370
Revenue to other Group companies	594	3	1,083	(1,680)	-
Total revenue	27,440	7,030	8,580	(1,680)	41,370
Operating Profit	5,166	703	428	197	6,494
Finance income					383
Finance expense					(257)
Share of loss in joint venture					-
Profit before tax expense					6,620
Year to 30 June 2016
Revenue to external customers	54,157	15,524	19,265	-	88,946
Revenue to other group companies	2,409	60	2,401	(4,870)	-
Total revenue	56,566	15,584	21,666	(4,870)	88,946
Operating Profit	11,699	2,103	2,189	204	16,195
Net finance income					75
Share of profit in joint venture					(1)
Profit before tax expense					16,269

       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.  Investment in Subsidiary

On 1 July 2016 the Group acquired 49% of the share capital of Thorlux Australasia PTY Limited for a nominal sum. 

Previously Thorlux Australasia was a joint venture with a local partner and we therefore now own 100% of the company.  This will give us the ability to exercise full control over the operations with a view to improving the operating results going forward.

The Group has fully consolidated the results of Thorlux Australasia in the figures for December 2016.

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 2016: 115,675,590) 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 116,347,665 (Interim 2016: 115,791,614) during the period.

5.  Dividend

       The interim dividend is at the rate of 1.35p per share (Interim 2016: 1.20p), and based on 115,675,590 shares in issue at the announcement date the dividend will amount to £1,562,000 (Interim 2016: £1,388,000).  The interim dividend will be paid on 6 April 2017 to shareholders on the register at the close of business on 24 March 2017, and the shares become ex-dividend on 23 March 2017.

A final dividend for the year ended 30 June 2016 of 2.85p (2015: final of 2.55p) per share, amounting to £3,297,000 (2015: £2,950,000) was paid on 24 November 2016.

6.  Availability of interim statement

       Copies of the interim 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 31 March 2017.

 

END

 

 

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