Preliminary Results

RNS Number : 3608R

Thorpe(F.W.) PLC

21 September 2017

 

Preliminary Results

for the year ended 30 June 2017 (Unaudited)

F W Thorpe Plc, designers, manufacturers and suppliers of professional lighting systems for the specification market, is pleased to announce its preliminary results for the year ended 30 June 2017.

Key points:

Continuing operations	2017	2016
Revenue	£105.4m	£88.9m	18.6% increase
Operating profit	£18.4m	£16.2m	13.8% increase
Profit before tax	£18.4m	£16.3m	12.8% increase
Basic earnings per share	12.54p	11.24p	11.6% increase

·      Total interim and final dividend of 4.90p (2016: 4.05p) - an increase of 21.0%

·      Revenue and operating profit driven by strong performance across the Group

·      Significant revenue and operating profit growth at Thorlux, supported by the success of SmartScan wireless lighting controls

 

For further information please contact: 

F W Thorpe Plc
Mike Allcock - Chairman, Joint Chief Executive	01527 583200
Craig Muncaster - Joint Chief Executive, Group Financial Director	01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley	020 7496 3000

Chairman's statement

F W Thorpe Plc performed very well during the 2016/17 financial year and saw the handover of the chairman role to me from 1 July. It gives me pleasure to report on such an excellent year's trading. This is an opportune moment to thank Andrew Thorpe for his long service as Chairman and Joint Chief Executive in a period that has seen your company transition successfully through the LED revolution as well as achieve numerous other significant milestones. The whole board welcomes Andrew's continued support and guidance as he remains an executive on a part-time basis.

Craig Muncaster's financial capabilities, now supplemented by his operational experience, with him having served on the boards of all of our companies for the past seven years, make him the ideal and natural Joint Chief Executive. Craig's skills are complementary to mine and put us in a strong position to share the management of the day-to-day complexities of F W Thorpe's growing group of companies.

I joined the company as a technical apprentice in 1984. I have been a director since 1997, starting with a non-executive role on the board of one of our subsidiaries. During my career at F W Thorpe Plc I have served under four chairmen, and I hope to continue with a similar philosophy to my predecessors. That does not mean the business will remain the same - after all, we have changed so much in recent years - it just means that the core values will remain unchanged.

GROUP RESULTS

In the financial year 2016/17, our revenue exceeded the £100m milestone for the first time, reaching £105.4m, an 18.6% increase, and operating profit was £18.4m, up 13.8%.

All companies in the Group showed improved trading performances, with excellent results at Thorlux Lighting and Lightronics in the Netherlands in particular. It is also pleasing to recognise the increasing contribution to Group profits from the other subsidiary companies this year. A good proportion of revenue is now generated from overseas operations, reducing our reliance on the UK economy and helping to offset one of our business risks.

Performance as a whole for the year to 30 June 2017 allows your board to recommend a final dividend of 3.55p per share (2016: 2.85p), which gives a total for the year of 4.90p (2016: 4.05p excluding special dividend). This is an increase of 21.0%.

AROUND THE GROUP

Thorlux is our largest company, producing the most extensive range of lighting products for the widest market sectors. It is a product-led business offering solutions with key features and benefits. Thorlux never targets being the lowest capital cost supplier, instead it targets the lowest cost to the end user through the lifetime of a project after energy and maintenance costs are taken into consideration.

2016/17 was a busy year, with Thorlux generating £69.1m in revenue and increasing profits by 21.1%. Following its successful transition through the LED lighting revolution, and in its subsequent strengthened position, Thorlux has now entered the wireless lighting controls arena, having fully launched its SmartScan system. Developed in-house and on sale since September 2016, SmartScan delivered sales that grew rapidly and became a significant part of the year's success. SmartScan's features have found favour with existing and new clients. Understanding and reacting to these technological times, Thorlux continues to invest in research and development. Having launched phase 1 of SmartScan last year, Thorlux will launch phases 2 and 3 in this new financial year, with exciting and desirable new features.

The factory floor re-organisation, mentioned in the last annual report, is now complete and has been enhanced with anti-static floor protection to further protect electronic devices during the handling and assembly process. A total of 50 test and assembly stations are now operational, providing a significant boost in capacity for the foreseeable future.

The Thorlux SMT (surface mount technology) electronics assembly lines are in the process of being upgraded, which will vastly increase their speed and resultant capacity, and further investments are being made to duplicate the facility at the TRT Lighting site to add further capacity and disaster recovery capability. The board considers risks on a regular basis.

Group product development is centred around Thorlux; however, there has been noticeable cooperation and input this year from Luxintec in Spain, primarily for lens technology, and Lightronics in the Netherlands, for outdoor products. Sharing resources and intellectual property and the benefits that result is a trend that I would like to see continue.

UK, Ireland and export markets all performed well, with sales into Australasia and the UAE increasing substantially and making valuable contributions to the overall result.

Compact Lighting has traded for 26 years, servicing the retail and display markets. The company has never quite made the breakthrough that was expected of it, and after due consideration the board has decided to rebrand Compact as Thorlux during this new financial year.

Thorlux Lighting will now also address the retail and display markets, previously largely left to the efforts of Compact. The Thorlux and Compact sales forces have been merged, and Compact's latest highly tooled, high quality products have now been added to the Thorlux portfolio. The Compact Lighting factory, in Portsmouth, UK, will become a further manufacturing location for Thorlux Lighting, operated using Thorlux manufacturing IT and quality systems.

Compact customers are now ordering from Thorlux, and a renewed sales effort combining the general Thorlux range, including lighting controls, and display-lighting-specific Compact products has already found favour with certain large retail brands.

We are confident that the new arrangement will realise better potential in the future than Compact has realised alone in the past. This is the last time I shall report on Compact Lighting as an entity within our group. I would like to thank the management and staff at Compact Lighting for their continued support during this transitional process, and I hope that increased orders will keep them busy in the future.

Philip Payne products find favour with architects who wish to select products that enhance a building's appearance rather than spoil it. Philip Payne continues to be a very stable business providing consistently good returns.

In 2016/17, Payne's trading in the UK and in the UAE has been very good, with record profit levels achieved. UAE revenues have been derived from emergency lighting products that have undergone rigorous local approval and testing, and therefore this return on investment is pleasing. Further investment has now commenced to develop these same emergency lighting products to encompass SmartScan technology for wireless reporting of emergency lighting test status, which is important for compliance with local regulations.

Solite manufactures from its factory in Stockport. The company's products have been exclusively centred on the clean area market, for example pharmaceutical and microchip production areas. In recent months, Solite has started developing into new market segments, to include specialist healthcare and custodial lighting. These niche areas will fit Solite's manufacturing processes and provide increased opportunities beyond clean area projects.

Solite has had an extremely busy year and produced record results. The new factory and investments in new machinery in recent years have enabled Solite to cope with increased demands, albeit with increased lead times on occasion.

One notable success of Solite has been in Ireland, together with the Thorlux Dublin office. Solite has provided the specialist clean area knowledge for projects, whilst Thorlux has offered general lighting and controls expertise - an example of further Group collaboration going well. In 2016, we purchased an office in Dublin to further cement roots in Ireland and support ongoing success there.

We acquired Portland Lighting in 2011, anticipating that external lighting would adapt quite quickly to the reduced maintenance and energy usage of LED technology. We were right, and in recent years Portland Lighting has flourished.

Portland Lighting remains, by the measure of operating profit margin, our highest achiever. Orders plateaued in the last year, and whilst we do not expect great strides forward, we are looking for further growth abroad into mainland Europe over the next few years.

TRT Lighting manufactures exclusively LED street and tunnel lighting. Founded in 2013, it now employs 60 people and has seen rapid growth.

With such expansion has come challenges, and this year saw the purchase of a new factory, not far from TRT's existing site and that of Thorlux Lighting in Redditch, UK. TRT moved in during June and is now fully operational. TRT will be managing a new second clean room and SMT line shortly, and further investments are underway to extend the factory to provide an onsite powder-coating facility which will also act as part of a disaster recovery plan for other members of the Group. TRT's existing factory will remain unused for now and will offer further Group expansion possibilities should the need arise in the future.

TRT faces ongoing challenges from pressure in the market to reduce selling prices, and it is important that, like other Group companies, it finds features and benefits that customers will select and pay more for. Creating new product innovations is a high priority, together with tackling other growing pains. TRT's revenue increased 4.8% in 2016/17, but profits were slightly lower. The new year has started with an excellent order book.

Lightronics BV, based in the Netherlands, focuses on three market sectors: street lighting, bulkhead lighting for housing establishments, and highly vandal-resistant lighting. Orders, revenue and profits were all substantially up in the year. It has been a pleasure to welcome Lightronics to the Group and, as I mentioned to the workforce on the day that we acquired our majority stake, I see our relationship as a partnership.

We acquired Lightronics to obtain a stronger foothold in mainland Europe, via their own operations but also, importantly, to grow Thorlux sales abroad too. On this point we have faltered, and a renewed effort will commence this year. Whilst we have seen some small successes through Lightronics' routes to market, we are confident that with the right sales engineers we can find customers with similar needs to those in the UK. We have been here before several times, and we recognise that in the early days in new regions it can take some time to find the right sales people.

Our investment in Luxintec in Spain during 2016 gives us the opportunity to share product developments and the potential to grow our revenues in the Spanish market. The focus for 2016/17 has been the development of new products, the building of a new factory and lens development for the Group. Trading has not improved significantly since we invested, but we are laying the foundations for a successful future.

PERSONNEL

We were proud to host the visit of HRH the Duke of Kent to officially open our new assembly area designed, developed and completed in the large by former apprentices. It was very pleasing for our apprentices past and present to be recognised with such a prestigious occasion, an acknowledgement of our continued efforts to invest in developing our people for the future.

During the next few years, we will continue to invest in our selling presence and conduct further training to improve the operational management of the business and develop the leadership for the future.

The results for this year have been achieved by the combined efforts of all our personnel. It has been challenging at times for all of us, but I would like to express my gratitude to all staff and I will rely on their continued support as we endeavour to grow the business in the future.

OUTLOOK

This year's excellent performance will be difficult to replicate, as we will have to contend with ongoing economic uncertainty from Brexit, government instability and exchange rate variations.

We see ourselves better placed to respond to these issues nowadays, with manufacturing facilities in the UK and in mainland Europe, as well as revenue generated in a number of different countries from our own local sales offices.

We continue to review options for further acquisitions. We have the financial capacity, so it could be said that it is easy to acquire, and there are indeed frequent options for us to review. To find the right acquisition - one that meets our criteria and does not become a future liability - is not as easy as it might seem.

The general management team remains the same experienced group, and our intention is to continue on the same path of steady, sustainable growth.

M Allcock - Chairman

21 September 2017

Consolidated results (unaudited)

Consolidated income statement

For the year ended 30 June 2017

	Notes	2017 £'000	2016 £'000
Continuing operations
Revenue	2	105,448	88,946
Cost of sales		(59,025)	(50,000)
Gross profit		46,423	38,946
Distribution costs		(10,598)	(8,455)
Administrative expenses		(17,636)	(14,532)
Other operating income		233	236
Operating profit	2	18,422	16,195
Finance income		535	702
Finance costs		(784)	(627)
Share of profit/(loss) of joint ventures		178	(1)
Profit before income tax		18,351	16,269
Income tax expense	3	(3,851)	(3,270)
Profit for the year		14,500	12,999

Earnings per share from continuing operations attributable to the equity holders of the company during the year (expressed in pence per share).

Basic and diluted earnings per share		Notes	2017 pence	2016 pence
- Basic	Total	8	12.54	11.24
- Diluted	Total	8	12.47	11.21

Consolidated statement of comprehensive income

For the year ended 30 June 2017

		2017 £'000	2016 £'000
Profit for the year:		14,500	12,999
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
- Arising in year		287	(74)
- Reclassified in year		-	-
Exchange differences on translation of foreign operations
- Arising in year		657	1,627
- Reclassified in year		-	-
Taxation		18	60
		962	1,613
Items that will not be reclassified to profit or loss
Actuarial loss on pension scheme		(1,211)	(1,285)
Movement on unrecognised pension scheme surplus		1,071	1,095
		(140)	(190)
Other comprehensive income for the year, net of tax		822	1,423
Total comprehensive income for the year attributable to equity shareholders		15,322	14,422

Consolidated financial position

As at 30 June 2017

		Group
	Notes	2017 £'000	2016 £'000
Assets
Non-current assets
Property, plant and equipment	6	18,837	14,900
Intangible assets	5	15,927	15,183
Investment property		2,163	2,131
Loans and receivables		3,058	4,980
Investment in associates		936	936
Available-for-sale financial assets		3,630	3,348
Deferred tax assets		19	27
		44,570	41,505
Current assets
Inventories		22,592	18,863
Trade and other receivables		18,995	21,914
Other financial assets at fair value through profit or loss		389	389
Loans and receivables		750	-
Short-term financial assets	7	16,981	14,910
Cash and cash equivalents		24,678	18,295
Total current assets		84,385	74,371
Total assets		128,955	115,876
Liabilities
Current liabilities
Trade and other payables		(17,826)	(16,700)
Current income tax liabilities		(1,606)	(1,963)
Total current liabilities		(19,432)	(18,663)
Net current assets		64,953	55,708
Non-current liabilities
Retirement benefit deficit		-	-
Other payables		(5,774)	(4,619)
Provisions for liabilities and charges		(1,537)	(1,088)
Deferred income tax liabilities		(920)	(799)
Total non-current liabilities		(8,231)	(6,506)
Total liabilities		(27,663)	(25,169)
Net assets		101,292	90,707
Equity
Share capital		1,189	1,189
Share premium account		656	656
Capital redemption reserve		137	137
Foreign currency translation reserve		2,263	1,606
Retained earnings		97,047	87,119
Total equity		101,292	90,707

Consolidated statement of changes in equity

For the year ended 30 June 2017

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Foreign currency translation reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 1 July 2015		1,189	656	137	-	80,882	82,864
Comprehensive income
Profit for the year to 30 June 2016		-	-	-	-	12,999	12,999
Actuarial loss on pension scheme		-	-	-	-	(1,285)	(1,285)
Movement on unrecognised pension scheme surplus		-	-	-	-	1,095	1,095
Revaluation of available-for-sale financial assets		-	-	-	-	(74)	(74)
Movement on associated deferred tax		-	-	-	-	14	14
Impact of deferred tax rate change		-	-	-	-	46	46
Transfer to foreign currency translation reserve		-	-	-	(21)	21	-
Exchange differences on translation of foreign operations		-	-	-	1,627	-	1,627
Total comprehensive income		-	-	-	1,606	12,816	14,422
Transactions with owners
Dividends paid to shareholders	4	-	-	-	-	(6,651)	(6,651)
Share based payment charge		-	-	-	-	72	72
Total transactions with owners		-	-	-	-	(6,579)	(6,579)
Balance at 30 June 2016		1,189	656	137	1,606	87,119	90,707
Comprehensive income
Profit for the year to 30 June 2017		-	-	-	-	14,500	14,500
Actuarial loss on pension scheme		-	-	-	-	(1,211)	(1,211)
Movement on unrecognised pension scheme surplus		-	-	-	-	1,071	1,071
Revaluation of available-for-sale financial assets		-	-	-	-	287	287
Movement on associated deferred tax		-	-	-	-	(50)	(50)
Impact of deferred tax rate change		-	-	-	-	68	68
Exchange differences on translation of foreign operations		-	-	-	657	-	657
Total comprehensive income		-	-	-	657	14,665	15,322
Transactions with owners
Dividends paid to shareholders	4	-	-	-	-	(4,858)	(4,858)
Share based payment charge		-	-	-	-	121	121
Total transactions with owners		-	-	-	-	(4,737)	(4,737)
Balance at 30 June 2017		1,189	656	137	2,263	97,047	101,292

Consolidated statement of cash flows

For the year ended 30 June 2017

		Group
	Notes	2017 £'000	2016 £'000
Cash flows from operating activities
Cash generated from operations	9	22,380	18,946
Tax paid		(3,840)	(3,323)
Net cash generated from operating activities		18,540	15,623
Cash flows from investing activities
Purchases of property, plant and equipment		(5,400)	(2,543)
Proceeds from sale of property, plant and equipment		262	122
Purchase of intangibles		(2,148)	(1,764)
Purchase of subsidiary (inclusive of cash acquired)		240	-
Purchase of investment property		(100)	(28)
Purchase of available-for-sale financial assets		-	(404)
Sale of available-for-sale financial assets		5	-
Investment in associate		-	(936)
Property rental and similar income		31	74
Dividend income		210	177
Net purchase of short-term financial assets		(2,071)	(5,552)
Interest received		393	314
Receipt of loan notes		1,090	200
Net cash used in investing activities		(7,488)	(10,340)
Cash flows from financing activities
Dividends paid to company's shareholders	4	(4,858)	(6,651)
Net cash used in financing activities		(4,858)	(6,651)
Effects of exchange rate changes on cash		189	487
Net increase /(decrease) in cash in the year		6,383	(881)
Cash and cash equivalents at beginning of year		18,295	19,176
Cash and cash equivalents at end of year		24,678	18,295

Notes (unaudited)

1 Basis of preparation

The financial information set out above has been prepared in accordance with International Financial Reporting Standards adopted by the European Union and the IFRS interpretations committee (IFRS IC) though does not constitute the Group's statutory accounts for the year ended 30 June 2017. The financial information has been prepared on a going concern basis, under the historical cost convention, as modified by available-for-sale financial assets, financial assets and financial liabilities (including derivative instruments) at fair value through the profit and loss.

The company and group has adopted all IAS and IFRS adopted in the EU except for IAS 34, as AIM-listed companies are not required to adopt IAS 34. The company and group has not early adopted any other standards or interpretations not yet endorsed by the EU.

New or amended standards adopted for the year ending 30 June 2017 are:

Amendment to IAS 1, "Presentation of financial statements" on the disclosure initiative" (effective 1 January 2016)

Amendment to IFRS 10 and IAS 28 on investment entities applying the consolidation exemption (effective 1 January 2016)

Amendment to IFRS 10 and IAS 28 on sale or contribution of assets (effective 1 January 2016)

Amendments to IAS 27, "Separate financial statements" on the equity method (effective 1 January 2016)

Amendments to IAS 16, "Property, plant and equipment", and IAS 41, 'Agriculture', regarding bearer plants (effective 1 January 2016)

Amendment to IAS 16, "Property, plant and equipment" and IAS 38,'Intangible assets', on depreciation and amortisation (effective 1 January 2016)

Amendments to IFRS 11 " 'Joint Arrangements' on acquisition of an interest in a joint operation" (effective 1 January 2016)

Annual improvements 2014 (effective 1 January 2016)

IFRS 14, "Regulatory deferral accounts" (effective 1 January 2016)

The above new and amended standards had an immaterial impact on the financial statements and as such, the impact of adoption has not been separately disclosed.

The group has not yet adopted certain new standards, amendments and interpretations to existing standards, which have been published but are only effective for our accounting periods beginning on or after 1 January 2017 or later periods. These new pronouncements are listed below:

Amendment to IAS 7, "Statement of cash flows" on disclosure initiative (effective 1 January 2017)

Amendment to IAS 12, "Income taxes" on recognition of deferred tax assets for unrealised losses (effective 1 January 2017)

IFRS 9 "Financial Instruments" (effective 1 January 2018)

IFRS 15 "Revenue from contracts with customers" (effective 1 January 2018)

IFRIC 22, 'Foreign currency transactions and advance consideration' (effective 1 January 2018)

Amendments to IFRS 2, 'Share based payments' - Classification and measurement (effective 1 January 2018) (subject to EU endorsement)

Amendments to IFRS 4, Amendments regarding implementation of IFRS 9 (effective 1 January 2018) (subject to EU endorsement)

Amendment to IFRS 9, 'Financial instruments', on general hedge accounting (effective date 1 Jan 2018)

Amendments to IAS 40, 'Investment property' transfer of property (effective 1 January 2018) (subject to EU endorsement)

Annual improvements 2014-2016 cycle (effective 1 January 2018) (subject to EU endorsement)

IFRS 16 "Leases" (effective 1 January 2019)

FRIC 23,'Uncertainty over income tax' (effective 1 January 2019)

IFRS 17 "Insurance Contracts" (effective 1 January 2021)

The directors are currently evaluating the impact of the adoption of these standards, amendments and interpretations in future periods, although it is anticipated that these will have an immaterial impact on reported profits.

The results and financial information for the year ended 30 June 2017 is unaudited but the statutory accounts for the year then ended will be delivered to the Registrar of Companies in due course, and the auditors' report was unqualified and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.

The financial statements are presented in Pounds Sterling, rounded to the nearest thousand.

2 Segmental analysis

(a) Business segments

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 industrial, commercial and controls markets. The acquired Lightronics business is a material subsidiary, and is therefore disclosed separately. The seven remaining operating segments have been aggregated into the "other companies" reportable segment based upon their size, comprising the entities Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux Lighting LLC and Thorlux Australasia Pty Ltd.

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.

	Thorlux £'000	Lightronics £'000	Other companies £'000	Inter- segment adjustments £'000	Total continuing operations £'000
Year to 30 June 2017
Revenue to external customers	65,323	19,243	20,882	-	105,448
Revenue to other group companies	3,794	304	4,364	(8,462)	-
Total revenue	69,117	19,547	25,246	(8,462)	105,448
Operating profit	14,162	2,372	2,163	(275)	18,422
Net finance income					(249)
Share of profit of joint venture					178
Profit before income tax					18,351
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 loss of joint venture					(1)
Profit before income tax					16,269

Inter segment adjustments to operating profit consist of property rentals on premises owned by F W Thorpe Plc and adjustments to profit related to stocks held within the Group that were supplied by another segment.

b) Geographical analysis

The Group's business segments operate in four main areas, the UK, the Netherlands, the rest of Europe and the rest of the World. The home country of the company, which is also the main operating company, is the UK.

	2017 £'000	2016 £'000
UK	71,547	64,231
Netherlands	17,243	14,113
Europe	12,348	8,529
Other countries	4,310	2,073
	105,448	88,946

The vast majority of assets and capital expenditure are in the UK, and cannot be split geographically in relation to the Group's revenues.

3 Income tax expense

Analysis of income tax expense in the year:

	2017 £'000	2016 £'000
Current tax
Current tax on profits for the year	4,374	3,726
Adjustments in respect of prior years	(662)	(268)
Total current tax	3,712	3,458
Deferred tax
Origination and reversal of temporary differences	139	(188)
Total deferred tax	139	(188)
Income tax expense	3,851	3,270

The tax assessed for the year is higher (2016: higher) than the standard rate of corporation tax in the UK of 19.75% (2016: 20.00%). The differences are explained below:

	2017 £'000	2016 £'000
Profit before income tax	18,351	16,269
Profit on ordinary activities multiplied by the standard rate in the UK of 19.75% (2016: 20.00%)	3,624	3,254
Effects of:
Expenses not deductible for tax purposes	498	349
Accelerated tax allowances and other timing differences	241	(158)
Adjustments in respect of prior years	(662)	(268)
Foreign profit taxed at higher rate	150	97
Other	-	(4)
Tax charge	3,851	3,270

The effective tax rate was 20.99% (2016: 20.10%).

The change to the UK corporation tax rate from 19% to 17% from 1 April 2020 was substantively enacted on 6 September 2016 with deferred tax balances being re-calculated to reflect this change.

4 Dividends

Dividends paid during the year are outlined in the tables below:

Dividends paid (pence per share)	2017	2016
Final dividend	2.85	2.55
Special dividend	-	2.00
Interim dividend	1.35	1.20
Total	4.20	5.75

A final dividend in respect of the year ended 30 June 2017 of 3.55p per share, amounting to £4,106,000 is to be proposed at the Annual General Meeting on 23 November 2017 and, if approved, will be paid on 30 November 2017 to shareholders on the register on 27 October 2017.  The ex-dividend date is 26 October 2017.  These financial statements do not reflect this dividend payable.

Dividends proposed (pence per share)	2017	2016
Final dividend	3.55	2.85

Dividends paid	2017 £'000	2016 £'000
Final dividend	3,297	2,950
Special dividend	-	2,314
Interim dividend	1,561	1,387
Total	4,858	6,651

Dividends proposed	2017 £'000	2016 £'000
Final dividend	4,106	3,297

 

5 Intangible assets

Group 2017	Goodwill £'000	Development costs £'000	Technology £'000	Brand name £'000	Software £'000	Patents £'000	Fishing rights £'000	Total £'000
Cost
At 1 July 2016	9,972	6,454	1,791	736	1,195	150	182	20,480
Acquisition of a subsidiary	524	-	-	-	-	-	-	524
Additions	-	1,715	-	-	306	-	-	2,021
Write-offs and transfers	(600)	(1,757)	-	-	23	-	-	(2,334)
Currency translation	386	36	84	32	4	-	-	542
At 30 June 2017	10,282	6,448	1,875	768	1,528	150	182	21,233
Accumulated amortisation
At 1 July 2016	600	2,778	575	315	879	150	-	5,297
Charge for the year	-	1,560	218	116	146	-	-	2,040
Impairment for the year	262	-	-	-	-	-	-	262
Write-offs and transfers	(600)	(1,757)	-	-	23	-	-	(2,334)
Currency translation	-	7	21	11	2	-	-	41
At 30 June 2017	262	2,588	814	442	1,050	150	-	5,306
Net book amount
At 30 June 2017	10,020	3,860	1,061	326	478	-	182	15,927

Write-offs relate to development assets where no further economic benefits are expected obtained.

Group 2016	Goodwill £'000	Development costs £'000	Technology £'000	Brand name £'000	Software £'000	Patents £'000	Fishing rights £'000	Total £'000
Cost
At 1 July 2015	9,063	5,797	1,583	657	1,039	150	182	18,471
Additions	-	1,681	-	-	251	-	-	1,932
Write-offs and transfers	-	(1,052)	-	-	(109)	-	-	(1,161)
Currency translation	909	28	208	79	14	-	-	1,238
At 30 June 2016	9,972	6,454	1,791	736	1,195	150	182	20,480
Accumulated amortisation
At 1 July 2015	600	1,947	356	198	901	120	-	4,122
Charge for the year	-	1,882	182	97	86	30	-	2,277
Write-offs and transfers	-	(1,052)	-	-	(109)	-	-	(1,161)
Currency translation	-	1	37	20	1	-	-	59
At 30 June 2016	600	2,778	575	315	879	150	-	5,297
Net book amount
At 30 June 2016	9,372	3,676	1,216	421	316	-	182	15,183

6 Property, plant and equipment

	Group
	Freehold land and buildings £'000	Plant and equipment £'000	Total £'000
Cost
At 1 July 2016	11,541	18,410	29,951
Acquisition of a subsidiary	-	44	44
Additions	2,935	2,715	5,650
Disposals	-	(2,131)	(2,131)
Transfers	80	(80)	-
Currency translation	-	32	32
At 30 June 2017	14,556	18,990	33,546
Accumulated depreciation
At 1 July 2016	2,567	12,484	15,051
Acquisition of a subsidiary	-	9	9
Charge for the year	222	1,407	1,629
Disposals	-	(1,988)	(1,988)
Currency translation	-	8	8
At 30 June 2017	2,789	11,920	14,709
Net book amount
At 30 June 2017	11,767	7,070	18,837

	Group
	Freehold land and buildings £'000	Plant and equipment £'000	Total £'000
Cost
At 1 July 2015	11,079	16,585	27,664
Additions	462	2,074	2,536
Disposals	-	(349)	(349)
Transfers	-	80	80
Currency translation	-	20	20
At 30 June 2016	11,541	18,410	29,951
Accumulated depreciation
At 1 July 2015	2,358	11,472	13,830
Charge for the year	209	1,246	1,455
Disposals	-	(316)	(316)
Transfer	-	80	80
Currency translation	-	2	2
At 30 June 2016	2,567	12,484	15,051
Net book amount
At 30 June 2016	8,974	5,926	14,900

 

7 Short-term financial assets

	2017 £'000	2016 £'000
Beginning of year	14,910	9,358
Net purchases	2,071	5,552
End of year	16,981	14,910

The short-term financial assets consist of term cash deposits in sterling with an original term in excess of three months.

8 Earnings per share

Basic and diluted earnings per share for profit attributable to equity holders of the company

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company and held as treasury shares.

Basic	2017	2016
Weighted average number of ordinary shares in issue	115,675,590	115,675,590
Profit attributable to equity holders of the company (£'000)	14,500	12,999
Basic earnings per share (pence per share) total	12.54	11.24

Diluted	2017	2016
Weighted average number of ordinary shares in issue (diluted)	116,303,503	115,938,805
Profit attributable to equity holders of the company (£'000)	14,500	12,999
Diluted earnings per share (pence per share) total	12.47	11.21

 

9 Cash generated from operations

		Group
Cash generated from continuing operations		2017 £'000	2016 £'000
Profit before income tax		18,351	16,269
Depreciation charge		1,697	1,523
Amortisation/impairment of intangibles		2,302	2,277
Profit on disposal of property, plant and equipment		(119)	(89)
Net finance expense/(income)		249	(75)
Retirement benefit contributions in excess of current and past service charge		(140)	(190)
Share of (profit)/loss from joint venture		(178)	1
Share based payment charge		337	193
Research and development expenditure credit		(233)	(236)
Effects of exchange rate movements		113	182
Changes in working capital
- Inventories		(3,646)	(1,128)
- Trade and other receivables		2,156	(2,094)
- Payables and provisions		1,491	2,313
Cash generated from continuing operations		22,380	18,946

10 Cautionary statement

Sections of this report contain forward looking statements that are subject to risk factors including the economic and business circumstances occurring from time to time in countries and markets in which the Group operates. By their nature, forward looking statements involve a number of risks, uncertainties and future assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results and outcomes to differ materially from those expressed in or implied by the forward looking statements. No assurance can be given that the forward looking statements in this preliminary announcement will be realised. Statements about the Chairman's expectations, beliefs, hopes, plans, intentions and strategies are inherently subject to change and they are based on expectations and assumptions as to future events, circumstances and other factors which are in some cases outside the Company's control. Actual results could differ materially from the Company's current expectations. It is believed that the expectations set out in these forward looking statements are reasonable but they may be affected by a wide range of variables which could cause actual results or trends to differ materially, including but not limited to, changes in risks associated with the Company's growth strategy, fluctuations in product pricing and changes in exchange and interest rates.

11 Annual report and accounts

The annual report and accounts will be sent to shareholders on 23 October 2017 and will be available, along with this announcement, on the Group's website (www.fwthorpe.co.uk) from that time. The Group will hold its AGM on 23 November 2017.

 

END

 

 

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