TIDMTFW
RNS Number : 9795N
Thorpe(F.W.) PLC
05 October 2021
Results
for the year ended 30 June 2021
FW Thorpe Plc - a group of companies that de sign, manufacture
and supply professional lighting systems - is pleased to announce
its preliminary results for the year ended 30 June 2021.
Key points:
Continuing operations 2021 2020
-------------------------------------- --------- --------- -------------
Revenue GBP117.9m GBP113.3m 4.0% increase
Operating profit (before exceptional GBP19.2m GBP16.3m 17.7%
item) increase
Profit before tax (before exceptional GBP18.6m GBP15.9m 16.5%
item) increase
Profit before tax GBP20.1m GBP15.9m 26.3%
increase
18.5%
Basic earnings per share 13.57p 11.45p increase
-------------------------------------- --------- --------- -------------
-- Total interim and final dividend of 5.80p (2020: 5.66p) - an increase of 2.5%
-- Final dividend of 4.31p (2020: 4.20p) and special dividend of
2.20p (2020: nil) - last paid in 2016
-- Revenue surpassed last year's high - supported by large scale orders and by services
-- Operating profit recovered strongly from prior year, no impact from fire at Lightronics
-- Profit before tax includes exceptional profit due to
insurance claims from the fire of GBP1.6m
-- Net cash generated from operating activities remained strong - GBP21.9m (2020: GBP19.4m)
-- Solid start to 2021/22, operating performance in line with the start of last year
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR) as supplemented
by The Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310)
("UK MAR").
For further information please contact:
FW Thorpe Plc
Mike Allcock - Chairman, Joint Chief Executive 01527 583200
Craig Muncaster - Joint Chief Executive, Group
Financial Director 01527 583200
Singer Capital Markets - Nominated Adviser
Steve Pearce /James Moat 020 7496 3000
Chairman's Statement
After a year of very difficult trading conditions for many
companies, I would like to start by thanking the management and
workforce across FW Thorpe Plc for their total commitment to Group
operations in the last 12 months. Without their dedication, I would
not be able to report the improved operating results below.
Whilst I am pleased with the improved performance under such
circumstances, there is an element of wondering what could have
been, for a second year running, had the Group not encountered, and
continued to encounter, difficulties associated with the COVID-19
pandemic, the ongoing fallout from Brexit in the UK, and worldwide
supply shortages.
On a positive note, within the Group we have once again started
the new financial year with a very strong order book, exceeding our
expectations in most companies, especially Thorlux Lighting, and we
look forward to more normal trading conditions returning soon.
The Annual Report and Accounts contains a more detailed overview
of the COVID situation and how it is being dealt with across the
Group, together with a closer appraisal of the performance of each
Group company.
Group Results
Year-end revenue grew again in the year, despite various
operational difficulties, culminating in an overall increase of
4.0%, at GBP118m. A high proportion of the growth is attributed to
Thorlux Lighting, but there were notable performances too from TRT
Lighting, exceeding GBP10m revenue for the first time, and Solite
and Portland Lighting, recovering well from reduced levels last
year, and truly solid performances from the Dutch contingent,
especially Lightronics, having to cope with the near-total
destruction of its manufacturing facility early in autumn 2020.
More on this later.
Philip Payne's market, of high-end hospitality venues and
central London offices, was adversely affected the most in the
Group by the pandemic, with no traditional large scale orders
materialising. A solid year of battening down the hatches and
controlling costs resulted in a subdued but profitable year
overall.
Final Group operating profit (before exceptional item) for the
year ended up 17.7% at GBP19m - another creditable result, all
things considered.
The Group's continued robust balance sheet and strong cashflow
performance allows the Board to recommend a final dividend of 4.31p
per share (2020: 4.20p) for the year to 30 June 2021, which gives a
total of 5.80p (2020: 5.66p) and an increase of 2.5%. It has been a
number of years since the Group paid a special dividend, so I am
pleased to recommend a special dividend of 2.20p per share (2020:
nil).
General Overview
All businesses have targeted further growth this year, and early
signs are positive, with order intake overall for the Group at
record levels. The Group has found it particularly hard to forecast
the ongoing stability of orders, given the uncertainty of the
general economic situation. Orders have certainly held up better
than expected; within the Group, we believe that during uncertainty
customers have been less inclined to take chances with lesser known
brands and have stuck with tried and tested and more local
manufacturers. Certain export markets have improved, such as
Germany and Norway, but generally export projects have been harder
to win, reinforcing the point made above. Nevertheless, Group
companies' overall resilience to various adverse trading conditions
has again been proven throughout the financial year.
The Group's use of technology has been good, rolling out new up
to date systems such as Office 365 just before the pandemic. For
sales people, however, there is nothing like a face to face
meeting, and it is only recently that these have restarted on a
gradual basis. This has, for example, made it harder for general
new starters in the sales team, and specifically for a new venture
for Philip Payne attempting to increase, with new recruits, its
sales efforts into end users.
In coming months there are significant challenges to deal with,
especially related to component shortages affecting everyone in the
Group. All companies are dealing with severe shortages and rising
costs for many of the basic components necessary for making Group
luminaires, such as steel, plastics, cardboard, electronic
components and microchips. Although the Group has a strong cash
position and can afford to stock up, the reality is that this has
not been possible and stocks have reduced. Not receiving reliable
delivery dates from suppliers, even for goods planned months in
advance, is making day to day operations tense and frustrating.
Individual companies' service levels have declined - particularly
at Thorlux Lighting, which is now quoting significantly longer lead
times than are normal or desirable.
To add to these difficulties, Brexit has resulted in a number of
workers from Group factories returning home to mainland Europe.
There is a reduced pool of labour in the UK to replace them, which
is not helpful during a period in which the Group is recruiting
heavily to support its requirement to ramp up production output.
Various improvement plans are in place, but there may be some
disruption in output and service levels until later in the autumn.
Brexit also created operational difficulties in the early part of
the calendar year, with finished goods for delivery to the EU
extensively stuck in ports for long periods, and inbound component
supplies hampered in a similar way. Some customers in Germany have
actively moved away from the Group as a result, although within the
Group we have managed to successfully route some orders through
Lightronics to mitigate some of the trading impacts.
I am pleased to report that the Group has successfully completed
the earn-out period with the investors and management team in the
Netherlands. I am also delighted to report that the Group has
successfully secured the ongoing services of the management team. I
take this opportunity to thank all the Group's Dutch colleagues for
their excellent work in recent years - a successful example of just
what can be achieved, working collaboratively, that the Group
aspires to with all its companies and future investments.
As mentioned in my interim statement, Lightronics suffered a
devastating fire in September 2020. It is of credit to the local
management that, on the morning following the fire, new temporary
premises were secured and a recovery plan codenamed Project Restart
commenced. Production output soon recovered and overall,
incredibly, Lightronics managed to achieve similar performance to
that of the prior year, even improving margins slightly through
material cost reductions. Plans for the new building, which will
have around 75% more manufacturing space than the previous unit,
have received planning consent, and construction will commence
shortly. Insurance claims have been recovered, as expected.
Famostar, too, is actively developing its site for future
expansion, with a greater warehouse area planned and plans
generally for a larger operation in the future.
Indeed, all companies have developed individual plans for
growth. For example, Portland Lighting, whose customer base has
been in steady decline for the last few years, has developed new
products into two completely new market sectors to strengthen its
own resilience to market movements in a similar way to the Group as
whole.
On the sustainability front, within the Group we continue to
develop and implement strategies to improve our credentials even
further - an activity first started in earnest with an improvement
programme back in 2010. A few months ago, I visited the Group's
tree planting scheme in Devauden, Monmouthshire, some 10 years on
from when I ceremonially planted the first tree there with the
government minister for the environment and sustainable
development. Currently 149,849 saplings have been planted, with
many well on their way to reaching maturity, with the scheme
winning independent awards in the process. Fewer trees will be
planted in future, as the Group will have less grid supplied energy
to offset, having completed a project during the year to fit solar
PV panels to most Group company factory roofs, with a target of
self-generating around 40 to 50% of the Group's energy. Many Group
directors, me included, have switched to fully electric vehicles;
of course, during the daytime, whilst we are sitting at our desks
working, our cars are charging, pollution free, in front of the
building. Apart from the obvious green benefits, the Group's solar
investments are expected to pay back in as little as five years, so
it is good news for lowering our cost base too.
All Group companies, on the product front, are taking
circularity seriously, further minimising the use of plastics and
environmentally damaging materials, targeting even longer
lifetimes, and making products simpler to upgrade or recycle at the
end of their lifetime. More and more of the Group's customers
demand solutions that are kind to the environment - good news for
local manufacturing wherever possible.
The Group is undergoing a three year improvement programme,
using an external third party assessor, to better measure and
improve its green credentials and certify them to appropriate
standards in an independent and reliable way. The Board feels this
is important, because the credibility of some claims in the market
is generally questionable.
Throughout the pandemic, FW Thorpe has continued its policy of
independence and has not claimed government assistance such as
furlough monies at any stage. Even during periods of layoff and
during COVID-related absences, employees have been paid in full. I
am proud of what has been achieved by everyone concerned - those
working diligently from home, and those arriving daily at the
Group's busy and COVID-secure factories.
Investments in lighting controls technology, and in particular
in the ability of those systems to co-communicate with other
systems, continues at pace. Later in the year, Thorlux will release
the second generation of SmartScan, building on the reliable and
successful SmartScan system first launched in 2016, which won the
2019 Queen's Award for Enterprise in the Innovation category. The
system, now being used extensively by many companies across the
Group, will be faster and smarter, and importantly will provide
more data and analytics for customers to use in new ways to help
streamline their operations, using the Group's luminaires as a
method of collecting and transporting information. Investments this
year in new improved electronics, especially but not limited to
those for outdoor areas, have brought cost downs, enabling
customers to achieve paybacks in shorter times.
Acquisition
I mentioned last year that the Group remained acquisitive but
was waiting until business again stabilised to some extent. I am
pleased to report that, having put acquisition projects on hold
last spring and following further discussions, on 4 October 2021 FW
Thorpe acquired a majority stake in Electrozemper S.A., trading as
Zemper, which has manufactured emergency lighting luminaires in
Ciudad Real, Spain, since 1967.
Zemper has a complete range of emergency lighting, an area of
business well liked by FW Thorpe for being somewhat niche and
specialised. The factory is self-contained, with its own plastic
moulding production, electronic printed circuit board assembly
lines, robotic assembly techniques and end of line testing.
Generally, Zemper operates in markets where the Group currently
only has a very small market share. Zemper's largest revenue is
derived from Spain, France and Belgium. Zemper's annual revenue is
EUR20m, with EBITDA over EUR4m. The deal structure is similar to
that agreed for the Dutch acquisitions, and management is part of
the ongoing project.
The Board sees long term synergies and collaboration
possibilities with other companies in the Group whilst further
penetrating wider geographical markets.
I welcome to FW Thorpe Plc the employees of Zemper and wish them
long and successful careers as part of the team.
Personnel
I would like to thank my whole team for their continued support
and diligence through such challenging times. I hope that some
stability will return in this financial year, and I look forward to
being able more regularly to visit Group operating sites again
soon.
Outlook
Whilst still carrying some increased manufacturing costs, all
companies are capable of producing increased revenue in the coming
year. As mentioned earlier, the Group as a whole commenced the new
year with a good order book, especially at Thorlux Lighting.
There remain some difficulties, though, caused by component
supply shortages, some capacity restraints and ongoing
COVID-related disruption.
Mike Allcock
Chairman and Joint Chief Executive
5 October 2021
Consolidated Results
Consolidated Income Statement
For the year ended 30 June 2021
2021 2020
Notes GBP'000 GBP'000
------------------------------------------------ ----- -------- --------
Continuing operations
Revenue 2 117,875 113,342
Cost of sales (62,484) (63,351)
------------------------------------------------ ----- -------- --------
Gross profit 55,391 49,991
------------------------------------------------ ----- -------- --------
Distribution costs (13,598) (13,434)
Administrative expenses (22,855) (20,489)
Other operating income 289 264
------------------------------------------------ ----- -------- --------
Operating profit (before exceptional item) 19,227 16,332
Exceptional item in respect of Lightronics fire 1,566 -
------------------------------------------------ ----- -------- --------
Operating profit 2 20,793 16,332
Finance income 615 708
Finance expense (1,267) (1,097)
------------------------------------------------ ----- -------- --------
Profit before income tax 20,141 15,943
Income tax expense 3 (4,329) (2,629)
------------------------------------------------ ----- -------- --------
Profit for the year 15,812 13,314
------------------------------------------------ ----- -------- --------
Earnings per share from continuing operations attributable to
the equity holders of the Company during the year (expressed in
pence per share)
2021 2020
Basic and diluted earnings per share Notes pence pence
------------------------------------- ----- ------ ------
- Basic 8 13.57 11.45
- Diluted 8 13.52 11.40
------------------------------------- ----- ------ ------
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
2021 2020
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Profit for the year: 15,812 13,314
------------------------------------------------------ -------- --------
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations (688) 229
------------------------------------------------------ -------- --------
(688) 229
Items that will not be reclassified to profit
or loss
Revaluation of financial assets at fair value
through other comprehensive income 135 (834)
Actuarial gain/(loss) on pension scheme 1,758 (2,039)
Movement on unrecognised pension scheme surplus (1,940) 1,869
Taxation (236) 13
------------------------------------------------------ -------- --------
(283) (991)
Other comprehensive expense for the year, net
of tax (971) (762)
------------------------------------------------------ -------- --------
Total comprehensive income for the year attributable
to equity shareholders 14,841 12,552
------------------------------------------------------ -------- --------
Consolidated Statement of Financial Position
As at 30 June 2021
Group
---------------------------------------------------- ----- ------------------
2021 2020
Notes GBP'000 GBP'000
---------------------------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 5 28,251 30,574
Intangible assets 6 19,705 21,032
Investments in subsidiaries - -
Investment property 1,967 1,987
Financial assets at amortised cost 746 1,800
Equity accounted investments and joint arrangements - -
Financial assets at fair value through other
comprehensive income 3,764 3,772
---------------------------------------------------- ----- -------- --------
Total non-current assets 54,433 59,165
---------------------------------------------------- ----- -------- --------
Current assets
Inventories 20,389 25,296
Trade and other receivables 29,310 21,256
Financial assets at amortised cost 1,800 625
Short-term financial assets 7 23,603 18,580
Cash and cash equivalents 52,268 44,422
---------------------------------------------------- ----- -------- --------
Total current assets 127,370 110,179
---------------------------------------------------- ----- -------- --------
Total assets 181,803 169,344
---------------------------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables (39,198) (36,185)
Lease liabilities (226) (220)
Current income tax liabilities (1,040) (831)
---------------------------------------------------- ----- -------- --------
Total current liabilities (40,464) (37,236)
---------------------------------------------------- ----- -------- --------
Net current assets 86,906 72,943
---------------------------------------------------- ----- -------- --------
Non-current liabilities
Other payables (78) (67)
Lease liabilities (435) (417)
Provisions for liabilities and charges (2,242) (2,721)
Deferred income tax liabilities (1,591) (601)
---------------------------------------------------- ----- -------- --------
Total non-current liabilities (4,346) (3,806)
---------------------------------------------------- ----- -------- --------
Total liabilities (44,810) (41,042)
---------------------------------------------------- ----- -------- --------
Net assets 136,993 128,302
---------------------------------------------------- ----- -------- --------
Equity
Share capital 1,189 1,189
Share premium account 1,960 1,526
Capital redemption reserve 137 137
Foreign currency translation reserve 2,076 2,764
Retained earnings
---------------------------------------------------- ----- -------- --------
At 1 July 122,686 117,036
Profit for the year attributable to the owners 15,812 13,314
Other changes in retained earnings (6,867) (7,664)
---------------------------------------------------- ----- -------- --------
131,631 122,686
---------------------------------------------------- ----- -------- --------
Total equity 136,993 128,302
---------------------------------------------------- ----- -------- --------
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Foreign
Share Capital currency
Share premium redemption translation Retained Total
capital account reserve reserve earnings equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 1 July
2019 1,189 1,266 137 2,535 117,036 122,163
Adjustments on first
time adoption of IFRS16
(net of tax) - - - - (265) (265)
Restated balance at
1 July 2019 1,189 1,266 137 2,535 116,771 121,898
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Comprehensive income
Profit for the year
to 30 June 2020 - - - - 13,314 13,314
Actuarial loss on
pension scheme - - - - (2,039) (2,039)
Movement on unrecognised
pension scheme surplus - - - - 1,869 1,869
Revaluation of financial
assets at fair value
through other comprehensive
income - - - - (834) (834)
Movement on associated
deferred tax - - - - 81 81
Impact of deferred
tax rate change - - - - (68) (68)
Exchange differences
on translation of
foreign operations - - - 229 - 229
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total comprehensive
income - - - 229 12,323 12,552
Transactions with
owners
Shares issued from
exercised options - 260 - - - 260
Dividends paid to
shareholders 4 - - - - (6,468) (6,468)
Share based payment
charge - - - - 60 60
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total transactions
with owners - 260 - - (6,408) (6,148)
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 30 June
2020 1,189 1,526 137 2,764 122,686 128,302
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Comprehensive income
Profit for the year
to 30 June 2021 - - - - 15,812 15,812
Actuarial loss on
pension scheme - - - - 1,758 1,758
Movement on unrecognised
pension scheme surplus - - - - (1,940) (1,940)
Revaluation of financial
assets at fair value
through other comprehensive
income - - - - 135 135
Movement on associated
deferred tax - - - - (59) (59)
Impact of deferred
tax rate change - - - - (177) (177)
Exchange differences
on translation of
foreign operations - - - (688) - (688)
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total comprehensive
income - - - (688) 15,529 14,841
Transactions with
owners
Shares issued from
exercised options - 434 - - - 434
Dividends paid to
shareholders 4 - - - - (6,631) (6,631)
Share based payment
charge - - - - 47 47
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total transactions
with owners - 434 - - (6,584) (6,150)
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 30 June
2021 1,189 1,960 137 2,076 131,631 136,993
----------------------------- ----- -------- -------- ----------- ------------ --------- --------
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Group
------------------------------------------------- ----- ------------------
2021 2020
Notes GBP'000 GBP'000
------------------------------------------------- ----- -------- --------
Cash flows from operating activities
Cash generated from operations 9 25,726 23,231
Tax paid (3,853) (3,848)
------------------------------------------------- ----- -------- --------
Net cash generated from operating activities 21,873 19,383
------------------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and equipment (2,932) (6,988)
Proceeds from sale of property, plant and
equipment 290 212
Purchase of intangibles (1,756) (1,719)
Net sale/(purchase) of financial assets at
fair value through Other Comprehensive Income 205 (61)
Insurance proceeds re: property, plant and
equipment lost in fire 3,057 -
Proceeds from sale of other financial assets
at fair value through Profit and Loss account - 387
Property rental and similar income 41 92
Dividend income 186 187
Net (deposit)/withdrawal of short-term financial
assets (5,023) 7,903
Interest received 105 322
Net receipt of loan notes 59 1,156
------------------------------------------------- ----- -------- --------
Net cash (used in)/received from investing
activities (5,768) 1,491
------------------------------------------------- ----- -------- --------
Cash flows from financing activities
Net proceeds from the issuance of ordinary
shares 434 260
Proceeds from loans 365 192
Repayment of borrowings (958) (203)
Settlement of lease liabilities - (1,011)
Payment of lease liabilities (310) (265)
Payment of lease interest (39) (36)
Dividends paid to Company's shareholders 4 (6,631) (6,468)
------------------------------------------------- ----- -------- --------
Net cash used in financing activities (7,139) (7,531)
------------------------------------------------- ----- -------- --------
Effects of exchange rate changes on cash (1,120) 272
------------------------------------------------- ----- -------- --------
Net increase in cash in the year 7,846 13,615
Cash and cash equivalents at beginning of
year 44,422 30,807
------------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of year 52,268 44,422
------------------------------------------------- ----- -------- --------
Notes
1 Basis of preparation
The consolidated and company financial statements of FW Thorpe
Plc have been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act
2006. The financial statements have been prepared on a going
concern basis, under the historical cost convention except for the
financial instruments measured at fair value either through other
comprehensive income or profit and loss per the provisions of
IFRS9.
There are no other standards that are not yet effective that are
expected to have a material impact on the group in the current or
future reporting periods and on foreseeable future
transactions.
The consolidated financial statements are presented in Pounds
Sterling, which is the Company's functional and presentation
currency, rounded to the nearest thousand.
The preparation of financial information in conformity with the
basis of preparation described above requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's and
Group's accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial information, are
disclosed in the critical accounting estimates and judgements
section.
The Company has elected to take the exemption under section 408
of the Companies Act 2006 from presenting the Company income
statement.
The directors confirm they are satisfied that the Group and
Company have adequate resources, with GBP52.3m cash and GBP23.6m
short term deposits, to continue in business for the foreseeable
future factoring in the expected impact of Covid-19. They have also
produced an analysis that demonstrates that the Group could cover
its cash commitments even if there was a reduction of 33% in sales
over the following year from approving these accounts. For this
reason, they continue to adopt the going concern basis in preparing
the accounts.
The financial information set out in this document does not
constitute the statutory financial statements of the Group for the
year end 30 June 2021 but is derived from the Annual Report and
Accounts 2021. The auditors have reported on the annual financial
statements and issued an unqualified opinion.
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 FW
Thorpe is organised into ten 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
businesses in the Netherlands, Lightronics and Famostar, are
material subsidiaries and disclosed separately as Netherlands
companies.
The seven remaining operating segments have been aggregated into
the "other companies" reportable segment based upon their size,
comprising the entities Philip Payne Limited, Solite Europe
Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux
Lighting L.L.C., Thorlux Australasia Pty Limited, Thorlux Lighting
GmbH.
FW 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.
Inter- Total
Netherlands Other segment continuing
Thorlux companies companies adjustments operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2021
Revenue to external customers 69,969 31,490 16,416 - 117,875
Revenue to other group companies 3,304 290 5,238 (8,832) -
------------------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 73,273 31,780 21,654 (8,832) 117,875
Operating profit (before exceptional
item) 11,694 5,402 1,722 409 19,227
Exceptional item in respect of Lightronics
fire - 1,566 - - 1,566
------------------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 11,694 6,968 1,722 409 20,793
------------------------------------------- -------- ----------- ---------- ------------ -----------
Net finance expense (652)
------------------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 20,141
------------------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2020
Revenue to external customers 65,615 31,340 16,387 - 113,342
Revenue to other group companies 3,164 234 4,021 (7,419) -
------------------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 68,779 31,574 20,408 (7,419) 113,342
------------------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 10,150 4,125 1,412 645 16,332
------------------------------------------- -------- ----------- ---------- ------------ -----------
Net finance expense (389)
------------------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 15,943
------------------------------------------- -------- ----------- ---------- ------------ -----------
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 elimination of profit on transfer of assets
between Group companies.
(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.
2021 2020
GBP'000 GBP'000
------------------ -------- --------
UK 74,363 69,657
Netherlands 28,879 28,748
Rest of Europe 12,499 12,265
Rest of the World 2,134 2,672
------------------ -------- --------
117,875 113,342
------------------ -------- --------
3 Income Tax Expense
Analysis of income tax expense in the year:
2021 2020
GBP'000 GBP'000
-------------------------------------------------- -------- ---------
Current tax
Current tax on profits for the year 4,128 3,691
Adjustments in respect of prior years (564) (981)
-------------------------------------------------- -------- ---------
Total current tax 3,564 2,710
-------------------------------------------------- -------- ---------
Deferred tax
Origination and reversal of temporary differences 765 (81)
-------------------------------------------------- -------- ---------
Total deferred tax 765 (81)
-------------------------------------------------- -------- ---------
Income tax expense 4,329 2,629
-------------------------------------------------- -------- ---------
The tax assessed for the year is higher (2020: lower) than the
standard rate of corporation tax in the UK of 19.00% (2020:
19.00%). The differences are explained below:
2021 2020
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Profit before income tax 20,141 15,943
--------------------------------------------------------- -------- --------
Profit on ordinary activities multiplied by the standard
rate in the UK of 19% (2020: 19.00%) 3,827 3,029
Effects of:
Expenses not deductible for tax purposes 1,077 854
Accelerated tax allowances and other timing differences 238 17
Adjustments in respect of prior years (564) (981)
Patent box relief (686) (643)
Foreign profit taxed at higher rate 437 353
--------------------------------------------------------- -------- --------
Tax charge 4,329 2,629
--------------------------------------------------------- -------- --------
The effective tax rate was 21.49% (2020: 16.49%). Adjustments in
respect of prior years relates to refunds received for prudent
assumptions on additional investment allowances and patent box
relief in the tax calculations.
The UK corporation tax rate of 19% (effective 1 April 2020) was
substantively enacted on 17 March 2020. The UK corporation tax rate
increase from 19% to 25% from 1 April 2023, was substantively
enacted in May 2021. This has led to an increase in the deferred
tax assets and liabilities at 30 June 2021 as these values have
been calculated based on a rate at which they are expected to
crystalise.
4 Dividends
Dividends paid during the year are outlined in the tables
below:
Dividends paid (pence per share) 2021 2020
--------------------------------- ---- ----
Final dividend 4.20 4.10
Interim dividend 1.49 1.46
--------------------------------- ---- ----
Total 5.69 5.56
--------------------------------- ---- ----
A final dividend in respect of the year ended 30 June 2021 of
4.31p per share, amounting to GBP5,028,000 (2020: GBP4,886,000) and
a special dividend of 2.20p, amounting to GBP2,567,000 (2020: nil)
is to be proposed at the Annual General Meeting on 18 November 2021
and, if approved, will be paid on 25 November 2021 to shareholders
on the register on 29 October 2021. The ex-dividend date is 28
October 2021. These financial statements do not reflect this
dividend payable.
Dividends proposed (pence per share) 2021 2020
------------------------------------- ---- ----
Final dividend 4.31 4.20
------------------------------------- ---- ----
Special dividend 2.20 -
------------------------------------- ---- ----
2021 2020
Dividends paid GBP'000 GBP'000
----------------- -------- --------
Final dividend 4,895 4,770
Interim dividend 1,736 1,698
----------------- -------- --------
Total 6,631 6,468
----------------- -------- --------
2021 2020
Dividends proposed GBP'000 GBP'000
------------------- -------- --------
Final dividend 5,028 4,886
------------------- -------- --------
Special dividend 2,567 -
------------------- -------- --------
5 Property, Plant and Equipment
Group
------------------------- ----------------------------------------------
Right-
Freehold land Plant and of-use
and buildings equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- -------- --------
Cost
At 1 July 2020 23,552 26,933 856 51,341
Additions 133 2,435 364 2,932
Disposals* (1,181) (1,548) (276) (3,005)
Currency translation (410) (158) (49) (617)
------------------------- -------------- ---------- -------- --------
At 30 June 2021 22,094 27,662 895 50,651
------------------------- -------------- ---------- -------- --------
Accumulated depreciation
At 1 July 2020 4,362 15,955 450 20,767
Charge for the year 617 2,487 212 3,316
Disposals* (283) (1,013) (221) (1,517)
Currency translation (58) (84) (24) (166)
------------------------- -------------- ---------- -------- --------
At 30 June 2021 4,638 17,345 417 22,400
------------------------- -------------- ---------- -------- --------
Net book amount
------------------------- -------------- ---------- -------- --------
At 30 June 2021 17,456 10,317 478 28,251
------------------------- -------------- ---------- -------- --------
* Disposals includes the write off of assets as a result of the
Lightronics fire.
Group
------------------------- ----------------------------------------------
Right-
Freehold land Plant and of-use
and buildings equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- -------- --------
Cost
At 1 July 2019 19,720 23,851 - 43,571
Adoption of IFRS16 - - 2,266 2,266
------------------------- -------------- ---------- -------- --------
At 1 July (restated) 19,720 23,851 2,266 45,837
Additions 3,709 4,016 192 7,917
Disposals (31) (1,005) (1,628) (2,664)
Transfers (17) 17 - -
Currency translation 171 54 26 251
------------------------- -------------- ---------- -------- --------
At 30 June 2020 23,552 26,933 856 51,341
------------------------- -------------- ---------- -------- --------
Accumulated depreciation
At 1 July 2019 3,712 14,506 - 18,218
Adoption of IFRS16 - - 908 908
------------------------- -------------- ---------- -------- --------
At 1 July (restated) 3,712 14,506 908 19,126
Charge for the year 662 2,331 228 3,221
Disposals (31) (911) (699) (1,641)
Transfers (2) 2 - -
Currency translation 21 27 13 61
------------------------- -------------- ---------- -------- --------
At 30 June 2020 4,362 15,955 450 20,767
------------------------- -------------- ---------- -------- --------
Net book amount
------------------------- -------------- ---------- -------- --------
At 30 June 2020 19,190 10,978 406 30,574
------------------------- -------------- ---------- -------- --------
6 Intangible Assets
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
Cost
At 1 July 2020 15,116 7,357 3,000 1,323 2,573 150 182 29,701
Additions - 1,516 - - 240 - - 1,756
Write-offs
and transfers - (964) - - (5) - - (969)
Currency translation (685) (38) (154) (66) 3 - - (940)
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
At 30 June
2021 14,431 7,871 2,846 1,257 2,811 150 182 29,548
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
Accumulated
amortisation
At 1 July 2020 248 3,902 1,908 980 1,481 150 - 8,669
Charge for
the year - 1,508 373 74 373 - - 2,328
Write-offs
and transfers - (964) - - (5) - - (969)
Currency translation (7) (31) (102) (48) 3 - - (185)
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
At 30 June
2021 241 4,415 2,179 1,006 1,852 150 - 9,843
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
Net book amount
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
At 30 June
2021 14,190 3,456 667 251 959 - 182 19,705
--------------------- -------- ----------- ---------- -------- -------- -------- ------------------- --------
Write-offs relate to development assets where no further
economic benefits will be obtained.
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2019 14,921 7,292 2,956 1,304 2,202 150 182 29,007
Additions - 1,322 - - 397 - - 1,719
Write-offs
and transfers - (1,275) - - (26) - - (1,301)
Currency translation 195 18 44 19 - - - 276
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2020 15,116 7,357 3,000 1,323 2,573 150 182 29,701
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated
amortisation
At 1 July 2019 246 3,441 1,504 801 1,178 150 - 7,320
Charge for
the year - 1,715 371 162 329 - - 2,577
Write-offs
and transfers - (1,275) - - (26) - - (1,301)
Currency translation 2 21 33 17 - - - 73
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2020 248 3,902 1,908 980 1,481 150 - 8,669
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2020 14,868 3,455 1,092 343 1,092 - 182 21,032
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
7 Short-term Financial Assets
2021 2020
Group and Company GBP'000 GBP'000
--------------------------- -------- --------
Beginning of year 18,580 26,483
Net deposits/(withdrawals) 5,023 (7,903)
--------------------------- -------- --------
23,603 18,580
--------------------------- -------- --------
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 2021 2020
--------------------------------------------------------------- ------------ -----------
Weighted average number of ordinary shares in issue 116,511,580 116,272,709
--------------------------------------------------------------- ------------ -----------
Profit attributable to equity holders of the Company (GBP'000) 15,812 13,314
--------------------------------------------------------------- ------------ -----------
Basic earnings per share (pence per share) total 13.57 11.45
--------------------------------------------------------------- ------------ -----------
Diluted 2021 2020
--------------------------------------------------------------- ------------ -----------
Weighted average number of ordinary shares in issue (diluted) 116,938,189 116,805,366
--------------------------------------------------------------- ------------ -----------
Profit attributable to equity holders of the Company (GBP'000) 15,812 13,314
--------------------------------------------------------------- ------------ -----------
Diluted earnings per share (pence per share) total 13.52 11.40
--------------------------------------------------------------- ------------ -----------
9 Cash Generated from Operations
Group
------------------------------------------------------ ------------------
2021 2020
Cash generated from continuing operations GBP'000 GBP'000
------------------------------------------------------ -------- --------
Profit before income tax 20,141 15,943
Depreciation charge 3,316 3,221
Depreciation of investment property 20 19
Amortisation of intangibles 2,328 2,577
Profit on disposal of property, plant and equipment (115) (118)
Exceptional item in respect of Lightronics fire (1,566) -
Insurance proceeds re inventory lost in fire 5 -
Insurance proceeds re other costs 318 -
Net finance expense 652 389
Retirement benefit contributions in excess of current
and past service charge (182) (170)
Share based payment charge 1,429 1,211
Research and development expenditure credit (289) (249)
Effects of exchange rate movements 1,114 (219)
Changes in working capital
- Inventories 4,878 238
- Trade and other receivables (7,287) 571
- Payables and provisions 964 (182)
------------------------------------------------------ -------- --------
Total cash generated from operations 25,726 23,231
------------------------------------------------------ -------- --------
10 Events after the Statement of Financial Positions date
On 21 September 2021 the Group completed its commitment to
purchase the outstanding share appreciation rights in the
subsidiaries Lightronics Participaties B.V. and Famostar Emergency
Lighting B.V. The settlement was executed by a cash payment of the
outstanding liability.
On 4 October 2021, the Group acquired 63% of the share capital
of Electrozemper S.A. (Zemper), an emergency lighting specialist in
Spain. The company was acquired by FW Thorpe Plc for initial
consideration of EUR20.3m (GBP17.5m), plus EUR4.2m (GBP3.6m) for
cash, working capital and property adjustments, with an additional
EUR1.1m (GBP1.0m) payable subject to EBITDA performance 2021/22.
The acquisition has been funded from the cash reserves of FW Thorpe
Plc.
For the financial year to June 2021, Zemper achieved revenue of
EUR20.3m (GBP17.4m) and operating profit of EUR3.8m (GBP3.3m). A
fair value exercise will be performed in the next 12 months to
determine the value of goodwill and other intangible assets that
have arisen from this acquisition.
11 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.
12 Annual report and accounts
The annual report and accounts will be sent to shareholders on
12 October 2021 and will be available, along with this
announcement, on the Group's website (www.fwthorpe.co.uk) from 12
October 2021. The Group will hold its AGM on 18 November 2021.
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END
FR EAPELEEXFFFA
(END) Dow Jones Newswires
October 05, 2021 02:00 ET (06:00 GMT)
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