TIDMTFW
RNS Number : 6336S
Thorpe(F.W.) PLC
18 March 2021
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2020
FW Thorpe Plc - a group of companies that design, manufacture
and supply professional lighting systems - is pleased to announce
its interim results for the six months ended 31 December 2020.
Financial highlights:
Interim Interim
2021 (unaudited) 2020 (unaudited)
-------------------------- ------------------ ------------------ ------
Revenue GBP56.4m GBP57.4m -1.8%
Operating profit GBP7.7m GBP7.5m +2.2%
Profit before tax GBP7.4m GBP7.4m -%
Basic earnings per share 5.05p 5.04p +0.2%
-------------------------- ------------------ ------------------ ------
-- Interim dividend 1.49p (Interim 2020: 1.46p) - 2.1% increase
-- Strong start to the year by Thorlux, supported by some large project orders
-- Netherlands performance - strong recovery following fire at Lightronics back in September
-- Other companies - reduced revenue at overseas sales offices
-- Net cash generated from operating activities - GBP8.0m (Interim 2020: GBP6.2m)
Note: This announcement contains inside information for the
purposes of Article 7 of Regulation 596/2014 (MAR).
For further information, please contact:
FW Thorpe Plc
Mike Allcock - Chairman and Joint Chief Executive 01527 583200
Craig Muncaster - Joint Chief Executive and
Group Financial Director 01527 583200
N+1 Singer - Nominated Adviser
Steve Pearce/James Moat 020 7496 3000
CHAIRMAN'S INTERIM STATEMENT
Despite the challenging economic backdrop, the Group delivered a
resilient performance, with revenue reducing only marginally at the
half year compared with last year, and a pleasing marginal increase
in profitability at an operating level.
Whilst much of the business community suffers serious ongoing
uncertainty caused by the Covid pandemic, now compounded by
Brexit-related operational difficulties, it is also pleasing for
the Group to report a strong order performance, mainly attributed
to its largest division, Thorlux Lighting, with support from TRT
Lighting and Famostar. Understandably, elsewhere, orders are
struggling to reach the levels of previous years, but all the main
manufacturing companies achieved profitable results at the
half-year point. Covid and Brexit are presenting some barriers to
export sales, which are likely to resolve over time.
As reported in last autumn's Chairman's Statement, Lightronics
suffered a devastating fire on 23 September 2020. Fortunately no
one was hurt, but unfortunately the fire destroyed the majority of
Lightronics' manufacturing facility and all of the recently
completed European Application Centre, requiring the building to be
completely demolished. Giving credit to the local management team,
remarkably, within only a few weeks, manufacturing commenced at a
rented property close by. The latest update is that the site is now
cleared and ready for reconstruction of the new improved facility,
insurance claims are proceeding in accordance with expectations,
and production output and efficiency is recovering to near normal
levels. I would like to congratulate the whole team for their
tremendous professionalism, and I would also like to thank
Lightronics' customers for their support during this time.
Following the Lightronics' fire, the Board has completed an
independent enhanced fire risk review of all its operations, and
actions are continuing to do everything possible to manage and
mitigate risks of this nature.
Covid planning and employee safety remain a priority. The Group
still has around 200 employees working from home, with a successful
IT infrastructure helping to facilitate their excellent performance
under the circumstances. For those attending work, all the Group's
Covid-secure factories in the UK have installed infra-red
temperature testing at entrances, and, furthermore, all employees
are tested at regular intervals using fast-response lateral flow
test kits. Despite the Group's rigorous planning and strict
adherence to guidelines, shortly after Christmas the TRT facility
in Redditch experienced significant disruption. Other sites,
although not as seriously affected, are coping with ongoing daily
difficulties as best they can.
Capital investment has been significantly reduced compared to
prior periods; however, the Board recently approved the roll-out of
solar PV installations on the roofs of other UK group companies, in
addition to the recently completed and very successful Thorlux
scheme, reported in the 2019 Annual Report and Accounts. The Group
expects to generate at least 40% of the electricity consumed on
these sites, saving both cost and carbon emissions, further
underpinning the Group's sustainability credentials and wish to
continually improve in this area.
This half year has been particularly difficult to manage with so
many adverse head winds. I would like to congratulate the whole
team for what has been achieved so far in such unusual and
challenging circumstances and thank them for their support in
keeping manufacturing almost entirely operational and satisfying
customer demands, thus helping keep customers' infrastructure
projects active.
As a result of this solid performance and strong balance sheet,
the Board has approved an increased dividend of 1.49p (interim
2020: 1.46p) for the six months to 31 December 2020.
Supported by the Group's healthy order book, I foresee a steady
second-half performance better than expected at the start of the
pandemic.
I wish all stakeholders continued good health and I look forward
to the conclusion of the vaccination programme signalling a return
to business as usual. The Board certainly has an appetite to return
to a trajectory of sustained and profitable growth, and to that end
board members hope that the recent impacts on the economy long term
will not restrict us from achieving our goals.
Mike Allcock
Chairman
18 March 2021
FW Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2020
31.12.20 31.12.19 30.06.20
(six months (six months (twelve
to) to) months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 56,374 57,412 113,342
Operating profit 7,653 7,489 16,332
Finance income 364 402 708
Finance costs (650) (527) (1,097)
Profit before tax expense 7,367 7,364 15,943
Tax expense (1,489) (1,505) (2,629)
------------- ------------- ----------
Profit for the period 5,878 5,859 13,314
Dividend rate per share:
------ ------ ------
Interim 1.49p 1.46p 1.46p
Final - - 4.20p
------ ------ ------
Earnings per share - basic 5.05p 5.04p 11.45p
- diluted 5.03p 5.02p 11.40p
-------------------------------- ------ ------ -------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2020
31.12.20 31.12.19 30.06.20
(six months (six months
to) to)
(twelve
months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit for the period 5,878 5,859 13,314
Other comprehensive income
Items that may be reclassified
to profit or loss
Exchange rate differences on translation
of foreign operations (30) (558) 229
(30) (558) 229
------------- ------------- ----------
Items that will not be reclassified
to profit or loss
Revaluation of financial assets
at fair value through other comprehensive
income * 403 168 (834)
Actuarial loss on pension scheme - - (2,039)
Movement on unrecognised pension
surplus - - 1,869
Taxation (6) (29) 13
397 139 (991)
------------- ------------- ----------
Other comprehensive income for
the year, net of tax 367 (419) (762)
Total comprehensive income for
the year 6,245 5,440 12,552
------------- ------------- ----------
All comprehensive income is attributable to the owners of the
company.
* The gain on the revaluation of financial assets at fair value
through other comprehensive income of GBP403,000 is due to the
increase in market value of these investments.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
As at As at As at
31.12.20 31.12.19 30.06.20
(unaudited) (unaudited) (audited)
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 26,924 30,317 30,574
Intangible assets 20,368 20,811 21,032
Investment property 1,982 1,997 1,987
Loans and receivables - 2,919 1,800
Equity accounted investments - 936 -
Financial assets at fair value
through other comprehensive income 4,175 3,838 3,772
Deferred tax assets - 2 -
------------ ------------ ----------
53,449 60,820 59,165
Current assets
Inventories 20,664 25,121 25,296
Trade and other receivables 26,457 21,568 21,256
Financial assets at amortised cost 1,800 - 625
Short-term financial assets 25,596 24,542 18,580
Cash and cash equivalents 39,471 27,438 44,422
------------ ------------ ----------
Total current assets 113,988 98,669 110,179
Total assets 167,437 159,489 169,344
------------ ------------ ----------
Liabilities
Current liabilities
Trade and other payables (33,205) (19,102) (36,185)
Lease liabilities (238) (82) (220)
Current tax liabilities (150) (274) (831)
------------ ------------ ----------
Total current liabilities (33,593) (19,458) (37,236)
Net current assets 80,395 79,211 72,943
Non-current liabilities
Other payables (73) (13,442) (67)
Lease liabilities (464) (565) (417)
Provisions for liabilities and
charges (2,732) (2,375) (2,721)
Deferred tax liabilities (626) (786) (601)
------------ ------------ ----------
Total non-current liabilities (3,895) (17,168) (3,806)
------------ ------------ ----------
Total liabilities (37,488) (36,626) (41,042)
------------ ------------ ----------
Net assets 129,949 122,863 128,302
------------ ------------ ----------
Equity attributable to owners of
the company
Issued share capital 1,189 1,189 1,189
Share premium account 1,799 1,526 1,526
Capital redemption reserve 137 137 137
Foreign currency translation reserve 2,734 1,977 2,764
Retained earnings
-------------------------------------- ------------ ------------ ----------
At 1 July 122,686 117,036 117,036
Profit for the year attributable
to owners 5,878 5,859 13,314
Other changes in retained earnings (4,474) (4,861) (7,664)
-------------------------------------- ------------ ------------ ----------
124,090 118,034 122,686
------------ ------------ ----------
Total equity 129,949 122,863 128,302
------------ ------------ ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2020
Share Share Capital Foreign Retained Total
Capital Premium Redemption Currency Earnings Equity
Reserve Translation
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 June 2019 1,189 1,266 137 2,535 117,036 122,163
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
Adjustment on first time
adoption of IFRS16 (net
of tax) - - - - (265) (265)
Restated balance at 30
June 2019 1,189 1,266 137 2,535 116,771 121,898
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
Comprehensive income
Profit for six months
to 31 December 2019 - - - - 5,859 5,859
Other comprehensive income - - - (558) 139 (419)
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
Total comprehensive income - - - (558) 5,998 5,440
Transactions with owners
Share options exercised - 260 - - - 260
Dividends paid to shareholders - - - - (4,770) (4,770)
Share-based payment charge - - - - 35 35
Total transactions with
owners - 260 - - (4,735) (4,475)
Comprehensive income
Profit for six months
to 30 June 2020 - - - - 7,455 7,455
Actuarial loss on pension
scheme - - - - (2,039) (2,039)
Movement on unrecognised
pension surplus - - - - 1,869 1,869
Revaluation of financial
assets at fair value through
other comprehensive income - - - - (1,002) (1,002)
Movement on associated
deferred tax - - - - 110 110
Impact of deferred tax
rate change - - - - (68) (68)
Exchange rate differences
on translation of foreign
operations - - - 787 - 787
Total comprehensive income - - - 787 6,325 7,112
Transactions with owners
Dividends paid to shareholders - - - - (1,698) (1,698)
Share-based payment charge - - - - 25 25
Total transactions with
owners - - - - (1,673) (1,673)
Balance at 30 June 2020 1,189 1,526 137 2,764 122,686 128,302
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
Comprehensive income
Profit for six months
to 31 December 2020 - - - - 5,878 5,878
Other comprehensive income - - - (30) 397 367
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
Total comprehensive income - - - (30) 6,275 6,245
Transactions with owners
Share options exercised - 273 - - - 273
Dividends paid to shareholders - - - - (4,895) (4,895)
Share-based payment charge - - - - 24 24
Total transactions with
owners - 273 - - (4,871) (4,598)
Balance at 31 December
2020 1,189 1,799 137 2,734 124,090 129,949
-------------------------------- --------- --------- ------------ ------------- ---------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2020
31.12.20 31.12.19 30.06.20
(six months (six months (twelve months
to) to) to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash generated from operations
Profit before income tax 7,367 7,364 15,943
Adjustments for
- Depreciation charge 1,746 1,491 3,221
- Depreciation of investment property 10 9 19
- Amortisation of intangibles 1,260 1,276 2,577
- Profit on disposal of property,
plant and equipment (46) (41) (118)
- Impairment of property, plant and
equipment due to fire 3,214 - -
- Net finance expense/(income) 286 125 389
- Retirement benefit contributions
in excess of current and past service
charge (129) (124) (170)
- Share-based payment charge 703 419 1,211
- Research and development expenditure
credit (130) (149) (249)
- Effects of exchange rate movements 281 537 (219)
Changes in working capital
- Inventories 4,634 387 238
- Trade and other receivables (5,546) 49 571
- Payables and provisions (3,898) (2,178) (182)
------------------------------------------------ ------------------------- ------------- ----------------
Cash generated from operations 9,752 9,165 23,231
Tax paid (1,738) (2,958) (3,848)
Cash flow from investing activities
Purchase of property, plant and equipment (1,464) (5,521) (6,988)
Proceeds from sale of property, plant
and equipment 86 83 212
Purchase of intangibles (768) (1,099) (1,719)
(Purchase)/sale of financial assets
at fair value through other comprehensive
income (5) (61) (61)
Proceeds from sale of other financial
assets at fair value through profit
and loss - 387 387
Property rental and similar income 26 6 92
Dividend income 87 111 187
Net withdrawal/(deposit) of short-term
financial assets (7,016) 1,941 7,903
Interest received 101 164 322
Net receipt of loan notes 805 597 1,156
------------------------------------------------
Net cash generated from/(used in)
investing activities (8,148) (3,392) 1,491
Cash flow from financing activities
Net proceeds from the issuance of
ordinary shares 273 260 260
Proceeds from loans 198 121 192
Repayment of borrowings - (1,124) (203)
Settlement of lease liabilities - - (1,011)
Payment of lease liabilities (129) - (265)
Payment of lease interest (18) - (36)
Dividends paid to company shareholders (4,895) (4,770) (6,468)
------------------------------------------------
Net cash used in financing activities (4,571) (5,513) (7,531)
------------------------------------------------ ------------------------- ------------- ----------------
Effects of exchange rate changes on
cash (246) (671) 272
------------------------------------------------ ------------------------- ------------- ----------------
Net increase/(decrease) in cash and
cash equivalents (4,951) (3,369) 13,615
Cash and cash equivalents at the beginning
of the period 44,422 30,807 30,807
------------------------------------------------
Cash and cash equivalents at the end
of the period 39,471 27,438 44,422
------------------------------------------------ ------------------------- ------------- ----------------
Notes to the Interim Financial Statements
1. Basis of preparation
The consolidated interim financial statements for the six months
to 31 December 2020 have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union, IFRIC
interpretations and the AIM Rules for Companies.
The figures for the period to 31 December 2020 and the
comparative period to 31 December 2019 have not been audited or
reviewed and are therefore disclosed as unaudited. The figures for
30 June 2020 have been extracted from the financial statements for
the year to 30 June 2020, 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 2020 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 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 the 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 continuing operating segments have been
aggregated into the "other companies" segment based on their size,
comprising the entities Philip Payne Limited, Solite Europe
Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux
L.L.C, Thorlux Australasia PTY Limited and 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 the performance of the operating
segments for the purpose of making decisions about resources to be
allocated. The CODM reviews the performance of the business by
considering the key profit measure of operating profit, including
the impact of associated contingent consideration arrangements, and
considers that none of the other operating segments are of
sufficient size and distinction to be reviewed separately when
making Group wide strategic decisions. Assets and liabilities have
not been segmented which is consistent with the Group's internal
reporting.
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.
2. Segmental analysis (continued)
Thorlux Netherlands Other Inter- Total
Companies
Companies Segment Continuing
Adjust- Operations
ments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months to 31 December
2020
Revenue to external customers 33,470 14,986 7,918 - 56,374
Revenue to other Group
companies 1,157 148 2,887 (4,192) -
------------------------------- -------- ------------ ---------- -------- --------------
Total revenue 34,627 15,134 10,805 (4,192) 56,374
------------------------------- -------- ------------ ---------- -------- --------------
Operating profit 4,918 1,691 684 360 7,653
------------------------------- -------- ------------ ---------- -------- --------------
Finance income 364
Finance expense (650)
------------------------------- -------- ------------ ---------- -------- --------------
Profit before tax expense 7,367
=============================== ======== ============ ========== ======== ==============
Six months to 31 December
2019 (restated)
Revenue to external customers 32,363 15,485 9,564 - 57,412
Revenue to other Group
companies 1,740 86 1,931 (3,757) -
------------------------------- -------- ------------ ---------- -------- --------------
Total revenue 34,103 15,571 11,495 (3,757) 57,412
------------------------------- -------- ------------ ---------- -------- --------------
Operating profit 4,839 1,470 951 229 7,489
Finance income 402
Finance expense (527)
------------------------------- -------- ------------ ---------- -------- --------------
Profit before tax expense 7,364
=============================== ======== ============ ========== ======== ==============
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 income (389)
Profit before tax expense 15,943
=============================== ======== ============ ========== ======== ==============
3. Insurance claim resulting from fire at the premise of Lightronics Participaties B.V.
On 23 September 2020 the facilities of Lightronics Participaties
B.V. were damaged by fire. This resulted in the destruction of the
majority of Lightronics' manufacturing facility and the recently
completed European Application Centre, requiring the building to be
completely demolished.
The figures reflected in these financial statements are not
final, as the full extent of the damage is being assessed. The
financial statements reflect the best estimate of the associated
impairment and reimbursement from insurance proceeds and the
figures will be trued up by year end, but this is unlikely to lead
to a material change to the figures reported.
The cost of replacing these assets has been estimated to be
EUR4.4m (GBP3.9m) excluding any consequential loss. EUR2.6m
(GBP2.3m) of this value is for the refurbishment of the building
and EUR1.8m (GBP1.6m) for replacement of plant, equipment and
inventory.
A claim for reimbursement has been filed with the insurers and
an estimate for the incremental costs relating to refurbishment and
a temporary shift of operations to other locations has been
established. The Group has assessed the insurance reimbursement
receivable of EUR3.6m (GBP3.2m) to meet the requirements to be
recognised as a contingent asset within trade receivables.
As at the date of this interim statement, EUR0.75m (GBP0.67m)
has been received from the insurers for replacing inventory and
agreement reached in principle for the replacement of the property,
plant and equipment.
The table below details what is included in these financial
statements for this event:
EUR (EUR'000) GBP (GBP'000)
Costs incurred
Impairment of freehold land
and buildings (2,576) (2,315)
Impairment of plant and equipment (1,000) (899)
Impairment of inventory (775) (696)
-------------- --------------
Total impairment (4,351) (3,910)
-------------- --------------
Reimbursement claim
Insurance reimbursement receivable
* 3,603 3,238
Reimbursement received to date 748 672
-------------- --------------
Total claim 4,351 3,910
-------------- --------------
* Included in trade and other receivables in the Consolidated
Statement of Financial Position
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 116,426,119 (Interim 2020: 116,215,549) 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 116,862,079 (Interim 2020: 116,779,815)
during the period.
5. Dividend
The interim dividend is at the rate of 1.49p per share (Interim
2020: 1.46p) and based on 116,551,808 shares in issue at the
announcement date the dividend will amount to GBP1,737,000 (Interim
2020: GBP1,698,000). The interim dividend will be paid on 23 April
2021 to shareholders on the register at the close of business on 6
April 2021, and the shares become ex-dividend on 1 April 2021.
A final dividend for the year ended 30 June 2020 of 4.20p (2019:
final 4.10p) per share, amounting to GBP4,895,000 (2019:
GBP4,770,000) was paid on 26 November 2020.
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 7 April 2021.
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