REG - Thorpe(F.W.) PLC - Half Yearly Report <Origin Href="QuoteRef">TFW.L</Origin>
RNS Number : 6511SThorpe(F.W.) PLC21 March 2016F W Thorpe Plc
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2015
F W Thorpe Plc, designers, manufacturers and suppliers of professional lighting systems for the specification market is pleased to announce its interim results for the six months ended 31 December 2015.
Key points:
Continuing operations
Interim
2016
Interim
2015
Excluding Lightronics acquisition
Revenue
41.4m
32.6m
26.8% increase
5.2% increase
Operating profit
6.5m
5.5m
17.9% increase
5.1% increase
Profit before tax
6.6m
5.8m
13.7% increase
6.0% increase
Basic earnings per share
4.47p
3.92p
14.0% increase
7.5% increase
Revenue and operating profit boosted by Lightronics acquisition
Lightronics performed ahead of expectations in first six months, driven by one off projects
TRT Lighting profitable growth continues
Investment of 1.2m for 40% of Luxintec S.L., a luminaire and specialist lenses manufacturer based in Spain, was completed post period end on 9 March 2016
Interim dividend increased to 1.20p (Interim 2015: 1.10p)
Special dividend of 2.00p (Interim 2015: nil)
For further information please contact:
F W Thorpe Plc
Andrew Thorpe - Chairman
01527 583200
Craig Muncaster - Group Financial Director
01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley
020 7496 3000
CHAIRMAN'S INTERIM STATEMENT
Pleasingly results for the half year to 31 December 2015 proved rewarding with Group revenues up 27% and operating profit up 18% from continuing operations. On a like-for-like basis, excluding Lightronics (which we acquired in April 2015), revenues and operating profits increased by 5.2% and 5.1% respectively. Including the effects of investment income and taxation, earnings per share rose by 14%.
Generally whilst underlying growth throughout most of the Group subsidiaries can be described as solid rather than astounding, good progress has been made in most quarters.
Global economies still show shakiness and whilst we are not present in many, the general malaise does not endow any of our markets with booming economies and high demand.
In our overseas markets business is, therefore, currently hard fought, your company having to persuade new customers, often with different cultures, of the benefits of using our product offering of high quality, highly sophisticated lighting systems and excellent before and after sales service.
The Thorlux offices in Dusseldorf, Germany and Dublin, Ireland are continuing to make forward strides, however, the Thorlux office in Brisbane, Australia and the Group office in the UAE are still not performing as required.
The approach of opening new Group offices abroad takes time and whilst more maturity is sought on those fronts we have widened our approach, as reported in my last statement, with the purchase of Lightronics BV the successful Netherlands based lighting company.
In the same vein I can now report that your company has just approved a 1.2m investment in a 40% shareholding in Luxintec S.L., a 3.5m revenue Spanish manufacturer of precision LED lighting lenses and a limited range of luminaires, the latter being a market in which they wish to expand.
Both the investments in Lightronics and Luxintec allow a wide scope for the interchange of products in both directions but most probably allowing a wider platform for most Group companies to participate in the Netherlands and Spanish speaking markets of which there are many.
The first half of the 2015/16 year has been driven by exceptional performance of Lightronics BV and marked further progress at TRT Lighting our road tunnel and street lighting systems manufacturer. Your Group continues to strive for growth and the Board is cautiously optimistic about the rest of the financial year.
Group results outlined above allow your company to pay a dividend for the half year to 31 December 2015 of 1.20p per share (Interim 2015: 1.10p), an increase of 9%. Further, at this time and in consideration of adequate Group reserves, a special dividend of 2.00p per share (Interim 2015: nil) will be paid at the same time as the interim dividend.
Andrew Thorpe
Chairman
21 March 2016
F W Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2015
Continuing Operations
31.12.15
(six months to)
31.12.14
(six months to)
30.06.15
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Revenue
41,370
32,629
73,554
Operating Profit
6,494
5,510
13,718
Finance income
383
315
727
Finance expense*
(257)
-
-
Share of loss of joint venture
(-)
(4)
(50)
Profit before tax expense
6,620
5,821
14,395
Tax expense
(1,446)
(1,283)
(2,691)
Profit for the period from continuing operations
5,174
4,538
11,704
Loss for the period from discontinued operations
-
(104)
(253)
Loss on disposal of subsidiary
-
(120)
-
Profit for the period
5,174
4,314
11,451
*Finance expense represents payments made in relation to the acquisition of Lightronics Participaties BV.
Dividend rate per share:
Interim
1.20p
1.10p
1.10p
Final
-
-
2.55p
Special
2.00p
-
-
Earnings per share
- basic
4.47p
3.92p
10.12p
(continuing operations)
- diluted
4.47p
3.90p
10.11p
Earnings per share
- basic
4.47p
3.73p
9.90p
- diluted
4.47p
3.71p
9.89p
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2015
31.12.15 (six months to)
31.12.14
(six months to)
30.06.15
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Profit for the year
5,174
4,314
11,451
Other comprehensive income
Items that may be reclassified to profit or loss
- Arising in period*
(207)
(46)
(152)
- Reclassified in period
-
-
-
Exchange rate movement on investment in joint venture
- Arising in period
58
(3)
(21)
- Reclassified in period
-
-
-
Taxation
103
9
30
(46)
(40)
(143)
Items that will not be reclassified to profit or loss
Actuarial gain on pension scheme
-
-
(247)
Movement on unrecognised pension surplus
-
-
18
-
-
(229)
Other comprehensive income for the year, net of tax
(46)
(40)
(372)
Total comprehensive income for the year
5,128
4,274
11,079
All comprehensive income is attributable to the owners of the company.
* The loss on items that may be reclassified to profit or loss of 207,000 is due to the decrease in market value of available for sale financial assets.
CONSOLIDATED BALANCE SHEET
as at 31 December 2015
As at
As at
As at
31.12.15
31.12.14
30.06.15
(unaudited)
(unaudited)
(audited)
Assets
'000
'000
'000
Non-Current Assets
Property, plant and equipment
14,192
13,190
13,834
Intangible assets
14,160
6,678
14,349
Investment property
2,140
2,135
2,171
Loans and receivables
4,968
1,340
4,760
Investment in joint venture
-
50
-
Available for sale financial assets
3,218
3,124
3,018
Deferred tax assets
26
26
17
38,704
26,543
38,149
Current assets
Inventories
16,813
13,794
17,762
Trade and other receivables
13,908
13,513
19,698
Other financial assets at fair value through profit or loss
389
388
389
Short term financial assets - deposits
12,560
14,605
9,358
Cash and cash equivalents
21,606
19,341
19,176
Total current assets (excluding non-current assets and disposal groups held for sale)
65,276
61,641
66,383
Non-current assets and disposal groups held for sale
-
1,772
-
65,276
63,413
66,383
Total Assets
103,980
89,956
104,532
Liabilities
Current liabilities
Trade and other payables
(11,545)
(9,258)
(14,656)
Current tax liabilities
(2,197)
(1,717)
(2,051)
Total current liabilities (excluding liabilities associated with non-current assets and disposal groups held for sale)
(13,742)
(10,975)
(16,707)
Liabilities associated with non-current assets and disposal groups held for sale
-
(553)
-
(13,742)
(11,528)
(16,707)
Net current assets
51,534
51,885
49,676
Non-current liabilities
Retirement benefit deficit
-
-
-
Other payables
(4,044)
-
(3,838)
Provisions for liabilities and charges
(259)
(222)
(102)
Deferred tax liabilities
(857)
(911)
(1,021)
Total liabilities
(18,902)
(12,661)
(21,668)
Net assets
85,078
77,295
82,864
Equity attributable to owners of the company
Issued share capital
1,189
1,189
1,189
Share premium account
656
656
656
Capital redemption reserve
137
137
137
Retained earnings
83,096
75,313
80,882
Total equity
85,078
77,295
82,864
GROUP STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2015
Share
Share
Capital
Retained
Total
Capital
Premium
Redemption
Earnings
Equity
Reserve
'000
'000
'000
'000
'000
Balance at 30 June 2014
1,189
656
137
75,305
77,287
Comprehensive income
Profit for six months to 31 December 2014
-
-
-
4,314
4,314
Other comprehensive income
-
-
-
(40)
(40)
Total comprehensive income
-
-
-
4,274
4,274
Transactions with owners
Dividends paid to shareholders
-
-
-
(4,280)
(4,280)
Share-based payment charge
14
14
Total transactions with owners
-
-
-
(4,266)
(4,266)
Balance at 31 December 2014
1,189
656
137
75,313
77,295
Comprehensive income
Profit for six months to 30 June 2015
-
-
-
7,137
7,137
Actuarial loss on pension scheme
-
-
-
(247)
(247)
Movement on unrecognised pension surplus
-
-
-
18
18
Revaluation of available-for-sale financial assets
-
-
-
(106)
(106)
Movement on associated deferred tax
-
-
-
21
21
Exchange rate movement on joint venture
-
-
-
(18)
(18)
Total comprehensive income
-
-
-
6,805
6,805
Transactions with owners
Dividends paid to shareholders
-
-
-
(1,272)
(1,272)
Share-based payment charge
-
-
-
36
36
Total transactions with owners
-
-
-
(1,236)
(1,236)
Balance at 30 June 2015
1,189
656
137
80,882
82,864
Comprehensive income
Profit for six months to 31 December 2015
-
-
-
5,174
5,174
Other comprehensive income
-
-
-
(46)
(46)
Total comprehensive income
-
-
-
5,128
5,128
Transactions with owners
Dividends paid to shareholders
-
-
-
(2,950)
(2,950)
Share-based payment charge
-
-
-
36
36
Total transactions with owners
-
-
-
(2,914)
(2,914)
Balance at 31 December 2015
1,189
656
137
83,096
85,078
GROUP STATEMENT OF CASH FLOWS
for the six months to 31 December 2015
31.12.15
(six months to)
31.12.14
(six months to)
30.06.15
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Cash generated from operations
Profit before income tax
6,620
5,821
14,395
Adjustments for
- Depreciation charge
705
709
1,288
- Amortisation of intangibles & investment property
1,085
651
1,484
- Profit on disposal of property, plant and equipment
(48)
(16)
(104)
- Finance income
(383)
(315)
(727)
- Retirement benefit contributions in excess of current and past service charge
(85)
(77)
(229)
- Share of loss from joint venture
-
4
50
- Share-based payment expense
88
14
76
- Effects of exchange rate movements
110
-
(28)
Changes in working capital
- Inventories
949
406
(1,707)
- Trade and other receivables
5,799
1,107
(3,659)
- Trade and other payables
(2,838)
(1,422)
2,215
Discontinued operations
-
7
261
Cash generated from operations
12,002
6,889
13,315
Tax paid
(1,374)
(184)
(1,280)
Cash flow from investing activities
Purchase of property, plant and equipment
(1,113)
(1,976)
(3,271)
Proceeds from sale of property, plant and equipment
71
63
167
Purchase of intangibles
(836)
(623)
(1,621)
Purchase of subsidiary net of cash acquired
-
-
(6,392)
Disposal of subsidiary
-
-
(561)
Purchase of investment property
(19)
-
(36)
Net sale/(purchase) of available for sale financial assets
(407)
271
271
Property rental and similar income
40
78
154
Dividend income
93
69
149
Net sale/(purchase) of deposits
(3,202)
1,033
6,280
Interest received
114
90
301
Receipt of loans notes
11
-
1,261
Net cash (used in)/generated from investing activities
(5,248)
(995)
(3,298)
Cash flow from financing activities
Repayment of borrowings
-
-
(1,920)
Dividends paid to company shareholders
(2,950)
(4,280)
(5,552)
Net cash used in financing activities
(2,950)
(4,280)
(7,472)
Net increase in cash and cash equivalents
2,430
1,430
1,265
Cash and cash equivalents at the beginning of the period
19,176
17,911
17,911
Cash and cash equivalents at the end of the period
21,606
19,341
19,176
Notes to the Interim Financial Statements
1. Basis of Preparation
The consolidated interim financial statements for the six months to 31 December 2015 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board and the AIM Rules for Companies.
The figures for the period to 31 December 2015 and the comparative period to 31 December 2014 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2015 have been extracted from the financial statements for the year to 30 June 2015, 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 2015 have been applied consistently throughout the Group during the period.
2. Segmental analysis
The segmental analysis is presented on the same basis as that used for internal reporting purposes. For internal reporting F W Thorpe is organised into eight operating segments, based on the products and customer base in the lighting market. The largest business is Thorlux which manufactures professional lighting systems for the industrial, commercial and controls market. The recently acquired Lightronics business is the next largest business. The six remaining continuing operating segments have been aggregated into the 'other companies' segment based on their size and comprise Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited and Thorlux LLC.
F W Thorpe's chief operating decision-maker (CODM) is the Group board. The Group board reviews the Group's internal reporting in order to monitor and assess the performance of the operating segments for the purpose of making decisions about resources to be allocated. Performance is evaluated based on a combination of revenue and operating profit. Assets and liabilities have not been segmented which is consistent with the Group's internal reporting.
2. Segmental analysis (continued)
Thorlux
Lightronics
Other
Inter-
Total
Companies
Segment
Continuing
Adjust-
Operations
ments
'000
'000
'000
'000
'000
6 months to 31 December 2015
Revenue to external customers
26,846
7,027
7,497
-
41,370
Revenue to other Group companies
594
3
1,083
(1,680)
-
Total revenue
27,440
7,030
8,580
(1,680)
41,370
Operating Profit
5,166
703
428
197
6,494
Finance income
383
Finance expense
(257)
Share of loss in joint venture
-
Profit before tax expense
6,620
6 months to 31 December 2014
Revenue to external customers
26,601
-
6,028
-
32,629
Revenue to other Group companies
572
-
831
(1,403)
-
Total revenue
27,173
-
6,859
(1,403)
32,629
Operating Profit
5,105
283
122
5,510
Net finance income
315
Share of loss in joint venture
(4)
Profit before tax expense
5,821
Year to 30 June 2015
Revenue to external customers
54,192
3,275
16,077
-
73,544
Revenue to other group companies
2,329
-
1,781
(4,110)
-
Total revenue
56,521
3,275
17,858
(4,110)
73,544
Operating Profit
11,267
481
1,944
26
13,718
Net finance income
727
Share of profit in joint venture
(50)
Profit before tax expense
14,395
Inter-segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc, adjustments to profit related to stocks held within the Group that were supplied by another segment and adjustments to investment provisions relating to Group companies.
3. Post Balance Sheet Event -Investment in Associate
On 9 March 2016, subsequent to the period end, the Group invested 1,200,000 for a 40% shareholding in a luminaire and specialist lens manufacturer based in Spain, Luxintec S.L. This investment provides a platform to sell the Group's products in Spain and secures a part of the supply chain for the Group in the future. In 2015 Luxintec's annual revenues were 3.5m with operating profit of 0.3m.
The Group intends to apply the equity method of accounting to recognise this interest.
4. Income tax expense
For the period ending 30 June 2015, the effective tax rate for the Group was 18.7% however the effective tax rate applied for the period ended 31 December 2015 has increased to 21.8%. The main reasons for this increase are:
The Group is no longer being classified as a Small or Medium sized Enterprise resulting in a lower rate of tax relief for research and development expenses;
An increasing share of the Group's profits are being generated in the Netherlands where the main corporate tax rate is 25%; and
No adjustment in 31 December 2015 for prior year tax credit.
5. Earnings per share
The basic earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 115,675,590 (Interim 2015: 115,675,590) during the period.
The diluted earnings per share is calculated on profit after taxation and the weighted average number of potentially dilutive ordinary shares in issue of 115,791,614 (Interim 2015: 116,313,090) during the period.
6. Dividend
The interim dividend is at the rate of 1.20p per share (Interim 2015: 1.10p), and based on 115,675,590 shares in issue at the announcement date the dividend will amount to 1,388,000 (Interim 2015: 1,272,000). A special dividend of 2.00p per share (Interim 2015: nil) will also be declared and based on 115,675,590 shares in issue at the announcement date the dividend will amount to 2,314,000 (Interim 2015: nil). The interim and special dividends will be paid on 5 April 2016 to shareholders on the register at the close of business on 29 March 2016, and the shares become ex-dividend on 24 March 2016.
The company has obtained dispensation from the Stock Exchange to pay the dividends within a reduced timetable due to the Easter bank holidays and operational commitments preventing the earlier announcement of these results. This enables the dividend to be paid in a similar timeframe to the previous year.
A final dividend for the year ended 30 June 2015 of 2.55p (2014: final of 2.20p) per share, amounting to 2,950,000 (2014: 2,545,000) was paid on 19 November 2015.
7. Availability of interim statement
Copies of this report are being sent to shareholders and will also be available from the company's registered office or on the company's website (www.fwthorpe.co.uk) from 7 April 2016.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIR LLFERVFITLIR
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