REG - Thorpe(F.W.) PLC - Interim Results <Origin Href="QuoteRef">TFW.L</Origin>

FW ThorpeAnnouncement

16/03/2017 07:06

RNS Number : 6114Z
Thorpe(F.W.) PLC
16 March 2017
F W Thorpe Plc
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2016
F W Thorpe Plc, designers, manufacturers and suppliers of professional lighting systems for the specification market is pleased to announce its interim results for the six months ended 31 December 2016.
Key points:

Interim
2017
Interim
2016

Revenue
51.2m
41.4m
23.8% increase
Operating profit
7.8m
6.5m
19.7% increase
Profit before tax
7.8m
6.6m
18.0% increase
Basic earnings per share
5.38p
4.47p
20.3% increase
 Revenue and operating profit growth at Thorlux drives positive interim result
 Lightronics continues to perform well, driven by one off projects
 Interim dividend increased to 1.35p (Interim 2016: 1.20p)
For further information please contact:
 
F W Thorpe Plc
Andrew Thorpe - Chairman
01527 583200
Craig Muncaster - Group Financial Director


01527 583200
N+1 Singer - Nominated Adviser

Richard Lindley
020 7496 3000
This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).


CHAIRMAN'S INTERIM STATEMENT
I am pleased to be able to report a successful first half of the 2016/17 financial year with Group revenues increased by 23.8% and operating profit increased by 19.7%.
Whilst normally expecting a higher level of profit attainment on raised revenues the exceptionally buoyant first half at our largest entity, Thorlux Lighting, had to be met by the imposition of high levels of overtime, shift working etc. which inevitably has led to a higher cost of production than we would have liked. These actions were necessary to satisfy spikes in customer demand but it is unlikely that the need for such levels of activity will persist.
Generally, throughout the Group, the performances in both revenue and profit have improved with the exception of Compact Lighting which is still in a transitory state of merging many product ranges and sales platforms with Thorlux Lighting.
Offices abroad have also performed well with renewed optimism at the, now 100% owned, Australian office. Our UAE office is still finding its way, however.
Investments throughout the Group continue as desired where decided as prudent by your Board. Product investment, of course, continues not least with the notable recent introduction of "SmartScan" a new highly advanced wireless lighting control system, which has immediately found favour with many of our customers. Hardware investment also continues and this has most recently included the purchase, in Redditch, of a modern 1,800 square metre freehold factory unit for Group firm, TRT Lighting which, as mentioned in my last report, was being constrained through lack of space. 
This new space will not only increase manufacturing capacity at TRT Lighting but will also house a new paint plant serving not only TRT but for use as a back-up facility in case of paint plant problems at nearby Thorlux where current capacity is stretched. In the same vein, it will house a new surface mount circuit board production line again for TRT use and as a Group back-up facility.
The Group carbon offsetting project in Devauden, Monmouthshire has recently partaken of an over doubling of tree stock to a total of some 150,000 plantings. This puts the company somewhat in advance of its carbon offsetting requirements.
Group performance for the "first half", therefore, allows your company to pay a dividend for the six months to 31st December 2016 of 1.35p (Interim 2015 1.20p) this being a 12.5% increase.
We remain optimistic of a satisfactory overall result for the year.
Andrew Thorpe
Chairman
16 March 2017 
F W Thorpe Plc


CONSOLIDATED INCOME STATEMENT 
for the six months to 31 December 2016





31.12.16
(six months to)
31.12.15
(six months to)
30.06.16
(twelve months to)





(unaudited)
(unaudited)
(audited)





'000
'000
'000




Revenue
51,236 
41,370 
88,946




Operating Profit
7,775 
6,494 
16,195




Finance income
307 
383 
702
Finance costs*
 (272)
 (257)
(627) 
Share of loss of joint venture
(-)
(-)
(1)




Profit before tax expense
7,810 
6,620  
16,269




Tax expense
 (1,588)
 (1,446)
(3,270)




Profit for the period from continuing operations
6,222 
5,174  
12,999




Profit for the period
6,222 
5,174 
12,999




*Finance costs represents payments made in relation to the acquisition of Lightronics Participaties BV.
Dividend rate per share:



 Interim
1.35p
1.20p
1.20p
 Final
-
-
2.85p
 Special
 -
 2.00p
2.00p
 
Earnings per share
- basic
5.38p
4.47p
11.24p

- diluted 
5.35p
4.47p
11.21p
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2016





31.12.16 (six months to)
31.12.15 (six months to)
30.06.16
(twelve months to)





(unaudited)
(unaudited)
(audited)





'000
'000
'000




Profit for the year
6,222
5,174
12,999




Other comprehensive income







Items that may be reclassified to profit or loss



Revaluation of available-for-sale financial assets



 - Arising in period*
227
(207)
(74)




 - Reclassified in period
-
-
-




Exchange rate differences on translation of foreign operations







 - Arising in period
192
58
1,627




 - Reclassified in period
-
-
-




Taxation
(43)
103
60





376
(46)
1,613 








Items that will not be reclassified to profit or loss







Actuarial loss on pension scheme
-
-
(1,285)




Movement on unrecognised pension surplus
-
-
1,095





-
-
(190)




Other comprehensive income for the year, net of tax
376
(46)
1,423












Total comprehensive income for the year 
6,598
5,128
14,422




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


CONSOLIDATED BALANCE SHEET 
as at 31 December 2016

As at
As at
As at 

31.12.16
31.12.15
30.06.16





(unaudited)
(unaudited)
(audited)
Assets
'000
'000
'000
Non-Current Assets



Property, plant and equipment
17,570
14,192
14,900
Intangible assets
15,465
14,160
15,183
Investment property
2,219
2,140
2,131
Loans and receivables
4,340
4,968
4,980
Equity accounted investments
936
-
936
Available for sale financial assets
3,574
3,218
3,348
Deferred tax assets
32
26
27

44,136 
38,704 
41,505
Current assets



Inventories
20,847
16,813
18,863
Trade and other receivables
17,210
13,908
21,914
Other financial assets at fair value through profit or loss
389
389
389
Short term financial assets - deposits
12,767
12,560
14,910
Cash and cash equivalents
22,957
21,606
18,295
Total current assets
74,170
65,276
74,371








Total Assets
118,306
103,980
115,876




Liabilities



Current liabilities



Trade and other payables
(15,804)
(11,545)
(16,700)
Current tax liabilities
(1,667)
(2,197)
(1,963)
Total current liabilities
(17,471)
(13,742)
(18,663)




Net current assets
56,699
51,534
55,708




Non-current liabilities



Retirement benefit deficit
-
-
-
Other payables
(4,811)
(4,044)
(4,619)
Provisions for liabilities and charges
(1,171)
(259)
(1,088)
Deferred tax liabilities
(785)
(857)
(799)
Total liabilities
(24,238)
(18,902)
(25,169) 




Net assets
94,068
85,078
90,707




Equity attributable to owners of the company



Issued share capital
1,189
1,189
1,189
Share premium account
656
656
656
Capital redemption reserve
137
137
137
Foreign currency translation reserve
1,798
-
1,606
Retained earnings
90,288
83,096
87,119




Total equity
94,068
85,078
90,707




 


GROUP STATEMENT OF CHANGES IN EQUITY 
for the six months to 31 December 2016

Share Capital
Share Premium
Capital Redemption Reserve
Foreign Currency Translation Reserve
Retained Earnings
Total Equity








'000
'000
'000
'000
'000
'000







Balance at 30 June 2015
1,189
656
137
-
80,882
82,864







Comprehensive income






Profit for six months to 31 December 2015
-
-
-
-
5,174
5,174
Other comprehensive income
-
-
-
-
(46)
(46)
Total comprehensive income
-
-
-
-
5,128
5,128







Transactions with owners






Dividends paid to shareholders
-
-
-
-
(2,950)
(2,950)
Share-based payment charge




36 
36 
Total transactions with owners
-
-
-
-
(2,914)
(2,914)







Balance at 31 December 2015
1,189
656
137
-
83,096
85,078







Comprehensive income






Profit for six months to 30 June 2016
-
-
-
-
7,825
7,825
Actuarial loss on pension scheme
-
-
-
-
(1,285)
(1,285)
Movement on unrecognised pension surplus
-
-
-
-
1,095
1,095
Revaluation of available-for-sale financial assets
-
-
-
-
133
133
Movement on associated deferred tax
-
-
-
-
(43)
(43)
Transfer to foreign currency translation reserve



(21)
21
-
Exchange rate differences on translation of foreign operations
-
-
-
1,627
(58)
1,569
Total comprehensive income
-
-
-
1,606
7,688
9,294







Transactions with owners






Dividends paid to shareholders
-
-
-
-
(3,701)
(3,701)
Share-based payment charge
-
-
-
-
36
36
Total transactions with owners
-
-
-
-
(3,665)
(3,665)







Balance at 30 June 2016
1,189
656
137
1,606
87,119
90,707







Comprehensive income






Profit for six months to 31 December 2016
-
-
-
-
 6,222
6,222
Other comprehensive income
-
-
-
192
184
376
Total comprehensive income
-
-
-
192
6,406
6,598







Transactions with owners






Dividends paid to shareholders
-
-
-
-
(3,297)
(3,297)
Share-based payment charge
-
-
-
-
60
60
Total transactions with owners
-
-
-
-
(3,237)
(3,237)







Balance at 31 December 2016
1,189
656
137
1,798
90,288
94,068







GROUP STATEMENT OF CASH FLOWS 
for the six months to 31 December 2016

31.12.16
(six months to)
31.12.15
(six months to)
30.06.16
(twelve months to)





(unaudited)
(unaudited)
(audited)

'000
'000
'000
Cash generated from operations



Profit before income tax
7,810
6,620
16,269 
Adjustments for



- Depreciation charge
781
705
1,523
- Amortisation of intangibles & investment property
947
1,085
2,277
- Profit on disposal of property, plant and equipment
(44)
(48)
 (89)
- Finance expense
(35)
(383)
(75)
- Retirement benefit contributions in excess of current and past service charge
(73)
(85)
(190)
- Share of loss from joint venture
-
-
1
- Share-based payment expense
122
88
193
- Research and development expenditure (credit)/charge
(126)
-
(236)
- Effects of exchange rate movements
(78)
110
182
Changes in working capital



- Inventories
(1,919)
949 
(1,128)
- Trade and other receivables
4,116
5,799 
(2,094)
- Trade and other payables
(1,042)
(2,838)
2,313
Cash generated from operations
10,459
12,002
18,946




Tax paid
(1,823)
(1,374)
(3,323)




Cash flow from investing activities



Purchase of property, plant and equipment
(3,302)
(1,113)
(2,543)
Proceeds from sale of property, plant and equipment
134
71
122
Purchase of intangibles 
(782)
(836)
(1,764)
Purchase of investment property
(122)
(19)
(28)
Net sale/(purchase) of available for sale financial assets
1
(407)
(404)
Equity accounted investments acquired
-
-
(936)
Property rental and similar income
29
40
74
Dividend income
104
93
177
Net sale/(purchase) of deposits
2,143
(3,202)
(5,552)
Interest received
124
114
314
Receipt of loans notes
710
11
200
Net cash (used in)/generated from investing activities
(961)
(5,248)
(10,340)




Cash flow from financing activities



Dividends paid to company shareholders
(3,297)
(2,950)
(6,651)
Net cash used in financing activities
(3,297)
(2,950)
(6,651)




Effects of exchange rate changes on cash
284
-
487




Net increase in cash and cash equivalents
4,662
2,430
(881)




Cash and cash equivalents at the beginning of the period
18,295
19,176
19,176
Cash and cash equivalents at the end of the period
22,957
21,606
18,295
 
Notes to the Interim Financial Statements
1. Basis of Preparation
 The consolidated interim financial statements for the six months to 31 December 2016 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board and the AIM Rules for Companies. 
 The figures for the period to 31 December 2016 and the comparative period to 31 December 2015 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2016 have been extracted from the financial statements for the year to 30 June 2016, which have been delivered to the Registrar of Companies. The interim financial statements do not constitute statutory accounts within the meaning of the Companies Act 2006.

The financial statements are presented in Pounds Sterling, rounded to the nearest thousand. 
 The interim financial statements are prepared under the historical cost convention, modified by the revaluation of certain current and non-current investments at fair value through profit or loss.
 The accounting policies set out in the financial statements for the year ended 30 June 2016 have been applied consistently throughout the Group during the period. 
2. Segmental analysis
 The segmental analysis is presented on the same basis as that used for internal reporting purposes. For internal reporting F W Thorpe is organised into nine operating segments, based on the products and customer base in the lighting market - the largest business is Thorlux, which manufactures professional lighting systems for the industrial, commercial and controls markets. The Lightronics business is a material subsidiary and therefore disclosed separately. 
 The seven remaining continuing operating segments have been aggregated into the 'other companies' segment based on their size, comprising the entities Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux LLC and Thorlux Australasia PTY Limited.
 F W Thorpe's chief operating decision-maker (CODM) is the Group board. The Group board reviews the Group's internal reporting in order to monitor and assess the performance of the operating segments for the purpose of making decisions about resources to be allocated. Performance is evaluated based on a combination of revenue and operating profit. Assets and liabilities have not been segmented which is consistent with the Group's internal reporting.
 2. Segmental analysis (continued)

Thorlux
Lightronics
Other
Inter-
Total



Companies
Segment
Continuing




Adjust-
Operations




ments


'000
'000
'000
'000
'000
6 months to 31 December 2016





Revenue to external customers
31,470
9,713
10,053
-
51,236
Revenue to other Group companies
1,530
136
1,913
(3,579)
-






Total revenue
33,000
9,849
11,966
(3,579)
51,236






Operating Profit
5,933
1,104
620
118
7,775






Finance income




307
Finance expense




(272)
Share of loss in joint venture




-






Profit before tax expense




7,810






6 months to 31 December 2015





Revenue to external customers
26,846
7,027
7,497
-
41,370
Revenue to other Group companies
594
3
1,083
(1,680)
-






Total revenue
27,440
7,030
8,580
(1,680)
41,370






Operating Profit
5,166
703
428
197
6,494






Finance income




383
Finance expense




(257)
Share of loss in joint venture




-






Profit before tax expense




6,620






Year to 30 June 2016





Revenue to external customers
54,157
15,524
19,265
-
88,946
Revenue to other group companies
2,409
60
2,401
(4,870)
-






Total revenue
56,566
15,584
21,666
(4,870)
88,946






Operating Profit
11,699
2,103
2,189
204
16,195






Net finance income




75
Share of profit in joint venture




(1) 












Profit before tax expense




16,269






 Inter-segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc, adjustments to profit related to stocks held within the Group that were supplied by another segment and adjustments to investment provisions relating to Group companies.
3. Investment in Subsidiary
On 1 July 2016 the Group acquired 49% of the share capital of Thorlux Australasia PTY Limited for a nominal sum. 
Previously Thorlux Australasia was a joint venture with a local partner and we therefore now own 100% of the company. This will give us the ability to exercise full control over the operations with a view to improving the operating results going forward.
The Group has fully consolidated the results of Thorlux Australasia in the figures for December 2016. 
4. Earnings per share
 The basic earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 115,675,590 (Interim 2016: 115,675,590) during the period.

The diluted earnings per share is calculated on profit after taxation and the weighted average number of potentially dilutive ordinary shares in issue of 116,347,665 (Interim 2016: 115,791,614) during the period.
 
5. Dividend
 The interim dividend is at the rate of 1.35p per share (Interim 2016: 1.20p), and based on 115,675,590 shares in issue at the announcement date the dividend will amount to 1,562,000 (Interim 2016: 1,388,000). The interim dividend will be paid on 6 April 2017 to shareholders on the register at the close of business on 24 March 2017, and the shares become ex-dividend on 23 March 2017.
A final dividend for the year ended 30 June 2016 of 2.85p (2015: final of 2.55p) per share, amounting to 3,297,000 (2015: 2,950,000) was paid on 24 November 2016.
6. Availability of interim statement
 Copies of the interim report are being sent to shareholders and will also be available from the company's registered office or on the company's website (www.fwthorpe.co.uk) from 31 March 2017.

This information is provided by RNS
The company news service from the London Stock Exchange
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