REG - Thorpe(F.W.) PLC - Interim Results
14/03/2024 07:00
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RNS Number : 7741G Thorpe(F.W.) PLC 14 March 2024
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2023
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 2023.
Financial highlights:
Interim Interim
2024 (unaudited) 2023 (unaudited)
Revenue £82.6m £81.9m +1%
Operating profit (before acquisition adjustments)* £12.3m £12.6m -2%
Operating profit £11.2m £11.0m +2%
Profit before tax £10.7m £10.6m +1%
Basic earnings per share 7.31p 7.15p +2%
*Acquisition adjustments include amortisation of intangible assets.
· Interim dividend 1.70p (Interim 2023: 1.62p) - 4.9% increase
· Steady performance during the period, supported by, margin
improvements at Thorlux and Lightronics
· Zemper improved export revenues to France and Belgium
· Other UK companies showing marginal improvement overall
· Net cash generated from operating activities - £14.0m (Interim
2023: £9.9m)
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
Singer Capital Markets - Nominated Adviser
James Moat / Sam Butcher 020 7496 3000
CHAIRMAN'S INTERIM STATEMENT
Results for the half year are in line with the expectations given in the
Group's November trading update, overall performance being broadly level with
last year's. It seems that customers finished for Christmas very early:
December was particularly slow across all parts of the Group, thus suppressing
results at the half year point when compared with the prior year. I am pleased
to say that trading bounced back with a vengeance in January, giving the Group
a good start for its run-in to the full year.
Raw material costs, the Group's largest costs, are showing welcome reductions,
whilst inflationary pressure on wages and salaries remains. The Group is
experiencing some issues with rising shipping costs again and some minor
supply delays due to the situation in the Red Sea region. The Group has,
overall, managed these inflationary pressures well, with Group operating
margins maintained; Thorlux and Lightronics, in particular, show margin
improvements. Stock has continued to be reduced in a carefully controlled way
whilst good stock levels are maintained for strategically important items.
In Spring 2024, some interesting patent-applied-for products are being
launched. These new products have a unique approach to sustainability, being
3D machined from oak which is harvested from sustainable European forests.
(Hopefully, one day, the Group will be able to use its own wood from its
sustainable forests.) The Portland traffic range has started to gather
traction following receipt of some sizeable first orders. Group product
synergy initiatives have advanced, and the Group's first shared technology
emergency range, designed and manufactured by Zemper, is due for launch this
summer. In recent weeks, Ratio sales in the UK have started to gather some
momentum, especially for the IO7 illuminated post; however, the UK and the
Netherlands are loss making in these early days whilst investment is made in
improved technology to satisfy market requirements.
The road to Net Zero continues, and the Group's short and long term objectives
are currently being assessed by a third party, the Science Based Targets
initiative (SBTi). The Group's internal programme of improvement continues,
and an investment of around £300k has been made, at Solite, to trial a new
concept of powder coating using electricity for heating the oven, with only
intermittent boosting from the gas supply when required. Powder coating
facilities across the Group are extensive, so the Board will watch this trial
with interest; big reductions in CO(2) are forecast, due to reduced gas usage
in favour of solar-produced or sustainable electricity. The £2m woodland
investment in Longtown, Hereford, UK, has completed, and plans and planning
applications are progressing to allow the next phase of the Group's carbon
offsetting activity, which will ultimately facilitate the planting of a
further 130,000-plus trees. As the Group hopes to continually reduce its
carbon emissions, it expects this scheme's planting capacity to last for a
decade, and hopefully much more.
As a result of ongoing performance and the strong balance sheet, the Board has
approved a dividend of 1.70p (interim 2023: 1.62p) for the six months to 31
December 2023, being an increase of 4.9%.
At the time of writing, the general order book and revenue for the Group as a
whole are good. Within the Group, therefore, we look forward to an improved
situation at the year end, providing there are no sudden changes to the
economic outlook.
Mike Allcock
Chairman
14 March 2024
FW Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2023
31.12.23 31.12.22 30.06.23
(six months to) (six months to) (twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue 82,593 81,853 176,749
Operating profit 11,203 10,979 27,832
Finance income 424 261 716
Finance expense (312) (620) (1,094)
Share of loss of joint ventures (597) - (520)
Profit before tax 10,718 10,620 26,934
Income tax expense (2,148) (2,240) (5,000)
Profit for the period 8,570 8,380 21,934
Dividend rate per share:
Interim 1.70p 1.62p 1.62p
Final - - 4.84p
Earnings per share - basic 7.31p 7.15p 18.72p
- diluted 7.31p 7.15p 18.70p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2023
31.12.23 (six months to) 31.12.22 (six months to) 30.06.23
(twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period 8,570 8,380 21,934
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations 223 1,323 231
223 1,323 231
Items that will not be reclassified to profit or loss
Revaluation of financial assets at fair value through other comprehensive 290 82 (105)
income *
Movement on associated deferred tax (73) (20) 26
Actuarial loss on pension scheme ** - - (123)
Movement on unrecognised pension surplus ** - - 177
217 62 (25)
Other comprehensive income for the period, net of tax 440 1,385 206
Total comprehensive income for the period 9,010 9,765 22,140
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 £290,000 is due to the increase in market value of
these investments.
** No interim actuarial valuation undertaken
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
As at As at As at
31.12.23 31.12.22 30.06.23
(unaudited) (unaudited) (audited)
Assets £'000 £'000 £'000
Non-current assets
Property, plant and equipment 38,752 36,372 38,763
Intangible assets 70,308 71,601 70,891
Investment properties 4,757 1,974 1,986
Financial assets at amortised cost 242 1,622 1,587
Equity accounted investments and joint arrangements 5,042 6,267 5,592
Financial assets at fair value through other comprehensive income 3,654 3,553 3,364
Deferred income tax assets 391 259 382
123,146 121,648 122,565
Current assets
Inventories 30,159 37,889 33,437
Trade and other receivables 35,333 31,881 35,733
Financial assets at amortised cost 3,202 1,800 1,266
Short-term financial assets 4 5 4
Cash and cash equivalents 31,295 21,104 35,013
Total current assets 99,993 92,679 105,453
Total assets 223,139 214,327 228,018
Liabilities
Current liabilities
Trade and other payables (36,438) (38,274) (37,457)
Financial liabilities (1,179) (1,057) (1,435)
Lease liabilities (761) (742) (812)
Current income tax liabilities (1,288) (865) (1,143)
Total current liabilities (39,666) (40,938) (40,847)
Net current assets 60,327 51,741 64,606
Non-current liabilities
Other payables (5,476) (10,810) (11,987)
Financial liabilities (1,220) (1,622) (1,461)
Lease liabilities (3,543) (3,534) (3,822)
Provisions for liabilities and charges (3,449) (3,377) (3,299)
Deferred income tax liabilities (6,058) (4,231) (6,261)
Total non-current liabilities (19,746) (23,574) (26,830)
Total liabilities (59,412) (64,512) (67,677)
Net assets 163,727 149,815 160,341
Equity attributable to owners of the company
Issued share capital 1,189 1,189 1,189
Share premium account 3,026 2,927 2,976
Capital redemption reserve 137 137 137
Foreign currency translation reserve 2,262 3,131 2,039
Retained earnings
At 1 July 154,000 139,392 139,392
Profit for the year attributable to owners 8,570 8,380 21,934
Other changes in retained earnings (5,457) (5,341) (7,326)
157,113 142,431 154,000
Total equity 163,727 149,815 160,341
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2023
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 2022 1,189 2,827 137 1,808 139,392 145,353
Comprehensive income
Profit for six months to 31 December 2022 - - - - 8,380 8,380
Other comprehensive income - - - 1,323 62 1,385
Total comprehensive income - - - 1,323 8,442 9,765
Transactions with owners
Share options exercised - 100 - - - 100
Dividends paid to shareholders - - - - (5,403) (5,403)
Total transactions with owners - 100 - - (5,403) (5,303)
Balance at 31 December 2022 1,189 2,927 137 3,131 142,431 149,815
Comprehensive income
Profit for six months to 30 June 2023 - - - - 13,554 13,554
Actuarial gain on pension scheme - - - - (123) (123)
Movement on unrecognised pension surplus - - - - 177 177
Revaluation of financial assets at fair value through other comprehensive - - - - (187) (187)
income
Movement on associated deferred tax - - - - 46 46
Exchange rate differences on translation of foreign operations - - - (1,092) - (1,092)
Total comprehensive income - - - (1,092) 13,467 12,375
Transactions with owners
Share options exercised - 49 - - - 49
Dividends paid to shareholders - - - - (1,898) (1,898)
Total transactions with owners - 49 - - (1,898) (1,849)
Balance at 30 June 2023 1,189 2,976 137 2,039 154,000 160,341
Comprehensive income
Profit for six months to 31 December 2023 - - - - 8,570 8,570
Other comprehensive income - - - 223 217 440
Total comprehensive income - - - 223 8,787 9,010
Transactions with owners
Share options exercised - 50 - - - 50
Dividends paid to shareholders - - - - (5,674) (5,674)
Total transactions with owners - 50 - - (5,674) (5,624)
Balance at 31 December 2023 1,189 3,026 137 2,262 157,113 163,727
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2023
31.12.23 31.12.22 30.06.23
(six months to) (six months to) (twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash generated from operations
Profit before tax 10,718 10,620 26,934
Adjustments for
- Depreciation of property, plant and equipment 2,349 2,048 4,289
- Depreciation of investment property 23 10 20
- Amortisation of intangibles 2,445 1,770 4,454
- Profit on disposal of property, plant and equipment (104) (58) (192)
- Net finance (income)/expense (112) 359 378
- Retirement benefit contributions less current and past service charge (107) (73) 54
- Share of joint venture loss 597 - 520
- Research and development expenditure credit (277) (182) (382)
- Effects of exchange rate movements (641) 394 952
Changes in working capital
- Inventories 3,409 (2,136) 3,117
- Trade and other receivables 506 3,008 (98)
- Payables and provisions (2,935) (3,921) (3,830)
Cash generated from operations 15,871 11,839 36,216
Tax paid (1,827) (1,964) (4,341)
Net cash generated from operating activities 14,044 9,875 31,875
Cash flow from investing activities
Purchase of property, plant and equipment (2,893) (4,133) (7,739)
Proceeds from sale of property, plant and equipment 216 155 535
Purchase of intangible assets (1,295) (1,157) (2,255)
Purchase of subsidiaries (net of cash acquired) - (12,603) (12,602)
Purchase of shares in subsidiaries (4,290) (5,293) (6,445)
Purchase of investment properties (2,143) - (22)
Net sale of financial assets at fair value through Other Comprehensive Income - - 1
Property rental and similar income 25 23 93
Dividend income 85 102 209
Net withdrawal of short-term financial assets - 5,074 5,075
Interest received 204 137 434
Receipts from loans receivable - - 1,813
Issue of loans receivable (650) (437) (1,748)
Net cash used in investing activities (10,741) (18,132) (22,651)
Cash flow from financing activities
Net proceeds from the issuance of ordinary shares 50 100 149
Addition of lease liabilities - - 203
Proceeds from borrowings - 1,006 1,039
Repayment of borrowings (522) (1,787) (2,532)
Principal element of lease payments (423) (334) (789)
Payment of interest (153) (94) (339)
Payments to non-controlling interests (447) - -
Dividends paid to company shareholders (5,674) (5,403) (7,301)
Net cash used in financing activities (7,169) (6,512) (9,570)
Effects of exchange rate changes on cash 148 368 (146)
Net decrease in cash and cash equivalents (3,718) (14,401) (492)
Cash and cash equivalents at the beginning of the period 35,013 35,505 35,505
Cash and cash equivalents at the end of the period 31,295 21,104 35,013
Notes to the Interim Financial Statements
1. Basis of preparation
The consolidated interim financial statements for the six months to 31
December 2023 have been prepared in accordance with the AIM Rules for
Companies, UK adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards, with future changes being subject to endorsement by the
UK Endorsement Board.
The figures for the period to 31 December 2023 and the comparative period to
31 December 2022 have not been audited or reviewed and are therefore disclosed
as unaudited. The figures for 30 June 2023 have been extracted from the
financial statements for the year to 30 June 2023, 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 and through other
comprehensive income.
The accounting policies set out in the financial statements for
the year ended 30 June 2023 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 twelve 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 of SchahlLED and Thorlux Lighting Limited are
included in this segment in accordance with the Group's internal reporting.
The businesses in the Netherlands, Lightronics and Famostar, are material
subsidiaries and disclosed separately as Netherlands companies. The businesses
in the Zemper Group are also material and disclosed separately as Zemper
Group.
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 Zemper Other Inter- Total
Companies Group Companies Segment Continuing
Operations
£'000 £'000 £'000 £'000 £'000 £'000
Six months to 31 December 2023
Revenue to external customers 46,465 18,118 8,959 9,051 - 82,593
Revenue to other Group companies 1,717 99 9 1,850 (3,675) -
Total revenue 48,182 18,217 8,968 10,901 (3,675) 82,593
EBITDA 9,151 4,101 1,774 925 69 16,020
Depreciation and amortisation 2,274 633 1,288 622 - 4,817
Operating profit before acquisition adjustments 7,414 3,576 935 303 69 12,297
Operating profit 6,877 3,468 486 303 69 11,203
Net finance income 112
Share of loss of joint venture (597)
Profit before tax expense 10,718
Included in the Thorlux segment are additional revenues from SchahlLED of
£9.1m and operating profit of £0.5m. Acquisition adjustments includes
amortisation for intangible assets.
Thorlux Netherlands Zemper Other Inter- Total
Companies Group Companies Segment Continuing
Operations
£'000 £'000 £'000 £'000 £'000 £'000
Six months to 31 December 2022
Revenue to external customers 46,964 16,746 8,676 9,467 - 81,853
Revenue to other Group companies 2,026 317 - 2,342 (4,685) -
Total revenue 48,990 17,063 8,676 11,809 (4,685) 81,853
EBITDA 8,747 3,193 1,761 938 168 14,807
Depreciation and amortisation 1,724 451 1,012 641 - 3,828
Operating profit before acquisition adjustments 8,046 2,850 1,199 297 168 12,560
Operating profit 7,023 2,742 749 297 168 10,979
Net finance expense (359)
Profit before tax expense 10,620
Included in the Thorlux segment are additional revenues from SchahlLED of
£6.7m and operating profit of £0.4m. Acquisition adjustments includes
amortisation for intangible assets.
Thorlux Netherlands Zemper Other Inter- Total
Companies Group Companies Segment Continuing
Operations
£'000 £'000 £'000 £'000 £'000 £'000
Year to 30 June 2023
Revenue to external customers 101,859 36,226 19,328 19,336 - 176,749
Revenue to other Group companies 3,601 417 - 4,667 (8,685) -
Total revenue 105,460 36,643 19,328 24,003 (8,685) 176,749
EBITDA 21,458 7,952 4,205 2,392 588 36,595
Depreciation and amortisation 4,212 983 2,307 1,261 - 8,763
Operating profit before acquisition adjustments 18,062 7,187 2,801 1,131 588 29,769
Operating profit 17,246 6,969 1,898 1,131 588 27,832
Net finance expense (378)
Share of profit of joint ventures (520)
Profit before tax expense 26,934
Included in the Thorlux segment are additional revenues from SchahlLED of
£16.9m and operating profit of £1.4m. Acquisition adjustments includes
amortisation for intangible assets.
3. Purchase of shares in subsidiaries
On 3 October 2023, the Group purchased a further 13.5% of the share capital of
Electrozemper S.A. with a cash payment of £4.3m (€5.0m), as part of its
commitment to acquire the remaining shares.
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
117,237,021 (Interim 2023: 117,191,586) 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
117,306,123 (Interim 2023: 117,292,983) during the period.
5. Dividend
The interim dividend is at the rate of 1.70p per share (Interim
2023: 1.62p) and based on 117,271,586 shares in issue at the announcement date
the dividend will amount to £1,994,000 (Interim 2023: £1,899,000). The
interim dividend will be paid on 19 April 2024 to shareholders on the register
at the close of business on 22 March 2024, and the shares become ex-dividend
on 21 March 2024.
For the year ended 30 June 2023 , a final dividend of 4.84p (2022: final
4.61p) per share amounting to £5,674,000 (2022: £5,403,000) was paid on 24
November 2023.
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 (http://www.fwthorpe.co.uk) ) from 26
March 2024.
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