Interim Results

FW Thorpe

15/03/2018 07:00

RNS Number : 7679H

Thorpe(F.W.) PLC

15 March 2018

F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2017

F W 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 2017.

Key points:

Interim
2018
Interim
2017
Revenue
53.2m
51.2m
3.8% increase
Operating profit
7.8m
7.8m
0.7% increase
Profit before tax
7.9m
7.8m
0.9% increase
Basic earnings per share
5.43p
5.38p
0.9% increase

 Performance of most Group companies was similar to the record figures of 2017

 Famostar acquisition completed in December for initial consideration of 7.6m

 Interim dividend increased to 1.40p (Interim 2017: 1.35p)

For further information, please contact:

F W 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
Richard Lindley
020 7496 3000

CHAIRMAN'S INTERIM STATEMENT

The Group started this financial year reasonably well, and at the halfway point had increased revenues by 3.8% and operating profit by 0.7%. Order income did not reach the record highs of 2016/17, making a further record-breaking full year result a challenge, as indicated in my update at the time of our AGM in November 2017.

Following the rebranding of Compact Lighting as Thorlux, Thorlux now has the benefit of additional retail revenue, which is now making a small contribution. Elsewhere, the majority of Group businesses performed in line with or ahead of last year, with the exception of TRT, where orders increased but margins reduced due to market pressure on selling prices. Improvements at TRT are underway for the second half of this financial year.

Certain overseas operations performed well, with a particularly positive contribution from those in the UAE and Australia. Lightronics delivered a large-scale project in Rotterdam and its performance is in line with that of last year.

Famostar, an emergency lighting specialist in the Netherlands, was welcomed to the Group. Within the Group, we see this as a complementary addition to the Lightronics operation, improving Lightronics' product offering and giving the opportunity to share Group technology in the future.

Having completed the new TRT factory and surface mount technology (SMT) electronics assembly line, the Group is now turning its attention to other areas. In January, the Group acquired the Lightronics factory and neighbouring property for 3.4m, providing a stable footing for expansion. On this site, the Group plans to build its European Application Centre, similar to the very successful Thorlux centre in the UK. It will showcase Lightronics, Thorlux and other Group products and systems.

Product development is a foundation of all Group businesses and continues apace. At Thorlux, additional SmartScan wireless lighting system features were launched, as planned. In addition, a raft of new and improved luminaires will appear on individual business websites before the end of the current financial year.

The results for the six months to 31 December 2017 allow for an increased dividend of 1.40p (Interim 2017: 1.35p), representing a 3.7% increase.

It remains a challenge to maintain last year's result, in spite of the interim performance. Revenue and profits should be bolstered by the addition of Famostar in the second half of the year; however, whilst the Group will endeavour to reach record levels, it seems unlikely.

Within the Group we will, of course, continue to work on and invest in projects that support our vision of stable long-term growth into the future.

Mike Allcock

Chairman

15 March 2018

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2017

31.12.17
(six months to)
31.12.16
(six months to)
30.06.17
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Revenue
53,170
51,236
105,448
Operating Profit
7,829
7,775
18,422
Finance income
338
307
535
Finance costs
(285)
(272)
(784)
Share of profit of joint venture
-
-
178
Profit before tax expense
7,882
7,810
18,351
Tax expense
(1,598)
(1,588)
(3,851)
Profit for the period from continuing operations
6,284
6,222
14,500
Profit for the period
6,284
6,222
14,500


Dividend rate per share:
Interim
1.40p
1.35p
1.35p
Final
-
-
2.85p

Earnings per share
- basic
5.43p
5.38p
12.54p
- diluted
5.39p
5.35p
12.47p

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2017

31.12.17
(six months to)
31.12.16
(six months to)
30.06.17
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Profit for the year
6,284
6,222
14,500
Other comprehensive income
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
- Arising in period*
263
227
287
- Reclassified in period
-
-
-
Exchange rate differences on translation of foreign operations
- Arising in period
159
192
657
- Reclassified in period
-
-
-
Taxation
(45)
(43)
18
377
376
962
Items that will not be reclassified to profit or loss
Actuarial loss on pension scheme
-
-
(1,211)
Movement on unrecognised pension surplus
-
-
1,071
-
-
(140)
Other comprehensive income for the year, net of tax
377
376
822
Total comprehensive income for the year
6,661
6,598
15,322


All comprehensive income is attributable to the owners of the company.

* The profit on items that may be reclassified to profit or loss of 263,000 is due to the increase in market value of available for sale financial assets.

CONSOLIDATED BALANCE SHEET

as at 31 December 2017

As at
As at
As at
31.12.17
31.12.16
30.06.17
(unaudited)
(unaudited)
(audited)
Assets
'000
'000
'000
Non-Current Assets
Property, plant and equipment
19,666
17,570
18,837
Intangible assets
22,873
15,465
15,927
Investment property
2,133
2,219
2,163
Loans and receivables
6,306
4,340
3,058
Equity accounted investments
936
936
936
Available for sale financial assets
3,893
3,574
3,630
Deferred tax assets
9
32
19
55,816
44,136
44,570
Current assets
Inventories
20,913
20,847
22,592
Trade and other receivables
22,607
17,210
18,995
Other financial assets at fair value through profit or loss
389
389
389
Loans and receivables
-
-
750
Short term financial assets - deposits
9,856
12,767
16,981
Cash and cash equivalents
28,417
22,957
24,678
Total current assets
82,182
74,170
84,385
Total Assets
137,998
118,306
128,955
Liabilities
Current liabilities
Trade and other payables
(18,056)
(15,804)
(17,826)
Current tax liabilities
(2,015)
(1,667)
(1,606)
Total current liabilities
(20,071)
(17,471)
(19,432)
Net current assets
62,111
56,699
64,953
Non-current liabilities
Retirement benefit deficit
-
-
-
Other payables
(11,463)
(4,811)
(5,774)
Provisions for liabilities and charges
(1,619)
(1,171)
(1,537)
Deferred tax liabilities
(706)
(785)
(920)
Total non-current liabilities
(13,788)
(6,767)
(8,231)
Total liabilities
(33,859)
(24,238)
(27,663)
Net assets
104,139
94,068
101,292
Equity attributable to owners of the company
Issued share capital
1,189
1,189
1,189
Share premium account
902
656
656
Capital redemption reserve
137
137
137
Foreign currency translation reserve
2,422
1,798
2,263
Retained earnings
99,489
90,288
97,047
Total equity
104,139
94,068
101,292


GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2017

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 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
Comprehensive income
Profit for six months to 30 June 2017
-
-
-
-
8,278
8,278
Actuarial loss on pension scheme
-
-
-
-
(1,211)
(1,211)
Movement on unrecognised pension surplus
-
-
-
-
1,071
1,071
Revaluation of available-for-sale financial assets
-
-
-
-
60
60
Movement on associated deferred tax
-
-
-
-
(7)
(7)
Impact of deferred tax rate change
-
-
-
-
68
68
Exchange rate differences on translation of foreign operations
-
-
-
465
-
465
Total comprehensive income
-
-
-
465
8,259
8,724
Transactions with owners
Dividends paid to shareholders
-
-
-
-
(1,561)
(1,561)
Share-based payment charge
-
-
-
-
61
61
Total transactions with owners
-
-
-
-
(1,500)
(1,500)
Balance at 30 June 2017
1,189
656
137
2,263
97,047
101,292
Comprehensive income
Profit for six months to 31 December 2017
-
-
-
-
6,284
6,284
Other comprehensive income
-
-
-
159
218
377
Total comprehensive income
-
-
-
159
6,502
6,661
Transactions with owners
Share options exercised
2
246
-
-
-
248
Shares transferred from treasury
(2)
-
-
-
-
(2)
Dividends paid to shareholders
-
-
-
-
(4,114)
(4,114)
Share-based payment charge
-
-
-
-
54
54
Total transactions with owners
-
246
-
-
(4,060)
(3,814)
Balance at 31 December 2017
1,189
902
137
2,422
99,489
104,139


GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2017

31.12.17
(six months to)
31.12.16
(six months to)
30.06.17
(twelve months to)
(unaudited)
(unaudited)
(audited)
'000
'000
'000
Cash generated from operations
Profit before income tax
7,882
7,810
18,351
Adjustments for
- Depreciation charge
997
781
1,697
- Amortisation of intangibles & investment property
1,313
947
2,302
- Profit on disposal of property, plant and equipment
(45)
(44)
(119)
- Finance (income)/expense
(53)
(35)
249
- Retirement benefit contributions in excess of current and past service charge
(53)
(73)
(140)
- Share of profit from joint venture
-
-
(178)
- Share-based payment expense
166
122
337
- Research and development expenditure credit
(123)
(126)
(233)
- Effects of exchange rate movements
120
(78)
113
Changes in working capital
- Inventories
2,623
(1,919)
(3,646)
- Trade and other receivables
(2,469)
4,116
2,156
- Payables and provisions
(94)
(1,042)
1,491
Cash generated from operations
10,264
10,459
22,380
Tax paid
(1,351)
(1,823)
(3,840)
Cash flow from investing activities
Purchase of property, plant and equipment
(1,848)
(3,302)
(5,400)
Proceeds from sale of property, plant and equipment
79
134
262
Purchase of intangibles
(939)
(782)
(2,148)
Purchase of subsidiary (net of cash acquired)
(5,922)
-
240
Purchase of investment property
-
(122)
(100)
Net sale/(purchase) of available for sale financial assets
-
1
5
Property rental and similar income
27
29
31
Dividend income
94
104
210
Net sale/(purchase) of deposits
7,125
2,143
(2,071)
Interest received
202
124
393
Net (issue)/receipt of loans notes
(118)
710
1,090
Net cash (used in)/generated from investing activities
(1,300)
(961)
(7,488)
Cash flow from financing activities
Net proceeds from the issuance of ordinary shares
248
-
-
Dividends paid to company shareholders
(4,114)
(3,297)
(4,858)
Net cash used in financing activities
(3,866)
(3,297)
(4,858)
Effects of exchange rate changes on cash
(8)
284
189
Net increase/(decrease) in cash and cash equivalents
3,739
4,662
6,383
Cash and cash equivalents at the beginning of the period
24,678
18,295
18,295
Cash and cash equivalents at the end of the period
28,417
22,957
24,678

Notes to the Interim Financial Statements

1. Basis of Preparation

 The consolidated interim financial statements for the six months to 31 December 2017 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the AIM Rules for Companies.

 The figures for the period to 31 December 2017 and the comparative period to 31 December 2016 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2017 have been extracted from the financial statements for the year to 30 June 2017, 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 2017 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. During the period, Compact Lighting Limited has been incorporated into the Thorlux segment further to previous announcements. 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 Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux LLC, Thorlux Australasia PTY Limited and Famostar B.V.

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.

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
Lightronics
Other
Inter-
Total
Companies
Segment
Continuing
Adjust-
Operations
ments
'000
'000
'000
'000
'000
6 months to 31 December 2017
Revenue to external customers
32,298
10,210
10,662
-
53,170
Revenue to other Group companies
2,307
57
1,114
(3,478)
-
Total revenue
34,605
10,267
11,776
(3,478)
53,170
Operating Profit
5,948
1,102
782
(3)
7,829
Finance income
338
Finance expense
(285)
Share of loss in joint venture
-
Profit before tax expense
7,882
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
Year to 30 June 2017
Revenue to external customers
65,323
19,243
20,882
-
105,488
Revenue to other group companies
3,794
304
4,364
(8,462)
-
Total revenue
69,117
19,547
25,246
(8,462)
105,448
Operating Profit
14,162
2,372
2,163
(275)
18,422
Finance expense
(249)
Share of profit in joint venture
178
Profit before tax expense
18,351


Comparative periods for the Other Companies segment include Compact Lighting Limited. For the current period Compact Lighting Limited is incorporated in the Thorlux segment following the reorganisation of this business in July 2017.

3. Investment in Subsidiary

In December 2017, the Group acquired 100% of the share capital of Famostar B.V., an emergency lighting specialist in the Netherlands. The company was acquired by Lightronics Participaties B.V. for an initial consideration of 7.6m (circa 6.8m) with an estimated additional 0.5m (0.4m) payable subject to performance conditions relating to EBITDA in 2017 and 2018. Based on current best estimates, a further 2.7m (2.4m) could be payable to the holders of share appreciation rights in Lightronics Participaties B.V. which is subject to future performance conditions linked to a significant increase in EBITDA over the next three years.

Amounts recognised in respect of this acquisition are:

,000
Total identifiable assets
2,674
Goodwill
8,156
Total purchase consideration
10,830
Total purchase consideration satisfied by:
Cash
7,600
Contingent consideration: Famostar
500
Contingent consideration: Share appreciation rights
2,730
Total consideration
10,830
Net cash flow arising on acquisition
Cash consideration
7,600
Less cash in subsidiary acquired
(931)
Cash outflow on acquisition
6,669

A fair value exercise has not yet been performed on the acquired assets and liabilities; this will be undertaken for the current financial year-end. The outcome of this exercise may result in changes to the fair value of the acquired assets and liabilities, as well as associated goodwill.

Unaudited results for the year ended 31st December 2017 showed revenues of 7.7m, and profit before tax of 1.3m. This acquisition is expected to make a minor contribution to Group profits for the current financial year.

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 115,750,590 (Interim 2017: 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 116,502,118 (Interim 2017: 116,347,665) during the period.

5. Dividend

 The interim dividend is at the rate of 1.40p per share (Interim 2017: 1.35p), and based on 115,875,590 shares in issue at the announcement date the dividend will amount to 1,622,000 (Interim 2017: 1,562,000). The interim dividend will be paid on 12 April 2018 to shareholders on the register at the close of business on 23 March 2018, and the shares become ex-dividend on 22 March 2018.

A final dividend for the year ended 30 June 2017 of 3.55p (2016: final of 2.85p) per share, amounting to 4,114,000 (2016: 3,297,000) was paid on 30 November 2017.

6. Events after the Balance Sheet Date

InJanuary 2018, the Group acquired the property in the Netherlands occupied by its subsidiary, Lightronics Participaties B.V. for 3,400,000.

7. 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 29 March 2018.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR USSWRWWAOAAR