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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 £56.4m £57.4m -1.8%
Operating profit £7.7m £7.5m +2.2%
Profit before tax £7.4m £7.4m -%
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 - £8.0m (Interim
2020: £6.2m)
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 to) (six months to) (twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'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 (six months to) 31.12.19 (six months to) 30.06.20
(twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'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 403 168 (834)
income *
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 £403,000 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 £'000 £'000 £'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 Capital Share Premium Capital Redemption Reserve Foreign Currency Translation Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'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 - - - - (1,002) (1,002)
income
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 to) (six months to) (twelve months to)
(unaudited) (unaudited) (audited)
£'000 £'000 £'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 (129) (124) (170)
charge
- 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 (5) (61) (61)
income
Proceeds from sale of other financial assets at fair value through profit and - 387 387
loss
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 Companies Other Inter- Total
Companies Segment Continuing
Adjust- Operations
ments
£'000 £'000 £'000 £'000 £'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 €4.4m (£3.9m)
excluding any consequential loss. €2.6m (£2.3m) of this value is for the
refurbishment of the building and €1.8m (£1.6m) 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 €3.6m (£3.2m) to meet the
requirements to be recognised as a contingent asset within trade receivables.
As at the date of this interim statement, €0.75m (£0.67m) 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 (€'000) 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 £1,737,000 (Interim 2020: £1,698,000). 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 £4,895,000 (2019: £4,770,000) 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 (http://www.fwthorpe.co.uk) ) from 7 April 2021.
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