Dewhurst Group
Plc
("Dewhurst" or the "Group")
Preliminary Results for the
year ended 30 September 2024
Chairman's Statement
Results
I am delighted to report record sales and
improved profits. Operating profit is up 5% and profit before tax
is 7% higher. Group sales for the year to 30 September 2024
('2024') increased 11% to £64.4 million (2023: £58.0 million).
Operating profit was £8.1 million (2023: £7.8 million) and profit
before tax was £8.6 million (2023: £8.1 million). Earnings per
share were 66.58p (2023: 62.45p) up 7%.
Sales performance improved at all divisions and
at almost all companies. Transport and Highways grew 7% although
this was primarily due to growth in rail infrastructure work, while
highways showed more modest growth after their strong showing the
previous year. Keypad sales returned to a level that has become
more normal since the start of this decade, reporting an increase
of a third on last year's depressed figures. The Lift division
improved 10% assisted by the additional contribution from our new
business in Singapore. The UK continued its growth of last year and
the Australian businesses also contributed growth this year,
bouncing back after a decline the previous year. This was offset by
a small decline in North America, after strong growth the previous
year. The pound strengthened against our other operational
currencies during the year by about 10% from start to end, with an
average year impact of approximately 4%. The translation effect of
this change reduced our reported sales by £1.7 million and our
reported profit before tax by £0.2 million.
We are proposing an increase in our final
dividend of 0.50p, making an increase of 0.75p for the year. If
approved, this would result in a total dividend for 2024 of 16.50p
per share which is 4.8% up on 2023.
Operations and People
All businesses have performed well this year and
all showed growth in sales in local currency terms. The increases
in reported sales have been partly as a result of inflation in
material and labour costs over the last couple of years, although
we have absorbed some costs ourselves. We have worked hard over the
year to mitigate these increases and to improve our operating
efficiency. It is encouraging that this focus has borne results as
most businesses have shown improvement in operating performance
this year.
We installed a new Group-wide HR management
system during the year, which is helping us to improve our
communication and engagement with our staff as well as improving
control of our documentation. I am also encouraged by the progress
we have made this year in improving our sustainability performance
through reducing our real scope 1 & 2 carbon emissions. Clearly
there is much more to do, but I feel we have made material progress
both in engagement with our staff and in respect of emissions. This
is set out in our Sustainability report.
Achieving our overall growth and improved
performance has been a stimulating challenge for all involved. The
results have been achieved through the efforts of all our staff and
I would like to thank everyone for their individual
contributions.
I am delighted to welcome Jeremy Dewhurst to the
Group Board in his new role as Chief Financial Officer and to thank
Jared Sinclair for his dedicated performance of that role for 22
years and for his continuing support on the transition. We are all
pleased Jared is remaining on the Board in a new role as Chief
Integration Officer.
Investment
We have continued to invest in our new company
in Singapore designing and manufacturing displays. The investment
is both financial and in resources in order to position the company
to be able to achieve profitable growth. The business has made
progress this year, but there is more to do.
Given the cash on our balance sheet we decided
this year to put some of the surplus to use in the pension scheme
and return some funds to shareholders. Our defined benefit pension
scheme has been a liability on our balance sheet for many years
now. In addition it is an increasing burden to keep up with the
regulations to administer the scheme. It is our objective to
transfer the scheme to an insurer when this is viable. In the
meantime we aim to capitalise on higher interest rates to de-risk
and reduce the volatility in the scheme in the short term. In
September 2024, we used £2.5 million of our cash to accelerate
payments into the scheme to improve the funding position. A further
£2.5 million has been paid into the scheme since the year
end.
We also took the opportunity accorded by the
authority granted at the AGM to return some of our cash to
shareholders by re-purchasing some of our non-voting shares. This
has previously been reported by RNS and is set out in more detail
in the Financial Review.
Outlook
Group sales have started the year slightly up on
last year and in line with our expectations. Lift product demand is
softer in Canada, as we have been anticipating for a while, because
of excess capacity in certain segments of the property market.
Elsewhere the lift market is reasonable in the short term, but
likely to slow in some markets during the year. We currently expect
keypad demand to be similar to this year, although it does tend to
fluctuate quite significantly during the year. Highways and
transport products are also expected to be similar or slightly
ahead of last year.
The outlook for growth in the UK has worsened
since the new Government's October budget with our customers' mood
dented by the additional financial burden placed on companies. It
remains to be seen whether this is a temporary setback or whether
it will have longer term effects. If tariffs are introduced on
elevator products imported into the US from Canada and the UK this
is likely to be detrimental to our business, but it is too early to
assess the scale of the impact.
We are likely to have to continue to invest in
our Singapore business in the short to medium term, but our
priority objective is to achieve long term sustainable
growth.
Richard
Dewhurst
Chairman
Strategic Report
Business Review
The Group has achieved another milestone year,
driven by robust performances across our business segments and
demonstrating the strength of our strategic vision and operational
execution. Sales increased by 11% year-on-year to £64.4M, while
profits before tax grew by 7%, reflecting both a recovery in market
conditions and the effective implementation of our operational
initiatives.
Our principal activities remain the manufacture
and distribution of electrical components and control equipment for
industrial and commercial applications. The year has seen strong
growth in several divisions, with some registering record sales and
profits. A business review of the Group's operations is dealt with
below in operating highlights, in the Chairman's statement, and in
the Financial review.
Key Performance Indicators
The Directors continue to use a focused set of
financial and non-financial KPIs to track performance and ensure
sustainable growth. Key financial measures include earnings per
share, adjusted operating profit, profit before tax, and return on
equity, reflecting strong profitability and effective capital use
in 2024.
Non-financial KPIs focus on quality, on-time
deliveries, and sustainability progress. Notable achievements this
year include increased use of recycled materials, reduced waste and
improved energy efficiency. These KPIs highlight the Group's
balanced approach to financial strength, operational excellence and
environmental responsibility.
Operating Highlights
The global economic environment remains complex,
marked by inflationary pressures, supply chain disruptions, and
geopolitical uncertainty. Despite these challenges, we have
maintained a strong market presence in the lift, transport, and
keypad sectors. Our ongoing commitment to our people, operational
efficiency and our customer focus has been integral to this year's
success.
While we have seen improvements in both our
Keypads market and Australian lift interiors business, there were
signs in our second-half performance which suggest some continued
challenges in North America and the UK. Nonetheless, most
businesses performed well reflecting our overall positive
performance.
Following insights from our inaugural staff
survey, we introduced several initiatives to strengthen employee
engagement and development. These included the rollout of a global
HR system - PeopleHR and further integration of our mission,
vision, and values driving stronger engagement and development
across the organisation.
As part of our planned senior leadership
transitions, Jeremy Dewhurst was promoted to Chief Financial
Officer, joining the Group's Board of Directors. Jared Sinclair
stepped down as Chief Financial Officer to take on the role of
Chief Integration Officer, while remaining a Group Board member and
the Company Secretary. These changes have been implemented
smoothly, bringing fresh perspectives and maintaining strong
momentum. We are confident they will continue to drive positive
outcomes and support the Group's long-term objectives.
Collaboration across the Group remains key to
unlocking global product opportunities, both organic and inorganic.
This year, we have focused on strengthening cross-business
partnerships, sharing expertise and identifying new market
possibilities. These efforts position us to capitalise on emerging
opportunities, drive innovation and expand our product offerings on
a global scale for sustained growth.
Meeting our people and supporting our businesses
in person continues to be a key part of my strategy to strengthen
connections and deepen understanding across the Group. I have
visited all our businesses at least twice throughout the year and
want to thank them all for their continued hard work, dedication
and outstanding contributions.
UNITED KINGDOM
Dewhurst Limited
Dewhurst Limited delivered a strong performance
this year, achieving record sales and growth in profit. This
success was driven by a significant shift in product mix compared
to previous years, with all product groups exceeding both last
year's results and initial expectations.
Lift products performed well supported by a
strong performance in other non-lift related product lines. The
resurgence in our keypad business resulted in increased demand from
Hungary and a key rail project saw the delivery of a high number of
our PA51 LED illuminated Bodyside Indicators used on rolling stock
to provide the visible indication of the door interlock
status.
Operationally, we have intensified our focus on
improving efficiency, enabling us to manage increased demand as
well as ensure we remain competitive in our markets. A key
sustainability milestone was the installation of an on-site
nitrogen generation system, which supports laser cutting
operations. This initiative not only reduced costs but also
eliminated the environmental impact associated with regular bottled
gas deliveries.
Leadership transitions also marked a pivotal
year for the company. Peter Dewhurst was promoted to Managing
Director of Dewhurst Ltd in April while continuing to lead as
Managing Director of Dewhurst Singapore, our displays and position
indicators business. Peter's global perspective is expected to
drive further product innovation as the company continues
integrating advanced technologies such as IoT, AI, and smart
manufacturing systems.
This year's result is testament to hard work of
the entire team who have found innovative ways to improve workflows
to cope with increased demand whilst continuing to meet our
stringent quality requirements and the tight deadlines of our
customers.
Traffic Management Products (TMP)
Sales exited at similarly pleasing levels to
2023 with all key product lines performing in line with
expectation. This, despite ongoing financial constraints within
local authorities who have seen significant reductions in their
spending power coincide with increasing demand for their services
and inflationary pressures.
Traffic bollard sales into our export market
remained strong but we expect this to reduce as the rollout of new
installations is nearing completion.
Increased operating costs coupled with market
price pressure remains an ongoing challenge. We continue to
navigate product and customer mix to ensure we remain competitive
in securing the larger contracts in the market whilst mitigating
credit risk.
Our focus on our customers, operational
efficiencies and our sustainability credentials summarised as
people, profit and planet continue to provide opportunities for
competitive advantage. Combined they are helping shape our product
innovation.
A&A Electrical Distributors
(A&A)
The past year at A&A has been relatively
flat, reflecting the ongoing volatility and competitive nature of
the market. Both we and our customers have faced challenges in this
dynamic environment.
However, some areas have shown resilience.
Products related to trailing cables, lifts, and safety equipment
performed well, along with the introduction of our redesigned trade
counter, which has generated significant interest and supported
sales.
We have also taken steps to strengthen our
product management team to accelerate the introduction of new
products. In addition, we are exploring ways to extend our
operational improvements across a broader supplier network to
deliver even greater value to our customers. The continued focus on
operational efficiency and sustainability has led to the
implementation of new tools that allow for quicker cost and pricing
management, enhancing our agility in a fast-moving market.
Additionally, we introduced an in-house designed driver delivery
app that helps manage driving routes and provide more accurate
arrival times, improving the overall customer
experience.
A key development this year has been the
addition of electric vans to our fleet, which aligns with our
sustainability goals while also reducing operational costs. This
addition contributes to our competitive edge by enhancing
efficiency and reducing carbon emissions.
Our e-commerce platform has seen increased use
as more customers become familiar with its features and benefits.
However, we remain committed to ensuring that traditional
engagement methods continue to play a vital role in meeting the
needs of all our customers.
Ongoing regulatory requirements present both
risks and opportunities, which will be key drivers for future
product development and range expansion. These regulations will
play an important part in shaping our product strategy going
forward.
EUROPE
Dewhurst Hungary
Whilst not back to previous levels there was
good recovery in our keypad market as the effects of our customer's
restructuring settled. Our own restructuring implemented last year
coupled with our decision to move some of our product assembly from
the UK to Hungary earlier this year has delivered a consistent base
load to the business and an area we will continue to
explore.
NORTH AMERICA
Dupar Controls
Following a period of steady growth over the
past few years, Dupar experienced a relatively flat year, primarily
due to economic uncertainty, a slowdown in large construction
projects and ongoing challenges within the construction
market.
The impact of these factors was compounded by
continuing supply chain disruptions, particularly with key
suppliers of controller boards, which had been an issue in the
previous year. As a result, many customers shifted their project
priorities, which disrupted our manufacturing patterns and
negatively affected our overall efficiency.
Despite these challenges, Dupar successfully
managed planned personnel changes in some key management positions.
The transitions were planned carefully to ensure there was adequate
handover time, preventing any disruption to performance.
Additionally, our operational efficiency remained resilient in
coping with fluctuating demands throughout the year. Although the
external factors posed significant hurdles Dupar's ability to adapt
to changing circumstances has helped mitigate the impact on
operations.
Elevator Research & Manufacturing
(ERM)
Our continued focus on operational efficiency
and customer engagement resulted in another strong year at ERM and
again delivered further progression in our
profitability.
Our 60th anniversary celebrations in
May were well attended and provided a chance to thank our customers
for their continued support. Increased customer visits and
investment in our engineering function including additional
engineering resource supports our efforts for further expansion in
the California market.
AUSTRALIA & ASIA
Australian Lift Components (ALC)
An improved performance at ALC saw both sales
and profits exceed the previous year's results, driven by a renewed
focus on differentiation.
Key successes included significant sales of ALC
pit kits and advances in our technical capabilities, particularly
in integrating Dewhurst display systems into our products. However,
challenges persist in the market, as the lack of new projects and
the continued emphasis by major lift companies on promoting their
factory packages create a competitive environment.
P&R Lift Cars (P&R)
A positive turnaround year at P&R as we
halted the decline of the last two years. The market has been more
favourable this year with the improvements made in many of our key
processes.
During the year we acquired the remaining
shareholding of Roy Peat which saw him stand down as General
Manager but remain with the business in a new role which utilises
his design skills and years of experience within the lift
industry.
James Cameron joined the business in June as
General Manager and has settled in well. We have worked hard to
steady our position whilst working on our plans for further
progression.
Lift Material
Another year of record sales at LMA as we
consolidated our position across our key product lines. Investment
in people and the opening of a new branch in Melbourne resulted in
profit being slightly down on the previous year but an enabler to
our further growth.
Good progress has been made in the expansion of
our escalator handrail business during the year as well as the
addition of new product lines to LMA's growing portfolio. The
introduction of our E-Commerce system developed at A&A is
designed to promote these products quickly as well as offer
customers significant benefits in the way they can obtain quotes
and place orders.
Dual
The transformation of Dual has continued at an
impressive pace, delivering an excellent year marked by record
levels in both sales and profit. Favourable market conditions
contributed to this success, along with the achievement of securing
the prestigious Metronet project. Despite its challenging
engineering demands and tight timeframes, the project has been
expertly executed by the entire team at Dual.
The challenges of increased customer demand
coupled with tight project timelines meant production space was
significantly stretched. However, the improvements in our
production workflows enabled our output to be achieved efficiently
and safely.
The hard work and dedication of our entire team
has been instrumental in driving our strategic initiatives
forward.
Dewhurst Hong Kong
Despite the political and economic challenges
Hong Kong has encountered over the past 12 months, the business has
continued to demonstrate strong performance again achieving a
double-digit increase compared to last year and setting another
record.
Customer engagement remains a central focus of
the company's operations, whether through in-person meetings,
virtual engagements via Teams, or technical webinars, which have
helped maintain strong relationships with clients and foster
continued growth.
However, progress has been slower than expected
with regard to the approval of the rope gripper by Hong Kong
authorities. Limited approvals have been granted, but there is
still significant potential for this product, as well as others to
be distributed within the Hong Kong market in the
future.
Dewhurst Singapore
The three-month hiatus between the announcement of
ending production of the E-Motive products and our acquisition of
the brand understandably caused customer concern. This gap allowed
competitors to strengthen their positions, particularly in the
Singapore market, where they capitalised on the uncertainty.
Despite this setback, we have successfully reversed
this trend in the UK and Australian markets, where demand for our
display products has started to rise.
Our increased customer engagement, backed by a proven
record of manufacturing high-quality products, is beginning to
yield positive results. We are optimistic about seeing significant
improvements in our sales across Singapore, Asia and the Middle
East in the near future. Additionally, we have focused on
rationalising our product lines and improving our cost base, which
will further support our growth objectives and strengthen our
financial position.
John
Bailey
Chief Executive
Officer
Financial Review
Trading results
The Group continued its upward trend with an
11.1% increase in total sales to £64.4
million (2023: £58.0 million). Lift sales increased
10.0% due to strong growth in Asia & Australia, which includes
a full year of trading at Dewhurst Singapore. Continued
construction projects supported both our Australian lift interiors
businesses P&R and Dual deliver double digit growth, with Dual
registering a record year in 2024. Slowing demand in North America
impacted on Dupar, with the outlook expected to be challenging for
at least the first half of 2025. Steady growth in Transport sales
was driven by higher rail sales at Dewhurst, and Keypad sales
bounced back in 2024, delivering 33.2% growth in sales, although
this continues the fluctuations in demand seen in previous
years.
Overall operating profit increased by 4.8% to
£8.1 million (2023: £7.8 million), at an operating profit margin of
12.6% (2023: 13.4%) and profit before taxation increased 6.9% to
£8.6 million (2023: £8.1 million).
A significant proportion of the Group's revenue
and profits are generated and held in foreign currency, and the
foreign exchange retranslation impact on the reporting performance
of the Group this year decreased both like-for-like revenue and
profit before tax by 3% (2023: a decrease of 1% each).
Strong cash position
The subsidiaries continued to trade throughout
2024 without the need for Group cash support, and paid dividends
back to Group totalling £6.7 million. £3.6 million of this cash was
generated from operating activities during the year and as a result
Group cash is strong. Further details can be seen from the
consolidated cash flow statement.
During the year, the Group spent £1.5 million to
acquire the remaining 25% of the shares in P&R Liftcars, £1.8m
on the purchase of own shares, and £0.9 million on the purchase of
property, plant and equipment.
The Group started and ended the year without any
bank borrowings. The cash balance at year end was £21.6 million,
down £2.8 million from £24.4 million in 2023.
Pension scheme surplus
The Company paid a total of £3.9 million deficit
reduction contributions into the pension scheme this year and I am
pleased to report that the deficit decreased by £5.1m and is now in
a surplus position of £3.0m (2023: £2.1 million deficit) on an
IAS19 basis.
Aside from the increase in contributions, the
main reason for the decrease in the deficit was an overperformance
of the pension scheme assets, which was partially offset by the
liability discount rate decreasing from 5.50% to 4.95% at the
year-end.
All recommendations made by the scheme's actuary
to eliminate the scheme deficit within an agreed timeframe have
been fully implemented.
Capital management and treasury
policy
The Group defines capital as total equity plus
net debt. The objective is to maintain a strong and efficient
capital base to support the Group's strategic objectives, provide
optimal returns for shareholders and safeguard the Group's assets
and status as a going concern. The Group is not subject to
externally imposed capital requirements and the Group's philosophy
is to have minimal or no borrowing where possible.
The Group seeks to reduce or eliminate
financial risk to ensure sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably.
The policies and procedures operated are regularly reviewed and
approved by the Board. By varying the duration of its fixed and
floating cash deposits, the Group maximises the return on interest
earned.
The Group continues to hedge foreign currencies
internally where possible and did not use derivatives during the
year in the form of foreign exchange contracts to manage its
currency risk.
Dividends
The Board is proposing a final dividend of
11.50p (2023: 11.00p). If approved, this would be paid on 26
February 2025 and would result in a total dividend for 2024 of
16.50p per share which is 4.8% up on 2023 and is covered 4.3 times
by earnings. The dividend would be paid to members on the register
at 17 January 2025 (ex-dividend 16 January 2025). Dividends
are accounted for when paid or approved by shareholders, and not
when proposed, therefore the proposed final dividend for 2024 has
not been accrued at the end of the reporting period.
Following a share buyback programme, there was a
reduction in the number of allotted shares during the year, and
these have been fully reported in the Directors' Report.
Jeremy
Dewhurst
Chief Financial
Officer
