TIDMTFW
RNS Number : 4998K
Thorpe(F.W.) PLC
22 September 2016
Preliminary Results
for the year ended 30 June 2016 (Unaudited)
F W Thorpe Plc, designers, manufacturers and suppliers of
professional lighting systems for the specification market, is
pleased to announce its preliminary results for the year ended 30
June 2016.
Key points:
2016 2015 Excluding
Lightronics
Continuing operations acquisition
------------------------- -------- -------- --------- ------------
Revenue GBP88.9m GBP73.5m 20.9% 4.4%
increase increase
Operating profit GBP16.2m GBP13.7m 18.1% 6.5%
increase increase
Profit before tax GBP16.3m GBP14.4m 13.0% 6.3%
increase increase
Basic earnings per share 11.1%
- continuing 11.24p 10.12p increase -
------------------------- -------- -------- --------- ------------
-- Total interim and final dividend of 4.05p (2015: 3.65p)
-- Revenue and operating profit boosted by Lightronics acquisition
-- Thorlux profitability improvement despite relatively flat revenues
-- TRT performed strongly, disappointing Compact performance
This announcement contains inside information for the purpose of
Article 7 of EU Regulation 596/2014.
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
Chairman's statement
In your company's 2015/16 financial year to June 30 2016, I am
pleased to report that revenue reached a new high of GBP88.9m
increasing 20.9% over the previous year. Similarly operating profit
rose to GBP16.2m, an increase of 18.1% in comparison to the year to
June 2015. Once again investment income fell, due to a continuing
reduction in general bank interest rates.
Most companies in the Group traded well during 2015/16 either
maintaining or increasing revenue and profit in comparison to last
year. Again, most credit should go to TRT Lighting, our road tunnel
and street lighting company and to Lightronics BV, our Netherlands
lighting company purchased last year, both of whom made substantial
progress.
Whilst striving to go forward one must also be aware of where
one's tail is. Our tail was trimmed during the 2014/15 year with
the sale of Sugg Lighting. Well, when the tail has been trimmed
then there is a new end to the tail. This new end is our Compact
Lighting company; started by us in 1992 to design, produce and
manufacture lighting for retailers. Discussions are in hand as to
how the company can better address the retail sector.
LED continues to be an increasing percentage of Group sales and
for most projects now the choice is LED. Parts of the Group still
suffer inefficiencies in having to produce some "traditional" forms
of lighting such as fluorescent and, less so, high intensity
discharge products and this will continue until the component
prices for this old technology increase further due to volume
reductions. LED component prices are still reducing but at a slower
pace than in the earlier days of LED. At some point the two costs
will match and LED will be the only logical choice. Thorlux, within
the Group, suffers most from this malaise although this year it has
been possible to increase the number of old technology ranges being
withdrawn. LED chip efficiency is still improving but also at a
slower rate meaning that products throughout the Group are not
having to be updated at quite such a furious pace as in recent
years.
In the last financial year your Group purchased Lightronics BV
in The Netherlands and this financial year we have made a EUR1.2m
investment purchasing 40% of Luxintec SL in Spain. This was
mentioned as a Board approved intention in my six monthly report.
Times are early but good progress is being made to see how we can
assist this ostensibly LED lens manufacturer move deeper into the
much larger luminaire market.
Group exports, with the assistance of offices, agents abroad and
now with the inclusion of Lightronics, have increased during this
financial year. A worthy increase considering that due to the costs
of manufacturing in the UK exporters from the UK can only ever sell
on attributes other than price. Business in the Group UAE office is
building and there are some "nice" jobs on the not-too-distant
horizon that should be secured. The office is currently down to two
people but restoration of the third is imminent. Recent discussions
with our UAE partner may lead to the cementing of relations with
some local companies who could provide additional regular
business.
Investments in this financial year have been many and varied but
only the Luxintec SL investment of EUR1.2m and the refurbishment of
the old Thorlux loading deck into 330 square metres of office space
for GBP0.4m are of notable individual value. This new space allows
Thorlux to increase the number of Lighting Scheme Design Engineers
as the general move in the market is that many specifiers, though
quite capable of producing their own lighting schemes, are
preferring to ask those lighting companies being considered, to
complete schemes for them. This requirement is, therefore, a
commercial necessity rather than a luxury and is one affecting
other companies in the Group similarly.
Investments in product design and development continue across
the Group without hindrance and there are a number of exciting (in
lighting terms) new developments to be introduced in the next
year.
Performance for the year to June 30 2016 allows your Board to
recommend a final dividend of 2.85p per share (2015: 2.55p) which
together with the interim and special dividends paid in April 2016
gives a total dividend for the year of 6.05p per share (2015:
3.65p). Excluding the special dividend this is an increase of
11.0%.
Thorlux Lighting
The largest part of the Group, with three hundred and ninety one
people, and manufacturer of commercial and industrial lighting
systems, Thorlux Lighting's figures show a solid performance with
an increase in operating profit on flat revenues. These figures
must, however, be viewed in the knowledge that approximately
GBP1.0m of regular business was lost, in essence due to an American
take-over of that customer. The new owners took a different view of
how they wished to service their lighting needs. Further, there has
been a notable reduction in certain areas of government spending
where the company has been strong. Despite these setbacks Thorlux
managed to maintain, although not increase, revenue.
The factory re-layout has been in full swing during the year and
many small investments have been made renewing, updating and
improving many elements of the manufacturing process. One fairly
major investment at Thorlux during 2015/16 has been the
transformation of an old loading deck into 330 square metres of
office space at a cost of some GBP0.4m, and as mentioned earlier in
this report.
The Thorlux Dusseldorf office in Germany with five people has
performed well with sales of EUR2.3m in the year to June 30 2016
and it is currently actively exploring ways to also allow Thorlux
to expand coverage into Switzerland and Austria, with some orders
having recently been received from the former. The office in
Dublin, Ireland, with four people and revenue of EUR2.9m during the
period also performed well. The joint venture in Australia has
disappointed again, however, and as a result of the situation
re-assessment as mentioned in my six monthly report we have agreed
by mutual consent with our joint venture partner, to dissolve this
partnership. This dissolution took place on 1 July 2016 with the
result that F W Thorpe Plc via Thorlux Lighting is now 100% owner
of Thorlux Australasia Pty.
I would like, at this time, to thank our Australian partner for
his work and assistance in helping set up this venture and also to
wish him continued success in his other business activities.
To counter various areas of business lacking in vitality at this
time Thorlux has been concentrating on other areas of the market,
with a bolstering of "Business Development" capabilities. Some
areas of government spending have been squeezed but others are
probably more buoyant than previously and the company has given
more concentration to the latter with some notable success.
Further new contacts have been forged within the retail sector,
not delving into Compact Lighting's sector of instore lighting but
for back-of-house, warehousing and external requirements.
Compact Lighting
Compact Lighting is the new tail talked about in my opening
remarks. It has not performed satisfactorily over many years and
has in most of those years not been a net contributor to Group
results. Its market is well served by many and various others who,
like Compact, have restricted themselves to certain areas of retail
lighting. In Compact's case, to certain areas of instore
lighting.
Your Group Board is well aware that it must be looking to the
"sharp end" but, at the same time, it must be cognisant of what is
happening at the tail. Discussions must be developed into how
Compact Lighting Ltd can work closer with Thorlux and be turned
into an entity giving better service to the Group. There will be a
concentration in this regard during 2016/17.
Philip Payne
"Payne's", manufacturer of specification exit signs with twenty
three people has produced another set of pleasing results with
another set of record revenue and profit figures.
UK trading has been reasonably buoyant but as mentioned last
year the company has also been concentrating, via the Group UAE
office, on marketing in a number of Middle East countries where
incidences of fire driven disasters have led to strict regimes of
design, technical ability and certification requirements for
emergency lighting equipment. Philip Payne has all these attributes
and some notable successes have been gained to reward their
diligence in working to meet these criteria.
The desire to improve and expand continues at Payne's with
investments throughout the year including the purchase from Thorlux
of two press-brake sheet metal bending machines, replaced last year
by Thorlux, and needed to replace their one unreliable machine.
Payne's has also completed a necessary renewal of most hardware
running the management system.
One or two notable projects supplied this year with Philip Payne
exit systems are, to name but a few, The British Museum, The Palace
of Westminster, Winchester Cathedral and Harrods.
Solite Europe
Solite, maker of cleanroom lighting and with eighteen people had
its most successful year increasing revenue by 18.5% and operating
profit by 71.0%.
Well ensconced now in their new factory occupied last year
Solite has taken over one or two ranges of more specialist products
from Thorlux; products that are complementary to their current
offering. These ranges have not yet really been appreciative to
current performance, however.
Solite, to date, having looked to market their products in
countries adjacent to our own are beginning to look further afield
for opportunities in their specialist cleanroom sector.
Portland Lighting
The report on Portland Lighting, maker of lights for signs, with
eighteen people, could be almost copied from last year.
It was recognised when we purchased Portland back in 2012 that
there was a limited scope in the UK for great market strides in
their niche area. Taking this, into account, however, Portland has
performed admirably and "as expected" with sales and profit only
edging up but maintaining its highest-in-the-Group profit to sales
ratio.
Product sales in LED format have increased their percentage of
the whole and trials of solar powered billboard lighting have been
completed during the year with some success. I say "some success"
as in many locations there are visual, space, or other locational
restrictions which hamper the use of this type of technology in
particular places.
Portland has made a move, during the year, to enter the export
market but unfortunately this has met with a false start. Start
number two is under consideration.
TRT
TRT, your Group's UK manufacturer of road tunnel and street
lighting fittings with forty two people, has continued to make
swift progress with sales and profit well ahead of last year.
One serious constraint has been a lack of space in the premises
purchased for them at start-up and the lack of any suitable larger
alternatives to purchase in the Redditch area. Since its inception
TRT has relied in no insignificant terms on technical assistance
from Thorlux and for storage and paintwork assistance and so, as it
moves forward, it is advisable for the former to keep close to the
latter. This arrangement has benefitted both parties as it has also
made good use of spare storage and powder coating capacity at
Thorlux. There are one or two property opportunities on the horizon
which we hope will move closer soon.
Component sourcing problems experienced during 2014/15 have to a
large degree been mitigated by increasing stocks and sourcing some
items nearer to home.
Many or most Group products end up being installed in buildings
where we never enter so it is good to often see TRT products on our
daily travels, lighting the streets. To mention one of many tunnel
lighting projects in which TRT Lighting are involved, this year the
main entry and exit tunnels to Heathrow Airport are being re-lit
using a TRT LED lighting system.
Lightronics
Lightronics BV our Netherlands manufacturer of mainly outdoor
lighting with fifty one people and purchased during the 2014/15
year performed very well. 2015/16 is the first year in which a full
year's figures have been included in Group figures, adding revenue
of GBP15.6m and an operating profit of GBP2.1m to those
figures.
Their projects throughout the year have been for numerous
Netherlands towns and cities, as well as major road lighting
projects for Amsterdam. One may ask about synergies and possible
exchange of products with TRT Lighting in particular but different
countries light areas in different ways with national preferences
and in this instance the Dutch often prefer more aesthetically
orientated products for street lighting than the UK where a more
functional approach is used. In this product area this has actually
led, so far, to more Lightronics products being added to the TRT
range than vice versa. Either way is good for the Group,
however.
In regard to the Group wish for Lightronics to be a launch pad
for Group commercial lighting systems into the Netherlands, this
has started more slowly than we would have wished but times are
early and a second Sales Engineer for this purpose has just been
employed.
Luxintec
It was mentioned in the six monthly report that your Board has
approved an investment of EUR1.2m to purchase a minority 40%
shareholding in Luxintec SL and this investment has been
completed.
Luxintec with thirty six people has designed and manufactured
LED lenses for the Group with creditable success for a number of
years and the majority owner and founder wished to expand his
business into the much larger field of luminaire manufacture.
Times are very early here and, recognising that F W Thorpe Plc
is a minority shareholder in this instance, talks as to how
Luxintec can utilise Group designs to accomplish their wishes are
ongoing.
Our wish, of course, is that by using Group designs and
assistance Luxintec can grow substantially selling Spanish
manufactured luminaires into their market; the "made in Spain" tab
seemingly being an important one for them.
Carbon Offsetting
There has been no increase in plantings since last year's figure
of 70,324 trees planted and this pause was signalled in last year's
report. Your company is now a little behind in its carbon offset
tree planting but this will most likely be made up this year as
more government grants are now available!
The 3,000 or so trees destroyed due to the Hymenoscyphus
fraxineus fungus (Ash die-back disease) have now been replaced with
other types. Regrettably the other 7,000 Ash trees will also have
to be destroyed and replaced imminently.
Despite our best efforts, offset tree planting purchases by our
customers are still somewhat muted although, this year, we will be
having another campaign to try and summon up interest.
This investment still, however, is often respectfully mentioned
by many of our existing and potential customers and "green"
credentials are becoming a more important criteria for numerous
firms in their purchase considerations.
People
Last year I said that we have a serious number of personnel who
have been with us 25 years and some well over 40 years.
Well, this year we celebrated one gentleman who has spent 50
years at Thorlux. Peter Corrigan started as an apprentice metal
spinner at the age of fifteen years old. He worked through to lead
the section and became our "Master Spinner". In later years he took
up general and time study duties timing our various manufacturing
operations. A cricket fan, the company booked a special London
weekend for him and his wife including a limited over England
versus Pakistan match. Regrettably two weeks before the weekend, he
was taken ill and couldn't go.
We managed to retrieve most activities for a later weekend but
unfortunately, despite our best efforts, we couldn't get England to
play Pakistan again at the Oval!
Peter is now back with us looking well and much slimmer!
To all those others in the Group may I express my thanks for
making 2015/16 another successful year.
The Future
I seem to say it every year but, yet again, I must say that the
future is uncertain but now for another and additional reason;
"Brexit". Most world economies are still not buoyant and this just
adds another economic unknown.
We will, however, continue to concentrate on areas we think best
whilst still hearing but not necessarily acting upon what others
tell us! Concentrate on selling to the BRICS our government told
us! Brazil isn't doing so well, Russia is suffering with low oil
prices and sanctions, India we don't hear of much, and China has a
reducing growth rate. All of these countries, by the way, have very
high protectionist import duties for foreign manufactured goods
such as lighting equipment. We do, however, remain cautiously
optimistic about the year ahead.
We will continue to concentrate in stable areas and where we
have "advantage", be it our efficient durable products and systems
for high energy cost markets, our reliable rugged industrial ranges
for rugged industrial uses or whatever.
However events play-out people will always need lights.
We will continue on!
A B Thorpe - Chairman
22 September 2016
Consolidated results (unaudited)
Consolidated income statement
For the year ended 30 June 2016
2016 2015
Notes GBP'000 GBP'000
------------------------------------ ----- -------- --------
Continuing operations
Revenue 2 88,946 73,544
Cost of sales (50,000) (41,314)
------------------------------------ ----- -------- --------
Gross profit 38,946 32,230
Distribution costs (8,455) (6,181)
Administrative expenses (14,532) (12,331)
Other operating income 236 -
------------------------------------ ----- -------- --------
Operating profit 2 16,195 13,718
Finance income 702 727
Finance costs* (627) -
Share of loss of joint ventures (1) (50)
------------------------------------ ----- -------- --------
Profit before income tax 16,269 14,395
Income tax expense 3 (3,270) (2,691)
------------------------------------ ----- -------- --------
Profit for the year from continuing
operations 12,999 11,704
------------------------------------ ----- -------- --------
Loss for the year from discontinued
operations - (253)
------------------------------------ ----- -------- --------
Profit for the year 12,999 11,451
------------------------------------ ----- -------- --------
*Finance expense represents payments made in relation to the
acquisition of Lightronics Participaties BV.
Earnings per share from continuing operations attributable to
the equity holders of the company during the year (expressed in
pence per share).
Basic and diluted earnings 2016 2015
per share Notes pence pence
--------------------------- ------------- ----- ------ ------
Continuing
- Basic operations 8 11.24 10.12
Continuing
- Diluted operations 8 11.21 10.11
--------------------------- ------------- ----- ------ ------
Discontinued
- Basic operations 8 - (0.22)
Discontinued
- Diluted operations 8 - (0.22)
--------------------------- ------------- ----- ------ ------
- Basic Total 8 11.24 9.90
- Diluted Total 8 11.21 9.89
--------------------------- ------------- ----- ------ ------
Consolidated statement of comprehensive income
For the year ended 30 June 2016
2016 2015
Notes GBP'000 GBP'000
-------------------------------------------- ------ ---------- --------
Profit for the year: 12,999 11,451
---------------------------------------------------- ---------- --------
Other comprehensive income/(expenses)
Items that may be reclassified to profit
or loss
Revaluation of available-for-sale financial
assets
- Arising in year (74) (152)
- Reclassified in year - -
Exchange differences on translation
of foreign operations
- Arising in year 1,627 (21)
- Reclassified in year - -
Taxation 60 30
---------------------------------------------------- ---------- --------
1,613 (143)
--------------------------------------------------- ---------- --------
Items that will not be reclassified
to profit or loss
-------------------------------------------- ------ ---------- --------
Actuarial (loss)/gain on pension scheme (1,285) (247)
Movement on unrecognised pension scheme
surplus 1,095 18
---------------------------------------------------- ---------- --------
(190) (229)
--------------------------------------------------- ---------- --------
Other comprehensive expense for the
year, net of tax 1,423 (372)
---------------------------------------------------- ---------- --------
Total comprehensive income for the
year attributable to equity shareholders 14,422 11,079
---------------------------------------------------- ---------- --------
Consolidated financial position
As at 30 June 2016
Group
------------------
2016 2015
Notes GBP'000 GBP'000
-------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 6 14,900 13,834
Intangible assets 5 15,183 14,349
Investment property 2,131 2,171
Loans and receivables 4,980 4,760
Investment in associates 936 -
Available-for-sale financial
assets 3,348 3,018
Deferred tax assets 27 17
-------------------------------- ----- -------- --------
41,505 38,149
Current assets
Inventories 18,863 17,762
Trade and other receivables 21,914 19,698
Other financial assets at
fair value through profit
or loss 389 389
Short-term financial assets 7 14,910 9,358
Cash and cash equivalents 18,295 19,176
-------------------------------- ----- -------- --------
Total current assets 74,371 66,383
-------------------------------- ----- -------- --------
Total assets 115,876 104,532
-------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables (16,700) (14,656)
Current income tax liabilities (1,963) (2,051)
-------------------------------- ----- -------- --------
Total current liabilities (18,663) (16,707)
-------------------------------- ----- -------- --------
Net current assets 55,708 49,676
-------------------------------- ----- -------- --------
Non-current liabilities
Retirement benefit deficit - -
Other payables (4,619) (3,838)
Provisions for liabilities
and charges (1,088) (102)
Deferred income tax liabilities (799) (1,021)
-------------------------------- ----- -------- --------
Total liabilities (25,169) (21,668)
-------------------------------- ----- -------- --------
Net assets 90,707 82,864
-------------------------------- ----- -------- --------
Equity
Share capital 1,189 1,189
Share premium account 656 656
Capital redemption reserve 137 137
Foreign currency translation
reserve 1,606 -
Retained earnings 87,119 80,882
-------------------------------- ----- -------- --------
Total equity 90,707 82,864
-------------------------------- ----- -------- --------
Consolidated statement of changes in equity
For the year ended 30 June 2016
Share Capital
Share premium redemption Retained Total
capital account reserve Foreign currency earnings equity
Notes GBP'000 GBP'000 GBP'000 translation reserve GBP'000 GBP'000 GBP'000
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 1 July 2014 1,189 656 137 - 75,305 77,287
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Comprehensive income
Profit for the year to 30
June 2015 - - - - 11,451 11,451
Actuarial gain on pension
scheme - - - - (247) (247)
Movement on unrecognised
pension scheme surplus - - - - 18 18
Revaluation of
available-for-sale
financial assets - - - - (152) (152)
Movement on associated
deferred tax - - - - 30 30
Exchange differences on
translation of foreign
operations - - - - (21) (21)
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total comprehensive income - - - - 11,079 11,079
Transactions with owners
Dividends paid to
shareholders 4 - - - - (5,552) (5,552)
Share based payment charge - - - - 50 50
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total transactions with
owners - - - - (5,502) (5,502)
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 30 June 2015 1,189 656 137 - 80,882 82,864
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Comprehensive income
Profit for the year to 30
June 2016 - - - - 12,999 12,999
Actuarial loss on pension
scheme - - - - (1,285) (1,285)
Movement on unrecognised
pension scheme surplus - - - - 1,095 1,095
Revaluation of
available-for-sale
financial assets - - - - (74) (74)
Movement on associated
deferred tax - - - - 2 2
Impact of deferred tax rate
change - - - - 58 58
Transfer to foreign currency
translation reserve - - - (21) 21 -
Exchange differences on
translation of foreign
operations - - - 1,627 - 1,627
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total comprehensive income - - - 1,606 12,816 14,422
Transactions with owners
Dividends paid to
shareholders 4 - - - - (6,651) (6,651)
Share based payment charge - - - - 72 72
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Total transactions with
owners - - - - (6,579) (6,579)
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Balance at 30 June 2016 1,189 656 137 1,606 87,119 90,707
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Consolidated statement of cash flows
For the year ended 30 June 2016
Group
------------------
2016 2015
Notes GBP'000 GBP'000
---------------------------------- ----- -------- --------
Cash flows from operating
activities
Cash generated from operations 9 18,946 13,315
Tax paid (3,323) (1,280)
---------------------------------- ----- -------- --------
Net cash generated from operating
activities 15,623 12,035
---------------------------------- ----- -------- --------
Cash flows from investing
activities
Purchases of property, plant
and equipment (2,543) (3,271)
Proceeds from sale of property,
plant and equipment 122 167
Purchase of intangibles (1,764) (1,621)
Purchase of subsidiary (net
of cash acquired) - (6,392)
Disposal of subsidiary - (561)
Purchase of investment property (28) (36)
Purchase of available-for-sale
financial assets (404) (100)
Sale of available-for-sale
financial assets - 371
Investment in associate (936) -
Property rental and similar
income 74 154
Dividend income 177 149
Net (purchase)/sale of deposits (5,552) 6,280
Interest received 314 301
Receipt of loan notes 200 1,261
---------------------------------- ----- -------- --------
Net cash used in investing
activities (10,340) (3,298)
---------------------------------- ----- -------- --------
Cash flows from financing
activities
Repayment of borrowings - (1,920)
Dividends paid to company's
shareholders 4 (6,651) (5,552)
Net cash used in financing
activities (6,651) (7,472)
---------------------------------- ----- -------- --------
Effects of exchange rate
changes on cash 487 -
Net (decrease)/increase in
cash in the year (881) 1,265
Cash and cash equivalents
at beginning of year 19,176 17,911
---------------------------------- ----- -------- --------
Cash and cash equivalents
at end of year 18,295 19,176
---------------------------------- ----- -------- --------
Notes (unaudited)
1 Basis of preparation
The consolidated financial statements of F W Thorpe Plc have
been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted by the
EU), IFRIC interpretations and the Companies Act 2006 applicable to
Companies reporting under IFRS. The financial statements have been
prepared on a going concern basis, under the historical cost
convention, as modified by available-for-sale financial assets,
financial assets and financial liabilities (including derivative
instruments) at fair value through the profit and loss.
The company and group has adopted all IAS and IFRS adopted in
the EU except for IAS 34, as AIM-listed companies are not required
to adopt IAS 34. The company and group has not early adopted any
other standards or interpretations not yet endorsed by the EU.
The group has not yet adopted certain new standards, amendments
and interpretations to existing standards, which have been
published but are only effective for our accounting periods
beginning on or after 1 January 2016 or later periods. These new
pronouncements are listed below:
Amendment to IAS 1, "Presentation of financial statements" on
the disclosure initiative" (effective 1 January 2016)
Amendment to IFRS 10 and IAS 28 on investment entities applying
the consolidation exemption (effective 1 January 2016)
Amendment to IFRS 10 and IAS 28 on sale or contribution of
assets (effective 1 January 2016)
Amendments to IAS 27, "Separate financial statements" on the
equity method (effective 1 January 2016)
Amendments to IAS 16, "Property, plant and equipment", and IAS
41, 'Agriculture', regarding bearer plants (effective 1 January
2016)
Amendment to IAS 16, "Property, plant and equipment" and IAS
38,'Intangible assets', on depreciation and amortisation (effective
1 January 2016)
Amendments to IFRS 11 " 'Joint Arrangements' on acquisition of
an interest in a joint operation" (effective 1 January 2016)
Annual improvements 2014 (effective 1 January 2016)
IFRS 14, "Regulatory deferral accounts" (effective 1 January
2016)
Amendment to IAS 7, "Statement of cash flows" on disclosure
initiative (effective 1 January 2017)
Amendment to IAS 12, "Income taxes" on recognition of deferred
tax assets for unrealised losses (effective 1 January 2017)
IFRS 9 "Financial Instruments" (effective 1 January 2018)
IFRS 15 "Revenue from contracts with customers" (effective 1
January 2018)
IFRS 16 "Leases" (effective 1 January 2019)
The directors are currently evaluating the impact of the
adoption of these standards, amendments and interpretations in
future periods, although it is anticipated that the impact will be
immaterial.
No new or amended standards were adopted for the year ending 30
June 2016.
The accounts for the year ended 30 June 2015 have been delivered
to the Registrar of Companies, and the auditors' report was
unqualified and did not contain a statement under section 498(2)
and (3) of the Companies Act 2006.
The financial statements are presented in Pounds Sterling,
rounded to the nearest thousand.
2 Segmental analysis
(a) Business segments
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 eight operating segments based on the
products and customer base in the lighting market - the largest
business is Thorlux, which manufactures professional lighting
systems for industrial, commercial and controls markets. The
recently acquired Lightronics business will be a material
subsidiary, and is therefore disclosed separately. The six
remaining operating segments have been aggregated into the "other
companies" reportable segment based upon their size, comprising the
entities Compact Lighting Limited, Philip Payne Limited, Solite
Europe Limited, Portland Lighting Limited, TRT Lighting Limited and
Thorlux LLC.
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 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- Total
Other segment continuing
Thorlux Lightronics companies adjustments operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- ----------- ---------- ------------ -----------
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 loss of joint venture (1)
--------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 16,269
--------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2015
Revenue to external customers 54,192 3,275 16,077 - 73,544
Revenue to other group companies 2,329 - 1,781 (4,110) -
--------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 56,521 3,275 17,858 (4,110) 73,544
--------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 11,267 481 1,944 26 13,718
--------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income 727
Share of loss of joint venture (50)
--------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 14,395
--------------------------------- -------- ----------- ---------- ------------ -----------
Inter segment adjustments to operating profit consist of
property rentals on premises owned by F W Thorpe Plc and
adjustments to profit related to stocks held within the group that
were supplied by another segment.
b) Geographical analysis
The Group's business segments operate in four main areas, the
UK, the Netherlands, the rest of Europe and the rest of the World.
The home country of the company, which is also the main operating
company, is the UK.
2016 2015
GBP'000 GBP'000
---------------- -------- --------
UK 64,231 61,317
Netherlands 14,113 3,899
Europe 8,529 6,239
Other countries 2,073 2,089
---------------- -------- --------
88,946 73,544
---------------- -------- --------
The vast majority of assets and capital expenditure are in the
UK, and cannot be split geographically in relation to the Group's
revenues.
3 Income tax expense
Analysis of income tax expense in the year:
2016 2015
GBP'000 GBP'000
-------------------------------------------------- -------- ---------
Current tax
Current tax on profits for the year 3,726 2,807
Adjustments in respect of prior years (268) (184)
-------------------------------------------------- -------- ---------
Total current tax 3,458 2,623
-------------------------------------------------- -------- ---------
Deferred tax
Origination and reversal of temporary differences (188) 68
-------------------------------------------------- -------- ---------
Total deferred tax (188) 68
-------------------------------------------------- -------- ---------
Income tax expense 3,270 2,691
-------------------------------------------------- -------- ---------
The tax assessed for the year is higher (2015: lower) than the
standard rate of corporation tax in the UK of 20.00% (2015:
20.75%). The differences are explained below:
2016 2015
GBP'000 GBP'000
-------------------------------------------- -------- ---------
Profit before income tax 16,269 14,395
-------------------------------------------- -------- ---------
Profit on ordinary activities multiplied
by the standard rate in the UK of 20.00%
(2015: 20.75%) 3,254 2,987
Effects of:
Expenses not deductible for tax purposes 349 72
Accelerated tax allowances and other timing
differences (158) (181)
Adjustments in respect of prior years (268) (184)
Foreign profit taxed at higher rate 97 21
Other (4) (24)
-------------------------------------------- -------- ---------
Tax charge 3,270 2,691
-------------------------------------------- -------- ---------
The effective tax rate was 20.01% (2015: 18.7%).
Changes to the UK corporation tax rates were announced in the
Chancellor's Budget on 8 July 2015 and on the 16 March 2016. These
include reductions to the main rate to reduce the rate to 19.0%
from 1 April 2017 and to 17.0% from 1 April 2020.
4 Dividends
Dividends paid during the year are outlined in the tables
below:
Dividends paid (pence per share) 2016 2015
--------------------------------- ---- ----
Final dividend 2.55 2.20
Special dividend 2.00 1.50
Interim dividend 1.20 1.10
--------------------------------- ---- ----
Total 5.75 4.80
--------------------------------- ---- ----
A final dividend in respect of the year ended 30 June 2016 of
2.85p per share, amounting to GBP3,297,000 is to be proposed at the
Annual General Meeting on 17 November 2016 and, if approved, will
be paid on 24 November 2016 to shareholders on the register on 28
October 2016. The ex-dividend date is 27 October 2016. These
financial statements do not reflect this dividend payable.
Dividends proposed (pence per share) 2016 2015
------------------------------------- ---- ----
Final dividend 2.85 2.55
Special dividend - -
------------------------------------- ---- ----
2016 2015
Dividends paid GBP'000 GBP'000
----------------- -------- --------
Final dividend 2,950 2,545
Special dividend 2,314 1,735
Interim dividend 1,387 1,272
----------------- -------- --------
Total 6,651 5,552
----------------- -------- --------
2016 2015
Dividends proposed GBP'000 GBP'000
------------------- -------- --------
Final dividend 3,297 2,950
Special dividend - -
------------------- -------- --------
5 Intangible assets
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2015 9,063 5,797 1,583 657 1,039 150 182 18,471
Currency translation 909 28 208 79 14 - - 1,238
Additions - 1,681 - - 251 - - 1,932
Write-offs
and transfers - (1,052) - - (109) - - (1,161)
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2016 9,972 6,454 1,791 736 1,195 150 182 20,480
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated
amortisation
At 1 July 2015 600 1,947 356 198 901 120 - 4,122
Currency translation - 1 37 20 1 - - 59
Charge for
the year - 1,882 182 97 86 30 - 2,277
Write-offs
and transfers - (1,052) - - (109) - - (1,161)
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2016 600 2,778 575 315 879 150 - 5,297
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2016 9,372 3,676 1,216 421 316 - 182 15,183
--------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Write-offs relate to development assets where no further
economic benefits will be obtained.
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2014 3,503 4,961 311 174 907 150 182 10,188
Additions - 1,542 - - 60 - - 1,602
Acquisition
of a subsidiary 5,560 122 1,272 483 72 - - 7,509
Write-offs - (828) - - - - - (828)
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2015 9,063 5,797 1,583 657 1,039 150 182 18,471
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated
amortisation
At 1 July 2014 600 1,491 311 174 800 90 - 3,466
Charge for
the year - 1,284 45 24 101 30 - 1,484
Impairment - - - - - - - -
Write-offs - (828) - - - - - (828)
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2015 600 1,947 356 198 901 120 - 4,122
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June
2015 8,463 3,850 1,227 459 138 30 182 14,349
----------------- -------- ----------- ---------- -------- -------- -------- -------- --------
6 Property, plant and equipment
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- --------
Cost
At 1 July 2015 11,079 16,585 27,664
Currency translation - 20 20
Additions 462 2,074 2,536
Disposals - (349) (349)
Transfers - 80 80
------------------------- -------------- ---------- --------
At 30 June 2016 11,541 18,410 29,951
------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2015 2,358 11,472 13,830
Currency translation - 2 2
Charge for the year 209 1,246 1,455
Disposals - (316) (316)
Transfer - 80 80
------------------------- -------------- ---------- --------
At 30 June 2016 2,567 12,484 15,051
------------------------- -------------- ---------- --------
Net book amount
------------------------- -------------- ---------- --------
At 30 June 2016 8,974 5,926 14,900
------------------------- -------------- ---------- --------
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ---------- --------
Cost
At 1 July 2014 10,910 15,979 26,889
Additions 1,438 1,760 3,198
Acquisition of a subsidiary
(note 10) - 100 100
Disposals (1,269) (1,254) (2,523)
---------------------------- -------------- ---------- --------
At 30 June 2015 11,079 16,585 27,664
---------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2014 2,306 11,495 13,801
Charge for the year 203 1,097 1,300
Disposals (151) (1,120) (1,271)
---------------------------- -------------- ---------- --------
At 30 June 2015 2,358 11,472 13,830
---------------------------- -------------- ---------- --------
Net book amount
---------------------------- -------------- ---------- --------
At 30 June 2015 8,721 5,113 13,834
---------------------------- -------------- ---------- --------
7 Short-term financial assets
2016 2015
GBP'000 GBP'000
-------------------------- -------- --------
Beginning of year 9,358 15,638
Net purchases/(disposals) 5,552 (6,280)
-------------------------- -------- --------
End of year 14,910 9,358
-------------------------- -------- --------
The short-term financial assets consist of term cash deposits in
sterling with an original term in excess of three months.
8 Earnings per share
Basic and diluted earnings per share for profit attributable to
equity holders of the company
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the year,
excluding ordinary shares purchased by the company and held as
treasury shares.
Basic 2016 2015
------------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue 115,675,590 115,675,590
------------------------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the company (GBP'000) 12,999 11,451
------------------------------------------------------------------- ----------- -----------
Basic earnings per share (pence per share) continuing operations 11.24 10.12
Basic earnings per share (pence per share) discontinued operations - (0.22)
------------------------------------------------------------------- ----------- -----------
Basic earnings per share (pence per share) total 11.24 9.90
------------------------------------------------------------------- ----------- -----------
Diluted 2016 2015
--------------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue (fully diluted) 115,938,805 115,706,334
--------------------------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the company (GBP'000) 12,999 11,451
--------------------------------------------------------------------- ----------- -----------
Diluted earnings per share (pence per share) continuing operations 11.21 10.11
Diluted earnings per share (pence per share) discontinued operations - (0.22)
--------------------------------------------------------------------- ----------- -----------
Diluted earnings per share (pence per share) total 11.21 9.89
--------------------------------------------------------------------- ----------- -----------
9 Cash generated from operations
Group
Cash generated from continuing 2016 2015
operations GBP'000 GBP'000
--------------------------------------- -------- ---------
Profit before income tax 16,269 14,395
Depreciation charge 1,523 1,288
Amortisation/impairment of intangibles 2,277 1,484
Profit on disposal of property,
plant and equipment (89) (104)
Finance income (75) (727)
Retirement benefit contributions
in excess of current and past
service charge (190) (229)
Share of loss from joint venture 1 50
Share based payment charge 193 76
Research and development expenditure
credit (236) -
Effects of exchange rate movements 182 (28)
Changes in working capital
- Inventories (1,128) (1,707)
- Trade and other receivables (2,094) (3,659)
- Payables and provisions 2,313 2,215
Cash generated from continuing
operations 18,946 13,054
---------------------------------------- -------- ---------
The cash generation from discontinued operations is as
follows:
Cash generated from discontinued operations 2016 2015
-------------------------------------------- ---- -----
Profit before income tax - (233)
Depreciation charge - 12
Finance income - 7
Changes in working capital
- Inventories - 84
- Trade and other receivables - 189
- Trade and other payables - 202
-------------------------------------------- ---- -----
Cash generated from discontinued operations - 261
-------------------------------------------- ---- -----
2016 2015
Total cash generated from operations GBP'000 GBP'000
------------------------------------- -------- --------
Continuing operations 18,946 13,054
Discontinued operations - 261
------------------------------------- -------- --------
Total cash generated from operations 18,946 13,315
------------------------------------- -------- --------
10 Cautionary statement
Sections of this report contain forward looking statements that
are subject to risk factors including the economic and business
circumstances occurring from time to time in countries and markets
in which the Group operates. By their nature, forward looking
statements involve a number of risks, uncertainties and future
assumptions because they relate to events and/or depend on
circumstances that may or may not occur in the future and could
cause actual results and outcomes to differ materially from those
expressed in or implied by the forward looking statements. No
assurance can be given that the forward looking statements in this
preliminary announcement will be realised. Statements about the
Chairman's expectations, beliefs, hopes, plans, intentions and
strategies are inherently subject to change and they are based on
expectations and assumptions as to future events, circumstances and
other factors which are in some cases outside the Company's
control. Actual results could differ materially from the Company's
current expectations. It is believed that the expectations set out
in these forward looking statements are reasonable but they may be
affected by a wide range of variables which could cause actual
results or trends to differ materially, including but not limited
to, changes in risks associated with the Company's growth strategy,
fluctuations in product pricing and changes in exchange and
interest rates.
11 Annual report and accounts
The annual report and accounts will be sent to shareholders on
17 October 2016 and will be available on the Group's website
(www.fwthorpe.co.uk) from that time. The Group will hold its AGM on
17 November 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXNFAFXKEFF
(END) Dow Jones Newswires
September 22, 2016 02:00 ET (06:00 GMT)