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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Thorpe (f.w.) Plc | LSE:TFW | London | Ordinary Share | GB00BC9ZLX92 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.00 | -0.51% | 390.50 | 381.00 | 400.00 | 400.00 | 400.00 | 400.00 | 24,430 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Lighting Equipment, Nec | 176.75M | 21.93M | 0.1844 | 21.69 | 475.74M |
From Apr 2019 to Apr 2024
TIDMTFW
RNS Number : 3262B
Thorpe(F.W.) PLC
20 September 2018
Preliminary Results
for the year ended 30 June 2018 (Unaudited)
FW 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 2018.
Key points:
Hot Features
Premium
2018 2017 Exc. Famostar
Continuing operations acquisition
------------------------- --------- --------- ------------- -------------
Revenue GBP109.6m GBP105.4m 4.0% increase 0.4% increase
Operating profit GBP19.5m GBP18.4m 5.7% increase 1.8% increase
Profit before tax GBP19.6m GBP18.4m 6.6% increase 2.7% increase
10.9%
Basic earnings per share 13.91p 12.54p increase 7.8% increase
------------------------- --------- --------- ------------- -------------
-- Total interim and final dividend of 5.40p (2017: 4.90p) - an increase of 10.2%
-- Revenue and operating profit growth driven by the acquisition of Famostar B.V. and a strong performance from existing overseas sales offices
-- Continued investment in the Group - development of high technology lighting, purchase of the Lightronics facility in the Netherlands and a new printed circuit board line at TRT Lighting
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information please contact:
FW Thorpe Plc Mike Allcock - Chairman, Joint Chief Executive 01527 583200 Craig Muncaster - Joint Chief Executive, Group Financial Director 01527 583200 N+1 Singer - Nominated Adviser Richard Lindley / James Moat 020 7496 3000
Chairman's statement
FW Thorpe Plc achieved record revenue and profit levels in the 2017/18 financial year, even superseding last year's big stride forward in performance. This result was supported by growth from our operations overseas, including the addition of Famostar B.V.
GROUP RESULTS
In 2017/18, our revenue reached GBP109.6m, an increase of 4.0%, and operating profit was GBP19.5m, up 5.7%. This result is very credible, particularly against the backdrop of softer market conditions reported by some of our mainstream competitors.
Over the last few years, we have actively divested and re-organised those parts of the Group that have not contributed for many years, either financially or technically, and which we felt had no long-term future within the Group. We have also endeavoured to add businesses that give us access to new territories and the potential to share technology to develop market-leading products for our customers. I am pleased to report the continued success and profitability of all our remaining businesses, and especially our acquisitions.
I would like to make special mention of our colleagues at Lightronics, in the Netherlands, who have had another successful year, I would also like to welcome Famostar to our group; the company has certainly joined us in 'top gear' and has made a healthy contribution to this year's result.
General market conditions in the Netherlands seem good, and it is not an accident that we are enjoying some of that growth and helping to balance our risk in various markets. We have been actively working on this strategy over recent years, and this year saw some excellent growth in and a contribution from, various export markets, but with particularly good achievements by the UAE office and Australia.
There is a detailed summary of each company's performance later in our Annual Report and Accounts.
Performance as a whole for the year to 30 June 2018 allows your board to recommend a final dividend of 4.00p per share (2017: 3.55p), which gives a total for the year of 5.40p (2017: 4.90p).
This year saw our products move further forwards into the high technology lighting arena, bringing to market further wireless and software systems making our products capable of providing enhanced services beyond our traditional main selling point of saving energy. Latest developments, using the SmartScan platform, provide users with a building's occupancy statistics by area and even provide data that analyses people movement, helping to improve a business's efficiency, for example in a warehouse picking application to optimise product locations. Our emergency lights now provide exact test records, even indicating the day and date when tests were completed and producing their own downloadable test certificates. Certain emergency lights are now capable of providing statistical data regarding their local environment, such as humidity, air temperature and CO(2) concentration levels; this is potentially going to save one local hospital hundreds of pounds per day in manual test and measurement costs. We can now also change the colour temperature of our lights (warmer to cooler white), which is claimed to alter our hormone levels, to provide customers with options regarding health and wellbeing - and, quite amazingly, this is achieved wirelessly, in addition to all the other benefits our Smart luminaire technology provides. No wonder sales of these high technology systems rocketed this year with new customers found and others switching to this new technology. In the field of lighting controls I genuinely believe we are inventive and leading the way, but more importantly we do not just talk about what is possible - we deliver it!
Each year I sit down and think about what is next. I wonder which products we will find to differentiate ourselves from the cheaper competition. In the last few years, all our companies switched to almost 100% LED technology, and most now offer wireless solutions.
There seems no end to our ideas and innovation, and I am really looking forward to the launch of a completely new range of luminaires this autumn, which will reinvigorate the workplace through lighting and make the work environment a place where people want to be. Importantly, these luminaires will find applications in all our main market segments and give our sales engineers creative ways to light spaces. We have applied for several patents to protect our ideas. It is an exciting, albeit challenging, time to be running a group of lighting companies. If we can bring these new products to market quickly, I am confident it will give us a much needed boost to UK orders.
There is a general malaise in the UK market caused by a reduction in business confidence to invest in the construction sector and elsewhere as the country awaits Brexit and the return of political stability. We have enjoyed ongoing buoyancy throughout the government austerity drive, mainly due to the introduction of the new technologies mentioned above, but we believe that the boost has peaked.
Every company in the Group has a set of objectives, each of which is chosen to see the Group successfully through turbulent times. At each board meeting, these objectives are monitored and progressed. The Group's philosophy has not changed, and the board continues to invest for the long term and work hard to ensure the businesses operate a professional and low risk ethos. However, there is an inevitable focus on costs and, to that end, the board took the decision, in August, to close the production plant in Portsmouth, where demand has not been as high as originally anticipated.
Over the last 12 months, the previous Compact Lighting entity has been successfully integrated into the Thorlux Lighting UK operations, and all products have now been transferred to the Thorlux manufacturing systems. A small number of staff are likely to transfer to Thorlux headquarters in Redditch. I wish those seeking employment elsewhere success, and I would like to thank all employees affected for their understanding.
We continue to invest in the better performing areas of the Group and, in January, purchased the Lightronics building and adjoining buildings in Waalwijk in the Netherlands for EUR3.4m. A further GBP1.6m investment is being made in a new factory for Portland Lighting, close to its current rented accommodation in Walsall. Investments have also been made in electronic printed circuit board assembly equipment at TRT, to serve TRT's products locally and to provide risk mitigation for the Thorlux plant.
PERSONNEL
I would like to thank my whole team for their continued support and diligence. The long service records of many in management positions and in our lower ranks are proving invaluable as we steer our ship through economically and technologically changing times.
OUTLOOK
Whilst we have strengthened the position of the Group by restructuring loss making operations, diversifying the business through acquisitions and investing in product innovation, this year's excellent performance will be difficult to replicate as we contend with ongoing economic uncertainty, government instability and exchange rate volatility.
Whereas in recent years, we have worked hard to balance our risk by growing into new market sectors and territorial markets, the majority of our sales are still within the UK.
We are planning for the future uncertainty, and we have a strategy in place. We have great financial strength and excellent products that are in line with or ahead of latest trends, and we have a great team of focused people.
We are, however, to some extent, reliant on market conditions.
We intend to continue on the same path of steady, sustainable long-term growth.
M Allcock - Chairman
20 September 2018
Consolidated results (unaudited)
Consolidated income statement
For the year ended 30 June 2018
2018 2017
Notes GBP'000 GBP'000
---------------------------------- ----- ------------ ------------
Continuing operations
Revenue 2 109,614 105,448
Cost of sales (58,305) (59,025)
---------------------------------- ----- ------------ ------------
Gross profit 51,309 46,423
Distribution costs (11,823) (10,598)
Administrative expenses (20,261) (17,636)
Other operating income 241 233
---------------------------------- ----- ------------ ------------
Operating profit 2 19,466 18,422
Finance income 819 535
Finance costs (718) (784)
Share of profit of joint ventures - 178
---------------------------------- ----- ------------ ------------
Profit before income tax 19,567 18,351
Income tax expense 3 (3,457) (3,851)
---------------------------------- ----- ------------ ------------
Profit for the year 16,110 14,500
---------------------------------- ----- ------------ ------------
Earnings per share from continuing operations attributable to the equity holders of the company during the year (expressed in pence per share).
2018 2017
Basic and diluted earnings per share Notes Pence pence
------------------------------------- ------ ----- ------ ------
- Basic Total 8 13.91 12.54
- Diluted Total 8 13.81 12.47
------------------------------------- ------ ----- ------ ------
Consolidated statement of comprehensive income
For the year ended 30 June 2018
2018 2017
GBP'000 GBP'000
----------------------------------------------------- -------- ----------
Profit for the year: 16,110 14,500
------------------------------------------------------ -------- ----------
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
- Arising in year 189 287
- Reclassified in year - -
Exchange differences on translation of foreign
operations
- Arising in year 119 657
- Reclassified in year - -
Taxation (32) 18
------------------------------------------------------ -------- ----------
276 962
----------------------------------------------------- -------- ----------
Items that will not be reclassified to profit or
loss
----------------------------------------------------- -------- ----------
Actuarial gain/(loss) on pension scheme 1,459 (1,211)
Movement on unrecognised pension scheme surplus (1,615) 1,071
------------------------------------------------------ -------- ----------
(156) (140)
----------------------------------------------------- -------- ----------
Other comprehensive income for the year, net of
tax 120 822
------------------------------------------------------ -------- ----------
Total comprehensive income for the year attributable
to equity shareholders 16,230 15,322
------------------------------------------------------ -------- ----------
Consolidated STATEMENT OF financial position
As at 30 June 2018
Group
------------------
2018 2017
Notes GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 5 22,679 18,837
Intangible assets 6 21,596 15,927
Investment property 2,076 2,163
Loans and receivables 6,139 3,058
Investment in associates 936 936
Available-for-sale financial assets 3,820 3,630
Deferred tax assets 8 19
--------------------------------------- ----- -------- --------
57,254 44,570
Current assets
Inventories 21,489 22,592
Trade and other receivables 23,416 18,995
Other financial assets at fair value
through profit or loss 389 389
Loans and receivables - 750
Short-term financial assets 7 15,290 16,981
Cash and cash equivalents 28,668 24,678
--------------------------------------- ----- -------- --------
Total current assets 89,252 84,385
--------------------------------------- ----- -------- --------
Total assets 146,506 128,955
--------------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables (19,253) (17,826)
Current income tax liabilities (1,853) (1,606)
--------------------------------------- ----- -------- --------
Total current liabilities (21,106) (19,432)
--------------------------------------- ----- -------- --------
Net current assets 68,146 64,953
--------------------------------------- ----- -------- --------
Non-current liabilities
Retirement benefit deficit - -
Other payables (10,329) (5,774)
Provisions for liabilities and charges (2,164) (1,537)
Deferred income tax liabilities (655) (920)
--------------------------------------- ----- -------- --------
Total non-current liabilities (13,148) (8,231)
--------------------------------------- ----- -------- --------
Total liabilities (34,254) (27,663)
--------------------------------------- ----- -------- --------
Net assets 112,252 101,292
--------------------------------------- ----- -------- --------
Equity
Share capital 1,189 1,189
Share premium account 1,017 656
Capital redemption reserve 137 137
Foreign currency translation reserve 2,382 2,263
Retained earnings 107,527 97,047
--------------------------------------- ----- -------- --------
Total equity 112,252 101,292
--------------------------------------- ----- -------- --------
Consolidated statement of changes in equity
For the year ended 30 June 2018
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 2016 1,189 656 137 1,606 87,119 90,707
---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Comprehensive income
Profit for the year to 30
June 2017 - - - - 14,500 14,500
Actuarial loss on pension
scheme - - - - (1,211) (1,211)
Movement on unrecognised
pension scheme surplus - - - - 1,071 1,071
Revaluation of
available-for-sale
financial assets - - - - 287 287
Movement on associated
deferred tax - - - - (50) (50)
Impact of deferred tax rate
change - - - - 68 68
Exchange differences on
translation of foreign
operations - - - 657 - 657
Total comprehensive income - - - 657 14,665 15,322
Transactions with owners
Dividends paid to
shareholders 4 - - - - (4,858) (4,858) Share based payment charge - - - - 121 121 ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Total transactions with owners - - - - (4,737) (4,737) ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Balance at 30 June 2017 1,189 656 137 2,263 97,047 101,292 ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Comprehensive income Profit for the year to 30 June 2018 - - - - 16,110 16,110 Actuarial gain on pension scheme - - - - 1,459 1,459 Movement on unrecognised pension scheme surplus - - - - (1,615) (1,615) Revaluation of available-for-sale financial assets - - - - 189 189 Movement on associated deferred tax - - - - (32) (32) Exchange differences on translation of foreign operations - - - 119 - 119 ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Total comprehensive income - - - 119 16,111 16,230 Transactions with owners Shares issued from exercised options - 361 - - - 361 Dividends paid to shareholders 4 - - - - (5,737) (5,737) Share based payment charge - - - - 106 106 ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Total transactions with owners - 361 - - (5,631) (5,270) ---------------------------- ----- -------- -------- ----------- --------------------------- --------- -------- Balance at 30 June 2018 1,189 1,017 137 2,382 107,527 112,252 ---------------------------- ----- -------- -------- ----------- --------------------------- --------- --------
Consolidated statement of cash flows
For the year ended 30 June 2018
Group
------------------
2018 2017
Notes GBP'000 GBP'000
----------------------------------------- ----- -------- --------
Cash flows from operating activities
Cash generated from operations 9 23,998 22,380
Tax paid (3,291) (3,840)
----------------------------------------- ----- -------- --------
Net cash generated from operating
activities 20,707 18,540
----------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and
equipment (6,049) (5,400)
Proceeds from sale of property, plant
and equipment 197 262
Purchase of intangibles (1,967) (2,148)
Purchase of subsidiary (inclusive
of cash acquired) (6,313) 240
Sale/(purchase) of investment property 67 (100)
Sale of available-for-sale financial
assets - 5
Property rental and similar income 190 31
Dividend income 190 210
Net withdrawal/(deposit) of short-term
financial assets 1,691 (2,071)
Interest received 388 393
Net (issue)/receipt of loan notes (2,022) 1,090
----------------------------------------- ----- -------- --------
Net cash used in investing activities (13,628) (7,488)
----------------------------------------- ----- -------- --------
Cash flows from financing activities
Net proceeds from the issuance of
ordinary shares 361 -
Proceeds from loans 2,337 -
Dividends paid to company's shareholders 4 (5,737) (4,858)
Net cash used in financing activities (3,039) (4,858)
----------------------------------------- ----- -------- --------
Effects of exchange rate changes
on cash (50) 189
Net increase /(decrease) in cash
in the year 3,990 6,383
Cash and cash equivalents at beginning
of year 24,678 18,295
----------------------------------------- ----- -------- --------
Cash and cash equivalents at end
of year 28,668 24,678
----------------------------------------- ----- -------- --------
Notes (unaudited)
1 Basis of preparation
The financial information set out above has been prepared in accordance with International Financial Reporting Standards adopted by the European Union and the IFRS interpretations committee (IFRS IC) though does not constitute the Group's statutory accounts for the year ended 30 June 2018. The financial information has 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.
New or amended standards adopted for the year ending 30 June 2018 are:
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)
The above new and amended standards had an immaterial impact on the financial statements and as such, the impact of adoption has not been separately disclosed.
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 2018 or later periods. The new pronouncements that may have an effect on the Group are listed below:
IFRS 9 "Financial Instruments" (effective 1 January 2018)
IFRS 15 "Revenue from contracts with customers" (effective 1 January 2018)
Amendments to IFRS 2, 'Share based payments' - Classification and measurement (effective 1 January 2018)
Amendments to IFRS 4, Amendments regarding implementation of IFRS 9 (effective 1 January 2018)
Amendment to IFRS 9, 'Financial instruments', on general hedge accounting (effective date 1 Jan 2018)
IFRS 16 "Leases" (effective 1 January 2019)
IFRS 9 'Financial Instruments' is effective for accounting periods beginning on or after 1 January 2018, and will be adopted by the Group for the accounting period beginning 1 July 2018. The new standard replaces IAS 39 'Financial Instruments: Recognition & Measurement' and the changes introduced by the new standard can be grouped into the following three categories - Classification & Measurement, Impairment and Hedging. The Group are performing an impact assessment of the new standard and notes the following:
-- Classification and measurement: IFRS 9 contains three principal classification categories for financial assets which are amortised cost, fair value through other comprehensive income ("FVOCI") and fair value through profit or loss ("FVTPL"). The standard eliminates the existing IAS 39 categories of held-to-maturity, loans and receivables and available-for-sale financial assets. No material changes to net assets are expected from changes in the measurement basis of financial assets.
-- Impairment: IFRS 9 introduces an expected credit loss model which requires expected credit losses and changes to expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. Financial assets measured at amortised cost or FVOCI will be subject to the impairment provisions of IFRS 9. The Group has a low level of write-offs and strong credit control policies, and does not anticipate any material changes in the level of provision for financial assets.
-- Hedging: IFRS 9 introduces new hedge accounting requirements of IFRS 9 will align hedge accounting relationships with the Group's risk management objectives and strategy. The Group does not apply hedge accounting, therefore no changes are anticipated arising from the new standard.
IFRS15 is effective for accounting periods beginning on or after 1 January 2018, and will be adopted by the Group for the accounting period beginning 1 July 2018. The standard requires entities to apportion revenue earned from contracts to individual performance obligations based on a five-step model. An impact assessment has been carried out and the following areas of potential differences were identified:
-- Determination of performance obligations and the timing of revenue recognition for supply and install arrangements;
-- Warranty arrangements
Subsequent to the impact assessment the directors do not expect IFRS15 to have a material impact on reported profits.
The directors are currently evaluating the impact of the adoption of the other standards, amendments and interpretations in future periods, although it is anticipated that these will have an immaterial impact on reported profits.
1 Basis of preparation (CONTINUED)
The results and financial information for the year ended 30 June 2018 is unaudited but the statutory accounts for the year then ended will be delivered to the Registrar of Companies in due course, and expect the auditors' report to be 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 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. During the period, Compact Lighting Limited has been incorporated into the Thorlux segment further to previous announcements. The Lightronics business is a material subsidiary and therefore disclosed separately.
The eight 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 Lighting LLC, Thorlux Australasia PTY Limited, Thorlux Lighting GmbH and Famostar B.V.
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. 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 2018
Revenue to external customers 64,645 20,860 24,109 - 109,614
Revenue to other group companies 3,930 196 2,956 (7,082) -
--------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 68,575 21,056 27,065 (7,082) 109,614
--------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 13,611 2,050 3,407 398 19,466
--------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income 101
Share of profit of joint venture -
--------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 19,567
--------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2017
Revenue to external customers 65,323 19,243 20,882 - 105,448
Revenue to other group companies 3,794 304 4,364 (8,462) -
--------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 69,117 19,547 25,246 (8,462) 105,448
--------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 14,162 2,372 2,163 (275) 18,422
--------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income (249)
Share of profit of joint venture 178
--------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 18,351
--------------------------------- -------- ----------- ---------- ------------ -----------
Inter segment adjustments to operating profit consist of property rentals on premises owned by FW 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.
2018 2017
GBP'000 GBP'000
---------------- -------- --------
UK 70,652 71,547
Netherlands 22,713 17,243
Europe 10,726 12,348
Other countries 5,523 4,310
---------------- -------- --------
109,614 105,448
---------------- -------- --------
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:
2018 2017
GBP'000 GBP'000
-------------------------------------------------- -------- ---------
Current tax
Current tax on profits for the year 3,930 4,374
Adjustments in respect of prior years (170) (662)
-------------------------------------------------- -------- ---------
Total current tax 3,760 3,712
-------------------------------------------------- -------- ---------
Deferred tax
Origination and reversal of temporary differences (303) 139
-------------------------------------------------- -------- ---------
Total deferred tax (303) 139
-------------------------------------------------- -------- ---------
Income tax expense 3,457 3,851
-------------------------------------------------- -------- ---------
The tax assessed for the year is lower (2017: higher) than the standard rate of corporation tax in the UK of 19.00% (2017: 19.75%). The differences are explained below:
2018 2017
GBP'000 GBP'000
--------------------------------------------------------- -------- ---------
Profit before income tax 19,567 18,351
--------------------------------------------------------- -------- ---------
Profit on ordinary activities multiplied by the standard
rate in the UK of 19.00% (2017: 19.75%) 3,718 3,624
Effects of:
Expenses not deductible for tax purposes 648 498
Accelerated tax allowances and other timing differences (383) 241
Adjustments in respect of prior years (170) (662)
Foreign profit taxed at higher rate 285 150
Patent box relief (641) -
Tax charge 3,457 3,851
--------------------------------------------------------- -------- ---------
The effective tax rate was 17.67% (2017: 20.99%).
The change to the UK corporation tax rate from 19% to 17% from 1 April 2020 was substantively enacted on 6 September 2016 with the appropriate rate reflected within these financial statements.
4 Dividends
Dividends paid during the year are outlined in the tables below:
Dividends paid (pence per share) 2018 2017 --------------------------------- ---- ---- Final dividend 3.55 2.85 Interim dividend 1.40 1.35 --------------------------------- ---- ---- Total 4.95 4.20 --------------------------------- ---- ----
A final dividend in respect of the year ended 30 June 2018 of 4.00p per share, amounting to GBP4,639,000 is to be proposed at the Annual General Meeting on 22 November 2018 and, if approved, will be paid on 29 November 2018 to shareholders on the register on 2 November 2018. The ex-dividend date is 1 November 2018. These financial statements do not reflect this dividend payable.
Dividends proposed (pence per share) 2018 2017
------------------------------------- ---- ----
Final dividend 4.00 3.55
------------------------------------- ---- ----
2018 2017
Dividends paid GBP'000 GBP'000
----------------- -------- --------
Final dividend 4,114 3,297
Interim dividend 1,623 1,561
----------------- -------- --------
Total 5,737 4,858
----------------- -------- --------
2018 2017
Dividends proposed GBP'000 GBP'000
------------------- -------- --------
Final dividend 4,639 4,106
------------------- -------- --------
5 Property, plant and equipment
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ---------- --------
Cost
At 1 July 2017 14,556 18,990 33,546
Acquisition of a subsidiary 528 1,323 1,851
Additions 3,301 2,558 5,859
Disposals - (1,247) (1,247)
Transfers 294 (294) -
Currency translation (3) (2) (5)
At 30 June 2018 18,676 21,328 40,004
---------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2017 2,789 11,920 14,709
Acquisition of a subsidiary 435 1,188 1,623
Charge for the year 464 1,672 2,136
Disposals - (1,139) (1,139)
Transfers 141 (141) -
Currency translation - (4) (4)
At 30 June 2018 3,829 13,496 17,325
---------------------------- -------------- ---------- --------
Net book amount
---------------------------- -------------- ---------- --------
At 30 June 2018 14,847 7,832 22,679
---------------------------- -------------- ---------- --------
Group
------------------------------------
Freehold Plant
land and
and buildings equipment Total
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ---------- --------
Cost
At 1 July 2016 11,541 18,410 29,951
Acquisition of a subsidiary - 44 44
Additions 2,935 2,715 5,650
Disposals - (2,131) (2,131)
Transfers 80 (80) -
Currency translation - 32 32
---------------------------- -------------- ---------- --------
At 30 June 2017 14,556 18,990 33,546
---------------------------- -------------- ---------- --------
Accumulated depreciation
At 1 July 2016 2,567 12,484 15,051
Acquisition of a subsidiary - 9 9
Charge for the year 222 1,407 1,629
Disposals - (1,988) (1,988)
Currency translation - 8 8
---------------------------- -------------- ---------- --------
At 30 June 2017 2,789 11,920 14,709
---------------------------- -------------- ---------- --------
Net book amount
---------------------------- -------------- ---------- --------
At 30 June 2017 11,767 7,070 18,837
---------------------------- -------------- ---------- --------
6 Intangible assets
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2017 10,282 6,448 1,875 768 1,528 150 182 21,233
Acquisition of
a subsidiary 4,490 - 1,040 520 - - - 6,050
Additions - 1,605 - - 376 - - 1,981
Write-offs and
transfers - (1,281) - - (116) - - (1,397)
Currency translation 14 7 9 3 1 - - 34
At 30 June 2018 14,786 6,779 2,924 1,291 1,789 150 182 27,901
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated amortisation
At 1 July 2017 262 2,588 814 442 1,050 150 - 5,306
Charge for the
year - 1,753 299 157 191 - - 2,400
Write-offs and
transfers - (1,281) - - (113) - - (1,394)
Currency translation (13) 2 4 - - - - (7)
At 30 June 2018 249 3,062 1,117 599 1,128 150 - 6,305
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2018 14,537 3,717 1,807 692 661 - 182 21,596
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Write-offs relate to development assets where no further economic benefits are expected obtained.
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2016 9,972 6,454 1,791 736 1,195 150 182 20,480
Acquisition of
a subsidiary 524 - - - - - - 524
Additions - 1,715 - - 306 - - 2,021
Write-offs and
transfers (600) (1,757) - - 23 - - (2,334)
Currency translation 386 36 84 32 4 - - 542
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2017 10,282 6,448 1,875 768 1,528 150 182 21,233
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated amortisation
At 1 July 2016 600 2,778 575 315 879 150 - 5,297
Charge for the
year - 1,560 218 116 146 - - 2,040
Impairment for
the year 262 - - - - - - 262
Write-offs and
transfers (600) (1,757) - - 23 - - (2,334)
Currency translation - 7 21 11 2 - - 41
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2017 262 2,588 814 442 1,050 150 - 5,306
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2017 10,020 3,860 1,061 326 478 - 182 15,927
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
7 Short-term financial assets
2018 2017
GBP'000 GBP'000
--------------------------- -------- --------
Beginning of year 16,981 14,910
Net (withdrawals)/deposits (1,691) 2,071
--------------------------- -------- --------
End of year 15,290 16,981
--------------------------- -------- --------
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 2018 2017 --------------------------------------------------------------- ----------- ----------- Weighted average number of ordinary shares in issue 115,834,897 115,675,590 --------------------------------------------------------------- ----------- ----------- Profit attributable to equity holders of the company (GBP'000) 16,110 14,500 --------------------------------------------------------------- ----------- ----------- Basic earnings per share (pence per share) total 13.91 12.54 --------------------------------------------------------------- ----------- ----------- Diluted 2018 2017 --------------------------------------------------------------- ----------- ----------- Weighted average number of ordinary shares in issue (diluted) 116,692,591 116,303,503 --------------------------------------------------------------- ----------- ----------- Profit attributable to equity holders of the company (GBP'000) 16,110 14,500 --------------------------------------------------------------- ----------- ----------- Diluted earnings per share (pence per share) total 13.81 12.47 --------------------------------------------------------------- ----------- -----------
9 Cash generated from operations
Group
2018 2017
Cash generated from continuing operations GBP'000 GBP'000
-------------------------------------------- -------- ---------
Profit before income tax 19,567 18,351
Depreciation charge 2,195 1,697
Amortisation/impairment of intangibles 2,400 2,302
Profit on disposal of property, plant and
equipment (125) (119)
Net finance (income)/expense (101) 249
Retirement benefit contributions in excess
of current and past service charge (156) (140)
Share of profit from joint venture - (178)
Share based payment charge 533 337
Research and development expenditure credit (237) (233)
Effects of exchange rate movements 163 113
Changes in working capital
- Inventories 1,954 (3,646)
- Trade and other receivables (3,610) 2,156
- Payables and provisions 1,415 1,491
Cash generated from continuing operations 23,998 22,380
--------------------------------------------- -------- ---------
10 ACQUISITION OF SUBSIDIARY
In December 2017, the Group acquired 100% of the share capital of Famostar B.V., an emergency lighting specialist in the Netherlands. The company was acquired by Lightronics Participaties B.V. for initial consideration of EUR7.5m (GBP6.7m) with an estimated additional EUR0.5m (GBP0.4m) payable, subject to performance conditions relating to EBITDA in 2017 and 2018.
Share appreciation rights were granted for 35% of the share capital to the holders of share appreciation rights in Lightronics Participaties B.V. This equated to an investment of EUR2.7m (GBP2.4m) by the holders of these rights. Of this EUR2.7m, EUR1.7m (GBP1.5m) was provided in the form of a loan from FW Thorpe and a EUR1m (GBP0.9m) loan from the rights holders themselves. The loan notes are repayable on or before the end the 30 June 2021 and attract an interest rate of 5%.
The share appreciation rights are subject to future performance conditions linked to an increase in EBITDA over the next three years. This has been calculated by a pre-determined earnings multiple used to value the initial investment. An assessment has been made on the future increase in value of the 35% shareholding and EUR0.7m (GBP0.7m) is included as contingent consideration and disclosed in Other payables in the Consolidated Financial Position.
The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out below:
GBP'000
Intangible assets 1,560
Property, plant and equipment 228
Inventories 851
Trade and other receivables 1,125
Cash 827
Trade and other payables (736)
Provisions (543)
---------------------------------------------------- -------
Total identifiable assets 3,312
Goodwill 4,490
---------------------------------------------------- -------
Total purchase consideration 7,802
---------------------------------------------------- -------
Total purchase consideration satisfied by:
Cash 6,696
Contingent consideration: Famostar 444
Contingent consideration: Share appreciation rights 662
---------------------------------------------------- -------
Total consideration 7,802
---------------------------------------------------- -------
Net cash flow arising on acquisition
Cash consideration 7,140
Less cash in subsidiary acquired (827)
---------------------------------------------------- -------
Cash outflow on acquisition 6,313
---------------------------------------------------- -------
A fair value exercise has been performed; the book value of all assets and liabilities except for inventories and warranties are considered to represent fair value. For inventories and provisions for warranties reductions of EUR0.1m (GBP0.1m) and EUR0.6m (GBP0.5m) were applied to reflect slow moving stock lines and potential customer claims, respectively.
Fair value of intangible assets was assessed and determined on the basis of the technology and brand name acquired. Both the technology and brand name elements were determined using an industry typical royalty rate over a seven year period, discounted to the present day.
10 ACQUISITION OF SUBSIDIARY (continued)
The goodwill relates to the ongoing level of profitability of the business model, opportunity to sell existing Group products into the Dutch market and potential sourcing benefits for other Group companies.
Results for the year ended 31st December 2017 showed revenues of EUR7.7m, and profit before tax of EUR1.3m. For the six months to 30 June 2018, Famostar contributed EUR0.7m to Group profit before tax for the current financial year.
11 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.
12 Annual report and accounts
The annual report and accounts will be sent to shareholders on 25 October 2018 and will be available, along with this announcement, on the Group's website (www.fwthorpe.co.uk) from that time. The Group will hold its AGM on 22 November 2018.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR DKLFFVKFZBBB
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September 20, 2018 02:00 ET (06:00 GMT)
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