Half Yearly Report

RNS Number : 3803A

Thorpe(F.W.) PLC

20 March 2013

 



F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2012

Key points:

	Half Year 2012	Half Year 2011
Revenue	£27.1m	£29.9m	9% decrease
Operating profit	£4.7m	£5.4m	13% decrease
Profit before tax expense	£5.1m	£5.7m	11% decrease
Basic earnings per share - continuing operations	33.1p	36.6p	10% decrease

Operating profit margins maintained despite reduced revenues

Growth in LED product sales

TRT Lighting investment continues

Interim dividend increased to 10.0p (2011: 4.8p)

For further information please contact:                                                                            

F W Thorpe Plc
Andrew Thorpe - Chairman and Joint Chief Executive	01527 583200
Craig Muncaster - Financial Director	01527 583200
N+1 Singer - Nominated Adviser
Richard Lindley	0113 388 4789

CHAIRMAN'S INTERIM STATEMENT

Revenues for the half year to 31^st December 2012 decreased by 9% with a corresponding decrease in operating profit of 13% and profit before tax expense of 11%.  Basic earnings per share from continuing operations were down 10%.

I stated in the last annual report that, for reasons not readily apparent to us, there was a lull in order intake towards the end of 2011/12 financial year.  These final months' orders usually create a substantial backlog giving the following year an initial kick-start.  Unfortunately, this was not the case this time around.

Our order intake during the first six months of this financial year has not been rising in a continual upward trajectory but I can report that the orders for the last three months prior to writing have resumed the upward trend at our largest company Thorlux Lighting with other subsidiaries above, equivalent to, or below last year's performance.

The move to LED light sources continues with some 25% of group products now being LED compared to only 3% this time last year.  Our product development of LED products and systems continues apace.

Investment in the group continues with the largest project being the moving to completion of a new 2,400 square metre high roof finished goods warehouse for Thorlux sanctioned due to the serious capacity problems during 2011.  This new facility will allow more finished goods stock as well as freeing up a deal of existing floor space for increased manufacturing facilities.

The company has further, during this period, been absorbing the cost of bolstering sales capabilities in a number of areas and not least, absorbing the costs of our start-up TRT Lighting, as mentioned in my last report, to design, manufacture and supply LED roadway, road tunnel and area lighting for the future.  First production at TRT is planned for summer 2013.

Your company will pay an increased dividend of 10.0p per share (2011: 4.8p) for the half year to 31^st December 2012, an increase of 108%, recognising that the dividend yield has been reducing in recent years.

Finally, and being a little on the defensive, may I confirm that although the company has taken a step back, it is the first for some years and our figures still represent an 18% return on sales at operating profit level.

Andrew Thorpe

Chairman

20 March 2013

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2012

	Half year to	Half year to	Full year to
Continuing Operations	31.12.12	31.12.11	30.6.12
		(restated)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Revenue	27,076	29,924	55,559
Operating Profit	4,744	5,388	11,850
Finance income	352	278	831
Share of loss of joint venture	(19)	-	(23)
Profit before tax expense	5,077	5,666	12,658
Tax expense	(1,200)	(1,379)	(2,718)
Profit for the period from continuing operations	3,877	4,287	9,940
Profit for the period from discontinued operations*	-	1,377	1,377
Profit for the period	3,877	5,664	11,317

* Profit for the year from discontinued operations in 201      1 includes the exceptional item of the profit on sale from disposal of a subsidiary.  There is no other income from discontinued operations.

Dividend rate per share:
Interim	10.0p	4.8p	4.8p
Final	-	-	14.6p

Earnings per share for profit attributable to the equity holders of the company during the period

Basic and diluted earnings per share

Continuing operations	- basic	33.1p	36.6p	84.8p
Continuing operations	- diluted	33.1p	36.6p	84.8p
Discontinued operations	- basic	-	11.7p	11.7p
Discontinued operations	- diluted	-	11.7p	11.7p
Total	- basic	33.1p	48.3p	96.5p
Total	- diluted	33.1p	48.3p	96.5p

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2012

	Half year to	Half year to	Full year to
	31.12.12	31.12.11	30.6.12
		(restated)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit for the period	3,877	5,664	11,317
Actuarial loss on pension scheme	-	-	(1,410)
Movement on associated deferred tax asset relating to the pension scheme	-	-	468
Revaluation of available for sale assets	-	(5)	29
Movement on associated deferred tax	-	-	(8)
Impact of deferred tax rate change	-	-	56
Exchange rate movement on investment in joint venture	-	-	(2)
Other comprehensive income for the period net of tax	-	(5)	(867)
Total comprehensive income for the period	3,877	5,659	10,450

Total comprehensive income attributable to equity shareholders arises from:
-Continuing operations	3,877	4,282	9,073
-Discontinued operations	-	1,377	1,377
	3,877	5,659	10,450

CONSOLIDATED BALANCE SHEET

as at 31 December 2012

	As at	As at	As at
	31.12.12	31.12.11	30.6.12
		(restated)
	(unaudited)	(unaudited)	(audited)
Assets	£'000	£'000	£'000
Non-Current Assets
Property, plant and equipment	11,909	10,834	11,204
Intangible assets	6,177	5,172	5,984
Investment property	2,083	2,081	2,081
Loans and receivables	1,728	1,828	1,828
Investment in joint venture	92	135	111
Available for sale financial assets	1,967	1,300	1,841
Deferred tax assets	-	27	15
	23,956	21,377	23,064
Current assets
Inventories	10,146	10,275	11,144
Trade and other receivables	9,778	10,244	10,942
Other financial assets at fair value through profit or loss	387	387	387
Short term financial assets - deposits	17,205	13,971	17,108
Cash and cash equivalents	15,477	16,066	14,120
Total current assets	52,993	50,943	53,701
Total Assets	76,949	72,320	76,765
Liabilities
Current liabilities
Trade and other payables	(5,938)	(7,461)	(7,677)
Current tax liabilities	(1,073)	(1,409)	(1,395)
Total current liabilities	(7,011)	(8,870)	(9,072)
Net current assets	45,982	42,073	44,629
Non-current liabilities
Retirement benefit deficit	-	-	-
Provisions for liabilities and charges	(102)	(102)	(102)
Deferred tax liabilities	(858)	(763)	(778)
Total liabilities	(7,971)	(9,735)	(9,952)
Net assets	68,978	62,585	66,813
Equity attributable to owners of the company
Issued share capital	1,189	1,189	1,189
Share premium account	656	656	656
Capital redemption reserve	137	137	137
Retained earnings	66,996	60,603	64,831
Total equity	68,978	62,585	66,813

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2012

	Share	Share	Capital	Retained	Total
	Capital	Premium	Redemption	Earnings	Equity
			Reserve
	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2011	1,189	656	137	56,503	58,485
Comprehensive income
Profit for six months to 31 December 2011	-	-	-	5,664	5,664
Revaluation of available for sale assets	-	-	-	(5)	(5)
Total comprehensive income	-	-	-	5,659	5,659
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,559)	(1,559)
Total transactions with owners	-	-	-	(1,559)	(1,559)
Balance at 31 December 2011	1,189	656	137	60,603	62,585
Comprehensive income
Profit for six months to 30 June 2012	-	-	-	5,653	5,653
Actuarial loss on pension scheme	-	-	-	(1,410)	(1,410)
Movement on unrecognised pension surplus	-	-	-	468	468
Revaluation of available-for-sale financial assets	-	-	-	34	34
Movement on associated deferred tax	-	-	-	(8)	(8)
Impact of deferred tax rate change	-	-	-	56	56
Exchange rate movement on joint venture	-	-	-	(2)	(2)
Total comprehensive income	-	-	-	4,791	4,791
Transactions with owners
Dividends paid to shareholders	-	-	-	(563)	(563)
Total transactions with owners	-	-	-	(563)	(563)
Balance at 30 June 2012	1,189	656	137	64,831	66,813
Comprehensive income
Profit for six months to 31 December 2012	-	-	-	3,877	3,877
Total comprehensive income	-	-	-	3,877	3,877
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,712)	(1,712)
Total transactions with owners	-	-	-	(1,712)	(1,712)
Balance at 31 December 2012	1,189	656	137	66,996	68,978

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2012

	Half year to	Half year to	Full year to
	31.12.12	31.12.11	30.6.12
		(restated)
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash generated from operations
Profit before income tax	5,077	5,666	12,658
Adjustments for
- Depreciation charge	613	514	1,062
- Amortisation of intangibles	512	405	993
- Profit on disposal of property, plant and  equipment	(37)	(27)	(71)
- Finance income - net	(352)	(278)	(831)
- Retirement benefit contributions in excess of current and past service charge	(329)	(348)	(774)
- Share of loss from joint venture	19	-	23
Changes in working capital
- Inventories	998	1,173	304
- Trade and other receivables	1,140	1,562	918
- Trade and other payables	(988)	(1,964)	(1,583)
Discontinued operations	-	-	(8)
Cash generated from operations	6,653	6,703	12,691
Tax paid	(1,433)	(1,637)	(3,223)
Cash flow from investing activities
Purchase of property, plant and equipment	(1,362)	(524)	(2,198)
Proceeds of sale of property, plant and equipment	50	46	120
Purchase of intangibles - development costs and software	(707)	(484)	(1,341)
Purchase of subsidiary net of cash acquired	(383)	(2,530)	(2,502)
Purchase of investment property	(3)	-	(35)
Purchase of available for sale financial assets	(125)	(198)	(706)
Property rental and similar income	107	121	195
Dividend income	71	-	69
Net (purchase)/sale of deposits	(96)	(2,355)	(5,492)
Interest received	197	141	322
Net proceeds of disposal of subsidiary	-	4,106	4,106
Repayment of loans and receivables	100	-	-
Net cash outflow from investing activities	(2,151)	(1,677)	(7,462)
Cash flow from financing activities
Dividends paid to company shareholders	(1,712)	(1,559)	(2,122)
Net cash outflow from financing activities	(1,712)	(1,559)	(2,122)
Net increase/(decrease) in cash and cash equivalents	1,357	1,830	(116)
Cash and cash equivalents at the beginning of the period	14,120	14,236	14,236
Increase/(decrease) in cash and cash equivalents	1,357	1,830	(116)
Cash and cash equivalents at the end of the period	15,477	16,066	14,120

Notes to the Interim Financial Statements

1.    Basis of Preparation

       The consolidated interim financial statements for the six months to 31 December 2012 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board and the AIM Rules for Companies. 

The figures for the period to 31 December 2012 and the comparative period to 31 December 2011 have not been audited or reviewed and are therefore disclosed as unaudited.  The figures for 30 June 2012 have been extracted from the financial statements for the year to 30 June 2012, which have been delivered to the Registrar of Companies.  The interim financial statements do not constitute statutory accounts within the meaning of the Companies Act 2006. 

The financial statements are presented in Pounds Sterling, rounded to the nearest thousand.

The interim financial statements are prepared under the historical cost convention, modified by the revaluation of certain current and non-current investments at fair value through profit or loss.

The accounting policies set out in the financial statements for the year ended 30 June 2012 have been applied consistently throughout the group during the period.

2.         Segmental analysis

The segmental analysis is presented on the same basis as that used for internal reporting purposes.  For internal reporting F W Thorpe is organised into six 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 market.  The five remaining operating segments have been aggregated into the 'other companies' segment based on their size and comprise Compact Lighting, Philip Payne, Sugg Lighting, Solite Europe and Portland Lighting.

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.

2.     Segmental analysis (continued)

	Thorlux	Other	Inter-	Total
		Companies	Segment	Continuing
			Adjust-	Operations
			ments
	£'000	£'000	£'000	£'000
6 months to 31 December 2012
Revenue to external customers	22,259	4,817	-	27,076
Revenue to other group companies	46	275	(321)	-
Total revenue	22,305	5,092	(321)	27,076
Operating Profit	4,526	121	97	4,744
Net finance income				352
Share of loss in joint venture				(19)
Profit before tax expense				5,077
6 months to 31 December 2011
Revenue to external customers	24,363	5,561	-	29,924
Revenue to other group companies	65	287	(352)	-
Total revenue	24,428	5,848	(352)	29,924
Operating Profit	4,757	459	172	5,388
Net finance income				278
Share of loss in joint venture				-
Profit before tax expense				5,666
Year to 30 June 2012
Revenue to external customers	44,869	10,690	-	55,559
Revenue to other group companies	80	507	(587)	-
Total revenue	44,949	11,197	(587)	55,559
Operating Profit	10,740	828	282	11,850
Net finance income				831
Share of loss in joint venture				(23)
Profit before tax expense				12,658

Inter-segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc, adjustments to profit related to stocks held within the group that were supplied by another segment and adjustments to investment provisions relating to group companies.

3.         Earnings per share

The earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 11,723,559 (2011: 11,723,559) during the period.  For diluted earnings per share, the weighted average of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  The adjusted weighted average number of ordinary shares is calculated at 11,723,559 (2011: 11,723,559) as there are no dilutive potential ordinary shares.

4.         Dividend

The interim dividend is at the rate of 10.0p per share (2011: 4.8p), and based on 11,723,559 shares in issue at the announcement date the dividend will amount to £1,172,000 (2011: £563,000).  The interim dividend will be paid on Tuesday 7 May 2013 to shareholders on the register at the close of business on 12 April 2013 and the shares become ex-dividend on 10 April 2013.

A final dividend for the year ended 30 June 2012 of 14.6p (2011: final of 13.3p) per share, amounting to £1,712,000 (2011: £1,559,000) was paid on 22 November 2012.

5.         Availability of interim statement

Copies of this report are being sent to shareholders and will also be available from the company's registered office or on the company's website from 5 April 2013.

 

END

 

 

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