Interim Results

Thorpe(F.W.) PLC
14 March 2024
 

fwthorpelogo

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2023

 

FW Thorpe Plc - a group of companies that design, manufacture and supply professional lighting systems - is pleased to announce its interim results for the six months ended 31 December 2023.

 

Financial highlights:


Interim

2024 (unaudited)

Interim

2023  (unaudited)

 

Revenue

£82.6m 

£81.9m 

Operating profit (before acquisition adjustments)*

£12.3m 

              £12.6m

-2%

Operating profit

£11.2m 

£11.0m 

+2%

Profit before tax

£10.7m 

£10.6m 

+1%

Basic earnings per share

7.31p

7.15p

+2%

*Acquisition adjustments include amortisation of intangible assets.

·      Interim dividend 1.70p (Interim 2023: 1.62p) - 4.9% increase

·      Steady performance during the period, supported by, margin improvements at Thorlux and Lightronics

·      Zemper improved export revenues to France and Belgium

·      Other UK companies showing marginal improvement overall

·      Net cash generated from operating activities - £14.0m (Interim 2023: £9.9m)

 

 

 

 

Note: This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 (MAR).

For further information, please contact:                                                                         

FW Thorpe Plc

 

Mike Allcock - Chairman and Joint Chief Executive

01527 583200

Craig Muncaster - Joint Chief Executive and Group Financial Director

01527 583200

 

Singer Capital Markets - Nominated Adviser

 

James Moat / Sam Butcher

020 7496 3000

 

CHAIRMAN'S INTERIM STATEMENT

Results for the half year are in line with the expectations given in the Group's November trading update, overall performance being broadly level with last year's. It seems that customers finished for Christmas very early: December was particularly slow across all parts of the Group, thus suppressing results at the half year point when compared with the prior year. I am pleased to say that trading bounced back with a vengeance in January, giving the Group a good start for its run-in to the full year.  

Raw material costs, the Group's largest costs, are showing welcome reductions, whilst inflationary pressure on wages and salaries remains. The Group is experiencing some issues with rising shipping costs again and some minor supply delays due to the situation in the Red Sea region. The Group has, overall, managed these inflationary pressures well, with Group operating margins maintained; Thorlux and Lightronics, in particular, show margin improvements. Stock has continued to be reduced in a carefully controlled way whilst good stock levels are maintained for strategically important items. 

In Spring 2024, some interesting patent-applied-for products are being launched. These new products have a unique approach to sustainability, being 3D machined from oak which is harvested from sustainable European forests. (Hopefully, one day, the Group will be able to use its own wood from its sustainable forests.) The Portland traffic range has started to gather traction following receipt of some sizeable first orders. Group product synergy initiatives have advanced, and the Group's first shared technology emergency range, designed and manufactured by Zemper, is due for launch this summer. In recent weeks, Ratio sales in the UK have started to gather some momentum, especially for the IO7 illuminated post; however, the UK and the Netherlands are loss making in these early days whilst investment is made in improved technology to satisfy market requirements.

The road to Net Zero continues, and the Group's short and long term objectives are currently being assessed by a third party, the Science Based Targets initiative (SBTi). The Group's internal programme of improvement continues, and an investment of around £300k has been made, at Solite, to trial a new concept of powder coating using electricity for heating the oven, with only intermittent boosting from the gas supply when required. Powder coating facilities across the Group are extensive, so the Board will watch this trial with interest; big reductions in CO2 are forecast, due to reduced gas usage in favour of solar-produced or sustainable electricity. The £2m woodland investment in Longtown, Hereford, UK, has completed, and plans and planning applications are progressing to allow the next phase of the Group's carbon offsetting activity, which will ultimately facilitate the planting of a further 130,000-plus trees. As the Group hopes to continually reduce its carbon emissions, it expects this scheme's planting capacity to last for a decade, and hopefully much more.

As a result of ongoing performance and the strong balance sheet, the Board has approved a dividend of 1.70p (interim 2023: 1.62p) for the six months to 31 December 2023, being an increase of 4.9%. 

At the time of writing, the general order book and revenue for the Group as a whole are good. Within the Group, therefore, we look forward to an improved situation at the year end, providing there are no sudden changes to the economic outlook. 

 

 

 

Mike Allcock

Chairman

14 March 2024

FW Thorpe Plc

 

 

 

 

 

 

 

 

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2023

 


 



 

31.12.23

(six months to)

31.12.22

(six months to)

30.06.23 

(twelve months to)


(unaudited)

(unaudited)

(audited)


 




£'000  

£'000  

£'000 


 



Revenue

82,593  

81,853  

176,749 


 



Operating profit

11,203  

10,979  

27,832 


 



Finance income

424  

261  

716 

Finance expense

  (312) 

  (620) 

(1,094)   

Share of loss of joint ventures

(597) 

(520) 


 



Profit before tax

10,718  

10,620  

26,934 

 

 



Income tax expense

  (2,148) 

  (2,240) 

(5,000)


 



Profit for the period

8,570  

8,380  

21,934 

 

 



 

 

 

Dividend rate per share:

 



     Interim

1.70p

1.62p

1.62p

     Final

                 -

4.84p

 

 

                                                                                                           

 

 

Earnings per share

- basic

7.31p

7.15p

18.72p

 

- diluted

7.31p

7.15p

18.70p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2023

 


 



 

31.12.23    (six months to)

31.12.22    (six months to)

30.06.23 

(twelve months to)


 




(unaudited)

(unaudited)

(audited)


 




£'000 

£'000 

£'000 


 



Profit for the period

8,570 

8,380 

21,934 


 



Other comprehensive income/(expenses)

 



 

 



Items that may be reclassified to profit or loss

 



Exchange differences on translation of foreign operations

223

1,323

231

 

 



 

223

1,323

231  

 

 



Items that will not be reclassified to profit or loss

 



Revaluation of financial assets at fair value through other comprehensive income *

290 

82 

(105)

Movement on associated deferred tax

               (73)

(20)

26

Actuarial loss on pension scheme **

(123)

Movement on unrecognised pension surplus **

177


 



 

217 

62 

(25)


 



Other comprehensive income for the period, net of tax

440  

1,385  

206


 



Total comprehensive income for the period

 9,010 

 9,765 

22,140 

 

 



 

 

All comprehensive income is attributable to the owners of the company.

 

* The gain on the revaluation of financial assets at fair value through other comprehensive income of £290,000 is due to the increase in market value of these investments.

** No interim actuarial valuation undertaken



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2023

 


As at 

As at 

As at 


31.12.23 

31.12.22 

30.06.23 


(unaudited)

(unaudited)

(audited)

Assets

£'000 

£'000 

£'000 

Non-current assets

 



Property, plant and equipment

38,752 

36,372 

38,763 

Intangible assets

70,308 

71,601 

70,891 

Investment properties

4,757 

1,974 

1,986 

Financial assets at amortised cost

242 

1,622 

1,587 

Equity accounted investments and joint arrangements

5,042 

6,267 

  5,592 

Financial assets at fair value through other comprehensive income

3,654 

3,553 

3,364 

Deferred income tax assets

             391

             259

382

 

123,146 

121,648 

122,565 

Current assets

 



Inventories

30,159 

37,889 

33,437 

Trade and other receivables

35,333 

31,881 

35,733 

Financial assets at amortised cost

3,202 

1,800 

1,266 

Short-term financial assets

Cash and cash equivalents

31,295 

21,104 

35,013 

Total current assets

99,993 

92,679 

105,453 

Total assets

223,139 

214,327 

228,018

Liabilities

 



Current liabilities

 



Trade and other payables

(36,438)

(38,274)

(37,457)

Financial liabilities

(1,179)

(1,057)

(1,435)

Lease liabilities

(761)

(742)

(812)

Current income tax liabilities

(1,288)

(865)

(1,143)

Total current liabilities

(39,666)

(40,938)

(40,847)

Net current assets

60,327 

51,741 

64,606 

 

 



Non-current liabilities

 



Other payables

(5,476)

(10,810)

(11,987)

Financial liabilities

(1,220)

(1,622)

(1,461)

Lease liabilities

(3,543)

(3,534)

(3,822)

Provisions for liabilities and charges

(3,449)

(3,377)

(3,299)

Deferred income tax liabilities

(6,058)

(4,231)

(6,261)

Total non-current liabilities

(19,746)

(23,574)

(26,830)

Total liabilities

(59,412)

(64,512)

(67,677)

 

 



Net assets

163,727 

149,815 

160,341 


 



Equity attributable to owners of the company

 



Issued share capital

1,189 

1,189 

1,189 

Share premium account

3,026 

2,927 

2,976 

Capital redemption reserve

137 

137 

137 

Foreign currency translation reserve

2,262 

3,131 

2,039 

Retained earnings

 



At 1 July

154,000 

139,392 

139,392 

Profit for the year attributable to owners

8,570 

8,380 

21,934 

Other changes in retained earnings

(5,457)

(5,341)

(7,326)


157,113 

142,431 

154,000 

Total equity

163,727 

149,815 

160,341 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2023

 


Share Capital

Share Premium

Capital Redemption Reserve

Foreign Currency Translation Reserve

Retained Earnings

Total Equity


£'000 

£'000 

£'000 

£'000 

£'000 

£'000 

Balance at 30 June 2022

1,189 

2,827 

137 

1,808 

139,392 

145,353 

Comprehensive income






 

Profit for six months to 31 December 2022

8,380 

8,380 

Other comprehensive income

1,323

62 

1,385 

Total comprehensive income

1,323

8,442 

9,765 

Transactions with owners






 

Share options exercised

100 

100 

Dividends paid to shareholders

(5,403)

(5,403)

Total transactions with owners

100 

(5,403)

(5,303)

Balance at 31 December 2022

1,189 

2,927 

137 

3,131 

142,431 

149,815 

Comprehensive income






 

Profit for six months to 30 June 2023

13,554 

13,554

Actuarial gain on pension scheme

(123) 

(123)

Movement on unrecognised pension surplus

177

177

Revaluation of financial assets at fair value through other comprehensive income

(187)

(187)

Movement on associated deferred tax

46

46

Exchange rate differences on translation of foreign operations

(1,092)

(1,092)

Total comprehensive income

(1,092)

13,467 

12,375

Transactions with owners

 





 

Share options exercised

49 

49 

Dividends paid to shareholders

(1,898)

(1,898)

Total transactions with owners

49 

(1,898)

(1,849)

Balance at 30 June 2023

1,189 

2,976

137 

2,039 

154,000 

160,341 

Comprehensive income






 

Profit for six months to 31 December 2023

8,570

8,570

Other comprehensive income

223

217

  440

Total comprehensive income

223

8,787

9,010

Transactions with owners

 





 

Share options exercised

50 

50

Dividends paid to shareholders

(5,674)

(5,674)

Total transactions with owners

50 

(5,674)

(5,624)







 

Balance at 31 December 2023

1,189 

3,026 

137 

2,262 

157,113 

163,727 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months to 31 December 2023


31.12.23 

(six months to)

31.12.22 

(six months to)

30.06.23

(twelve months to)


(unaudited)

(unaudited)

(audited)


£'000 

£'000 

£'000 

Cash generated from operations

 



Profit before tax

10,718 

10,620 

26,934 

Adjustments for

 



- Depreciation of property, plant and equipment

2,349 

2,048 

4,289 

- Depreciation of investment property

23 

10 

20 

- Amortisation of intangibles

2,445 

1,770 

4,454 

- Profit on disposal of property, plant and equipment

               (104)

                 (58)

    (192)

- Net finance (income)/expense

(112)

359 

378 

- Retirement benefit contributions less current and past service charge

                    (107)

                    (73)

54

- Share of joint venture loss

                  597

                    -

520

- Research and development expenditure credit

(277)

(182)

(382)

- Effects of exchange rate movements

(641)

394 

952

Changes in working capital

 



- Inventories

            3,409

            (2,136)

3,117

- Trade and other receivables

                 506

              3,008 

(98)

- Payables and provisions

         (2,935)

         (3,921)

(3,830) 

Cash generated from operations

15,871 

11,839 

36,216 

Tax paid

(1,827)

(1,964)

(4,341)

Net cash generated from operating activities

14,044 

9,875 

31,875 

Cash flow from investing activities

 



Purchase of property, plant and equipment

(2,893)

(4,133)

(7,739)

Proceeds from sale of property, plant and equipment

216 

155 

535 

Purchase of intangible assets

(1,295)

(1,157)

(2,255)

Purchase of subsidiaries (net of cash acquired)

-

(12,603)

(12,602)

Purchase of shares in subsidiaries

(4,290)

(5,293)

(6,445)

Purchase of investment properties

            (2,143)

                     - 

                 (22)

Net sale of financial assets at fair value through Other Comprehensive Income

                     - 

                     - 

                 1

Property rental and similar income

25 

23 

93 

Dividend income

85 

102 

209 

Net withdrawal of short-term financial assets

5,074 

5,075

Interest received

204 

137 

434 

Receipts from loans receivable

                     - 

1,813

Issue of loans receivable

(650)

(437)

(1,748)

Net cash used in investing activities

(10,741)

(18,132)

(22,651)

Cash flow from financing activities

 



Net proceeds from the issuance of ordinary shares

50 

100 

149 

Addition of lease liabilities

                     - 

203

Proceeds from borrowings

1,006 

1,039 

Repayment of borrowings

(522)

(1,787)

(2,532)

Principal element of lease payments

(423)

(334)

(789)

Payment of interest

(153)

(94)

(339)

Payments to non-controlling interests

(447)

                     - 

                     - 

Dividends paid to company shareholders

(5,674)

(5,403)

(7,301)

Net cash used in financing activities

(7,169)

(6,512)

(9,570)

Effects of exchange rate changes on cash

               148

               368

(146) 

Net decrease in cash and cash equivalents

(3,718)

(14,401)

(492)

Cash and cash equivalents at the beginning of the period

35,013 

35,505 

35,505 

Cash and cash equivalents at the end of the period

31,295 

21,104 

35,013 

      

Notes to the Interim Financial Statements

 

1.   Basis of preparation

The consolidated interim financial statements for the six months to 31 December 2023 have been prepared in accordance with the AIM Rules for Companies, UK adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards, with future changes being subject to endorsement by the UK Endorsement Board.

The figures for the period to 31 December 2023 and the comparative period to 31 December 2022 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2023 have been extracted from the financial statements for the year to 30 June 2023, 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 and through other comprehensive income.

       The accounting policies set out in the financial statements for the year ended 30 June 2023 have been applied consistently throughout the Group during the period.

      

2.   Segmental analysis

The segmental analysis is presented on the same basis as that used for internal reporting purposes.  For internal reporting FW Thorpe is organised into twelve operating segments, based on the products and customer base in the lighting market - the largest business is Thorlux, which manufactures professional lighting systems for the industrial, commercial and controls markets.  The businesses of SchahlLED and Thorlux Lighting Limited are included in this segment in accordance with the Group's internal reporting. The businesses in the Netherlands, Lightronics and Famostar, are material subsidiaries and disclosed separately as Netherlands companies. The businesses in the Zemper Group are also material and disclosed separately as Zemper Group. 

The seven remaining continuing operating segments have been aggregated into the "other companies" segment based on their size, comprising the entities Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux L.L.C, Thorlux Australasia PTY Limited and Thorlux Lighting GmbH.

FW Thorpe's chief operating decision-maker (CODM) is the Group Board.  The Group Board reviews the Group's internal reporting in order to monitor and assess the performance of the operating segments for the purpose of making decisions about resources to be allocated.  The CODM reviews the performance of the business by considering the key profit measure of operating profit, including the impact of associated contingent consideration arrangements, and considers that none of the other operating segments are of sufficient size and distinction to be reviewed separately when making Group wide strategic decisions.  Assets and liabilities have not been segmented which is consistent with the Group's internal reporting.

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

 

 

 

 

 

 

 

 

 

 

2.     Segmental analysis (continued)

 

Thorlux

Netherlands

Companies

Zemper

Group

Other

Companies

Inter-

Segment

 

Total

Continuing

Operations


£'000 

£'000 

£'000 

£'000 

£'000 

£'000 

Six months to 31 December 2023

 

 

 

 

 

 

Revenue to external customers

46,465 

18,118 

8,959 

9,051 

82,593 

Revenue to other Group companies

1,717 

99 

1,850 

(3,675)

Total revenue

48,182 

18,217 

8,968 

10,901 

(3,675)

82,593 

EBITDA

   9,151

         4,101

   1,774

            925

         69

        16,020

Depreciation and amortisation

   2,274

            633

   1,288 

            622

  - 

          4,817

Operating profit before acquisition adjustments

   7,414

          3,576

     935

            303

         69

        12,297

Operating profit

6,877 

3,468 

486 

303 

   69 

       11,203

Net finance income






112

Share of loss of joint venture






(597)

Profit before tax expense

 

 

 

 

 

10,718 

Included in the Thorlux segment are additional revenues from SchahlLED of £9.1m and operating profit of £0.5m. Acquisition adjustments includes amortisation for intangible assets.

 

Thorlux

Netherlands

Companies

Zemper

Group

Other

Companies

Inter-

Segment

 

Total

Continuing

Operations

 

£'000 

£'000 

£'000 

£'000 

£'000 

£'000 

Six months to 31 December 2022







Revenue to external customers

46,964 

16,746 

8,676 

9,467 

81,853 

Revenue to other Group companies

2,026 

317 

2,342 

(4,685)

Total revenue

48,990 

17,063 

8,676 

11,809 

(4,685)

81,853 

EBITDA

   8,747

         3,193

   1,761

            938

         168

        14,807

Depreciation and amortisation

   1,724

            451

   1,012 

            641

  - 

          3,828

Operating profit before acquisition adjustments

   8,046

          2,850

   1,199

            297

         168

        12,560

Operating profit

7,023 

          2,742

   749

            297

   168 

       10,979

Net finance expense






(359)

Profit before tax expense






10,620 

Included in the Thorlux segment are additional revenues from SchahlLED of £6.7m and operating profit of £0.4m. Acquisition adjustments includes amortisation for intangible assets.

 

 

 

 

 

 

 

 

 

 

 

Thorlux

Netherlands

Companies

Zemper

Group

Other

Companies

Inter-

Segment

 

Total

Continuing

Operations

 

£'000 

£'000 

£'000 

£'000 

£'000 

£'000 

Year to 30 June 2023

 

 

 

 

 

 

Revenue to external customers

101,859 

36,226 

19,328 

19,336 

176,749 

Revenue to other Group companies

3,601 

417 

4,667 

(8,685)

Total revenue

105,460 

36,643 

19,328

24,003 

(8,685)

176,749 

EBITDA

 21,458

7,952

4,205

           2,392

         588

        36,595

Depreciation and amortisation

    4,212

983

2,307

           1,261

-

           8,763

Operating profit before acquisition adjustments

 18,062

7,187

2,801

1,131 

588 

29,769 

Operating profit

  17,246 

       6,969 

1,898

1,131 

588 

27,832 

Net finance expense






          (378)

Share of profit of joint ventures






                 (520)

Profit before tax expense






26,934 

Included in the Thorlux segment are additional revenues from SchahlLED of £16.9m and operating profit of £1.4m. Acquisition adjustments includes amortisation for intangible assets.

 

3.   Purchase of shares in subsidiaries

On 3 October 2023, the Group purchased a further 13.5% of the share capital of Electrozemper S.A. with a cash payment of £4.3m (€5.0m), as part of its commitment to acquire the remaining shares.

 

4.   Earnings per share

       The basic earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 117,237,021 (Interim 2023: 117,191,586) during the period. 


The diluted earnings per share is calculated on profit after taxation and the weighted average number of potentially dilutive ordinary shares in issue of 117,306,123 (Interim 2023: 117,292,983) during the period.

 

5.   Dividend

       The interim dividend is at the rate of 1.70p per share (Interim 2023: 1.62p) and based on 117,271,586 shares in issue at the announcement date the dividend will amount to £1,994,000 (Interim 2023: £1,899,000).  The interim dividend will be paid on 19 April 2024 to shareholders on the register at the close of business on 22 March 2024, and the shares become ex-dividend on 21 March 2024.

For the year ended 30 June 2023 , a final dividend of 4.84p (2022: final 4.61p) per share amounting to £5,674,000 (2022: £5,403,000) was paid on 24 November 2023.

 

6.   Availability of interim statement

       Copies of the interim report are being sent to shareholders and will also be available from the company's registered office or on the company's website (www.fwthorpe.co.uk) from 26 March 2024.

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