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Thorpe(F.W.) PLC (TFW)

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Thursday 01 October, 2020

Thorpe(F.W.) PLC

Final Results

RNS Number : 6868A
Thorpe(F.W.) PLC
01 October 2020
 

 

Results

for the year ended 30 June 2020

 

FW Thorpe Plc - a group of companies that de sign, manufacture and supply professional lighting systems - is pleased to announce its preliminary results for the year ended 30 June 2020.

 

 

Key points:

Continuing operations

2020

2019

 

 

Revenue

£113.3m

£110.6m

2.4% increase

 

Operating profit (before profit on disposal of property)

£16.3m

£17.6m

7.5% decrease

 

Profit before tax (before profit on disposal of property)

£15.9m

£17.7m

9.7% decrease

 

Profit before tax

£15.9m

£19.6m

18.5% decrease

 

Basic earnings per share

11.45p

13.91p

17.7% decrease

 

 

· Total interim and final dividend of 5.66p (2019: 5.53p) - an increase of 2.4%

· Revenue surpassed last year's high - supported by SmartScan sales, Famostar and Services

· Results dampened by impact of COVID-19 in last quarter of the financial year and the lower margins for Services

· Net cash generated from operating activities remained strong - £19.4m (2019: £21.6m)

· Solid recovery at the start of 2020/21, operating performance in line with the start of 2019/20

 

 

 

 

 

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

 

Steve Pearce /James Moat

020 7496 3000

Chairman's Statement

Despite seriously challenging times for all of us, your Company remains very profitable and in a good, robust condition.  The word "unprecedented" has been used prolifically during 2020, and again in the last few days the resilience of the business has been demonstrated, with Lightronics experiencing a fire at its facility in the Netherlands; I provide more details on this towards the end of my statement.

Until the March lockdown, whilst there were the usual Group ups and downs, most companies were in a strong position, especially at the main division, Thorlux Lighting, where orders were at record numbers and good levels of profit were being achieved. During each of the worst months - in March, April and May - the Group still returned an operating profit. Inevitably, however, profit in those months was much reduced, dampening the year-end result, which, until the COVID pandemic, the Board had expected to be an improvement on the previous year's.

All factories within the Group presently operate with full capacity available, using COVID-secure methods. No factory staff have been on furlough since early June. Over 100 office staff are still working successfully from home, with excellent IT logistics providing the capabilities to work near normally in most cases.

The Annual Report and Accounts contains a more detailed overview of the COVID situation and how it is being dealt with across the Group, together with a closer appraisal of the performance of each Group company.

Group results

Year-end revenue was higher than the previous year's, culminating in an overall increase of 2.4%, at £113.3m. Most of the growth was attributed to Thorlux Lighting, with some of that revenue resulting from larger projects including survey, installation and project management activities. Group cumulative operating profit had been ahead of last year's until lockdown occurred. During April and May in particular, lockdown resulted in significantly reduced revenue for the UK companies, wiping out the cumulative profit gain and losing positive momentum; revenue for this period was down on the previous year's by 27%. Final operating profit for the year was down by 7.5% (before disposal of property last year), at £16.3m - a creditable result, all things considered.

There were notable performances across the Group: at Thorlux, TRT Lighting and Famostar. Thorlux experienced excellent order levels throughout the year, especially for larger special projects in the rail and healthcare sectors, resulting in order income of £75m, up 4%, and an improved return on sales until the last quarter. TRT improved profitability again, albeit dampened by the restrictions in April and May, whilst Famostar managed an increase even in its final operating profit (before acquisition adjustments), of +41%, to €2.8m. In addition, throughout late spring and early summer, the Group's Dutch companies did a tremendous job of safely operating their factories at near-normal levels and experienced only slightly reduced customer demand.

I am proud that both Thorlux and Philip Payne manufactured lights for the Birmingham Nightingale Hospital and continued to supply other healthcare projects throughout the critical period.

Through prudent management of the business over many successful years, FW Thorpe has a strong balance sheet with significant reserves, and at the start of the COVID crisis Group companies were showing good levels of orders. The Board decided not to apply for any government support for furloughed employees during lockdown; this impacted operating costs by £0.6m, as the Group paid all employees normal salary whilst they were not working. This decision was duly considered and leaves the Group free of debt to external supporters, protects its reputation, and gives management ongoing freedom to make choices for the good of the business and its shareholders.

The Group's robust balance sheet and continued strong operating cash flow performance allow the Board to recommend a final dividend of 4.2p per share (2019: 4.1p) for the year to 30 June 2020, which gives a total of 5.66p (2019: 5.53p) and an increase of 2.4%.

Outlook

Remarkably, the 2020/21 financial year has started reasonably well overall for the Group, all things considered, with orders and revenue similar to levels at the start of last year. However, some of the Group's smaller companies are suffering a reduction in orders - most notably Portland Lighting, which primarily serves the retail and hospitality sectors.

Recent investments in new machinery, new factories and in (temporarily suspended) customer experience centres are now completed, putting the Group in good shape. No significant investment is planned in the first months of this new financial year, beyond the usual requirements for keeping products and technology up to date with market expectations.

Such an extreme situation has reminded the Board that FW Thorpe is intentionally managed cautiously to serve many market sectors, both in the type of products manufactured and geographically. This wide focus reduces the Group's exposure to changes in political situation and in technology, and during this year has given some degree of resilience in response to the pandemic.

It seems inevitable, however, that there will be a global recession, and that the UK, against a backdrop of Brexit uncertainly and the intense lockdown enforced by the Government, could be affected worse than many countries.

Whilst the Group's present order book is healthy and daily orders are good, this is partly attributable to an amount of pre-COVID work carried forward and to pent-up demand in the market. Due to significantly reduced new-project sales visits and activity during lockdown, reduced usage of the Group's extensive Application and Experience Centres, and the general state of the economy, it is difficult to predict anything other than a downturn in orders at the end of the 2020 calendar year.

All Group companies are being closely managed and performance is being monitored. Where markets have been severely affected, the Board will focus its attention on finding new markets in more buoyant areas; however, transitioning businesses into these new areas takes time. There are a number of larger-scale project opportunities for Group companies to target, but these inevitably come with tighter margins and higher operating costs.

All Group companies have benefited from the market adoption of LED technology over the last decade. Sales of LED luminaires were relatively easy to achieve, primarily on the basis of significant energy savings and increased reliability. Projects that can benefit from LED technology remain firm targets, such as where projects are still lit with luminaires using fluorescent lamps. For example, recent healthcare projects that Thorlux delivered were funded by paybacks that the customer achieved with LED technology. Opportunities to replace non-LED lamps are, however, fewer now. Early LED installations are now eight to ten years old, so the replacement market will soon become a target again.

Group companies need to offer features beyond energy saving and reliability alone. Options include improving the quality of the white light from LED luminaires, reducing glare, and improving the ecological impacts of our product designs.

Thorlux will continue to invest in controls technology, to offer lighting units with intelligence and connectivity that can link into other areas of building control and information technology. Thorlux continues to successfully evolve the SmartScan system, which now controls and monitors devices beyond purely lighting technology. (You can read more about this in a specific feature later in the Annual Report and Accounts.) Such controls technology will give Group companies an advantage over competitors offering cheap low-quality luminaires. SmartScan is now in use in several other Group companies, which, like Thorlux, are finding the market very receptive to the latest wireless technology.

Longer term, it is widely believed that UK and EU governments will invest to stimulate the economy. FW Thorpe is well positioned to be able to benefit from this as and when it occurs.

The Group remains acquisitive and continues to carefully investigate complementary businesses; however, opportunities have taken a back seat whilst the Board focuses on day-to-day operations and waits for more stability in the Group's markets in Europe and further afield.

Personnel

I would like to thank my whole team for their continued support and diligence through such challenging times. The Board is especially grateful to employees who so positively turned up to the Group's factories to work right through this unprecedented situation, and to those who kept motivated and committed whilst working from home, often from their dining-room tables and with added family distractions. Everyone's flexibility and conscientiousness throughout this period has kept the Group's customers satisfied, with on-time deliveries and services, whilst the companies' professionalism in managing risk has kept everyone in the Group safe.

Lightronics

As the Board puts the finishing touches to this year's Annual Report and Accounts, I unfortunately have to report that Lightronics experienced a fire on 23 September at its facility in the Netherlands.

 

Fortunately, no one was injured; however, damage to the assembly area and the European Application Centre is significant. The combination of the fire brigade's actions and the fire protection invested in during the recent refurbishment was able to prevent the fire from spreading to the warehouse and offices. The Board would like to express its thanks to the local fire brigade for their efforts to limit the spread of the fire.

 

With the support of the Group, Lightronics is working to restore operations to full capacity and has secured a temporary site. Whilst short-term disruption is inevitable, some servicing of customer requirements commenced within 24 hours of the fire. The limited impact on Lightronics' inventories, its ability to source further supplies, as well as the rapid response in which Lightronics is resuming operations and servicing customer needs, should, together with insurance cover for any unavoidable financial loss, result in no significant impact on the Lightronics business this year.

 

The Board wishes the team in the Netherlands well and thanks them for their efforts to limit the effects of the fire during these challenging times.

 

Annual General Meeting 2020

Unfortunately, due to the current restrictions put in place by the UK Government with regard to public gatherings, the Group is unable to hold its annual general meeting in the same way as in previous years. The Board will, of course, endeavour to give shareholders the opportunity to ask questions in other ways; please see the Notice of Meeting for further details. I look forward to welcoming you all back next year.

Best wishes to all the Group's shareholders, stakeholders and employees during this difficult period.

 

Mike Allcock
Chairman and Joint Chief Executive

30 September 2020

Consolidated Results

 

Consolidated Income Statement

For the year ended 30 June 2020

 

Notes

2020

£'000

2019

£'000

Continuing operations

 

 

 

Revenue

2

113,342

110,643

Cost of sales

 

(63,351)

(60,264)

Gross profit

 

49,991

50,379

Distribution costs

 

(13,434)

(13,182)

Administrative expenses

 

(20,489)

(19,840)

Other operating income

 

264

292

Operating profit (before profit on disposal)

 

16,332

17,649

Profit on disposal of property

 

-

1,917

Operating profit

2

16,332

19,566

Finance income

 

708

1,049

Finance expense

 

(1,097)

(1,046)

Profit before income tax

 

15,943

19,569

Income tax expense

3

(2,629)

(3,429)

Profit for the year

 

13,314

16,140

 

 

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 per share

Notes

2020

pence

2019

pence

- Basic

8

11.45

13.91

- Diluted

8

11.40

13.83

 

 

 

 

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2020

 

Notes

2020

£'000

2019

£'000

Profit for the year:

 

13,314

16,140

Other comprehensive income/(expenses)

 

 

 

Items that may be reclassified to profit or loss

 

 

 

Exchange differences on translation of foreign operations

 

229

153

 

 

229

153

Items that will not be reclassified to profit or loss

 

 

 

Revaluation of financial assets at fair value through other comprehensive income

 

(834)

(142)

Actuarial loss on pension scheme

 

(2,039)

(374)

Movement on unrecognised pension scheme surplus

 

1,869

191

Taxation

 

13

24

 

 

(991)

(301)

 

 

 

 

Other comprehensive expense for the year, net of tax

 

(762)

(148)

 

 

 

 

Total comprehensive income for the year attributable to equity shareholders

 

12,552

15,992

 

 

 

 

Consolidated Statement of Financial Position

As at 30 June 2020

 

Notes

Group

2020

£'000

2019

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

5

30,574

25,353

Intangible assets

6

21,032

21,687

Investment property

 

1,987

2,006

Financial assets at amortised cost

 

1,800

3,567

Equity accounted investments and joint arrangements

 

-

936

Financial assets at fair value through other comprehensive income

 

3,772

3,683

Total non-current assets

 

59,165

57,232

Current assets

 

 

 

Inventories

 

25,296

25,506

Trade and other receivables

 

21,256

21,502

Financial assets at amortised cost

 

625

-

Other financial assets at fair value through profit or loss

 

-

387

Short-term financial assets

7

18,580

26,483

Cash and cash equivalents

 

44,422

30,807

Total current assets

 

110,179

104,685

Total assets

 

169,344

161,917

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(36,185)

(21,912)

Lease liabilities

 

(220)

-

Current income tax liabilities

 

(831)

(1,935)

Total current liabilities

 

(37,236)

(23,847)

Net current assets

 

72,943

80,838

Non-current liabilities

 

 

 

Other payables

 

(67)

(12,804)

Lease liabilities

 

(417)

-

Provisions for liabilities and charges

 

(2,721)

(2,404)

Deferred income tax liabilities

 

(601)

(699)

Total non-current liabilities

 

(3,806)

(15,907)

Total liabilities

 

(41,042)

(39,754)

Net assets

 

128,302

122,163

Equity

 

 

 

Share capital

 

1,189

1,189

Share premium account

 

1,526

1,266

Capital redemption reserve

 

137

137

Foreign currency translation reserve

 

2,764

2,535

Retained earnings

 

 

 

At 1 July

 

117,036

107,527

Profit for the year attributable to the owners

 

13,314

16,140

Other changes in retained earnings

 

(7,664)

(6,631)

 

 

122,686

117,036

Total equity

 

128,302

122,163

 

 

 

 

Consolidated Statement of Changes in Equity

For the year ended 30 June 2020

 

Notes

Share

capital

£'000

Share

premium

account

£'000

Capital

redemption

reserve

£'000

Foreign currency translation reserve

£'000

Retained

earnings

£'000

Total

equity

£'000

Balance at 1 July 2018

 

 1,189

 1,017

 137

 2,382

 107,527

 112,252

Comprehensive income

 

 

 

 

 

 

 

Profit for the year to 30 June 2019

 

 -

 -

 -

 -

 16,140

 16,140

Actuarial loss on pension scheme

 

 -

 -

 -

 -

(374)

(374)

Movement on unrecognised pension scheme surplus

 

 -

 -

 -

 -

 191

 191

Revaluation of financial assets at fair value through other comprehensive income

 

 -

 -

 -

 -

(142)

(142)

Movement on associated deferred tax

 

 -

 -

 -

 -

 24

 24

Exchange differences on translation of foreign operations

 

 -

 -

 -

 153

 -

 153

Total comprehensive income

 

 - 

 - 

 - 

 153

 15,839

 15,992

Transactions with owners

 

 

 

 

 

 

 

Shares issued from exercised options

 

 -

 249

 -

 -

 -

 249

Purchase of own shares

 

 -

 -

 -

 -

(117)

(117)

Dividends paid to shareholders

4

 -

 -

 -

 -

(6,299)

(6,299)

Share based payment charge

 

 -

 -

 -

 -

 86

 86

Total transactions with owners

 

 - 

 249

 - 

 - 

(6,330)

(6,081)

Balance at 30 June 2019

 

 1,189

 1,266

 137

 2,535

 117,036

 122,163

Adjustments on first time adoption of IFRS16 (net of tax) *

 

 -

 -

 -

 -

(265)

(265)

Restated balance at 1 July 2019

 

 1,189

 1,266

 137

 2,535

 116,771

 121,898

Comprehensive income

 

 

 

 

 

 

 

Profit for the year to 30 June 2020

 

 -

 -

 -

 -

 13,314

 13,314

Actuarial loss on pension scheme

 

 -

 -

 -

 -

(2,039)

(2,039)

Movement on unrecognised pension scheme surplus

 

 -

 -

 -

 -

 1,869

1,869

Revaluation of financial assets at fair value through other comprehensive income

 

 -

 -

 -

 -

(834)

(834)

Movement on associated deferred tax

 

 -

 -

 -

 -

81

81

Impact of deferred tax rate change

 

 -

 -

 -

 -

(68)

(68)

Exchange differences on translation of foreign operations

 

 -

 -

 -

 229

 -

 229

Total comprehensive income

 

 - 

 - 

 - 

 229

 12,323

 12,552

Transactions with owners

 

 

 

 

 

 

 

Shares issued from exercised options

 

 -

 260

 -

 -

 -

 260

Dividends paid to shareholders

4

 -

 -

 -

 -

(6,468)

(6,468)

Share based payment charge

 

 -

 -

 -

 -

 60

 60

Total transactions with owners

 

 - 

 260

 - 

 - 

(6,408)

(6,148)

Balance at 30 June 2020

 

 1,189

 1,526

 137

 2,764

 122,686

 128,302

 

 

 

 

Consolidated Statement of Cash Flows

For the year ended 30 June 2020

 

Notes

Group

2020

£'000

2019

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

9

23,231

 25,038

Tax paid

 

(3,848)

(3,476)

Net cash generated from operating activities

 

19,383

 21,562

 

 

 

 

Cash flows from investing activities

 

 

 

Purchases of property, plant and equipment

 

(6,988)

(6,852)

Proceeds from sale of property, plant and equipment

 

212

 3,796

Purchase of intangibles

 

(1,719)

(2,417)

Disposal of investment property

 

-

 12

Purchase of available for sale investments

 

(61)

-

Net sale of financial assets at fair value through
other comprehensive income

 

-

 70

Proceeds from sale of other financial assets at fair value through Profit and Loss account

 

387

-

Property rental and similar income

 

92

 205

Dividend income

 

187

 225

Net withdrawal/(deposit) of short-term financial assets

 

7,903

(11,193)

Interest received

 

322

 403

Net receipt/(issue) of loan notes

 

1,156

 2,575

Net cash received from/(used) in investing activities

 

1,491

(13,176)

 

 

 

 

Cash flows from financing activities

 

 

 

Net proceeds from the issuance of ordinary shares

 

260

 249

Purchase of own shares

 

-

(117)

Proceeds from loans

 

192

 -

Repayment of borrowings

 

(203)

(197)

Settlement of lease liabilities

 

(1,011)

-

Payment of lease liabilities

 

(265)

 -

Payment of lease interest

 

(36)

 -

Dividends paid to Company's shareholders

4

(6,468)

(6,299)

Net cash used in financing activities

 

(7,531)

(6,364)

Effects of exchange rate changes on cash

 

272

 117

Net increase in cash in the year

 

13,615

 2,139

Cash and cash equivalents at beginning of year

 

30,807

 28,668

Cash and cash equivalents at end of year

 

44,422

 30,807

 

 

 

Notes

 

1 Basis of preparation

The consolidated and company financial statements of FW Thorpe Plc have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with the Companies Act 2006. The financial statements have been prepared on a going concern basis, under the historical cost convention except for the financial instruments measured at fair value either through other comprehensive income or profit and loss per the provisions of IFRS9. The accounting policies are the same as used in the Annual Report and Accounts 2020, which is to be published on the Group's website.

The Group adopted for the first time IFRS 16 "Leases" for the year ended 30 June 2020. There are no other standards that are not yet effective that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

The consolidated financial statements are presented in Pounds Sterling, which is the Company's functional and presentation currency, rounded to the nearest thousand.

The directors confirm they are satisfied that the Group and Company have adequate resources, with £44.4m cash and £18.6m short term deposits, to continue in business for the foreseeable future factoring in the expected impact of COVID-19. They have also produced an analysis that demonstrates that the Group could cover its cash commitments even if there were zero sales over the following year from approving these accounts. For this reason, they continue to adopt the going concern basis in preparing the accounts.

The financial information set out in this document does not constitute the statutory financial statements of the Group for the year end 30 June 2020 but is derived from the Annual Report and Accounts 2020. The auditors have reported on the annual financial statements and issued an unqualified opinion.

 

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 industrial, commercial and controls markets. The businesses in the Netherlands, Lightronics and Famostar, are material subsidiaries and disclosed separately as Netherlands companies.

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

 

Thorlux

£'000

Netherlands companies £'000

Other

companies

£'000

Inter-

segment

adjustments

£'000

Total

continuing

operations

£'000

Year to 30 June 2020

 

 

 

 

 

Revenue to external customers

65,615

31,340

16,387

-

 113,342

Revenue to other group companies

3,164

234

4,021

(7,419)

 -

Total revenue

 68,779

 31,574

 20,408

(7,419)

 113,342

Operating profit

10,150

4,125

1,412

645

16,332

Net finance expense

 

 

 

 

(389)

Profit before income tax

 

 

 

 

 15,943

 

 

 

 

 

 

Year to 30 June 2019 (restated)

 

 

 

 

 

Revenue to external customers

62,304

31,059

17,280

-

 110,643

Revenue to other group companies

3,551

372

3,567

(7,490)

 -

Total revenue

 65,855

 31,431

 20,847

(7,490)

 110,643

Operating profit (before disposal of property)

 11,578

 3,620

 2,398

 53

 17,649

Profit on disposal of property

 

 

 

 

 1,917

Operating profit

 11,578

 3,620

 2,398

 53

 19,566

Net finance income

 

 

 

 

 3

Profit before income tax

 

 

 

 

 19,569

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 elimination of profit on transfer of assets between Group companies. The prior year segmental reporting has been restated to provide comparatives of the Netherlands companies together.

 

(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.

 

2020

£'000

2019

£'000

UK

69,657

68,706

Netherlands

28,748

28,227

Rest of Europe

12,265

11,185

Rest of the World

2,672

2,525

 

113,342

110,643

 

3 Income Tax Expense

Analysis of income tax expense in the year:

 

2020

£'000

 2019

£'000

Current tax

 

 

Current tax on profits for the year

3,691

3,963

Adjustments in respect of prior years

(981)

(609)

Total current tax

2,710

3,354

Deferred tax

 

 

Origination and reversal of temporary differences

(81)

75

Total deferred tax

(81)

75

Income tax expense

2,629

3,429

The tax assessed for the year is lower (2019: lower) than the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%). The differences are explained below:

 

2020

£'000

2019

£'000

Profit before income tax

15,943

19,569

Profit on ordinary activities multiplied by the standard rate in the UK of 19.00% (2019: 19.00%)

3,029

3,718

Effects of:

 

 

Expenses not deductible for tax purposes

854

881

Accelerated tax allowances and other timing differences

17

55

Adjustments in respect of prior years

(981)

(609)

Chargeable gains relief on disposal of property

-

(352)

Patent box relief

(643)

(597)

Foreign profit taxed at higher rate

353

333

Tax charge

2,629

3,429

The effective tax rate was 16.49% (2019: 17.52%). Adjustments in respect of prior years relates to refunds received for prudent assumptions on additional investment allowances and patent box relief in the tax calculations.

The UK corporation tax rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted reduction in the rate from 19% to 17%.

 

 

 

4 Dividends

 

Dividends paid during the year are outlined in the tables below:

Dividends paid (pence per share)

2020

2019

Final dividend

4.10

4.00

Interim dividend

1.46

1.43

Total

5.56

5.43

A final dividend in respect of the year ended 30 June 2020 of 4.20p per share, amounting to £4,886,000 (2019: £4,763,000) is to be proposed at the Annual General Meeting on 19 November 2020 and, if approved, will be paid on 26 November 2020 to shareholders on the register on 30 October 2020. The ex-dividend date is 29 October 2020. These financial statements do not reflect this dividend payable.

Dividends proposed (pence per share)

2020

2019

Final dividend

4.20

4.10

 

Dividends paid

2020

£'000

2019

£'000

Final dividend

4,770

4,639

Interim dividend

1,698

1,660

Total

6,468

6,299

 

Dividends proposed

2020

£'000

2019

£'000

Final dividend

4,886

4,763

 

 

 

 

5 Property, Plant and Equipment

 

Group

Freehold land and buildings

£'000

Plant and

equipment

£'000

Right-

of-use

assets

£'000

Total

£'000

Cost

 

 

 

 

At 1 July 2019

 19,720

 23,851

 -

 43,571

Adoption of IFRS16

 -

 -

 2,266

 2,266

At 1 July (restated)

19,720

23,851

2,266

45,837

Additions

3,709

4,016

 192

 7,917

Disposals

(31)

(1,005)

(1,628)

(2,664)

Transfers

 (17)

 17

 -

 -

Currency translation

 171

 54

 26

 251

At 30 June 2020

 23,552

 26,933

 856

 51,341

Accumulated depreciation

 

 

 

 

At 1 July 2019

 3,712

 14,506

 -

 18,218

Adoption of IFRS16

 -

 -

 908

 908

At 1 July (restated)

3,712

14,506

908

19,126

Charge for the year

 662

 2,331

 228

 3,221

Disposals

(31)

(911)

(699)

(1,641)

Transfers

 (2)

 2

-

 -

Currency translation

 21

 27

 13

 61

At 30 June 2020

 4,362

 15,955

 450

 20,767

Net book amount

 

 

 

 

At 30 June 2020

 19,190

 10,978

 406

 30,574

 

 

 

Group

Freehold land and buildings

£'000

Plant and

equipment

£'000

Total

£'000

Cost

 

 

 

At 1 July 2018

 18,676

 21,328

 40,004

Additions

 3,176

 3,616

 6,792

Disposals

(2,199)

(1,116)

(3,315)

Currency translation

 67

 23

 90

At 30 June 2019

 19,720

 23,851

 43,571

Accumulated depreciation

 

 

 

At 1 July 2018

 3,829

 13,496

 17,325

Charge for the year

 546

 1,962

 2,508

Disposals

(673)

(962)

(1,635)

Currency translation

 10

 10

 20

At 30 June 2019

 3,712

 14,506

 18,218

Net book amount

 

 

 

At 30 June 2019

 16,008

 9,345

 25,353

 

 

 

6 Intangible Assets

Group 2020

Goodwill

£'000

Development

costs

£'000

Technology

£'000

Brand
name

£'000

Software

£'000

Patents

£'000

Fishing rights

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

 

At 1 July 2019

14,921

7,292

2,956

1,304

2,202

150

182

 29,007

Additions

-

1,322

-

-

397

-

-

 1,719

Write-offs and transfers

-

(1,275)

-

-

(26)

-

-

(1,301)

Currency translation

 195

 18

 44

 19

-

-

-

 276

At 30 June 2020

 15,116

 7,357

 3,000

 1,323

 2,573

 150

 182

 29,701

Accumulated amortisation

 

 

 

 

 

 

 

 

At 1 July 2019

246

3,441

1,504

801

1,178

150

 -

 7,320

Charge for the year

-

1,715

371

162

329

-

 -

 2,577

Write-offs and transfers

-

(1,275)

-

-

(26)

-

 -

(1,301)

Currency translation

 2

 21

 33

 17

-

-

 -

 73

At 30 June 2020

 248

 3,902

 1,908

 980

 1,481

 150

 -

 8,669

Net book amount

 

 

 

 

 

 

 

 

At 30 June 2020

 14,868

 3,455

 1,092

 343

 1,092

 -

 182

 21,032

Write-offs relate to development assets where no further economic benefits will be obtained.

Group 2019

Goodwill

£'000

Development

costs

£'000

Technology

£'000

Brand
name

£'000

Software

£'000

Patents

£'000

Fishing rights

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

 

At 1 July 2018

14,786

6,779

2,924

1,291

1,789

150

182

 27,901

Additions

-

1,791

-

-

592

-

-

 2,383

Write-offs and transfers

-

(1,293)

-

-

(178)

-

-

(1,471)

Currency translation

 135

 15

 32

 13

(1)

-

-

 194

At 30 June 2019

 14,921

 7,292

 2,956

 1,304

 2,202

 150

 182

 29,007

Accumulated amortisation

 

 

 

 

 

 

 

 

At 1 July 2018

249

3,062

1,117

599

1,128

150

 -

 6,305

Charge for the year

-

1,662

372

193

229

-

 -

 2,456

Write-offs and transfers

-

(1,293)

-

-

(178)

-

 -

(1,471)

Currency translation

(3)

 10

 15

 9

(1)

-

 -

 30

At 30 June 2019

 246

 3,441

 1,504

 801

 1,178

 150

 -

 7,320

Net book amount

 

 

 

 

 

 

 

 

At 30 June 2019

 14,675

 3,851

 1,452

 503

 1,024

 -

 182

 21,687

 

 

 

 

7 Short-term Financial Assets

Group and Company

2020

£'000

2019

£'000

Beginning of year

26,483

15,290

Net (withdrawals)/ deposits

(7,903)

11,193

 

18,580

26,483

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

2020

2019

Weighted average number of ordinary shares in issue

116,272,709

116,060,378

Profit attributable to equity holders of the Company (£'000)

13,314

16,140

Basic earnings per share (pence per share) total

11.45

13.91

 

Diluted

2020

2019

Weighted average number of ordinary shares in issue (diluted)

116,805,366

116,689,595

Profit attributable to equity holders of the Company (£'000)

13,314

16,140

Diluted earnings per share (pence per share) total

11.40

13.83

 

9 Cash Generated from Operations

Cash generated from continuing operations

Group

2020

£'000

2019

£'000

Profit before income tax

15,943

 19,569

Depreciation charge

3,221

 2,508

Depreciation of investment property

19

 58

Amortisation of intangibles

2,577

 2,456

Profit on disposal of property, plant and equipment

(118)

(2,116)

Net finance expense/(income)

389

(3)

Retirement benefit contributions in excess of current
and past service charge

(170)

(183)

Share based payment charge

1,211

 855

Research and development expenditure credit

(249)

(292)

Effects of exchange rate movements

(219)

(48)

Changes in working capital

 

 

- Inventories

238

(4,025)

- Trade and other receivables

571

 2,428

- Payables and provisions

(182)

 3,831

Total cash generated from operations

23,231

 25,038

 

 

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 12 October 2020 and will be available, along with this announcement, on the Group's website (www.fwthorpe.co.uk) from 5 October 2020. The Group will hold its AGM on 19 November 2020.

 

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