TIDMTFW
RNS Number : 2678E
Thorpe(F.W.) PLC
10 March 2022
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2021
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 2021.
Financial highlights:
Interim Interim Exc.
2022 (unaudited) 2021 (unaudited) Zemper
-------------------------- ------------------ ------------------ ----- --------
Revenue GBP63.5m GBP56.4m +13% +4%
Operating profit GBP8.8m GBP7.7m +15% +10%
Profit before tax GBP8.5m GBP7.4m +15% +14%
Basic earnings per share 5.91p 5.05p +17% +17%
-------------------------- ------------------ ------------------ ----- --------
-- Interim dividend 1.54p (Interim 2021: 1.49p) - 3.4% increase
-- Special dividend 2.27p (Interim 2021: nil)
-- Thorlux performance - strong orders, however, revenue and
operating results suppressed by supply chain challenges and
material cost inflation
-- Netherlands performance - positive performance, with improved
profitability as a result of first year without earn-out
provisions
-- Other companies - UK companies struggled, however, order
backlog supports a second half improvement
-- Net cash generated from operating activities - GBP8.9m (Interim 2021: GBP8.0m)
-- Initial acquisition of Electrozemper (Zemper) in Spain
completed in October as well as the investment in Ratio Electric in
the Netherlands in December
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
Steve Pearce/James Moat 020 7496 3000
CHAIRMAN'S INTERIM STATEMENT
I am pleased to report for the period 1 July to 31 December 2021
an improved interim Group operating profit - including three months
of contribution from our new addition, Zemper - of GBP8.8m, up 15%.
Also, there was a continuing healthy increase in the order books
for most companies within the Group - especially at Thorlux
Lighting, where orders were up 25% at the half-year point.
Unfortunately, as predicted in my full-year statement for last
year, sales revenues were suppressed across the Group at +4%
(excluding the addition of Zemper), because of each company's
difficulty sourcing sufficient components, in particular electronic
components and microchips. I would like to thank all those Group
employees involved in sourcing components and re-engineering
designs at short notice with alternative parts, as well as those
managing our customers' expectations.
Most Group companies are looking forward to an improved
second-half performance with supply chain issues easing, to some
extent, especially for commodity items like steel and cardboard.
Within the Group we are, however, mindful of significant cost
inflation for purchased items as well as increases for labour and
utilities. We have increased our prices in the market to
compensate, but are only now starting to see the positive
effects.
Zemper has already settled well into the Group, and, whilst it
will remain an autonomous operation, Group companies have started
to collaborate with Zemper in certain territorial markets and in
the technical engineering of emergency lighting products.
As previously announced, in December the Group concluded its
investment in a 50% interest in Ratio Electric, a Dutch
manufacturer and supplier of electrical connection and distribution
systems. Its results for 2021 are in line with expectations, and
the Group is making progress on introducing Ratio Electric's
vehicle charging products into the UK.
Also in the Netherlands, the Lightronics building
reconstruction, following the fire, is well advanced and on target,
with completion planned for this summer. The Board has also
approved expenditure to double the size of the building for
Famostar, to support its continued rapid sales growth.
As a result of this ongoing good performance and a strong
balance sheet, the Board has approved an increased dividend of
1.54p (Interim 2021: 1.49p) for the six months to 31 December 2021.
In addition, the Group will pay a special dividend of 2.27p
(Interim 2021: nil).
Just before Christmas, external third-party auditors completed
an assessment of the Group's carbon emissions and I am pleased to
report that the Group is considered carbon neutral for its
manufacturing operations. Within the Group we continue with vigour,
nonetheless, to improve further our environmental credentials, with
targets set for all Group companies. Planning permission has now
been granted to complete the roll-out of a solar PV installation to
the main Thorlux roof later this year, adding a further 3,000
panels to the 909 already installed; this is particularly
opportune, considering that the electricity kWh price at Thorlux
has recently nearly doubled. The Group continues with its Net Zero
assessment and target setting assisted and validated again by a
third party.
Supported by the Group's healthy order book, I foresee a good
second-half revenue performance, provided the component shortages
continue to improve. Operating results remain the focus and will
improve once the recent headwinds experienced for most businesses
subside.
Mike Allcock
Chairman
10 March 2022
FW Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2021
31.12.21 31.12.20 30.06.21
(six months (six months (twelve
to) to) months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 63,507 56,374 117,875
Operating profit 8,836 7,653 20,793
Finance income 208 364 615
Finance expense (548) (650) (1,267)
Profit before income tax 8,496 7,367 20,141
Income tax expense (1,596) (1,489) (4,329)
------------- ------------- ----------
Profit for the period 6,900 5,878 15,812
Dividend rate per share:
------ ------ ------
Interim 1.54p 1.49p 1.49p
Final - - 4.31p
Special 2.27p - 2.20p
------ ------ ------
Earnings per share - basic 5.91p 5.05p 13.57p
- diluted 5.88p 5.03p 13.52p
-------------------------------- ------ ------ -------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2021
31.12.21 31.12.20 30.06.21
(six months (six months
to) to)
(twelve
months
to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit for the period 6,900 5,878 15,812
Other comprehensive (expenses)/income
Items that may be reclassified
to profit or loss
Exchange differences on translation
of foreign operations (299) (30) (688)
(299) (30) (688)
------------- ------------- ----------
Items that will not be reclassified
to profit or loss
Revaluation of financial assets
at fair value through other comprehensive
income * 115 403 135
Actuarial gain on pension scheme - - 1,758
Movement on unrecognised pension
surplus - - (1,940)
Taxation (29) (6) (236)
86 397 (283)
------------- ------------- ----------
Other comprehensive (expense)/income
for the period, net of tax (213) 367 (971)
Total comprehensive income for
the period 6,687 6,245 14,841
------------- ------------- ----------
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 GBP115,000 is due to the
increase in market value of these investments.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2021
As at As at As at
31.12.21 31.12.20 30.06.21
(unaudited) (unaudited) (audited)
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 29,129 26,924 28,251
Intangible assets 49,125 20,368 19,705
Investment property 1,958 1,982 1,967
Financial assets at amortised cost 537 - 746
Equity accounted investments and 5,678 - -
joint arrangements
Financial assets at fair value
through other comprehensive income 3,909 4,175 3,764
------------ ------------ ----------
90,336 53,449 54,433
Current assets
Inventories 27,033 20,664 20,389
Trade and other receivables 29,693 26,457 29,310
Financial assets at amortised cost 1,800 1,800 1,800
Short-term financial assets 15,613 25,596 23,603
Cash and cash equivalents 23,636 39,471 52,268
------------ ------------ ----------
Total current assets 97,775 113,988 127,370
Total assets 188,111 167,437 181,803
------------ ------------ ----------
Liabilities
Current liabilities
Trade and other payables (32,934) (33,205) (39,198)
Current financial liabilities (990) - -
Lease liabilities (303) (238) (226)
Current income tax liabilities (308) (150) (1,040)
------------ ------------ ----------
Total current liabilities (34,535) (33,593) (40,464)
Net current assets 63,240 80,395 86,906
Non-current liabilities
Non-current financial liabilities (894) - -
Other payables (11,089) (73) (78)
Lease liabilities (651) (464) (435)
Provisions for liabilities and
charges (2,459) (2,732) (2,242)
Deferred tax liabilities (1,666) (626) (1,591)
------------ ------------ ----------
Total non-current liabilities (16,759) (3,895) (4,346)
------------ ------------ ----------
Total liabilities (51,294) (37,488) (44,810)
------------ ------------ ----------
Net assets 136,817 129,949 136,993
------------ ------------ ----------
Equity attributable to owners of
the company
Issued share capital 1,189 1,189 1,189
Share premium account 2,711 1,799 1,960
Capital redemption reserve 137 137 137
Foreign currency translation reserve 1,777 2,734 2,076
Retained earnings
-------------------------------------- ------------ ------------ ----------
At 1 July 131,631 122,686 122,686
Profit for the year attributable
to owners 6,900 5,878 15,812
Other changes in retained earnings (7,528) (4,474) (6,867)
-------------------------------------- ------------ ------------ ----------
131,003 124,090 131,631
------------ ------------ ----------
Total equity 136,817 129,949 136,993
------------ ------------ ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2021
Share Share Capital Foreign Retained Total
Capital Premium Redemption Currency Earnings Equity
Reserve Translation
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 June 2020 1,189 1,526 137 2,764 122,686 128,302
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Comprehensive income
Profit for six months
to 31 December 2020 - - - - 5,878 5,878
Other comprehensive income - - - (30) 397 367
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Total comprehensive income - - - (30) 6,275 6,245
Transactions with owners
Share options exercised - 273 - - - 273
Dividends paid to shareholders - - - - (4,895) (4,895)
Share-based payment charge - - - - 24 24
Total transactions with
owners - 273 - - (4,871) (4,598)
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Balance at 31 December
2020 1,189 1,799 137 2,734 124,090 129,949
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Comprehensive income
Profit for six months
to 30 June 2021 - - - - 9,934 9,934
Actuarial gain on pension
scheme - - - - 1,758 1,758
Movement on unrecognised
pension surplus - - - - (1,940) (1,940)
Revaluation of financial
assets at fair value through
other comprehensive income - - - - (268) (268)
Movement on associated
deferred tax - - - - (63) (63)
Impact of deferred tax
rate change - - - - (167) (167)
Exchange rate differences
on translation of foreign
operations - - - (658) - (658)
Total comprehensive income - - - (658) 9,254 8,596
Transactions with owners
Share options exercised - 161 - - - 161
Dividends paid to shareholders - - - - (1,736) (1,736)
Share-based payment charge - - - - 23 23
Total transactions with
owners - 161 - - (1,713) (1,552)
Balance at 30 June 2021 1,189 1,960 137 2,076 131,631 136,993
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Comprehensive income
Profit for six months
to 31 December 2021 - - - - 6,900 6,900
Other comprehensive income - - - (299) 86 (213)
-------------------------------- --------- --------- ------------ ------------- ---------- --------
Total comprehensive income - - - (299) 6,986 6,687
Transactions with owners
Share options exercised - 751 - - - 751
Dividends paid to shareholders - - - - (7,617) (7,617)
Share-based payment charge - - - - 3 3
Total transactions with
owners - 751 - - (7,614) (6,863)
Balance at 31 December
2021 1,189 2,711 137 1,777 131,003 136,817
-------------------------------- --------- --------- ------------ ------------- ---------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2021
31.12.21 31.12.20 30.06.21
(six months (six months (twelve months
to) to) to)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash generated from operations
Profit before income tax 8,496 7,367 20,141
Adjustments for
- Depreciation charge 1,789 1,746 3,316
- Depreciation of investment property 9 10 20
- Amortisation of intangibles 1,207 1,260 2,328
- Profit on disposal of property,
plant and equipment (111) (46) (115)
- Impairment of property,
plant and
equipment due to fire - 3,214 -
- Exceptional item in respect of
Lightronics
fire - - (1,566)
- Insurance proceeds re inventory
lost in fire - - 5
- Insurance proceeds re other costs - - 318
- Net finance expense 340 286 652
- Retirement benefit contributions
in excess of current and past service
charge (73) (129) (182)
- Share-based payment charge 2 703 1,429
- Research and development expenditure
credit (144) (130) (289)
- Effects of exchange rate movements 350 281 1,114
Changes in working capital
- Inventories (3,324) 4,634 4,878
- Trade and other receivables 2,730 (5,546) (7,287)
- Payables and provisions 348 (3,898) 964
----------------------------------------- ------------------------ ------------------------- ----------------------
Cash generated from operations 11,619 9,752 25,726
Tax paid (2,670) (1,738) (3,853)
Cash flow from investing activities
Purchase of property, plant and
equipment (1,743) (1,464) (2,932)
Proceeds from sale of property, plant
and equipment 219 86 290
Purchase of intangibles (917) (768) (1,756)
Purchase of subsidiaries (net of cash - -
acquired) (14,624)
Purchase of depositary receipts of - -
shares in subsidiaries (15,286)
Investment in joint venture or associate (4,838) - -
Net (purchase)/sale of financial assets
at fair value through Other
Comprehensive
Income - (5) 205
Insurance proceeds re: property, plant
and equipment lost in fire - - 3,057
Property rental and similar income 32 26 41
Dividend income 124 87 186
Net withdrawal/(deposit) of short-term
financial assets 7,990 (7,016) (5,023)
Interest received 67 101 105
Net receipt of loan notes - 805 59
-----------------------------------------
Net cash used in investing activities (28,976) (8,148) (5,768)
Cash flow from financing activities
Net proceeds from the issuance of
ordinary shares 751 273 434
Proceeds from loans 49 198 365
Repayment of borrowings (1,039) - (958)
Payment of lease liabilities (148) (129) (310)
Payment of lease interest (23) (18) (39)
Dividends paid to company shareholders (7,617) (4,895) (6,631)
-----------------------------------------
Net cash used in financing activities (8,027) (4,571) (7,139)
----------------------------------------- ------------------------ ------------------------- ----------------------
Effects of exchange rate changes on
cash (578) (246) (1,120)
----------------------------------------- ------------------------ ------------------------- ----------------------
Net (decrease)/increase in cash and
cash equivalents (28,632) (4,951) 7,846
Cash and cash equivalents at the
beginning
of the period 52,268 44,422 44,422
-----------------------------------------
Cash and cash equivalents at the end
of the period 23,636 39,471 52,268
----------------------------------------- ------------------------ ------------------------- ----------------------
Notes to the Interim Financial Statements
1. Basis of preparation
The consolidated interim financial statements for the six months
to 31 December 2021 have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial
Reporting Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union, IFRIC
interpretations and the AIM Rules for Companies.
The figures for the period to 31 December 2021 and the
comparative period to 31 December 2020 have not been audited or
reviewed and are therefore disclosed as unaudited. The figures for
30 June 2021 have been extracted from the financial statements for
the year to 30 June 2021, 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 2021 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 eleven 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 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 Zemper Other Inter- Total
Companies Group Companies Segment Continuing
Operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months to 31 December
2021
Revenue to external customers 35,621 15,810 4,629 7,447 - 63,507
Revenue to other Group
companies 2,020 - - 2,454 (4,474) -
------------------------------- -------- ------------ -------- ----------- --------- --------------
Total revenue 37,641 15,810 4,629 9,901 (4,474) 63,507
------------------------------- -------- ------------ -------- ----------- --------- --------------
Operating profit 5,113 2,973 452 120 178 8,836
------------------------------- -------- ------------ -------- ----------- --------- --------------
Finance income 208
Finance expense (548)
------------------------------- -------- ------------ -------- ----------- --------- --------------
Profit before tax expense 8,496
=============================== ======== ============ ======== =========== ========= ==============
Six months to 31 December
2020
Revenue to external customers 33,470 14,986 - 7,918 - 56,374
Revenue to other Group
companies 1,157 148 - 2,887 (4,192) -
------------------------------- -------- ------------ -------- ----------- --------- --------------
Total revenue 34,627 15,134 - 10,805 (4,192) 56,374
------------------------------- -------- ------------ -------- ----------- --------- --------------
Operating profit 4,918 1,691 - 684 360 7,653
-------- ------------ -------- ----------- --------- --------------
Finance income 364
Finance expense (650)
------------------------------- -------- ------------ -------- ----------- --------- --------------
Profit before tax expense 7,367
=============================== ======== ============ ======== =========== ========= ==============
Year to 30 June 2021
Revenue to external customers 69,969 31,490 - 16,416 - 117,875
Revenue to other Group
companies 3,304 290 - 5,238 (8,832) -
------------------------------- -------- ------------ -------- ----------- --------- --------------
Total revenue 73,273 31,780 - 21,654 (8,832) 117,875
------------------------------- -------- ------------ -------- ----------- --------- --------------
Operating profit before
exceptional item 11,694 5,402 - 1,722 409 19,227
Exceptional item in respect
of Lightronics fire - 1,566 - - - 1,566
Operating profit 11,694 6,968 - 1,722 409 20,793
------------------------------- -------- ------------ -------- ----------- --------- --------------
Net finance expense (652)
Profit before tax expense 20,141
=============================== ======== ============ ======== =========== ========= ==============
3. Acquisition
In October 2021, the Group acquired 63% of the share capital of
Electrozemper S.A., an emergency lighting specialist in Spain. The
company was acquired for an initial consideration of GBP19.9m
(EUR23.1m) with a deferred consideration of GBP1.1m (EUR1.3m)
payable during 2022. There is a fixed commitment to acquire the
remaining shares, based on current best estimates, a further
GBP16.1m (EUR18.7m) could be payable which is subject to future
performance conditions.
Amounts recognised in respect of this acquisition are:
EUR'000 GBP'000
Total identifiable assets 9,716 8,368
Goodwill 33,455 28,811
---------------------------------------- -------- --------
Total purchase consideration 43,171 37,179
---------------------------------------- -------- --------
Total purchase consideration satisfied
by:
Cash 23,125 19,915
Deferred consideration 1,323 1,139
Contingent consideration 18,723 16,125
---------------------------------------- -------- --------
Total consideration 43,171 37,179
---------------------------------------- -------- --------
Net cash flow arising on acquisition
Cash consideration 23,125 19,915
Less cash in subsidiary acquired (6,143) (5,291)
---------------------------------------- -------- --------
Cash outflow on acquisition 16,982 14,624
---------------------------------------- -------- --------
A fair value exercise has not yet been performed on the acquired
assets and liabilities; this will be undertaken for the current
financial year-end. The outcome of this exercise may result in
changes to the fair value of the acquired assets and liabilities,
as well as associated goodwill.
This acquisition is expected to make a contribution to Group
profits for the current financial year.
4. Purchase of depositary rights for shares in Subsidiaries
On 21 September 2021 the Group completed its commitment to
purchase the outstanding share appreciation rights in the
subsidiaries Lightronics Participaties B.V. and Famostar Emergency
Lighting B.V. The settlement was executed by a cash payment of
GBP15.3m (EUR17.9m) for the outstanding liability.
5. Investment in Joint Venture
In December 2021, the Group acquired 50% in Ratio Electric B.V.,
a specialist in electrical power connection and distribution
systems based in the Netherlands. Initial consideration paid was
GBP4.8m (EUR5.8m) and a further GBP0.9m (EUR1.0m) for payment in
twenty four months.
6. 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 116,816,601 (Interim 2021: 116,426,119) 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 117,368,458 (Interim 2021: 116,862,079)
during the period.
7. Dividend
The interim dividend is at the rate of 1.54p per share (Interim
2021: 1.49p) and based on 117,074,433 shares in issue at the
announcement date the dividend will amount to GBP1,803,000 (Interim
2021: GBP1,736,000). A special dividend of 2.27p amounting to
GBP2,658,000 (Interim 2021: GBPnil) will also be paid. The interim
and special dividends will be paid on 1 April 2022 to shareholders
on the register at the close of business on 18 March 2022, and the
shares become ex-dividend on 17 March 2022.
For the year ended 30 June 2021 , a final dividend of 4.31p
(2020: final 4.20p) per share and a special dividend of 2.20p
(2020: special nil), amounting to GBP7,617,000 (2020: GBP4,895,000)
was paid on 25 November 2021.
8. 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 31 March
2022.
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