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Thorpe(F.W.) PLC (TFW)

Thorpe(F.W.) PLC

Preliminary Results
RNS Number : 4781O
Thorpe(F.W.) PLC
20 September 2013
 



 

Preliminary Results

for the year ended 30 June 2013 (Unaudited)

 

F W Thorpe Plc, designers, manufacturers and suppliers of professional lighting systems for the specification market, is pleased to announce its preliminary results for the year ended 30 June 2013.

 

 

Key points:

 

Total interim and final dividend 3.0p (2012: 1.94p rebased)

All share related calculations have been rebased following the sub-division of shares (10 for 1) - effective 19 August 2013

 

LED product sales now represent 25% of total revenue   

 

Investment in TRT Lighting continues - first small scale orders received

 

Operating profits impacted by losses at Compact and Sugg - businesses re-organised,

profit expected in the first quarter of 2013/14

 

 



 

For further information please contact:       

F W Thorpe Plc
 
Andrew Thorpe – Chairman
01527 583200
Craig Muncaster – Group Financial Director
01527 583200
 
N+1 Singer – Nominated Adviser
 
Richard Lindley
 
020 7496 3000

                                                                         

                                                                                                                                         


CHAIRMAN'S STATEMENT

 

F W Thorpe Plc revenue for the year to 30th June 2013 was £55.3m, a decrease of 0.4%.  Operating profit also declined by 9.3% to £10.8m from £11.9m for the corresponding period.  Investment income increased however, giving a resultant profit before tax of £11.6m, a drop of 8.6% from last financial year's £12.7m.

The financial year just passed has, in those well-trodden words been "a year of two halves".  I mentioned, in the half year statement, that a lull in order intake, especially at our main company Thorlux Lighting, was experienced in the spring of 2012.  This lull did not allow a final flourish to the year ended June 2012 and also created a lower than normal order backlog with which to "kick-off" the new financial year. Sales outputs in those early months were therefore adversely affected at Thorlux, by far the largest firm in the group, and this was reflected in the half yearly report.  Orders from the start of the 2013 financial year, however, resumed a healthy upward trend resulting in a reversal of the problem and the requirement of a fast upshift in production.

That said, the best efforts of Thorlux and some other group subsidiaries were insufficient to make up for the shortfall during the first half of the year, the on-going costs of setting up the new LED road and tunnel lighting division, TRT Lighting, and losses at two group subsidiaries.  These two subsidiaries I will name for clarity's sake as Sugg Lighting Limited and Compact Lighting Limited and I will expand further on their performances later, in the individual company sections.  Other subsidiaries have either out-performed last year or held pace.

Group exports represented 14% of turnover and were broadly the same as last financial year.  Export generation is by UK specification or agents abroad for all group firms who export, with the exception of Thorlux, which uses these routes to market but, in addition, has established its own sales offices in Dublin, Munich, Melbourne and Brisbane.

Exporting is a hard fought business which is why it is so disappointing to see so many foreign made products used freely on many of our own publicly funded projects.

Investment in group resources continues with, amongst many other small investment projects, our new TRT Lighting now with production capability and fighting for orders and Thorlux having completed its new on-site 2,400 square metre finished goods warehouse and distribution unit.

I am often asked how we faired through the recession and I am pleased to be able to respond that your company has not really seen a recession apart from the "blip" in the spring of 2012.  I proffer that the economic climate has, however, restricted growth.

Your company strives to offer first class products and service.  On-going product development has achieved a wide offering of advanced LED light fittings and systems maintaining at some 25% of group sales.  Your company, further, is managing to offer legacy (traditional lighting technology) products at the same time as the new LED offerings.  It must be remembered that many new start up LED companies do not have the complication of having a historical product portfolio and can concentrate purely on LED matters.  It is proving that some of these start-up LED companies do not have the knowledge and expertise embodied within F W Thorpe.

Your company's performance allows the board to recommend a final dividend of 2.0p (2012:1.46p rebased) which when added to the interim paid in May 2013 totals a dividend of 3.0p per share (2012:1.94p rebased).  All share related figures have been rebased as on 19August 2013 the company sub-divided the shares on a ten for one basis, which increased the number of ordinary shares by a factor of ten.  The increased dividend is purely to re-instate a yield more in line with the historical level.

Thorlux Lighting

Thorlux, manufacturer of commercial and industrial lighting systems, having entered the period with the previously mentioned reduced order book found improving fortunes as the year progressed with each month inputting higher order volumes than the previous year's comparative.

Regrettably despite gallant efforts by "manufacturing" Thorlux missed last year's profit figures by a narrow margin.

Notwithstanding the concentration on new LED luminaires and systems design, the main investment during the year has been the completion of the new 2,400 square metre finished goods warehouse and distribution unit.

This unit is not only highly operationally efficient in its own right but it has allowed clearance of a large area of floor space in the existing Thorlux factory.  This floor space will be turned over to more assembly facilities and a new manufacturing area to produce populated printed circuit boards complete with LEDs.

Current facilities for LED circuit board manufacture are limited in both capacity and board size and are operating 24/7.

This new area will serve the whole group in the manufacture of circuit boards and give a freedom in design not open to those only capable of using proprietary boards offered by others.

Thorlux overseas sales have been slightly down during the year in question due to the completion of some large overseas one-off projects, but overseas sales offices continue to make progress in Germany, Republic of Ireland and Australia.  The Munich office, now with five people, is targeting £1m sales in 2013/14 (£0.7m 2012/13) and Dublin plans to resume growth after a difficult time for the Republic of Ireland.  Thorlux Lighting Australasia Pty Limited has made progress with the addition of a new sales engineer in Brisbane, but like Germany, a positive step change in sales input is sought.

Compact Lighting Limited

Compact, being the group maker of retail and display lighting, suffered a poor year and after a reasonable start the company traded at a loss for most of the rest of the period, with sales being very curtailed and not helped by hard pressed existing retail customers delaying refurbishment programmes.

I mentioned in last year's annual statement that a high level Sales Director had just been engaged and his work to date has been to re-establish a credible sales force, successfully re-engage with a particular sizeable customer where business was being lost and improve existing selling price levels.

We are confident that these efforts, together with Compact's now high grade and well tooled display lighting products, will show a great improvement in the current financial year.

I can report that Compact Lighting has traded at a respectable profit for the new year to date and trial installations for at least two sizeable potential new customers have been installed and are under appraisal.

Philip Payne Limited

Philip Payne, being a manufacturer of specification exit signage, experienced a stronger year with sales up some 11% and profits up some 25% compared to 2012.

The improved sales have prompted Payne to assume "ownership" of a small area of work space in an adjacent building previously rented out by the group.  This extra space will allow the addition of a small powder coating plant facility within their existing confines which, in itself, will save a deal of disruptive transport needs to their local powder coater, which may close at any moment due to retirement.

Some notable projects completed by Philip Payne this year, some which you may have seen and some not, include exit products for the National Gallery, the National History Museum, Broadmoor Prison and the London Edition Hotel.

Sugg Lighting Limited

In one report I stated that Sugg Lighting, our maker and refurbisher of heritage lighting, had used all of its nine lives but I have to report now that it is on its tenth!

Trading throughout the 2013 financial year deteriorated to a degree that it had to be accepted that previous managerial adjustments had not brought the benefits required.

Much heart searching at group level resulted in a decision that such an old British lighting institution such as Sugg, which once lit the streets of London with gas lanterns, should not be allowed to die without a further fight, so may I thank our shareholders for letting us use a little more of their money in this regard.

The top level of management at Sugg has now been changed and a new contract Managing Director has been in place since May 2013.  A past and successful sales manager for the London area has also been re-engaged.

In a similar manner to Compact, I am pleased to be able to report that for the new year to date Sugg is trading profitably once again with a clearer view forward.

Solite Europe Limited

Maker of cleanroom lighting equipment, Solite, has traded at a higher level than last year but it has been carrying the costs of its new Sales Director engaged at the beginning of the financial year.

The moderate increase in sales has, therefore, not shone through to swell a similar profit to last financial year.

Professional engineers in well-known high calibre end user companies often need some persuading and the "new" Solite Sales Director has organised trials of Solite LED lighting products at a number of such users.

These trials bode well for the future.

Portland Lighting

Portland, our sign lighting manufacturer, I am pleased to say has once again put Thorlux number two in the group profit to sales ratio stakes and it has actually increased the margin.

Portland has, therefore, enjoyed another successful year. Their sign lighting products are ideally suited to the LED light source offering not only energy savings but a far longer maintenance cycle than that for fluorescent or other traditional light sources.  The company has been fleet of foot in introducing this new technology to its customers and some 48% of Portland sales are now LED.

New users of Portland sign lighting include national "names" in the pub trade, a building society and convenience stores.

TRT Lighting

TRT, set up to manufacture tunnel, street and area lighting products and systems, has now two street light designs tooled and ready to go, although the firm is still in the throes of dotting i's and crossing t's in regard to the many and varied product, premises and systems certifications needed to allow sales into the local authority street lighting arena.

These products are also available to other group companies and small scale sales are already being achieved through these channels.  TRT itself is in a programme of visiting all potential local authority users and others and has numerous fittings either on trial with local authorities or awaiting the go ahead for trial installation.

Feedback from the field on these innovative products is very positive and the designs have recently been awarded a very creditable four star assessment by LUX magazine, an influential lighting publication.

Support from the group will, no doubt, continue to be required for some while yet but this should start reducing imminently.

 

Carbon Offsetting Project

Our "Woodland Carbon Code" accredited carbon offsetting project at Devauden, Monmouthshire had 35,000 trees at the time of the last statement. It now has 43,000 trees. Our company requires some 8,000 or so plantings per annum so it can be seen that most of the tree plantings are offsetting the CO produced by our own company operations.

I have mentioned before that customers have very sticky fingers when it comes to paying extra for carbon offsetting, although many still applaud us for our efforts!

We currently have a problem with ash dieback disease but it is expected that our Government will compensate for any loss in this regard.

People

The pace of work has certainly not reduced over the years despite the once exclaimed promise that automation and the advent of computers would leave us all little to do except go boating.

The people in F W Thorpe Plc have had plenty to occupy themselves with everyday business and the changes in lighting technology.  They seem to be a resilient lot, however, as we have presented four gold watches during the year with another eleven to come in this financial year. 

May I thank all of them young, medium or old timers!

The Future

Our figures, which I may remind shareholders are still very good, have not advanced over the last year which is a little disappointing to us as our efforts have remained undiminished.

Factors involved are no doubt the poor performance of the aforementioned two subsidiaries, a full £500,000 support for our fledgling road and tunnel lighting company TRT Lighting, a market that by all accounts has not been growing and some nibbling at the peripheries by new start-up LED luminaire manufacturers.

In the future we believe that the drastic action taken in regard to the two subsidiaries will render them in profit for the current year.  TRT is now capable of generating business and should start requiring less financial support as the new year progresses and the other smaller subsidiaries are showing forward movement at this time.  Thorlux continues to introduce top grade products all of which are now LED.

The work is being done on products and manufacturing so we must get smarter selling!

 

 

 

A B Thorpe - Chairman

20 September 2013

  

 

 

 

CONSOLIDATED RESULTS (UNAUDITED)

 

Consolidated income statement
for the year ended 30 June 2013

 

 

* Profit for the year from discontinued operations in 2012 includes the exceptional item of the profit on sale from disposal

of a subsidiary.  There is no other income from discontinued operations.

 

 

 

 

Earnings per share from continuing and discontinued operations attributable to the equity holders of the company during the year (expressed in pence per share)

 

 

All share related calculations have been rebased following the sub-division of shares (10 for 1) which became effective

on 19 August 2013.

CONSOLIDATED RESULTS (UNAUDITED)

 

Consolidated statement of comprehensive income
for the year ended 30 June 2013

 

 

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

 

 

 

 

CONSOLIDATED RESULTS (UNAUDITED)

 

Consolidated balance sheet
as at 30 June 2013

 

 

 

 

 

 

CONSOLIDATED RESULTS (UNAUDITED)

 

GROUP STATEMENT OF CHANGES IN EQUITY

for the year to 30 June 2013

 



Share

Share

Capital

Retained

Total


Note

capital

premium

redemption

earnings

equity





reserve












£'000 

£'000 

£'000 

£'000 

£'000 








Balance at 1 July 2011


1,189

656

137

56,503

58,485








Comprehensive income







Profit for the year to 30 June 2012


-

-

-

11,317

11,317

Actuarial loss on pension scheme


-

-

-

(1,410)

(1,410)

Movement on unrecognised pension scheme surplus





468

468

Revaluation of available for sale assets


-

-

-

29

29

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


-

-

-

10,450

10,450








Transactions with owners







Dividends paid to shareholders

4

-

-

-

(2,122)

(2,122)








Total transactions with owners


-

-

-

(2,122)

(2,122)








Balance at 30 June 2012


1,189

656

137

64,831 

66,813 








Comprehensive income







Profit for the year to 30 June 2013


-

-

-

9,565 

9,565 

Actuarial gain on pension scheme


-

-

-

814 

814 

Movement on unrecognised pension scheme surplus





(1,667)

(1,667)

Revaluation of available for sale assets


-

-

-

201 

201 

Movement on associated deferred tax


-

-

-

(48)

(48)

Impact of deferred tax rate change


-

-

-

30 

30 

Exchange rate movement on joint venture


-

-

-

(9)

(9)








Total comprehensive income


-

-

-

8,886 

8,886








Transactions with owners







Dividends paid to shareholders

4

-

-

-

(2,884)

(2,884)

Purchase of shares


-

-

-

(275)

(275)








Total transactions with owners


-

-

-

(3,159)

(3,159)








Balance at 30 June 2013


1,189

656

137

70,558 

72,540 








 

 

  

 

CONSOLIDATED RESULTS (UNAUDITED)

 

Consolidated statement of cash flows
for the year ended 30 June 2013

 

 

 


Notes (Unaudited)

 

1.  Basis of preparation

 

F W Thorpe Plc's preliminary results for the year ended 30 June 2013 have been approved by the board of Directors on 20 September 2013 and are unaudited. The financial information set out in the announcement does not constitute the Company's statutory accounts for the years ended 30 June 2013 or 30 June 2012.  The consolidated financial statements for the year to 30 June 2013 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards, IFRS's, as adopted by the European Union and issued by the International Accounting Standards Board and the Alternative Investment Market (AIM) Rules for Companies.

 

The unaudited preliminary information above has been prepared on the basis of the accounting policies set out in the annual financial statements for the year ended 30 June 2012 on a consistent basis.  The following new standards, amendments to standards or interpretations are mandatory for the first time for the year ending 30 June 2013 but have no material impact on the Group's financial statements:

 

IAS 19 Employee benefits (amended) - amended to provide a clearer indication of an entity's obligations resulting from the provision of defined benefit plans and how those obligations will affect its financial position, financial performance and cash flow. The amendments include:

 

•  The removal of the options to defer recognition of actuarial gains and losses and for alternative presentation of gains and losses by requiring immediate recognition of actuarial gains or losses in full in other comprehensive income and the inclusion of service and finance costs and plan administration costs in the Statement of Income;

•  The replacement of the expected return on pension plan assets and interest expense on pension plan liabilities with a single net interest component calculated on the net defined benefit liability or asset using the discount rate used to determine the defined benefit obligation; and

•   Additional disclosures to explain the characteristics of a company's defined benefit plans, the amounts recognised in the financial statements and the risk arising from defined benefit plans.

         

IAS 1 Presentation of financial statements - amended to revise the way other comprehensive income is presented.

 

The accounts for the year ended 30 June 2012 have been delivered to the Registrar of Companies, and the auditors' report was unqualified and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.

 

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

 

The preliminary results have been prepared on the historic cost basis as modified by the revaluation of available for sale financial assets at fair value through profit or loss.

 

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" reportable segment based upon 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





Adjust-





ments



£'000 

£'000 

£'000 

£'000 

Year to 30 June 2013










Revenue to external customers

45,197

10,135 

-

55,332

Revenue to other group companies

101

   562 

(663)

-


______  

______  

______  

______

Total revenue

45,298

10,697 

(663)

55,332


______  

______  

______  

______






Operating profit

10,239

317 

194 

10,750


______  

______  

______  

______











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


______  

______  

______  

______











 

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

 

Basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Company and held as treasury shares.  There was an increase in the number of treasury shares held during the year following the purchase of 260,000 shares (rebased) by the company on 1May 2013.

 

On 19 August 2013 the company sub-divided the shares on a ten for one basis, which increased the number of ordinary shares by a factor of ten. 

 

Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.  The company does not have any dilutive potential ordinary shares; hence there is no difference between basic earnings per share and dilutive earnings per share. 

 

All share related calculations have been rebased following the sub-division of shares.

 

Earnings per share are computed as follows:

 

 

 

4.   Dividends

 

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

 

 

A final dividend of 2.00p (2012:1.46p) per share is proposed and, if approved, will be paid on 21 November 2013 to shareholders on the register on 25 October 2013.  The ex-dividend date is 23 October 2013. 

 

 

 

4.      Dividends (continued)

 

 

5.   Short term financial assets

 

Short term financial assets comprise cash held on deposits maturing between 3 and 12 months.

 

6.   Taxation

 

The effective tax rate is 17.4% (2012: 21.5%).

 

The effective tax rate has reduced due to the reduction in the headline rate from 25.5% to 23.75%, the increased R&D expenditure and the resultant tax relief available as well as the contributions to the pension scheme which are in excess of the charge through the Income statement.

 

7.   Cash generated from operations

The cash generation from operations is as follows:

 

 

 

 

8.   Intangible assets

 

 

 

9.   Property, plant and equipment

 

 

 

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 18 October 2013 and will be available on the group's website (www.fwthorpe.co.uk) from that time. The group will hold its AGM on 14 November 2013.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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