Last checked at 23 Sep 2008 10:44
FW Thorpe Plc
Preliminary Results
for the year ended 30 June 2008
FW Thorpe Plc, designer and manufacturer of professional lighting equipment for the specification market, is pleased to announce its preliminary results for the year ended 30 June 2008.
Highlights:
* Turnover £51.8m (2007: £45.7m) 13% increase
* Export sales £9.0m (2007: £7.3m) 23% increase
* Operating profit of £10.5m (2007: £8.4m) 26% increase
* Profit before tax of £11.7m (2007: £9.2m) 28% increase
* Basic earnings per share 73.3p (2007: 58.8p) 25% increase
* Strong operating cash flow £11.9m (2007: £7.1m) 68% increase
* Total interim and final dividend 16.00p (2007: 13.25p) 21% increase
For further information please contact:
| F W Thorpe plc |
|
| Andrew Thorpe - Chairman | 01527 583200 |
| Peter Mason - Joint Chief Executive and Finance Director | 01527 583200
|
| Brewin Dolphin Limited - Nominated Adviser |
|
| Andrew Kitchingman Sean Wyndham-Quin | 0845 270 8613 0845 270 9518 |
CHAIRMAN'S STATEMENT
Revenue for the financial year ending 30th June 2008 was a milestone £51.8M, this being 13% above that for the year to 30th June 2007. The operating profit was also a milestone at £10.5M, 26% above last year's equivalent figure of £8.4M. A 51% higher finance income achieved through higher cash reserves including short term deposits, and increased interest rates has given a resulting profit before taxation of £11.7M, up 28% from last year.
Business throughout the year has been reasonably buoyant for all group companies save for Compact Lighting Ltd which, as mentioned at the half year, has been suffering from the reduced activity of some of its retail sales customers. The group's performance has, however, been pleasing and despite the dark cloud of sub prime mortgages having been passing overhead, your group seems to have drawn sun and energy from that famous "crack in the clouds".
Energy, or at least the saving of it, is a very important ideal embedded in the company product portfolio and this augers well for us in these times of generally increasing energy costs. Even Sugg Lighting, small as it is, has developed a new battery powered ignition system to save gas by replacing the unreliable clockwork switching systems on Royal Palace gas lanterns.
Export continues to improve with the two main group exporters, Thorlux, and Mackwell Electronics, having increased export turnover by 15% and 29% respectively in the year.
Investment during the year has been modest with no major spends, however two significant investments are imminent. The first of these two investments will be a small group owned facility for Sugg Lighting Ltd which is currently in rented premises with a lease due to expire next year. The second investment currently in process is the purchase of some 200 acres of land suitable for tree planting. This second investment, your Directors believe will offer a significant carbon offset "green" marketing opportunity for the group, details of which will become apparent at a later date.
Succession planning has also been a major point of discussion during the year and it was with great pleasure that in May 2008 we welcomed Mr Tony Cooper, Mr Nick Brangwin, and Mr David Taylor to the Board. Tony is Manufacturing Director of Thorlux Lighting, Nick is Sales Director of Mackwell Electronics, and David is Managing Director of Philip Payne Ltd. We wish them every success in their expanded new roles.
Group results detailed at the beginning of the report allows your Board to recommend a dividend of 12.1p per share (2007: 10.0p) which together with the interim dividend already paid makes a total dividend per share of 16.0p (2007: 13.25p) - for interim and final dividend. This is an increase of 21% on the total dividend for the year to 30th June 2007.
Thorlux Lighting
Thorlux Lighting, the group's largest company producing professional lighting solutions to the commercial and industrial lighting markets produced a further record turnover and operating profit up 16% and 30% respectively.
Home sales and export sales advanced by 16% and 15% respectively. Home sales have no doubt benefited from the introduction at the end of the last financial year of the Scanlight AT innovative LED "interrogate from anywhere" emergency lighting system, and from a new "European" style range of suspended, individual or continuously mounted fluorescent luminaires. Both new ranges have progressed well during their first year making significant contributions.
On the export side the German office in Munich has maintained its three personnel and one can say the road to recognition of Thorlux Lighting in Germany still continues. Thorlux did not meet its own KPI here but nevertheless sales increased by 13% over last year. Republic of Ireland sales increased by 33%, enough to persuade the company to double its staff on the territory by the employment of a further Sales Engineer. The advance in 'another European country' as mentioned in last years report has still not happened although further discussions have recently been taking place to try and further this aim.
The year has, sadly, seen the retirement of Sales Director Mr Norman Hobbs. Norman who was originally apprenticed to the old TI Group, spent time as a Sales Engineer with Simplex Lighting Ltd before joining Thorlux in 1976. Serving in a number of roles at Thorlux, Norman became Sales Director in 1991. The Board would, therefore, like to take this opportunity to express its thanks and gratitude to Norman for his sterling performance and friendship, and to wish him a very happy retirement. It is with great pleasure that we now, also, would like to welcome Mr Ged Ryan to the company as Thorlux Sales Director and it is felt sure that Ged, who has numbers of years of lighting sales management experience behind him, will successfully take up the cudgels.
Mackwell
Group emergency lighting control gear and systems manufacturer, Mackwell Electronics Ltd also turned in record performances for the year in question raising turnover by 19% and profit by 30% in comparison with the last financial year. Mackwell is now stretching its current premises at the seams, however some artful re-working of space and equipment use have allowed this further growth. Consideration needs to be given in the coming year to address the company's requirements to enable forward growth. The market for its traditional emergency lighting control gear is holding up well especially on the export front although the swing to LED emergency systems is gaining pace on the home market. Mackwell has placed itself well to cater for this change with LED based products and systems being some 13.4% of turnover this year compared to 5.6% of turnover in the last corresponding period. Mackwell has also proved itself to be the "greenest" company in the group by being the first group member to gain ISO 14001 International Standards Organisation accreditation for "Environmental Management Systems".
Compact Lighting
Compact, regrettably, did not make record sales or profits in this financial year and being in the business of lighting retail space it has suffered from a pull-back in refurbishment activity by a number of its customers. Whilst retail is a fair sized market, it is one in which many players can suffer ills at the same time and so it has been decided that action should be taken to broaden Compact's market coverage to include "display" by introducing more highly tooled products to their range. This would reflect more the range of high design content and tooled products elsewhere in the group.
It was reported last year of the imminent departure of Compact Lighting's Managing Director, David Lippold, in October 2007 and we expressed our thanks for his work at Compact. We must now thank Mr Barrie Compton for stepping into David's shoes at short notice whilst we appraise the position. Barrie, who is near retirement age, has prior directorial experience and has been proving himself as an exceptionally capable safe pair of hands.
Philip Payne
Philip Payne Ltd, being the group's specialist exit sign maker, has enjoyed a more stable year than last being now well embedded into its new premises. Both turnover and operating profit were record figures up 15% and 10%, respectively, creditable results based mainly on traditional business, and despite the increased overheads of its new premises and the increase in salesmen from one to two last year. A new range of highly tooled exit signs looks to be in line for branding by a larger peer of Payne's outside the group, as well as it being offered in the company's own product range. This business would be incremental to Payne's normal business but of course higher volumes to one customer means lower margins. To give a flavour of some of the company's specialist work, Payne's have, this year, supplied exit equipment to the Royal Albert Hall, BMA House (Charles Dickens's home), The British Museum, Gleneagles Hotel, and Wimbledon.
Sugg Lighting
Sugg Lighting Ltd, our now not so troubled maker of heritage lighting, has been operating profitably throughout the year on a management accounts basis, based on the inclusion of only the amount of space actually used by the company within their currently over-sized premises. The lease has previously been impaired, and therefore no cost will impact the income statement up until the expiry of the lease in Spring 2009. Efforts are currently afoot to relocate Sugg into a group owned premises of suitable size. This year has seen more success for Sugg than just returning to profitability in the gaining of a royal warrant "By Appointment to Her Majesty the Queen, Heritage Lighting Manufacturer and Refurbishment Specialist." Examples of Sugg expertise can be seen in the lanterns at the entrances to the newly refurbished St Pancras Station.
People
No redundancies this year, I am pleased to say and our work force has been kept fully busy. Time passes quickly when one is busy and it hardly seems a moment since I thanked our work force last year. It is that time again, however, so may I personally, thank all those in F W Thorpe Plc for their continued efforts and diligence throughout this successful financial year. Let us hope that in these uncertain times our expertise can keep us all busy during the next one.
Future
Our market is a mixed market in which we target the private sector, the public sector, home and export. There are pluses and minuses against each sector currently and so it is difficult to predict the coming year. Large torpedoes such as Northern Rock, Lehman Brothers, Bear Stearns, Fanny Mae, and Freddie Mac seem to keep hitting the world economic scene, however due to our market spread it is unlikely that all our target market sectors would suffer at the same time. To gain continued and increasing business from these target market sectors we must continue to try and sell our wares better in a wider market profile and continue to bring in new good lighting products to access areas of the market not yet fully addressed by our current portfolio of products.
A B Thorpe - Chairman
23 September, 2008
CONSOLIDATED RESULTS (UNAUDITED)
Consolidated income statement for the year ended 30 June 2008
| Note | 2008 | 2007 | |
| £'000 | £'000 | ||
| Revenue | 51,780 | 45,694 | |
| Cost of sales | (29,247) | (26,567) | |
| Gross profit | 22,533 | 19,127 | |
| Distribution costs | (3,644) | (3,006) | |
| Administrative expenses | (8,382) | (7,760) | |
| Operating profit | 10,507 | 8,361 | |
| Finance income | 1,213 | 804 | |
| Finance costs | - | - | |
| Net finance income | 1,213 | 804 | |
| Profit before income tax | 11,720 | 9,165 | |
| Income tax expense | 6 | (2,989) | (2,170) |
| Profit for the year | 8,731 | 6,995 |
Earnings per share for profit attributable to the equity holders of the company during the year (expressed in pence per share).
| 2008 | 2007 | ||
| Note | Pence | Pence | |
| Basic and diluted |
| ||
| - Basic | 2 | 73.3 | 58.8 |
| - Diluted | 2 | 73.2 | 58.7 |
CONSOLIDATED RESULTS (UNAUDITED)
Consolidated statement of recognised income and expense for the year ended 30 June 2008
| Note | 2008 | 2007 | |
| £'000 | £'000 | ||
| Profit for the year: | 8,731 | 6,995 | |
| Actuarial gain/(loss) on pension scheme | (1,624) | 446 | |
| Movement on associated deferred tax liability relating to the Pension Scheme | 455 | (134) | |
| Revaluation of available for sale assets | (55) | 48 | |
| Impact of change in UK tax rate of deferred tax | - | (68) | |
| Net income recognised directly in equity | (1,224) | 292 | |
| Total recognised gains and losses relating to the year | 7,507 | 7,287 |
CONSOLIDATED RESULTS (UNAUDITED)
Consolidated balance sheet as at 30 June 2008
| Group | |||
| Notes | 2008 | 2007 | |
| £'000 | £'000 | ||
| Assets | |||
| Non-current assets | |||
| Intangible assets | 2,285 | 2,060 | |
| Investment property | 184 | 184 | |
| Property, plant & equipment | 9,612 | 10,017 | |
| Available for sale financial assets | 115 | 103 | |
| Deferred income tax assets | 276 | - | |
| Retirement benefit surplus | - | 881 | |
| 12,472 | 13,245 | ||
| Current assets | |||
| Inventories | 8,646 | 8,491 | |
| Trade and other receivables | 10,559 | 9,499 | |
| Other financial assets at fair value through profit or loss | 377 | 359 | |
| Short term financial assets - deposits | 13,332 | 8,865 | |
| Cash and cash equivalents | 6,710 | 3,716 | |
| 39,624 | 30,930 | ||
| Total assets | 52,096 | 44,175 | |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | (7,483) | (6,370) | |
| Current income tax liabilities | (1,916) | (825) | |
| (9,399) | (7,195) | ||
| Net current assets | 30,225 | (23,735) | |
| Non-current liabilities | |||
| Retirement benefit deficit | (281) | - | |
| Provisions for liabilities and charges | (111) | (242) | |
| Deferred income tax liabilities | (640) | (943) | |
| Total liabilities | (10,431) | (8,380) | |
| Net assets | 41,665 | 35,795 | |
| Capital and reserves attributable to equity holders of the company | |||
| Called up share capital | 7 | 1,191 | 1,190 |
| Share premium account | 7 | 624 | 607 |
| Capital redemption reserve | 7 | 135 | 135 |
| Retained earnings | 7 | 39,715 | 33,863 |
| Total equity | 41,665 | 35,795 | |
CONSOLIDATED RESULTS (UNAUDITED)
Consolidated cash flow statements for the year ended 30 June 2008
| Group | |||
| Note | 2008 | 2007 | |
| £'000 | £'000 | ||
| Cash flows from operating activities | |||
| Cash generated from operations | 11,924 | 7,099 | |
| Interest paid | - | - | |
| Income tax paid | (2,022) | (2,075) | |
| Net cash generated from operating activities | 9,902 | 5,024 | |
| Purchases of property, plant and equipment | (726) | (1,252) | |
| Purchase of intangibles - development costs | (931) | (862) | |
| Purchase of available for sale financial assets | (67) | - | |
| Property rental and similar income | 55 | 61 | |
| Net purchase of deposits | (4,467) | (3,189) | |
| Interest received | 865 | 624 | |
| Net cash outflow from investing activities | (5,271) | (4,618) | |
| Proceeds from the issuance of ordinary shares | 18 | 23 | |
| Proceeds from borrowings | - | - | |
| Dividends paid to company's shareholders | 3 | (1,655) | (2,885) |
| Net cash outflow from financing activities | (1,637) | (2,862) | |
| Net increase in cash and cash equivalents in the year | 2,994 | (2,456) | |
| Cash and cash equivalents at beginning of year | 3,716 | 6,172 | |
| Cash and cash equivalents at end of year | 6,710 | 3,716 | |
Notes
1. Basis of preparation
F W Thorpe Plc's preliminary results for the year ended 30 June 2008 have been approved by the board of Directors on 23 September 2008 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 2008 or 30 June 2007.
The accounts for the year ended 30 June 2007 have been delivered to the Registrar, and the auditors' report was unqualified and did not contain a statement section 287(2) or (3) of the Companies Act 1985.
The preliminary results for the year to 30 June 2008 have been prepared in accordance with the accounting policies set out in the interim statement, taking into account the requirements and options set out in IFRS 1 "First time adoption of International Financial Reporting Standards. The Group has not sought to adopt the IAS 1 transitional guidance on business combinations and cumulative translational differences retrospectively. The transition date for the Group's application of IFRS is 1 July 2006 and comparative figures for 30 June 2007 have been restated to reflect IFRS. Reconciliations of the income statement and balance sheet from those previously reported under UK GAAP to the restated IFRS figures were given in the Interim Report for 2008.
The preliminary results have been prepared on the historic cost basis as modified by the
revaluation of certain land and buildings and available for sale financial assets and financial liability (including derivative financial instruments) at fair value through profit or loss.
2. 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.
Diluted earnings per share are calculated by adjusting the weighted average of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares being share options. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
Earnings per share are computed as follows:
| 2008 | 2007 | |
| Weighted average number of ordinary shares | 11,908,970 | 11,892,834 |
| Basic earnings per share (pence) | 73.3 | 58.8 |
| Adjusted weighted average number of ordinary shares | 11,932,840 | 11,926,194 |
| Diluted earnings per share (pence) | 73.2 | 58.7 |
3. Dividends
Dividends paid during the year are outlined in the table below: A final dividend of 12.1p (2007: final of 10p) per share is proposed and, if approved, will be paid on 20 November 2008.
| 2008 | 2007 | |
| Dividends paid (per share) | ||
| Final dividend 2007 | 10.00p | 9.00p |
| Special dividend 2007 | - | 12.00p |
| Interim dividend 2008 | 3.90p | 3.25p |
| Total | 13.90p | 24.25p |
| Dividends proposed (per share) | ||
| Final dividend 2008 | 12.10p | 10.00p |
| 2008 | 2007 | |
| £'000 | £'000 | |
| Dividends paid | ||
| Final dividend 2007 | 1,190 | 1,069 |
| Special dividend 2008 | - | 1,425 |
| Interim dividend 2008 | 465 | 391 |
| Total | 1,655 | 2,885 |
| Dividends proposed | ||
| Final dividend (2007: final dividend) | 1,442 | 1,190 |
The special dividend paid in 2007, was an additional dividend over and above the normal year end dividend, as the directors considered that the cash reserves were more than sufficient for the business after considering the possible requirements for organic and non organic growth.
4. Pension Scheme
A lump sum contribution of £nil (2007: £2,000,000) was made to the pension scheme during the year. This payment was in addition to the contributions recommended by the scheme actuary.
5. Short term financial assets
Short term financial assets comprise cash held on deposits maturing between 3 and 6 months.
6. Taxation
The effective tax rate is 25.6% (2007: 23.6%) due to taxable deductions, primarily in relation to capital allowances, research and development costs, smaller companies tax rate and the reduction in the standard rate of taxation resulting in reduced deferred taxation liabilities.
7. Movement in equity
The movement on share capital and reserves during the year is as follows:
| Share capital at 1 July 2007 | 1,190 |
| Shares issued | 1 |
| Share capital at 30 June 2008 | 1,191 |
| Share | Capital | ||
| Premium | Redemption | Retained | |
| Account | Reserve | Earnings | |
| £'000 | £'000 | £'000 | |
| At 1 July 2007 | 607 | 135 | 33,863 |
| Shares issued | 17 | - | - |
| Net actuarial loss on pension scheme | (1,169) | ||
| Profit for the year | 8,731 | ||
| Revaluation of available for sale assets | (55) | ||
| Dividends paid | (1,655) | ||
| At 30 June 2008 | 624 | 135 | 39,715 |
8. 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.
Dates:
AGM: 13 November 2008
Dividend payment date: 20 November 2008
Ex-dividend date: 15 October 2008
Record date: 17 October 2008