Thorpe Regulatory News (TFW)

20 Sep 2005 09:31

Thorpe(F.W.) PLC20 September 2005 FW Thorpe plc The following unaudited consolidated results for the year ended 30 June 2005were announced today: Abridged financial information Chairman's Statement In the financial year to 30th June 2005 your company produced a turnover of£41.6M an increase of 12% on last year's turnover of £37.2M with a resultingoperating profit before exceptional items of £5.8M being a 16% increase on theprevious year's £5.0M. After accounting for exceptional costs of impairment atSugg Lighting, the operating profit for the Group was £5.4M, an increase of 8%over the previous year. Investment income rose by 29% arising from theinvestment of cash generated from operations during the year and resulted in aprofit before tax of £5.8M, up 9% on last year. The pattern of trading through the year varied unexpectedly from previous years,probably due to the economic effects of the UK national election. Thesevariations were marked but differently felt by different group member companies.Some group members experienced a noticeable drop in orders and activity over theelection period whilst others did not or only sustained mild effects. The effectappeared to be in proportion to project size with smaller jobs being more easilysuspended over the election period than larger projects, which are carriedforward by their own inertia. These effects have probably led to some loss ofbusiness during the year. Generally, however, as can be seen and understood fromthe group performance figures, overall trading has remained encouraging for theyear as a whole. This year there have been no single large investments in plant, buildings,equipment or systems, but your company has continued to invest substantialamounts of money back into the business in a myriad of smaller projectsinvolving both manufacturing plant and IT systems. One of the larger projectshas been to strengthen group IT infrastructure which, with the increase inbusiness levels in recent years, had been left lacking in both capacity andspeed of operation. We now enjoy the benefits of the improved IT capabilitywhich in itself will allow us to develop and upgrade our operational systemsoftware. The company has, as usual derived the majority of its business from within theUK but this result should not cloud the determination expressed last year toincrease the proportion of business obtained from overseas mature marketsespecially within the EU. Group exports this year were 14% of total turnover anincrease of 17% on the last financial year. At the halfway stage I made some comment in regard to mixed performance withinthe group and whilst in hindsight some of that performance may well have beendue to the effects of the election period, reviews prompted in certain areas ofour business have, in themselves, been very useful, for example, in bringingThorlux back to the high level of productivity previously enjoyed but which hadbeen reducing due to the pressure of rapid output growth in very recent years.These reviews also helped in re-focusing product direction at MackwellElectronics and crystallising a new forward plan for Sugg Lighting. The above results have prompted your board to recommend a final dividend of 7.5pwhich taken with the, already paid interim dividend, makes a total for the yearof 10p being a 16% increase compared to last year. Review of Divisions Thorlux Lighting.Thorlux, the group's manufacturer of commercial, flood and industrial lightingproducts and systems has again enjoyed buoyant trading throughout the year and,with a "close eye" on operations, Thorlux has returned a turnover up 16% on 2004resulting in an operating profit up 26% over that period. Few new products wereintroduced during this financial year but a high proportion of sales emanatedfrom those new products added within the very recent years. Product design,however continued apace so that 2005/6 will see further exciting new productsadded to the Thorlux portfolio. On the "heaviest end" the Thorlux tunnelluminaire range and its associated remote control systems have enjoyed furthersuccess with new tunnel lighting projects having been gained within the UK. On the export front, whilst Thorlux sales to traditional export markets via atraditional agency network have been maintaining in value, the proportion oftotal turnover has continued to decline. The wish to carve out a substantialmarket under the trade name Thorlux in the sophisticated EU area remains, andthe Company's spearhead Munich based operation in Germany has enjoyed anencouraging year giving the confidence to double the staff to two. The rootfoundations, as mentioned last year, have been laid and the current mission isto find quality customers who are willing to try products from the "new kid onthe block". On the same theme Thorlux will also be reverting again to companyemployed staff to cover the Republic of Ireland. Mackwell ElectronicsMackwell, the group's manufacturer of electronic emergency lighting control gearand systems undertook a product review during the year and subsequently withdrewfrom one area of business that showed little future profit potential and onethat would require substantial investment but which could well fall prey to highvolume competition from the Far East. These actions caused a loss of turnoverand some profit but I am pleased to report that virtually all of the vacatedcapacity has been taken up reducing lead times and improving service to existingcustomers and for the manufacture of a new emergency lighting system. Despitethese events Mackwell's turnover ended the year up 7% with a profit up 6% overlast year. Compact LightingCompact Lighting, supplier of display lighting to the retail trade enjoyed abusy year with mixed success, producing a turnover up 15% on last year but witha 26% reduction in profit level. Certain well known High Street names onCompact's client list delayed refurbishment programs due to uncertainty in theretail market and although new customers were gained some of the new businessproved more difficult than expected. Philip PaynePhilip Payne, the Group's manufacturer of quality specialist and bespoke exitsignage has enjoyed a mixed trading year with a patch of poor business over theelection period, although it is difficult to understand why this occurred in thecase of Philip Payne. Opportunity was taken, however, during that time tore-appraise the Company structure and instigate changes to enable future growth.This appraisal resulted in strengthening of human resources from fourteen toseventeen people and Payne is now well set to resume growth well beyond currentlevels. The result of this unusual pattern of trading and the reappraisal leftPhilip Payne some 6% down on turnover and 24% down on profit. Profit to salesratio was still perfectly respectable and I am pleased to report that at,this time, trading at Payne's is back to, if not in excess of previous levels. Sugg LightingSugg Lighting, manufacturer and refurbisher of heritage lighting, suffered asevere down turn in business for some five months over the election period whichcaused an unfortunate return to losses after a period of five months ofprofitability. Sales order input has now returned to that of last years levelsbut the increase in sales required to put Sugg on a firm footing is stillelusive. Your board is currently considering a number of options. PeopleIt has been said that a business runs on its people. Well a short number ofyears ago the company found it very difficult to recruit people at all. Over thelast year or so, a fresh wind has been blowing from the direction of CentralEurope bringing with it many of our current work force. It is rewarding to findpeople who want to work and accept our offer of jobs. To these new arrivals andto our more long standing employees may I, again, offer our thanks for theirloyalty and diligence over the last year. The FutureThe cautionary tune mentioned in earshot last year did not bring great tides ofwoe, however, some of the words of the song still hang in the air and thoseinvolving house prices, retail sales, pressures on government budgets seem togive more concern now than twelve months ago. I must say again, therefore, thatyour company will continue to drive forward, continue to try and please itscustomers with service and products and we must still trust that our marketswill stay fair. Andrew ThorpeChairman 20 September 2005 Group Profit and Loss Account 2005 2004 £'000 £'000Turnover - continuing operations 41,572 37,258 Operating profit - before exceptional items 5,822 5,020Exceptional items (422) - Operating profit - continuing operations 5,400 5,020 Interest receivable and similar income 440 342 Profit on ordinary activities before taxation 5,840 5,362Taxation on profit on ordinary activities (1,479) (1,479) Profit on ordinary activities after taxation 4,361 3,883 Dividends (1,187) (1,014) Retained profit for the year 3,174 2,869Earnings per ordinary share- ordinary 36.9p 33.1p- diluted 36.5p 32.5p Dividends per share 10.0p 8.6p Group Balance Sheet As at As at 30.06.05 30.06.04 £'000 £'000Fixed assetsTangible assets 9,335 9,343Investments 258 281 9,593 9,264Current assetsStocks 7,267 6,599Debtors 10,622 8,355Investments 70 70Cash at bank and in hand 8,414 7,554 26,373 22,578 Creditors: amounts falling due within one year (7,256) (7,053) Net current assets 19,117 15,525 Total assets less current liabilities 28,710 25,149 Provisions for liabilities and chargesDeferred taxation (711) (403) Net assets 27,999 24,746 Capital and reservesCalled up share capital 1,184 1,177Capital Redemption Reserve 135 135Share premium account 545 473Profit and loss account 26,135 22,961 Equity shareholders' funds 27,999 24,746 Group Cash Flow Statement 2005 2004 £'000 £'000Net cash inflow from operating activities 4,239 4,379 Returns on investments and servicing of financeInterest and dividends received 440 342 TaxationUK corporation tax paid (1,758) (1,230) Capital expenditure and financial investmentPurchase of tangible fixed assets (1,170) (1,958)Sale of tangible fixed assets 56 66Sale/(Purchase) of fixed asset investments 28 (37)Net cash outflow for capital expenditure and financialinvestments (1,086) (1,929) Equity dividends paid (1,054) (811)Cash inflow before financing 781 751FinancingIssue of shares 79 68Repayment of hire purchase and finance leases - (7)Cash inflow from financing 79 61Increase in cash in the period 860 812 Notes:1. Reconciliation of operating profit to net cash inflow from operatingactivities 2005 2004 £'000 £'000 Operating profit 5,400 5,020Depreciation 1,148 1,168Profit on sale of fixed assets and fixed asset investments (31) (18)(Increase) in stocks (668) (403)(Increase) in debtors (2,267) (2,052)Increase in creditors 657 664Net cash inflow from operating activities 4,239 4,3792. Reconciliation of movement in net funds 1 July 2004 Cashflow 30 June 2005 £'000 £'000 £'000 Cash at bank and in hand 7,554 860 8,414Liquid resources 70 - 70Net Funds 7,624 860 8,484 3. Ordinary earnings per share is calculated by dividing the net profitattributable to shareholders of £4,361,000 (2004: £3,883,000) by the weightedaverage number of ordinary shares in issue during the year of 11,825,715 (2004:11,743,094).For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive potential ordinaryshares. The weighted average number of ordinary shares is calculated at11,943,559 (2004: 11,943,559). 4. Under present regulation, the Company is required to adopt InternationalFinancial Reporting Standards for the financial year ending 30 June 2006. Apreliminary review has shown that the major impact of the first-time adoption ofthe new accounting standards will arise from the introduction of IAS 19 relatingto pension costs. The current effects of adoption of FRS 17 relating to pensioncosts are disclosed in the notes to the Annual Report and Accounts of the Group. Dates: AGM: 10-Nov-2005 Dividend payment date 17-Nov-2005 Ex-dividend date 28-Sep-2005 Record date 30-Sep-2005 The above financial information does not constitute statutory accounts withinthe meaning of Section 240(5) of the Companies Act 1985. The statutory accountshave not been delivered to the Registrar of Companies but will be delivered indue course. The unaudited preliminary information included herein has been prepared on thebasis of the accounting policies as set out in the annual financial statementsfor the year ended 30 June 2004. The Auditors have given an unqualifed report onthose statutory accounts. ENQUIRIES to the Chairman: Andrew Thorpe, F W Thorpe Plc, Redditch.Tel: 01527 583200 This information is provided by RNS The company news service from the London Stock Exchange