Preliminary Results

Dewhurst PLC

("Dewhurst" or the "Group")

Preliminary Results for the year ended 30 September 2012

Chairman's Statement

Results

I am delighted to be able to report record sales and profits for the Group this year. Sales were up 24% to £51.6 million (2011: £41.5 million), operating profit before goodwill and an exceptional gain from the sale of the property was up 15% to £5.6 million (2011: £4.9 million) and profit before tax was £5.4 million (2011: £4.3 million) up 26%.

This would have been a good performance in any year but in the current market conditions I believe it is excellent. The improvement was broadly based, with growth in all three product divisions. Geographically, sales improved in the UK, Europe and the Far East. The only area not really showing improvement was North America which was broadly flat. The lift and keypad markets held up in the second half, but the transport sector was more difficult.

For the year as a whole keypad sales and Thames Valley Controls (TVC) were the strongest contributors to growth. TVC sales were bolstered by the new Hall Call Destination Product and good performance on remote monitoring products.

The Group's employees have performed really well to achieve these results and I would like to thank them for their continued effort and dedication.

Property

As reported at the half year we moved our headquarters and main Hounslow factory in December 2011. The team responsible for this did an excellent job as we moved in on time according to plan. Inevitably there was some disruption during January and February as we got to grips with our new facilities, but we did our best to keep this to a minimum. I would like to thank our customers for their forbearance during this time.

The premises were formally opened by the Secretary of State for Business, Innovation and Skills in June and we were happy to welcome a number of customers and suppliers to this event.

We completed the sale of our Inverness Road premises in early March after some lengthy negotiation. This provided a significant cash boost to the Group and as a result the directors are proposing a special one off additional dividend of 5 pence per share.

Acquisitions

During the year we completed our acquisition of ERM on the basis of our agreement with the shareholders in July 2010. The US market has remained tough, but we have now recruited a new general manager to drive the business forward.

Outlook

Keypad sales were unusually high this year. It is anticipated that these sales will revert to more normal levels in the coming year.

Our concerns expressed at the half year have proved well founded as the new year has started slowly. Customer confidence in the UK has deteriorated and uncertainty has crept back in. Transport demand remains weak due to Local Authority and Central Government cutbacks. However we have some potential in new products coming on stream during the year and the potential acquisition of Dual Engraving, announced on 12 November, which may help to offset performance elsewhere.

Richard Dewhurst

Chairman

Review of Operations

Operating Highlights

We have enjoyed a good year in the majority of our geographical markets. Over the last three or four years we have found that end customers have generally held back from spending unless it is absolutely necessary. This has flowed through to reduced spending on modernisation of lifts. However, we have found that this year many customers have been unable to put off overdue investment in their lifts any longer and there has been a definite increase in modernisation work. We have certainly benefitted in many of our businesses from the renewed activity that this has created.

In what has been a busy year we have had tremendous input from all our employees and we are very grateful for their hard work and significant contribution to this year's success.

UNITED KINGDOM

Dewhurst UK Manufacturing

This was an eventful and fruitful year at Dewhurst UK, with some significant changes taking place.

As we indicated in last year's report, we decided to restructure our UK businesses. We have moved the fixture and component supply for the UK back into Dewhurst UK and this has been an almost seamless change. Dewhurst UK now has a Sales Team of three people who have worked hard to interact with the customer base and build sales of all lift products but we have especially focussed on fixtures. We have achieved a reasonable amount of success in terms of sales growth in this area. In other areas, we have benefitted from the improved lift market and demand for many of our components such as displays, pushbuttons, locks and key switches has increased.

The move from our Inverness Road site to our new facility in Feltham seems a distant memory but it was a significant milestone in the year and also in the Company's history! The move took place over the last two weeks of December 2011 and the first two weeks of January 2012. It went very smoothly and essentially to plan. There was not a single day during the move when production or invoicing was totally compromised and significantly in January we achieved above budget invoicing in the month when we had carried out the largest element of our move.

Although things went as well as expected, obviously there was some impact on production and our on time deliveries dipped in January and February of 2012. We recovered after that but achieved only 90%, so we will be working hard during the coming year to restore on time deliveries to above 95%. The business has undergone a period of about 18 months during which the move has been all consuming and we have not been able to instigate new lean programmes across our manufacturing. We are now in a position to once again focus on our processes and look to improve them across all areas.

Our design teams have also been busy and have developed a number of new products. The main focus has been on our hall lantern products where we are developing new designs for 'Blade' hall lanterns that we will be able to sell not only in the UK but also through our subsidiary companies around the world. The Jumbo pushbutton has also been redesigned to make it both easier to manufacture and to install.

Thames Valley Controls (TVC)

This has been the first year of operation for the newly reformed Thames Valley Controls. As previously reported, with Dewhurst UK Manufacturing taking over the supply of the lift fixtures and components, TVC have focussed their activities on the manufacture and supply of Lift Control Products and Lift Monitoring Systems.

TVC have had an excellent first year with strong sales and a good contribution to Group profits.

The significant development work that we carried out for our flagship product Navigator: the Ethos Hall Call Destination System, bore fruit. We delivered a number of these systems throughout the year. Some of these installations are now fully commissioned and the feedback from customers and users alike has been very positive. Further development of the Navigator product has also taken place in the year, driven by customer requirements. For example, one project that we won in Canary Wharf required us to integrate a turnstile security system into Navigator. When staff swipe their card to gain access to the lift lobby, a call is automatically registered with the lifts and the staff are directed immediately to the lift that will take them to their floor. This speeds up traffic flow and improves security.

The upturn in the modernisation market also benefitted TVC and the excellent reputation of our Ethos controller in the market led to strong sales of the product through the year. The market remains very price-competitive and we have worked hard throughout the year to drive down the cost of manufacture to enable us to stay competitive in the long term.

Demand for our monitoring products has also remained strong and we have continued to invest in our reporting system, CMS Anywhere, to ensure that it is compatible with the wide range of software platforms our customers now use.

Traffic Management Products (TMP)

Despite reduced Government spending and increased competition TMP delivered good sales growth on the previous year.

Margins however remain under significant pressure as Local Authorities continue to implement spending cuts with price becoming the key determinant in product selection.

In response to such threats TMP have commenced a lean and continuous improvement programme and are working closely with their supply chain to ensure goals are aligned and the required efficiency and cost improvement are achieved.

TMP's commitment to new product development has continued with the Apollo sign lights, due for launch in January 2013, which will be followed by further product launches before the end of next year.

Cortest

Cortest achieved a record year with significant sales growth achieved through the delivery of two large PFI schemes.

The client base has continued to expand as we increase both the number of blue chip engineering companies and local authorities with whom we do business. However, as seen with TMP, Local Authority budget cuts have impacted margins and restricted our larger opportunities to PFI schemes.

We have made changes to the operational structure during the year to improve the effectiveness of the business to cope with fluctuating demand and we will continue to assess how best to meet these requirements going forward.

EUROPE

Dewhurst Hungary

Hungary had a strong year for sales. Just over half this growth was generated due to a change in the content of a product that we supply to a key customer. A relatively expensive component in the product that was originally free issued, had to be purchased by Dewhurst Hungary. Unfortunately, it was then sold on with a relatively low handling charge. Having said that, demand for all Hungary's product was strong throughout the year and even without this change Hungary would have shown good sales growth.

Throughout the year, the team at Dewhurst Hungary have carried out a large number of relatively small Kaizen projects to continuously improve our assembly processes. These have been quite successful, leading to small but important reductions in cycle times and also helping to improve our quality levels.

Despite being under constant price pressure, we are also under pressure to continuously improve quality standards and we have been able to drive our number of rejected parts down quite considerably over the last twelve months. We have invested in a state of the art Coordinate Measuring Machine, which allows us to measure the critical dimensions of components. This ensures that we have good control of the quality of piece parts, whether they be moulded, die cast or machined.

NORTH AMERICA

Dupar Controls

Dupar had another solid year and performed in a broadly similar way to last year. The market in North America continues to be difficult, so to hold their own in this environment was a creditable achievement.

There has been significant focus throughout the year on trying to make sure that our products are as quick and simple to install as possible. We now have a large number of jobs where customers free issue us their pushbutton control printed circuit boards. We then fully wire everything up, so that when our car stations arrive on site all the lift company needs to do is to connect up to the connectors on these boards and the installation of the car station is complete. This can save many hours of installation time and is a huge cost benefit to our customers.

Dupar continue to work hard to continuously improve their processes. Good progress has been made in ensuring the minimum of programming is required to interface the drawings they produce for each job, with their laser cutter and engraving machines. With jobs moving seamlessly through these two sections we have been able to improve our efficiency and throughput at Dupar.

Elevator Research & Manufacturing (ERM)

It has been another difficult year at ERM but we are confident that the changes we have made during the year will put us in a much stronger position for the coming year.

We carried out a major audit of the business early in the year and this has led to a fairly significant reorganisation of ERM in terms of the layout of our manufacturing space and also our product offering. In terms of manufacturing, we have been able to reduce the space in which we operate and this has allowed us to vacate two of the buildings that we leased. We have moved our fixture operation into a newer, more convenient building (one we were already leasing). Moving this part of the operation enabled us to have a clean sheet with regard to layout of our processes, so we now have a much better flow of work around the manufacturing space.

At the same time we have rationalised our product range and dropped two product lines which were no longer profitable. These changes leave us with a leaner and more efficient business, which is more able to compete in the current environment.

Clive Mann who had been running ERM for the past decade retired during the year and we welcome Barnet Rogers, who has taken up the role as the new General Manager of ERM. He has already implemented a number of positive changes and we wish him every success in the future.

AUSTRALASIA & ASIA

Australian Lift Components (ALC)

ALC reported a good increase in sales on the back of a healthy Australian market that benefitted all Group Companies in the region. Demand for fixture products was very strong with a number of large modernisation projects being completed through the year.

ALC aims to be the supplier of choice for high quality installations in Australia, so it was pleasing that this year we have provided fixtures for such iconic venues as the Sydney Opera House and the Melbourne Cricket Ground.

Lift Material

Lift Material had a reasonable year, again benefitting from strong demand for lift components.

In the middle of the year we signed an agreement with Escalator Handrail Company (EHC) of Canada to distribute and install their handrails. EHC are a world leader in the escalator handrail market and have some excellent new products. We will be focussing on the supply and installation of their range of thermoplastic handrails. These have the advantage of superior resistance to delamination, drive, slippage, dust and vandalism compared with conventional handrails. These new handrails also have an extended life, so the frequency of change - out is reduced. After extensive training, Lift Material are now accredited to carry out the onsite installation (splicing) of the EHC handrails and in the last quarter of the year they carried out their first installations. We are confident that this will be a strong product line for us over the medium term.

JAS Engineering

In their first full year within the Dewhurst Group JAS had good sales and although margins improved there is still more work to be done on improving efficiency. We have carried out initial lean training and implementation of a number of ideas generated will lead to some reorganisation of the operation.

Dewhurst Hong Kong

Dewhurst Hong Kong have built on their strong performance last year with another excellent year of sales and profit growth.

After some slower years, the Hong Kong market has stabilised and there is a steady flow of major infrastructure projects which lead to good demand for our products.

David Dewhurst

Group Managing Director

Financial Review

Record results

Dewhurst returned a record year on revenue and profits with double digit sales growth across all three business sectors. Strong global sales in keypad products was aided by £3.1 million of additional pass through revenue but even without these additional sales, the keypad growth was still double digit. The lift sector's growth came from good fixture and component sales in Asia and Australasia along with solid sales in the UK and despite the UK transport sector facing a tough and challenging year, sales of bollards and non-destructive testing grew. Overall revenue increased 24.3% from £41.5 million to £51.6 million whilst operating profit before goodwill write down and the gain on the property disposal grew by 14.9% from £4.9 million to £5.6 million.

Goodwill write down

Despite strong Group results, Dewhurst plc needed to take a prudent view on three subsidiaries and write down their respective goodwill amounts. ERM, our US corporation, faced with a struggling US economy continued to make losses and so was fully written down. A new general manager has been recruited and steps have been taken to address the losses. TMP improved performance, but was still short of its original purchase valuation and so required a goodwill write down. And finally, Dewhurst UK Manufacturing Ltd, having absorbed the Switching Components pushbutton range into its operations back in 2007, has seen a conversion of customers across to the Dewhurst pushbutton range over the years. This now requires its goodwill to be written down.

Gain on disposal of Inverness Road

The sale of the Inverness Road property is detailed in the report of the directors but as the gain was material at £3.9 million it has been separately disclosed on the face of the consolidated income statement. After taking professional advice it is the company's belief that capital gains tax roll-over relief will be available and the transaction has been accounted for on that basis.

Strengthened cash position

Cash flow was once again very good with £4.9 million of cash being generated from operations despite pension contributions of £1.4 million. The Group spent £0.8 million, as planned, completing the re-development of the Hampton Business Park property prior to moving in as well as spending £0.6 million acquiring the final stake in ERM. The £4.5 million net proceeds from the sale of Inverness Road ensured the Group ended the year with cash and short-term deposits at a very respectable £11.1 million. This is aligned with the Group's philosophy of maintaining a strong cash position together with minimal borrowing.

We started and finished the year with no borrowing and last year's precautionary £2.0 million secured bank overdraft facility was cancelled.

Pension scheme deficit

This year has seen the scheme deficit increase by £2.6 million from £9.3 million to £11.9 million. Although the scheme was closed to future accrual from 1 October 2010 and the company has paid £1.4 million annually since then into the scheme this and any asset return has been more than offset by this year's change in assumptions, specifically the liability discount used. The liability discount is used to calculate the net present value of future liabilities and is traditionally based upon the 15 year AA bond yields. The yield in the past year has dropped from 5% to 4% and this one assumption change has had approximately a £6 million negative impact on the scheme position.

The Group will continue to pay a fixed sum of £1.4 million annually to reduce the defined benefit pension scheme deficit and all recommendations made by the scheme's actuary to eliminate the scheme deficit within an agreed timeframe have been fully implemented.

Treasury policy

The Group seeks to reduce or eliminate financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The policies and procedures operated are regularly reviewed and approved by the board. By varying the duration of its fixed and floating cash deposits, the Group maximises the return on interest earned.

With just over half of profit before tax earned and held in foreign currencies the Group continues to hedge internally where possible and to consider the need to use derivatives in the form of foreign exchange contracts to manage its currency risk, as reported in note 25.

Dividends

Although the pension deficit remains a concern and a liability to be funded, the directors consider that some of the cash generated by the sale of Inverness Road should be returned to shareholders. They are therefore recommending a 5p special dividend in addition to the normal dividend of 7.02p. The total dividend for 2012 of 12.02p per share, up 79.7% against last year's 6.69p, is covered 3.7 times by earnings. Total equity declined from £21.8 million to £21.6 million. Dividends are accounted for when paid or approved by shareholders, and not when proposed, therefore the proposed final dividend for 2012 has not been accrued at the balance sheet date.

There was no change in the number of allotted shares during the year.

Jared Sinclair

Finance Director

For further details please contact:

Consolidated income statement

Consolidated statement of recognised income and expense

Consolidated balance sheet

The financial statements were approved by the board of directors and authorised for issue on 3 December 2012 and were signed on its behalf by:

Richard Dewhurst Chairman

Jared Sinclair Finance Director

Company Registration Number: 160314Consolidated cash flow statement

Notes

1. AGM, results and dividends

The trading profit for the year, after taxation, amounted to £3,754k (2011: £2,892k).

A5p special dividend in addition to the normal final dividend on the Ordinary and 'A' non-voting ordinary shares of 4.68p per share (2011: 4.46p) for the financial year ended 30 September 2012 will be proposed at the Annual General Meeting (AGM) to be held on 5 February 2013. If approved, this dividend will be paid on 21 February 2013 to members on the register at 18 January 2013.

An interim dividend of 2.34p per share (2011: 2.23p) was paid on 28 August 2012.

2. Earnings per share and dividend per share

The calculation of basic and diluted earnings per share is based on the profit for the financial year of £3,753,494 and on 8,511,398 Ordinary 10p and 'A' non-voting ordinary 10p shares, being the weighted average number of shares in issue throughout the financial year.

The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,202,198 'A' non-voting ordinary 10p shares, being the latest number of shares in issue. The directors are proposing a 5p special dividend in addition to the normal final dividend of 4.68p (2011: 4.46p) per share, totalling £824k (2011: £380k). This dividend has not been accrued at the balance sheet date.

3. Basis of preparation

The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2012 or 2011. Statutory accounts for 2011, have been delivered to the Registrar of Companies. The statutory accounts for 2012 which are prepared under IFRS as adopted by the EU will be delivered to the Registrar of Companies following the company's annual general meeting.

The preliminary statement of results has been reviewed by and agreed with the Company's auditor, Chantrey Vellacott DFK LLP, who have indicated that they will be giving an unqualified opinion in their report on the statutory financial statements for 2012. The auditor has also reported on the 2011 accounts. Their report was unqualified, did not include references to any matters to which the auditor drew attention to by way of emphasis without qualifying the opinion and did not contain a statement under section 498 of the Companies Act 2006.

Dewhurst plc has prepared its consolidated and company financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) from 1 October 2005. The group and company financial statements have been prepared in accordance with those parts of the Companies Act 2006 that are applicable to companies adopting IFRS. The company is registered and incorporated in the United Kingdom; and quoted on AIM.

It is expected that the audited Report and Accounts for the year ended 30 September 2012 will be sent to shareholders and will also be available on the Company's website www.dewhurst.co.uk on 21 December 2012.