THORPE (F.W.) PLC — Earnings Release 2014

Mar 20, 2014

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RNS Number : 7297C

Thorpe(F.W.) PLC

20 March 2014

F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2013

Key points:

	Interim 2014	Interim 2013
Revenue	£30.4m	£27.1m	12% increase
Operating profit	£5.1m	£4.7m	7%  increase
Profit before tax	£5.4m	£5.1m	7%  increase
Basic earnings per share - continuing operations	3.59p	3.31p	8%  increase

Growth in LED product sales continues - 35% of revenue

Continued investment in manufacturing facilities

Interim dividend increased to 1.05p (Interim 2013: 1.00p)

For further information please contact:                                                                            

F W Thorpe Plc
Andrew Thorpe - Chairman and Joint Chief Executive	01527 583200
Craig Muncaster - Financial Director	01527 583200
## N+1 Singer - Nominated Adviser
Richard Lindley	0113 388 4789

CHAIRMAN'S INTERIM STATEMENT

I am pleased to say that revenues for the half year ending on December 31st 2013 increased by 12% resulting in a group operating profit increase of 7%.  Investment income and other factors gave a basic earnings per share increase of 8% on continuing operations.

My last half year and full year reports explained a number of reasons why our 2012/13 year had fallen short of our expectations but I did indicate that order input had resumed to more satisfactory levels.

The general improvement has been seen in all parts of the business over the first six months of the financial year with the march of the LED light source being ever more prominent in all sectors.  I can report that the group is currently producing 35% of its revenue in LED format, up from 25% at the turn of the financial year.

Group export efforts continue with sales growth in excess of 10% compared to the equivalent six months last year. Some notable successes have been achieved by Sugg in Canada, Solite in Ireland, Thorlux with a welcome modest step-change upwards at its German operation, improvements in Australia and better vibrations coming now from the Republic of Ireland.

Notwithstanding continuing investment in the design of these sophisticated LED luminaires and systems, the list of plant investments includes installation of the previously mentioned powder coating facility at Philip Payne and the £0.5m cleanroom facility at Thorlux to produce populated LED electronic circuit boards for the group. This line augments the small line previously reported as working 24/7 at the time of the last report.

Our quest for improved sales ability also continues with further appointments at field sales level both home and abroad, and further, at business development level in the UK.

A brief comment should be made at this time in isolation about TRT Lighting, our start-up street and road tunnel lighting enterprise.  TRT, having completed design and tooling operations for its initial products, is now increasing production as orders gather pace, providing a welcome narrowing of group financial support.

In the light of the results outlined above your company will pay a dividend of 1.05p per share (Interim 2013 1.00p) for the half year to December 31st 2013, representing an increase of 5%.

Andrew Thorpe

Chairman

20 March 2014

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2013

	Six months to	Six months to	Twelve months to
Continuing Operations	31.12.13	31.12.12	30.06.13
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Revenue	30,410	27,076	55,332
Operating Profit	5,096	4,744	10,750
Finance income	317	352	903
Share of loss of joint venture	-	(19)	(80)
Profit before tax expense	5,413	5,077	11,573
Tax expense	(1,215)	(1,200)	(2,008)
Profit for the period	4,198	3,877	9,565

Dividend rate per share:
Interim	1.05p	1.00p	1.00p
Final	-	-	2.00p

Earnings per share	- basic	3.59p	3.31p	8.16p
	- diluted	3.59p	3.31p	8.16p

All share calculations have been rebased and restated following the sub-division of shares (10 for 1) which became effective on 19 August 2013.

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2013

	Six months to	Six months to	Twelve months to
	31.12.13	31.12.12	30.06.13
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit for the year	4,198	3,877	9,565
Other comprehensive income
Items that may be reclassified to profit or loss
- Arising in period	201	-	201
- Reclassified in period	-	-	-
Exchange rate movement on investment in joint venture
- Arising in period	(2)	-	(9)
- Reclassified in period	-	-	-
Taxation	-	-	(18)
	199	-	174
Items that will not be reclassified to profit or loss
Actuarial gain/(loss) on pension scheme	-	-	814
Movement on unrecognised pension surplus	-	-	(1,667)
	-	-	(853)
Other comprehensive income for the year, net of tax	199	-	(679)
Total comprehensive income for the year	4,397	3,877	8,886

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

CONSOLIDATED BALANCE SHEET

as at 31 December 2013

	As at	As at	As at
	31.12.13	31.12.12	30.06.13
	(unaudited)	(unaudited)	(audited)
Assets	£'000	£'000	£'000
Non-Current Assets
Property, plant and equipment	12,495	11,909	12,380
Intangible assets	6,550	6,177	6,686
Investment property	2,102	2,083	2,102
Loans and receivables	1,278	1,728	1,728
Investment in joint venture	20	92	22
Available for sale financial assets	2,917	1,967	2,458
Deferred tax assets	-	-	32
	25,362	23,956	25,408
Current assets
Inventories	12,307	10,146	11,942
Trade and other receivables	11,037	9,778	12,099
Other financial assets at fair value through profit or loss	388	387	388
Short term financial assets - deposits	20,265	17,205	20,148
Cash and cash equivalents	14,443	15,477	13,240
Total current assets	58,440	52,993	57,817
Total Assets	83,802	76,949	83,225
Liabilities
Current liabilities
Trade and other payables	(7,164)	(5,938)	(9,099)
Current tax liabilities	(991)	(1,073)	(540)
Total current liabilities	(8,155)	(7,011)	(9,639)
Net current assets	50,285	45,982	48,178
Non-current liabilities
Retirement benefit deficit	-	-	-
Provisions for liabilities and charges	(102)	(102)	(102)
Deferred tax liabilities	(948)	(858)	(944)
Total liabilities	(9,205)	(7,971)	(10,685)
Net assets	74,597	68,978	72,540
Equity attributable to owners of the company
Issued share capital	1,189	1,189	1,189
Share premium account	656	656	656
Capital redemption reserve	137	137	137
Retained earnings	72,615	66,996	70,558
Total equity	74,597	68,978	72,540

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2013

	Share	Share	Capital	Retained	Total
	Capital	Premium	Redemption	Earnings	Equity
			Reserve
	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2012	1,189	656	137	64,831	66,813
Comprehensive income
Profit for six months to 31 December 2012	-	-	-	3,877	3,877
Revaluation of available for sale assets	-	-	-	-	-
Total comprehensive income	-	-	-	3,877	3,877
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,712)	(1,712)
Total transactions with owners	-	-	-	(1,712)	(1,712)
Balance at 31 December 2012	1,189	656	137	66,996	68,978
Comprehensive income
Profit for six months to 30 June 2013	-	-	-	5,688	5,688
Actuarial loss on pension scheme	-	-	-	814	814
Movement on unrecognised pension surplus	-	-	-	(1,667)	(1,667)
Revaluation of available-for-sale financial 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	-	-	-	5,009	5,009
Transactions with owners
Dividends paid to shareholders	-	-	-	(1,172)	(1,172)
Purchase of shares	-	-	-	(275)	(275)
Total transactions with owners	-	-	-	(1,447)	(1,447)
Balance at 30 June 2013	1,189	656	137	70,558	72,540
Comprehensive income
Profit for six months to 31 December 2013	-	-	-	4,397	4,397
Total comprehensive income	-	-	-	4,397	4,397
Transactions with owners
Dividends paid to shareholders	-	-	-	(2,340)	(2,340)
Total transactions with owners	-	-	-	(2,340)	(2,340)
Balance at 31 December 2013	1,189	656	137	72,615	74,597

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2013

	Six months to	Six months to	Twelve months to
	31.12.13	31.12.12	30.06.13
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash generated from operations
Profit before income tax	5,413	5,077	11,573
Adjustments for
- Depreciation charge	600	613	1,182
- Amortisation of intangibles	660	512	1,082
- Profit on disposal of property, plant and  equipment	(28)	(37)	(63)
- Finance income - net	(317)	(352)	(903)
- Retirement benefit contributions in excess of current and past service charge	(170)	(329)	(863)
- Share of loss from joint venture	2	19	80
Changes in working capital
- Inventories	(287)	998	(798)
- Trade and other receivables	1,068	1,140	(1,189)
- Trade and other payables	(1,779)	(988)	1,745
Discontinued operations	-	-	-
Cash generated from operations	5,162	6,653	11,846
Tax paid	(784)	(1,433)	(2,737)
Cash flow from investing activities
Purchase of property, plant and equipment	(822)	(1,362)	(2,281)
Proceeds of sale of property, plant and equipment	46	50	93
Purchase of intangibles - development costs and software	(540)	(707)	(1,771)
Purchase of subsidiary net of cash acquired	-	(383)	(383)
Purchase of investment property	-	(3)	(21)
Purchase of available for sale financial assets	(201)	(125)	(416)
Property rental and similar income	133	107	188
Dividend income	63	71	130
Net purchase of deposits	(117)	(96)	(3,040)
Interest received	153	197	571
Repayment of loans and receivables	450	100	100
Net cash outflow from investing activities	(835)	(2,151)	(6,830)
Cash flow from financing activities
Dividends paid to company shareholders	(2,340)	(1,712)	(2,884)
Purchase of own shares	-	-	(275)
Net cash outflow from financing activities	(2,340)	(1,712)	(3,159)
Net increase/(decrease) in cash and cash equivalents	1,203	1,357	(880)
Cash and cash equivalents at the beginning of the period	13,240	14,120	14,120
Increase/(decrease) in cash and cash equivalents	1,203	1,357	(880)
Cash and cash equivalents at the end of the period	14,443	15,477	13,240

Notes to the Interim Financial Statements

1.   Basis of Preparation

The consolidated interim financial statements for the six months to 31 December 2013 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board and the AIM Rules for Companies. 

The figures for the period to 31 December 2013 and the comparative period to 31 December 2012 have not been audited or reviewed and are therefore disclosed as unaudited.  The figures for 30 June 2013 have been extracted from the financial statements for the year to 30 June 2013, 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 2013 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 F W Thorpe is organised into seven 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 six remaining operating segments have been aggregated into the 'other companies' segment based on their size and comprise Compact Lighting, Philip Payne, Sugg Lighting, Solite Europe, Portland Lighting and TRT 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 the 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	Continuing
			Adjust-	Operations
			ments
	£'000	£'000	£'000	£'000
6 months to 31 December 2013
Revenue to external customers	24,637	5,773	-	30,410
Revenue to other group companies	296	451	(747)	-
Total revenue	24,933	6,224	(747)	30,410
Operating Profit	4,846	153	97	5,096
Net finance income				317
Share of loss in joint venture				-
Profit before tax expense				5,413
6 months to 31 December 2012
Revenue to external customers	22,259	4,817	-	27,076
Revenue to other group companies	46	275	(321)	-
Total revenue	22,305	5,092	(321)	27,076
Operating Profit	4,526	121	97	4,744
Net finance income				352
Share of loss in joint venture				(19)
Profit before tax expense				5,077
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
Net finance income				903
Share of loss in joint venture				(80)
Profit before tax expense				11,573

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

The earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 116,975,590 (Interim 2013: 117,235,590) during the period.  The company does not have any dilutive potential ordinary shares; hence there is no difference between basic and diluted earnings per share.

All share calculations have been rebased and restated following the sub-division of shares (10 for 1) which became effective on 19 August 2013.

4.  Dividend

The interim dividend is at the rate of 1.05p per share (Interim 2013: 1.00p), and based on 116,975,590 shares in issue at the announcement date the dividend will amount to £1,228,000 (Interim 2013: £1,172,000).  The interim dividend will be paid on Tuesday 6 May 2014 to shareholders on the register at the close of business on 11 April 2014 and the shares become ex-dividend on 9 April 2014.

A final dividend for the year ended 30 June 2013 of 2.00p (2012: final of 1.46p) per share, amounting to £2,340,000 (2012: £1,712,000) was paid on 21 November 2013.

5.  Availability of interim statement

Copies of this 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 4 April 2014.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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