TIDMTFW
RNS Number : 6868A
Thorpe(F.W.) PLC
01 October 2020
Results
for the year ended 30 June 2020
FW Thorpe Plc - a group of companies that de sign, manufacture
and supply professional lighting systems - is pleased to announce
its preliminary results for the year ended 30 June 2020.
Key points:
Continuing operations 2020 2019
--------------------------------- --------- --------- -------------
Revenue GBP113.3m GBP110.6m 2.4% increase
Operating profit (before profit GBP16.3m GBP17.6m 7.5% decrease
on disposal of property)
Profit before tax (before profit GBP15.9m GBP17.7m 9.7% decrease
on disposal of property)
Profit before tax GBP15.9m GBP19.6m 18.5%
decrease
17.7%
Basic earnings per share 11.45p 13.91p decrease
--------------------------------- --------- --------- -------------
-- Total interim and final dividend of 5.66p (2019: 5.53p) - an increase of 2.4%
-- Revenue surpassed last year's high - supported by SmartScan sales, Famostar and Services
-- Results dampened by impact of COVID-19 in last quarter of the
financial year and the lower margins for Services
-- Net cash generated from operating activities remained strong - GBP19.4m (2019: GBP21.6m)
-- Solid recovery at the start of 2020/21, operating performance
in line with the start of 2019/20
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information please contact:
FW Thorpe Plc
Mike Allcock - Chairman, Joint Chief Executive 01527 583200
Craig Muncaster - Joint Chief Executive, Group
Financial Director 01527 583200
N+1 Singer - Nominated Adviser
Steve Pearce /James Moat 020 7496 3000
Chairman's Statement
Despite seriously challenging times for all of us, your Company
remains very profitable and in a good, robust condition. The word
"unprecedented" has been used prolifically during 2020, and again
in the last few days the resilience of the business has been
demonstrated, with Lightronics experiencing a fire at its facility
in the Netherlands; I provide more details on this towards the end
of my statement.
Until the March lockdown, whilst there were the usual Group ups
and downs, most companies were in a strong position, especially at
the main division, Thorlux Lighting, where orders were at record
numbers and good levels of profit were being achieved. During each
of the worst months - in March, April and May - the Group still
returned an operating profit. Inevitably, however, profit in those
months was much reduced, dampening the year-end result, which,
until the COVID pandemic, the Board had expected to be an
improvement on the previous year's.
All factories within the Group presently operate with full
capacity available, using COVID-secure methods. No factory staff
have been on furlough since early June. Over 100 office staff are
still working successfully from home, with excellent IT logistics
providing the capabilities to work near normally in most cases.
The Annual Report and Accounts contains a more detailed overview
of the COVID situation and how it is being dealt with across the
Group, together with a closer appraisal of the performance of each
Group company.
Group results
Year-end revenue was higher than the previous year's,
culminating in an overall increase of 2.4%, at GBP113.3m. Most of
the growth was attributed to Thorlux Lighting, with some of that
revenue resulting from larger projects including survey,
installation and project management activities. Group cumulative
operating profit had been ahead of last year's until lockdown
occurred. During April and May in particular, lockdown resulted in
significantly reduced revenue for the UK companies, wiping out the
cumulative profit gain and losing positive momentum; revenue for
this period was down on the previous year's by 27%. Final operating
profit for the year was down by 7.5% (before disposal of property
last year), at GBP16.3m - a creditable result, all things
considered.
There were notable performances across the Group: at Thorlux,
TRT Lighting and Famostar. Thorlux experienced excellent order
levels throughout the year, especially for larger special projects
in the rail and healthcare sectors, resulting in order income of
GBP75m, up 4%, and an improved return on sales until the last
quarter. TRT improved profitability again, albeit dampened by the
restrictions in April and May, whilst Famostar managed an increase
even in its final operating profit (before acquisition
adjustments), of +41%, to EUR2.8m. In addition, throughout late
spring and early summer, the Group's Dutch companies did a
tremendous job of safely operating their factories at near-normal
levels and experienced only slightly reduced customer demand.
I am proud that both Thorlux and Philip Payne manufactured
lights for the Birmingham Nightingale Hospital and continued to
supply other healthcare projects throughout the critical
period.
Through prudent management of the business over many successful
years, FW Thorpe has a strong balance sheet with significant
reserves, and at the start of the COVID crisis Group companies were
showing good levels of orders. The Board decided not to apply for
any government support for furloughed employees during lockdown;
this impacted operating costs by GBP0.6m, as the Group paid all
employees normal salary whilst they were not working. This decision
was duly considered and leaves the Group free of debt to external
supporters, protects its reputation, and gives management ongoing
freedom to make choices for the good of the business and its
shareholders.
The Group's robust balance sheet and continued strong operating
cash flow performance allow the Board to recommend a final dividend
of 4.2p per share (2019: 4.1p) for the year to 30 June 2020, which
gives a total of 5.66p (2019: 5.53p) and an increase of 2.4%.
Outlook
Remarkably, the 2020/21 financial year has started reasonably
well overall for the Group, all things considered, with orders and
revenue similar to levels at the start of last year. However, some
of the Group's smaller companies are suffering a reduction in
orders - most notably Portland Lighting, which primarily serves the
retail and hospitality sectors.
Recent investments in new machinery, new factories and in
(temporarily suspended) customer experience centres are now
completed, putting the Group in good shape. No significant
investment is planned in the first months of this new financial
year, beyond the usual requirements for keeping products and
technology up to date with market expectations.
Such an extreme situation has reminded the Board that FW Thorpe
is intentionally managed cautiously to serve many market sectors,
both in the type of products manufactured and geographically. This
wide focus reduces the Group's exposure to changes in political
situation and in technology, and during this year has given some
degree of resilience in response to the pandemic.
It seems inevitable, however, that there will be a global
recession, and that the UK, against a backdrop of Brexit
uncertainly and the intense lockdown enforced by the Government,
could be affected worse than many countries.
Whilst the Group's present order book is healthy and daily
orders are good, this is partly attributable to an amount of
pre-COVID work carried forward and to pent-up demand in the market.
Due to significantly reduced new-project sales visits and activity
during lockdown, reduced usage of the Group's extensive Application
and Experience Centres, and the general state of the economy, it is
difficult to predict anything other than a downturn in orders at
the end of the 2020 calendar year.
All Group companies are being closely managed and performance is
being monitored. Where markets have been severely affected, the
Board will focus its attention on finding new markets in more
buoyant areas; however, transitioning businesses into these new
areas takes time. There are a number of larger-scale project
opportunities for Group companies to target, but these inevitably
come with tighter margins and higher operating costs.
All Group companies have benefited from the market adoption of
LED technology over the last decade. Sales of LED luminaires were
relatively easy to achieve, primarily on the basis of significant
energy savings and increased reliability. Projects that can benefit
from LED technology remain firm targets, such as where projects are
still lit with luminaires using fluorescent lamps. For example,
recent healthcare projects that Thorlux delivered were funded by
paybacks that the customer achieved with LED technology.
Opportunities to replace non-LED lamps are, however, fewer now.
Early LED installations are now eight to ten years old, so the
replacement market will soon become a target again.
Group companies need to offer features beyond energy saving and
reliability alone. Options include improving the quality of the
white light from LED luminaires, reducing glare, and improving the
ecological impacts of our product designs.
Thorlux will continue to invest in controls technology, to offer
lighting units with intelligence and connectivity that can link
into other areas of building control and information technology.
Thorlux continues to successfully evolve the SmartScan system,
which now controls and monitors devices beyond purely lighting
technology. (You can read more about this in a specific feature
later in the Annual Report and Accounts.) Such controls technology
will give Group companies an advantage over competitors offering
cheap low-quality luminaires. SmartScan is now in use in several
other Group companies, which, like Thorlux, are finding the market
very receptive to the latest wireless technology.
Longer term, it is widely believed that UK and EU governments
will invest to stimulate the economy. FW Thorpe is well positioned
to be able to benefit from this as and when it occurs.
The Group remains acquisitive and continues to carefully
investigate complementary businesses; however, opportunities have
taken a back seat whilst the Board focuses on day-to-day operations
and waits for more stability in the Group's markets in Europe and
further afield.
Personnel
I would like to thank my whole team for their continued support
and diligence through such challenging times. The Board is
especially grateful to employees who so positively turned up to the
Group's factories to work right through this unprecedented
situation, and to those who kept motivated and committed whilst
working from home, often from their dining-room tables and with
added family distractions. Everyone's flexibility and
conscientiousness throughout this period has kept the Group's
customers satisfied, with on-time deliveries and services, whilst
the companies' professionalism in managing risk has kept everyone
in the Group safe.
Lightronics
As the Board puts the finishing touches to this year's Annual
Report and Accounts, I unfortunately have to report that
Lightronics experienced a fire on 23 September at its facility in
the Netherlands.
Fortunately, no one was injured; however, damage to the assembly
area and the European Application Centre is significant. The
combination of the fire brigade's actions and the fire protection
invested in during the recent refurbishment was able to prevent the
fire from spreading to the warehouse and offices. The Board would
like to express its thanks to the local fire brigade for their
efforts to limit the spread of the fire.
With the support of the Group, Lightronics is working to restore
operations to full capacity and has secured a temporary site.
Whilst short-term disruption is inevitable, some servicing of
customer requirements commenced within 24 hours of the fire. The
limited impact on Lightronics' inventories, its ability to source
further supplies, as well as the rapid response in which
Lightronics is resuming operations and servicing customer needs,
should, together with insurance cover for any unavoidable financial
loss, result in no significant impact on the Lightronics business
this year.
The Board wishes the team in the Netherlands well and thanks
them for their efforts to limit the effects of the fire during
these challenging times.
Annual General Meeting 2020
Unfortunately, due to the current restrictions put in place by
the UK Government with regard to public gatherings, the Group is
unable to hold its annual general meeting in the same way as in
previous years. The Board will, of course, endeavour to give
shareholders the opportunity to ask questions in other ways; please
see the Notice of Meeting for further details. I look forward to
welcoming you all back next year.
Best wishes to all the Group's shareholders, stakeholders and
employees during this difficult period.
Mike Allcock
Chairman and Joint Chief Executive
30 September 2020
Consolidated Results
Consolidated Income Statement
For the year ended 30 June 2020
2020 2019
Notes GBP'000 GBP'000
--------------------------------------------- ----- -------- --------
Continuing operations
Revenue 2 113,342 110,643
Cost of sales (63,351) (60,264)
--------------------------------------------- ----- -------- --------
Gross profit 49,991 50,379
--------------------------------------------- ----- -------- --------
Distribution costs (13,434) (13,182)
Administrative expenses (20,489) (19,840)
Other operating income 264 292
--------------------------------------------- ----- -------- --------
Operating profit (before profit on disposal) 16,332 17,649
Profit on disposal of property - 1,917
--------------------------------------------- ----- -------- --------
Operating profit 2 16,332 19,566
Finance income 708 1,049
Finance expense (1,097) (1,046)
--------------------------------------------- ----- -------- --------
Profit before income tax 15,943 19,569
Income tax expense 3 (2,629) (3,429)
--------------------------------------------- ----- -------- --------
Profit for the year 13,314 16,140
--------------------------------------------- ----- -------- --------
Earnings per share from continuing operations attributable to
the equity holders of the Company during the year (expressed in
pence per share)
2020 2019
Basic and diluted earnings per share Notes pence pence
------------------------------------- ----- ------ ------
- Basic 8 11.45 13.91
- Diluted 8 11.40 13.83
------------------------------------- ----- ------ ------
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2020
2020 2019
Notes GBP'000 GBP'000
----------------------------------------------------- ------ -------- --------
Profit for the year: 13,314 16,140
------------------------------------------------------------- -------- --------
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations 229 153
------------------------------------------------------------- -------- --------
229 153
Items that will not be reclassified to profit
or loss
Revaluation of financial assets at fair value
through other comprehensive income (834) (142)
Actuarial loss on pension scheme (2,039) (374)
Movement on unrecognised pension scheme surplus 1,869 191
Taxation 13 24
------------------------------------------------------------- -------- --------
(991) (301)
Other comprehensive expense for the year, net
of tax (762) (148)
------------------------------------------------------------- -------- --------
Total comprehensive income for the year attributable
to equity shareholders 12,552 15,992
------------------------------------------------------------- -------- --------
Consolidated Statement of Financial Position
As at 30 June 2020
Group
--------------------------------------- ----- ------------------
2020 2019
Notes GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 5 30,574 25,353
Intangible assets 6 21,032 21,687
Investment property 1,987 2,006
Financial assets at amortised cost 1,800 3,567
Equity accounted investments and
joint arrangements - 936
Financial assets at fair value through
other comprehensive income 3,772 3,683
--------------------------------------- ----- -------- --------
Total non-current assets 59,165 57,232
Current assets
Inventories 25,296 25,506
Trade and other receivables 21,256 21,502
Financial assets at amortised cost 625 -
Other financial assets at fair value
through profit or loss - 387
Short-term financial assets 7 18,580 26,483
Cash and cash equivalents 44,422 30,807
--------------------------------------- ----- -------- --------
Total current assets 110,179 104,685
--------------------------------------- ----- -------- --------
Total assets 169,344 161,917
--------------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables (36,185) (21,912)
Lease liabilities (220) -
Current income tax liabilities (831) (1,935)
--------------------------------------- ----- -------- --------
Total current liabilities (37,236) (23,847)
--------------------------------------- ----- -------- --------
Net current assets 72,943 80,838
--------------------------------------- ----- -------- --------
Non-current liabilities
Other payables (67) (12,804)
Lease liabilities (417) -
Provisions for liabilities and charges (2,721) (2,404)
Deferred income tax liabilities (601) (699)
--------------------------------------- ----- -------- --------
Total non-current liabilities (3,806) (15,907)
--------------------------------------- ----- -------- --------
Total liabilities (41,042) (39,754)
--------------------------------------- ----- -------- --------
Net assets 128,302 122,163
--------------------------------------- ----- -------- --------
Equity
Share capital 1,189 1,189
Share premium account 1,526 1,266
Capital redemption reserve 137 137
Foreign currency translation reserve 2,764 2,535
Retained earnings
--------------------------------------- ----- -------- --------
At 1 July 117,036 107,527
Profit for the year attributable
to the owners 13,314 16,140
Other changes in retained earnings (7,664) (6,631)
--------------------------------------- ----- -------- --------
122,686 117,036
--------------------------------------- ----- -------- --------
Total equity 128,302 122,163
--------------------------------------- ----- -------- --------
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Foreign
Share Capital currency
Share premium redemption translation Retained Total
capital account reserve reserve earnings equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 1 July 2018 1,189 1,017 137 2,382 107,527 112,252
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Comprehensive income
Profit for the year to
30 June 2019 - - - - 16,140 16,140
Actuarial loss on pension
scheme - - - - (374) (374)
Movement on unrecognised
pension scheme surplus - - - - 191 191
Revaluation of financial
assets at fair value through
other comprehensive income - - - - (142) (142)
Movement on associated
deferred tax - - - - 24 24
Exchange differences on
translation of foreign
operations - - - 153 - 153
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total comprehensive income - - - 153 15,839 15,992
Transactions with owners
Shares issued from exercised
options - 249 - - - 249
Purchase of own shares - - - - (117) (117)
Dividends paid to shareholders 4 - - - - (6,299) (6,299)
Share based payment charge - - - - 86 86
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total transactions with
owners - 249 - - (6,330) (6,081)
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 30 June 2019 1,189 1,266 137 2,535 117,036 122,163
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Adjustments on first time
adoption of IFRS16 (net
of tax) * - - - - (265) (265)
Restated balance at 1
July 2019 1,189 1,266 137 2,535 116,771 121,898
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Comprehensive income
Profit for the year to
30 June 2020 - - - - 13,314 13,314
Actuarial loss on pension
scheme - - - - (2,039) (2,039)
Movement on unrecognised
pension scheme surplus - - - - 1,869 1,869
Revaluation of financial
assets at fair value through
other comprehensive income - - - - (834) (834)
Movement on associated
deferred tax - - - - 81 81
Impact of deferred tax
rate change - - - - (68) (68)
Exchange differences on
translation of foreign
operations - - - 229 - 229
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total comprehensive income - - - 229 12,323 12,552
Transactions with owners
Shares issued from exercised
options - 260 - - - 260
Dividends paid to shareholders 4 - - - - (6,468) (6,468)
Share based payment charge - - - - 60 60
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Total transactions with
owners - 260 - - (6,408) (6,148)
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Balance at 30 June 2020 1,189 1,526 137 2,764 122,686 128,302
------------------------------- ----- -------- -------- ----------- ------------ --------- --------
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Group
------------------------------------------- ----- ------------------
2020 2019
Notes GBP'000 GBP'000
------------------------------------------- ----- -------- --------
Cash flows from operating activities
Cash generated from operations 9 23,231 25,038
Tax paid (3,848) (3,476)
------------------------------------------- ----- -------- --------
Net cash generated from operating
activities 19,383 21,562
------------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and
equipment (6,988) (6,852)
Proceeds from sale of property, plant
and equipment 212 3,796
Purchase of intangibles (1,719) (2,417)
Disposal of investment property - 12
Purchase of available for sale investments (61) -
Net sale of financial assets at fair
value through
other comprehensive income - 70
Proceeds from sale of other financial
assets at fair value through Profit
and Loss account 387 -
Property rental and similar income 92 205
Dividend income 187 225
Net withdrawal/(deposit) of short-term
financial assets 7,903 (11,193)
Interest received 322 403
Net receipt/(issue) of loan notes 1,156 2,575
------------------------------------------- ----- -------- --------
Net cash received from/(used) in
investing activities 1,491 (13,176)
------------------------------------------- ----- -------- --------
Cash flows from financing activities
Net proceeds from the issuance of
ordinary shares 260 249
Purchase of own shares - (117)
Proceeds from loans 192 -
Repayment of borrowings (203) (197)
Settlement of lease liabilities (1,011) -
Payment of lease liabilities (265) -
Payment of lease interest (36) -
Dividends paid to Company's shareholders 4 (6,468) (6,299)
------------------------------------------- ----- -------- --------
Net cash used in financing activities (7,531) (6,364)
------------------------------------------- ----- -------- --------
Effects of exchange rate changes
on cash 272 117
------------------------------------------- ----- -------- --------
Net increase in cash in the year 13,615 2,139
Cash and cash equivalents at beginning
of year 30,807 28,668
------------------------------------------- ----- -------- --------
Cash and cash equivalents at end
of year 44,422 30,807
------------------------------------------- ----- -------- --------
Notes
1 Basis of preparation
The consolidated and company financial statements of FW Thorpe
Plc have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union and in
accordance with the Companies Act 2006. The financial statements
have been prepared on a going concern basis, under the historical
cost convention except for the financial instruments measured at
fair value either through other comprehensive income or profit and
loss per the provisions of IFRS9. The accounting policies are the
same as used in the Annual Report and Accounts 2020, which is to be
published on the Group's website.
The Group adopted for the first time IFRS 16 "Leases" for the
year ended 30 June 2020. There are no other standards that are not
yet effective that are expected to have a material impact on the
entity in the current or future reporting periods and on
foreseeable future transactions.
The consolidated financial statements are presented in Pounds
Sterling, which is the Company's functional and presentation
currency, rounded to the nearest thousand.
The directors confirm they are satisfied that the Group and
Company have adequate resources, with GBP44.4m cash and GBP18.6m
short term deposits, to continue in business for the foreseeable
future factoring in the expected impact of COVID-19. They have also
produced an analysis that demonstrates that the Group could cover
its cash commitments even if there were zero sales over the
following year from approving these accounts. For this reason, they
continue to adopt the going concern basis in preparing the
accounts.
The financial information set out in this document does not
constitute the statutory financial statements of the Group for the
year end 30 June 2020 but is derived from the Annual Report and
Accounts 2020. The auditors have reported on the annual financial
statements and issued an unqualified opinion.
2 Segmental Analysis
(a) Business segments
The segmental analysis is presented on the same basis as that
used for internal reporting purposes. For internal reporting FW
Thorpe is organised into ten operating segments based on the
products and customer base in the lighting market - the largest
business is Thorlux, which manufactures professional lighting
systems for industrial, commercial and controls markets. The
businesses in the Netherlands, Lightronics and Famostar, are
material subsidiaries and disclosed separately as Netherlands
companies.
The seven remaining operating segments have been aggregated into
the "other companies" reportable segment based upon their size,
comprising the entities Philip Payne Limited, Solite Europe
Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux
Lighting L.L.C., Thorlux Australasia Pty Limited, Thorlux Lighting
GmbH.
FW 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.
Inter- Total
Netherlands Other segment continuing
Thorlux companies companies adjustments operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2020
Revenue to external customers 65,615 31,340 16,387 - 113,342
Revenue to other group companies 3,164 234 4,021 (7,419) -
---------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 68,779 31,574 20,408 (7,419) 113,342
---------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 10,150 4,125 1,412 645 16,332
---------------------------------- -------- ----------- ---------- ------------ -----------
Net finance expense (389)
---------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 15,943
---------------------------------- -------- ----------- ---------- ------------ -----------
Year to 30 June 2019 (restated)
Revenue to external customers 62,304 31,059 17,280 - 110,643
Revenue to other group companies 3,551 372 3,567 (7,490) -
---------------------------------- -------- ----------- ---------- ------------ -----------
Total revenue 65,855 31,431 20,847 (7,490) 110,643
---------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit (before disposal
of property) 11,578 3,620 2,398 53 17,649
Profit on disposal of property 1,917
---------------------------------- -------- ----------- ---------- ------------ -----------
Operating profit 11,578 3,620 2,398 53 19,566
---------------------------------- -------- ----------- ---------- ------------ -----------
Net finance income 3
---------------------------------- -------- ----------- ---------- ------------ -----------
Profit before income tax 19,569
---------------------------------- -------- ----------- ---------- ------------ -----------
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 elimination of profit on transfer of assets
between Group companies. The prior year segmental reporting has
been restated to provide comparatives of the Netherlands companies
together.
(b) Geographical analysis
The Group's business segments operate in four main areas, the
UK, the Netherlands, the rest of Europe and the rest of the World.
The home country of the company, which is also the main operating
company, is the UK.
2020 2019
GBP'000 GBP'000
------------------ -------- --------
UK 69,657 68,706
Netherlands 28,748 28,227
Rest of Europe 12,265 11,185
Rest of the World 2,672 2,525
------------------ -------- --------
113,342 110,643
------------------ -------- --------
3 Income Tax Expense
Analysis of income tax expense in the year:
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- ---------
Current tax
Current tax on profits for the year 3,691 3,963
Adjustments in respect of prior years (981) (609)
-------------------------------------------------- -------- ---------
Total current tax 2,710 3,354
-------------------------------------------------- -------- ---------
Deferred tax
Origination and reversal of temporary differences (81) 75
-------------------------------------------------- -------- ---------
Total deferred tax (81) 75
-------------------------------------------------- -------- ---------
Income tax expense 2,629 3,429
-------------------------------------------------- -------- ---------
The tax assessed for the year is lower (2019: lower) than the
standard rate of corporation tax in the UK of 19.00% (2019:
19.00%). The differences are explained below:
2020 2019
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Profit before income tax 15,943 19,569
--------------------------------------------------------- -------- --------
Profit on ordinary activities multiplied by the standard
rate in the UK of 19.00% (2019: 19.00%) 3,029 3,718
Effects of:
Expenses not deductible for tax purposes 854 881
Accelerated tax allowances and other timing differences 17 55
Adjustments in respect of prior years (981) (609)
Chargeable gains relief on disposal of property - (352)
Patent box relief (643) (597)
Foreign profit taxed at higher rate 353 333
--------------------------------------------------------- -------- --------
Tax charge 2,629 3,429
--------------------------------------------------------- -------- --------
The effective tax rate was 16.49% (2019: 17.52%). Adjustments in
respect of prior years relates to refunds received for prudent
assumptions on additional investment allowances and patent box
relief in the tax calculations.
The UK corporation tax rate of 19% (effective 1 April 2020) was
substantively enacted on 17 March 2020, reversing the previously
enacted reduction in the rate from 19% to 17%.
4 Dividends
Dividends paid during the year are outlined in the tables
below:
Dividends paid (pence per share) 2020 2019
--------------------------------- ---- ----
Final dividend 4.10 4.00
Interim dividend 1.46 1.43
--------------------------------- ---- ----
Total 5.56 5.43
--------------------------------- ---- ----
A final dividend in respect of the year ended 30 June 2020 of
4.20p per share, amounting to GBP4,886,000 (2019: GBP4,763,000) is
to be proposed at the Annual General Meeting on 19 November 2020
and, if approved, will be paid on 26 November 2020 to shareholders
on the register on 30 October 2020. The ex-dividend date is 29
October 2020. These financial statements do not reflect this
dividend payable.
Dividends proposed (pence per share) 2020 2019
------------------------------------- ---- ----
Final dividend 4.20 4.10
------------------------------------- ---- ----
2020 2019
Dividends paid GBP'000 GBP'000
----------------- -------- --------
Final dividend 4,770 4,639
Interim dividend 1,698 1,660
----------------- -------- --------
Total 6,468 6,299
----------------- -------- --------
2020 2019
Dividends proposed GBP'000 GBP'000
------------------- -------- --------
Final dividend 4,886 4,763
------------------- -------- --------
5 Property, Plant and Equipment
Group
------------------------- ------------------------------------------
Freehold Right-
land and Plant and of-use
buildings equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- -------- --------
Cost
At 1 July 2019 19,720 23,851 - 43,571
Adoption of IFRS16 - - 2,266 2,266
------------------------- ---------- ---------- -------- --------
At 1 July (restated) 19,720 23,851 2,266 45,837
Additions 3,709 4,016 192 7,917
Disposals (31) (1,005) (1,628) (2,664)
Transfers (17) 17 - -
Currency translation 171 54 26 251
------------------------- ---------- ---------- -------- --------
At 30 June 2020 23,552 26,933 856 51,341
------------------------- ---------- ---------- -------- --------
Accumulated depreciation
At 1 July 2019 3,712 14,506 - 18,218
Adoption of IFRS16 - - 908 908
------------------------- ---------- ---------- -------- --------
At 1 July (restated) 3,712 14,506 908 19,126
Charge for the year 662 2,331 228 3,221
Disposals (31) (911) (699) (1,641)
Transfers (2) 2 - -
Currency translation 21 27 13 61
------------------------- ---------- ---------- -------- --------
At 30 June 2020 4,362 15,955 450 20,767
------------------------- ---------- ---------- -------- --------
Net book amount
------------------------- ---------- ---------- -------- --------
At 30 June 2020 19,190 10,978 406 30,574
------------------------- ---------- ---------- -------- --------
Group
------------------------- --------------------------------
Freehold
land and Plant and
buildings equipment Total
GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- --------
Cost
At 1 July 2018 18,676 21,328 40,004
Additions 3,176 3,616 6,792
Disposals (2,199) (1,116) (3,315)
Currency translation 67 23 90
------------------------- ---------- ---------- --------
At 30 June 2019 19,720 23,851 43,571
------------------------- ---------- ---------- --------
Accumulated depreciation
At 1 July 2018 3,829 13,496 17,325
Charge for the year 546 1,962 2,508
Disposals (673) (962) (1,635)
Currency translation 10 10 20
------------------------- ---------- ---------- --------
At 30 June 2019 3,712 14,506 18,218
------------------------- ---------- ---------- --------
Net book amount
------------------------- ---------- ---------- --------
At 30 June 2019 16,008 9,345 25,353
------------------------- ---------- ---------- --------
6 Intangible Assets
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2019 14,921 7,292 2,956 1,304 2,202 150 182 29,007
Additions - 1,322 - - 397 - - 1,719
Write-offs and
transfers - (1,275) - - (26) - - (1,301)
Currency translation 195 18 44 19 - - - 276
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2020 15,116 7,357 3,000 1,323 2,573 150 182 29,701
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated amortisation
At 1 July 2019 246 3,441 1,504 801 1,178 150 - 7,320
Charge for the
year - 1,715 371 162 329 - - 2,577
Write-offs and
transfers - (1,275) - - (26) - - (1,301)
Currency translation 2 21 33 17 - - - 73
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2020 248 3,902 1,908 980 1,481 150 - 8,669
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2020 14,868 3,455 1,092 343 1,092 - 182 21,032
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Write-offs relate to development assets where no further
economic benefits will be obtained.
Development Brand Fishing
Goodwill costs Technology name Software Patents rights Total
Group 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Cost
At 1 July 2018 14,786 6,779 2,924 1,291 1,789 150 182 27,901
Additions - 1,791 - - 592 - - 2,383
Write-offs and
transfers - (1,293) - - (178) - - (1,471)
Currency translation 135 15 32 13 (1) - - 194
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2019 14,921 7,292 2,956 1,304 2,202 150 182 29,007
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Accumulated amortisation
At 1 July 2018 249 3,062 1,117 599 1,128 150 - 6,305
Charge for the
year - 1,662 372 193 229 - - 2,456
Write-offs and
transfers - (1,293) - - (178) - - (1,471)
Currency translation (3) 10 15 9 (1) - - 30
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2019 246 3,441 1,504 801 1,178 150 - 7,320
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
Net book amount
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
At 30 June 2019 14,675 3,851 1,452 503 1,024 - 182 21,687
------------------------- -------- ----------- ---------- -------- -------- -------- -------- --------
7 Short-term Financial Assets
2020 2019
Group and Company GBP'000 GBP'000
---------------------------- -------- --------
Beginning of year 26,483 15,290
Net (withdrawals)/ deposits (7,903) 11,193
---------------------------- -------- --------
18,580 26,483
---------------------------- -------- --------
The short-term financial assets consist of term cash deposits in
sterling with an original term in excess of three months.
8 Earnings Per Share
Basic and diluted earnings per share for profit attributable to
equity holders of the Company
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year,
excluding ordinary shares purchased by the Company and held as
treasury shares.
Basic 2020 2019
----------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue 116,272,709 116,060,378
----------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the Company
(GBP'000) 13,314 16,140
----------------------------------------------------- ----------- -----------
Basic earnings per share (pence per share) total 11.45 13.91
----------------------------------------------------- ----------- -----------
Diluted 2020 2019
----------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in issue
(diluted) 116,805,366 116,689,595
----------------------------------------------------- ----------- -----------
Profit attributable to equity holders of the Company
(GBP'000) 13,314 16,140
----------------------------------------------------- ----------- -----------
Diluted earnings per share (pence per share) total 11.40 13.83
----------------------------------------------------- ----------- -----------
9 Cash Generated from Operations
Group
------------------------------------------------------ ------------------
2020 2019
Cash generated from continuing operations GBP'000 GBP'000
------------------------------------------------------ -------- --------
Profit before income tax 15,943 19,569
Depreciation charge 3,221 2,508
Depreciation of investment property 19 58
Amortisation of intangibles 2,577 2,456
Profit on disposal of property, plant and equipment (118) (2,116)
Net finance expense/(income) 389 (3)
Retirement benefit contributions in excess of current
and past service charge (170) (183)
Share based payment charge 1,211 855
Research and development expenditure credit (249) (292)
Effects of exchange rate movements (219) (48)
Changes in working capital
- Inventories 238 (4,025)
- Trade and other receivables 571 2,428
- Payables and provisions (182) 3,831
------------------------------------------------------ -------- --------
Total cash generated from operations 23,231 25,038
------------------------------------------------------ -------- --------
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
12 October 2020 and will be available, along with this
announcement, on the Group's website (www.fwthorpe.co.uk) from 5
October 2020. The Group will hold its AGM on 19 November 2020.
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END
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