Financial highlights:
|
|
Interim 2021 (unaudited) |
Interim 2020 (unaudited) |
|
|
Revenue |
£56.4m |
£57.4m |
-1.8% |
|
Operating profit |
£7.7m |
£7.5m |
+2.2% |
|
Profit before tax |
£7.4m |
£7.4m |
-% |
|
Basic earnings per share |
5.05p |
5.04p |
+0.2% |
|
|
|||
- Interim dividend 1.49p (Interim 2020: 1.46p) – 2.1% increase
- Strong start to the year by Thorlux, supported by some large project orders
- Netherlands performance – strong recovery following fire at Lightronics back in September
- Other companies – reduced revenue at overseas sales offices
- Net cash generated from operating activities – £8.0m (Interim 2020: £6.2m)
CHAIRMAN'S INTERIM STATEMENT
Despite the challenging economic backdrop, the Group delivered a resilient performance, with revenue reducing only marginally at the half year compared with last year, and a pleasing marginal increase in profitability at an operating level.
Whilst much of the business community suffers serious ongoing uncertainty caused by the Covid pandemic, now compounded by Brexit-related operational difficulties, it is also pleasing for the Group to report a strong order performance, mainly attributed to its largest division, Thorlux Lighting, with support from TRT Lighting and Famostar. Understandably, elsewhere, orders are struggling to reach the levels of previous years, but all the main manufacturing companies achieved profitable results at the half-year point. Covid and Brexit are presenting some barriers to export sales, which are likely to resolve over time.
As reported in last autumn's Chairman's Statement, Lightronics suffered a devastating fire on 23 September 2020. Fortunately no one was hurt, but unfortunately the fire destroyed the majority of Lightronics' manufacturing facility and all of the recently completed European Application Centre, requiring the building to be completely demolished. Giving credit to the local management team, remarkably, within only a few weeks, manufacturing commenced at a rented property close by. The latest update is that the site is now cleared and ready for reconstruction of the new improved facility, insurance claims are proceeding in accordance with expectations, and production output and efficiency is recovering to near normal levels. I would like to congratulate the whole team for their tremendous professionalism, and I would also like to thank Lightronics' customers for their support during this time.
Following the Lightronics' fire, the Board has completed an independent enhanced fire risk review of all its operations, and actions are continuing to do everything possible to manage and mitigate risks of this nature.
Covid planning and employee safety remain a priority. The Group still has around 200 employees working from home, with a successful IT infrastructure helping to facilitate their excellent performance under the circumstances. For those attending work, all the Group's Covid-secure factories in the UK have installed infra-red temperature testing at entrances, and, furthermore, all employees are tested at regular intervals using fast-response lateral flow test kits. Despite the Group's rigorous planning and strict adherence to guidelines, shortly after Christmas the TRT facility in Redditch experienced significant disruption. Other sites, although not as seriously affected, are coping with ongoing daily difficulties as best they can.
Capital investment has been significantly reduced compared to prior periods; however, the Board recently approved the roll-out of solar PV installations on the roofs of other UK group companies, in addition to the recently completed and very successful Thorlux scheme, reported in the 2019 Annual Report and Accounts. The Group expects to generate at least 40% of the electricity consumed on these sites, saving both cost and carbon emissions, further underpinning the Group's sustainability credentials and wish to continually improve in this area.
This half year has been particularly difficult to manage with so many adverse head winds. I would like to congratulate the whole team for what has been achieved so far in such unusual and challenging circumstances and thank them for their support in keeping manufacturing almost entirely operational and satisfying customer demands, thus helping keep customers' infrastructure projects active.
As a result of this solid performance and strong balance sheet, the Board has approved an increased dividend of 1.49p (interim 2020: 1.46p) for the six months to 31 December 2020.
Supported by the Group's healthy order book, I foresee a steady second-half performance better than expected at the start of the pandemic.
I wish all stakeholders continued good health and I look forward to the conclusion of the vaccination programme signalling a return to business as usual. The Board certainly has an appetite to return to a trajectory of sustained and profitable growth, and to that end board members hope that the recent impacts on the economy long term will not restrict us from achieving our goals.
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2020
|
|
|
|
|
|
|
31.12.20 (six months to) |
31.12.19 (six months to) |
30.06.20 (twelve months to) |
|
|
|
|
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Revenue |
56,374 |
57,412 |
113,342 |
|
|
|
|
|
|
Operating profit |
7,653 |
7,489 |
16,332 |
|
|
|
|
|
|
Finance income |
364 |
402 |
708 |
|
Finance costs |
(650) |
(527) |
(1,097) |
|
|
|
|
|
|
Profit before tax expense |
7,367 |
7,364 |
15,943 |
|
|
|
|
|
|
Tax expense |
(1,489) |
(1,505) |
(2,629) |
|
|
|
|
|
|
Profit for the period |
5,878 |
5,859 |
13,314 |
|
|
|
|
|
|
Dividend rate per share: |
|
|
|
|
Interim |
1.49p |
1.46p |
1.46p |
|
Final |
– |
– |
4.20p |
|
Earnings per share |
– basic |
5.05p |
5.04p |
11.45p |
|
|
– diluted |
5.03p |
5.02p |
11.40p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2020
|
|
|
|
|
|
|
31.12.20 (six months to) |
31.12.19 (six months to) |
30.06.20 (twelve months to) |
|
|
|
|
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Profit for the period |
5,878 |
5,859 |
13,314 |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Items that may be reclassified to profit or loss |
|
|
|
|
Exchange rate differences on translation of foreign operations |
(30) |
(558) |
229 |
|
|
|
|
|
|
|
(30) |
(558) |
229 |
|
|
|
|
|
|
Items that will not be reclassified to profit or loss |
|
|
|
|
Revaluation of financial assets at fair value through other comprehensive income * |
403 |
168 |
(834) |
|
Actuarial loss on pension scheme |
– |
– |
(2,039) |
|
Movement on unrecognised pension surplus |
– |
– |
1,869 |
|
Taxation |
(6) |
(29) |
13 |
|
|
|
|
|
|
|
397 |
139 |
(991) |
|
|
|
|
|
|
Other comprehensive income for the year, net of tax |
367 |
(419) |
(762) |
|
|
|
|
|
|
Total comprehensive income for the year |
6,245 |
5,440 |
12,552 |
|
|
|
|
|
All comprehensive income is attributable to the owners of the company.
* The gain on the revaluation of financial assets at fair value through other comprehensive income of £403,000 is due to the increase in market value of these investments.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
|
|
As at |
As at |
As at |
|
|
31.12.20 |
31.12.19 |
30.06.20 |
|
|
|
|
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
Assets |
£'000 |
£'000 |
£'000 |
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
26,924 |
30,317 |
30,574 |
|
Intangible assets |
20,368 |
20,811 |
21,032 |
|
Investment property |
1,982 |
1,997 |
1,987 |
|
Loans and receivables |
– |
2,919 |
1,800 |
|
Equity accounted investments |
– |
936 |
– |
|
Financial assets at fair value through other comprehensive income |
4,175 |
3,838 |
3,772 |
|
Deferred tax assets |
– |
2 |
– |
|
|
53,449 |
60,820 |
59,165 |
|
Current assets |
|
|
|
|
Inventories |
20,664 |
25,121 |
25,296 |
|
Trade and other receivables |
26,457 |
21,568 |
21,256 |
|
Financial assets at amortised cost |
1,800 |
– |
625 |
|
Short-term financial assets |
25,596 |
24,542 |
18,580 |
|
Cash and cash equivalents |
39,471 |
27,438 |
44,422 |
|
Total current assets |
113,988 |
98,669 |
110,179 |
|
Total assets |
167,437 |
159,489 |
169,344 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
(33,205) |
(19,102) |
(36,185) |
|
Lease liabilities |
(238) |
(82) |
(220) |
|
Current tax liabilities |
(150) |
(274) |
(831) |
|
Total current liabilities |
(33,593) |
(19,458) |
(37,236) |
|
|
|
|
|
|
Net current assets |
80,395 |
79,211 |
72,943 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Other payables |
(73) |
(13,442) |
(67) |
|
Lease liabilities |
(464) |
(565) |
(417) |
|
Provisions for liabilities and charges |
(2,732) |
(2,375) |
(2,721) |
|
Deferred tax liabilities |
(626) |
(786) |
(601) |
|
Total non-current liabilities |
(3,895) |
(17,168) |
(3,806) |
|
Total liabilities |
(37,488) |
(36,626) |
(41,042) |
|
|
|
|
|
|
Net assets |
129,949 |
122,863 |
128,302 |
|
|
|
|
|
|
Equity attributable to owners of the company |
|
|
|
|
Issued share capital |
1,189 |
1,189 |
1,189 |
|
Share premium account |
1,799 |
1,526 |
1,526 |
|
Capital redemption reserve |
137 |
137 |
137 |
|
Foreign currency translation reserve |
2,734 |
1,977 |
2,764 |
|
Retained earnings |
|
|
|
|
At 1 July |
122,686 |
117,036 |
117,036 |
|
Profit for the year attributable to owners |
5,878 |
5,859 |
13,314 |
|
Other changes in retained earnings |
(4,474) |
(4,861) |
(7,664) |
|
|
124,090 |
118,034 |
122,686 |
|
Total equity |
129,949 |
122,863 |
128,302 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2020
|
|
Share Capital |
Share Premium |
Capital Redemption Reserve |
Foreign Currency Translation Reserve |
Retained Earnings |
Total Equity |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 30 June 2019 |
1,189 |
1,266 |
137 |
2,535 |
117,036 |
122,163 |
|
Adjustment on first time adoption of IFRS16 (net of tax) |
– |
– |
– |
– |
(265) |
(265) |
|
Restated balance at 30 June 2019 |
1,189 |
1,266 |
137 |
2,535 |
116,771 |
121,898 |
|
Comprehensive income |
|
|
|
|
|
|
|
Profit for six months to 31 December 2019 |
– |
– |
– |
– |
5,859 |
5,859 |
|
Other comprehensive income |
– |
– |
– |
(558) |
139 |
(419) |
|
Total comprehensive income |
– |
– |
– |
(558) |
5,998 |
5,440 |
|
Transactions with owners |
|
|
|
|
|
|
|
Share options exercised |
– |
260 |
– |
– |
– |
260 |
|
Dividends paid to shareholders |
– |
– |
– |
– |
(4,770) |
(4,770) |
|
Share-based payment charge |
– |
– |
– |
– |
35 |
35 |
|
Total transactions with owners |
– |
260 |
– |
– |
(4,735) |
(4,475) |
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
Profit for six months to 30 June 2020 |
– |
– |
– |
– |
7,455 |
7,455 |
|
Actuarial loss on pension scheme |
– |
– |
– |
– |
(2,039) |
(2,039) |
|
Movement on unrecognised pension surplus |
– |
– |
– |
– |
1,869 |
1,869 |
|
Revaluation of financial assets at fair value through other comprehensive income |
– |
– |
– |
– |
(1,002) |
(1,002) |
|
Movement on associated deferred tax |
– |
– |
– |
– |
110 |
110 |
|
Impact of deferred tax rate change |
– |
– |
– |
– |
(68) |
(68) |
|
Exchange rate differences on translation of foreign operations |
– |
– |
– |
787 |
– |
787 |
|
Total comprehensive income |
– |
– |
– |
787 |
6,325 |
7,112 |
|
Transactions with owners |
|
|
|
|
|
|
|
Dividends paid to shareholders |
– |
– |
– |
– |
(1,698) |
(1,698) |
|
Share-based payment charge |
– |
– |
– |
– |
25 |
25 |
|
Total transactions with owners |
– |
– |
– |
– |
(1,673) |
(1,673) |
|
Balance at 30 June 2020 |
1,189 |
1,526 |
137 |
2,764 |
122,686 |
128,302 |
|
Comprehensive income |
|
|
|
|
|
|
|
Profit for six months to 31 December 2020 |
– |
– |
– |
– |
5,878 |
5,878 |
|
Other comprehensive income |
– |
– |
– |
(30) |
397 |
367 |
|
Total comprehensive income |
– |
– |
– |
(30) |
6,275 |
6,245 |
|
Transactions with owners |
|
|
|
|
|
|
|
Share options exercised |
– |
273 |
– |
– |
– |
273 |
|
Dividends paid to shareholders |
– |
– |
– |
– |
(4,895) |
(4,895) |
|
Share-based payment charge |
– |
– |
– |
– |
24 |
24 |
|
Total transactions with owners |
– |
273 |
– |
– |
(4,871) |
(4,598) |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2020 |
1,189 |
1,799 |
137 |
2,734 |
124,090 |
129,949 |
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2020
|
|
31.12.20 (six months to) |
31.12.19 (six months to) |
30.06.20 (twelve months to) |
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
£'000 |
£'000 |
£'000 |
|
Cash generated from operations |
|
|
|
|
Profit before income tax |
7,367 |
7,364 |
15,943 |
|
Adjustments for |
|
|
|
|
– Depreciation charge |
1,746 |
1,491 |
3,221 |
|
– Depreciation of investment property |
10 |
9 |
19 |
|
– Amortisation of intangibles |
1,260 |
1,276 |
2,577 |
|
– Profit on disposal of property, plant and equipment |
(46) |
(41) |
(118) |
|
– Impairment of property, plant and equipment due to fire |
3,214 |
– |
– |
|
– Net finance expense/(income) |
286 |
125 |
389 |
|
– Retirement benefit contributions in excess of current and past service charge |
(129) |
(124) |
(170) |
|
– Share-based payment charge |
703 |
419 |
1,211 |
|
– Research and development expenditure credit |
(130) |
(149) |
(249) |
|
– Effects of exchange rate movements |
281 |
537 |
(219) |
|
Changes in working capital |
|
|
|
|
– Inventories |
4,634 |
387 |
238 |
|
– Trade and other receivables |
(5,546) |
49 |
571 |
|
– Payables and provisions |
(3,898) |
(2,178) |
(182) |
|
Cash generated from operations |
9,752 |
9,165 |
23,231 |
|
Tax paid |
(1,738) |
(2,958) |
(3,848) |
|
Cash flow from investing activities |
|
|
|
|
Purchase of property, plant and equipment |
(1,464) |
(5,521) |
(6,988) |
|
Proceeds from sale of property, plant and equipment |
86 |
83 |
212 |
|
Purchase of intangibles |
(768) |
(1,099) |
(1,719) |
|
(Purchase)/sale of financial assets at fair value through other comprehensive income |
(5) |
(61) |
(61) |
|
Proceeds from sale of other financial assets at fair value through profit and loss |
– |
387 |
387 |
|
Property rental and similar income |
26 |
6 |
92 |
|
Dividend income |
87 |
111 |
187 |
|
Net withdrawal/(deposit) of short-term financial assets |
(7,016) |
1,941 |
7,903 |
|
Interest received |
101 |
164 |
322 |
|
Net receipt of loan notes |
805 |
597 |
1,156 |
|
Net cash generated from/(used in) investing activities |
(8,148) |
(3,392) |
1,491 |
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
Net proceeds from the issuance of ordinary shares |
273 |
260 |
260 |
|
Proceeds from loans |
198 |
121 |
192 |
|
Repayment of borrowings |
– |
(1,124) |
(203) |
|
Settlement of lease liabilities |
– |
– |
(1,011) |
|
Payment of lease liabilities |
(129) |
– |
(265) |
|
Payment of lease interest |
(18) |
– |
(36) |
|
Dividends paid to company shareholders |
(4,895) |
(4,770) |
(6,468) |
|
Net cash used in financing activities |
(4,571) |
(5,513) |
(7,531) |
|
Effects of exchange rate changes on cash |
(246) |
(671) |
272 |
|
Net increase/(decrease) in cash and cash equivalents |
(4,951) |
(3,369) |
13,615 |
|
Cash and cash equivalents at the beginning of the period |
44,422 |
30,807 |
30,807 |
|
Cash and cash equivalents at the end of the period |
39,471 |
27,438 |
44,422 |