Coronavirus Update

F.W. Thorpe PLC- Interim Results for the Six Months to 31st December 2020

This content has been sourced from: https://www.investegate.co.uk/thorpe-f.w.--plc--tf...

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

 

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 

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 

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