Thorpe(F.W.) PLC -Interim Results

Key points:

 

Interim

2019

Interim

2018

 

Revenue

£52.7m 

£53.2m 

1.0% decrease

Operating profit (before profit on disposal of property)

£7.0m 

£7.8m 

10.3%  decrease

Profit before tax

£8.8m 

£7.9m 

11.4%  increase

Basic earnings per share

6.14p

5.43p

13.1%  increase

 

·      Group results were affected by a slow start to the year by Thorlux, with operating profit in line with management's guidance in the November AGM trading statement

·      Thorlux's order income is now back to 2018 levels after record orders for the last few months

·      The majority of other Group companies' results are similar to those at the Interim 2018 - with improved results at Lightronics and TRT, but disappointing results for some international sales offices

·      Results include Famostar, acquired in December 2017, which was not included in the Interim 2018 figures

·      Profit before tax includes profit on disposal of £1.9m following the sale of the Thorlux Portsmouth property

·      Interim dividend 1.43p (Interim 2018: 1.40p)

CHAIRMAN'S INTERIM STATEMENT

 

As indicated in the 2018 annual report statement and AGM update, the Group is finding it difficult to match the results of last year due to challenging trading conditions at the start of the year. Comparing interim 2019 and 2018 figures, Group revenue for the period is lower by 1.0% with operating profit lower by 10.3% before the profit on disposal. Revenue and operating profit are supplemented by the inclusion of Famostar, adding £3.6m in revenue and £0.4m in operating profit, which was not part of the interim 2018 Group results.

 

The Group's overall UK revenue is down by £4.0m at the half-year point, mainly due to the performance of Thorlux. Revenue from the Group's international sales offices is also down, by £1.5m. These reductions are mostly offset by revenue from overseas acquisitions, i.e. Lightronics and the inclusion of Famostar, albeit with a lower operating profit margin. There was also an improvement at TRT, the Group's street lighting business.

 

I am pleased to report that revenue generated from overseas operations now represents 41% of the total, providing risk mitigation in case of further turbulent economic and political times in the UK. The management team meet regularly to discuss and plan for the potential impacts arising from Brexit. We wait anxiously for matters to be resolved and business confidence to return to more normal levels.

 

As mentioned in the autumn AGM statement, despite a challenging start to the year, orders in October and November improved at the Group's main lighting division, Thorlux. Since then, orders have continued at record levels, which will give a much-needed boost through to the financial year-end. Overhead cost reductions made during the autumn are now expected to start flowing through to operating profit in the second half of the year.

 

The Thorlux Portsmouth and Sugg Lighting factories were sold in November for £4.8m, realising a £1.9m profit on disposal and supporting the increased reported profit before tax from £7.9m to £8.8m.

 

The Group continues to invest for the future. This includes the imminent delivery of new laser cutting metalworking machinery at Thorlux, a property extension underway at TRT to provide pre-treatment and powder coating facilities (and as a Group disaster recovery backup resource), a new factory has also been approved for Portland Lighting, and works, which are well advanced, on the Lightronics factory extension.

 

Thorlux Lighting has recently launched a new range of innovative lighting to reinvigorate the workplace; more detail on this will be included in the annual report later this year. Famostar is working hard to adopt SmartScan, our wireless lighting control system, into its product portfolio and TRT is set to launch two product innovations supported by Luxintec, the Group's lens specialist in Spain.

 

Despite the difficult trading conditions for the six months to 31 December 2018, I am pleased to announce an interim dividend of 1.43p (Interim 2018: 1.40p).

 

Looking forward, within the Group we remain concerned about the stability of the UK market; however, present trading conditions are more buoyant than we previously predicted, and stronger than the first half performance.  Whilst our improved order book gives us confidence that we will have a strong finish to the year, underlying operating profit is still expected to be below the record operating figures of the last financial year.

Mike Allcock

Chairman

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2018

 

 

 

 

 

 

31.12.18

(six months to)

31.12.17 

(six months to)

30.06.18 

(twelve months to)

 

 

 

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

£'000 

£'000 

£'000 

 

 

 

 

Revenue

52,669  

53,170  

109,614 

 

 

 

 

Operating Profit (before profit on disposal)

7,019  

7,829  

19,466 

 

 

 

 

Profit on disposal of property

1,917  

 

 

 

 

Operating Profit

8,936  

7,829  

19,466 

 

 

 

 

Finance income

416  

338  

819 

Finance costs

  (574) 

  (285) 

(718)   

 

 

 

 

Profit before tax expense

8,778  

7,882  

19,567 

 

 

 

 

Tax expense

  (1,652) 

  (1,598) 

(3,457)

 

 

 

 

Profit for the period

7,126  

6,284  

16,110 

 

 

 

 

 

 

 

Dividend rate per share:

 

 

 

     Interim

1.43p

1.40p

1.40p

     Final

4.00p