INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2022
FW Thorpe Plc – a group of companies that design, manufacture and supply professional lighting systems – is pleased to announce its interim results for the six months ended 31 December 2022.
Financial highlights:
| Interim2023 (unaudited) | Interim2022 (unaudited) | Exc. SchahlLED/Zemper acquisition | ||
| Revenue | £81.9m | £63.5m | +29% | +12% |
| Operating profit | £11.0m | £8.8m | +24% | +16% |
| Profit before tax | £10.6m | £8.5m | +25% | +21% |
| Basic earnings per share | 7.15p | 5.91p | +21% | +19% |
· Interim dividend 1.62p (Interim 2022: 1.54p) – 5.2% increase
· Like for like growth, driven by Thorlux which saw supply chain challenges easing, solid revenue and operating profit increase
· Netherlands and Zemper performances suppressed by margin pressures
· Other UK companies showing overall improvement
· Net cash generated from operating activities – £9.9m (Interim 2022: £8.9m)
· Initial acquisition of SchahlLED in Germany completed in September
Note: This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 (MAR).
For further information, please contact:
| FW Thorpe Plc | |
| Mike Allcock – Chairman and Joint Chief Executive | 01527 583200 |
| Craig Muncaster – Joint Chief Executive and Group Financial Director | 01527 583200 |
| Singer Capital Markets – Nominated Adviser | |
| James Moat | 020 7496 3000 |
CHAIRMAN’S INTERIM STATEMENT
It is pleasing to report that Group manufacturing operations have returned to a more normal and orderly situation, supply shortages have eased, and good customer service levels are returning.
Revenue for the half year ended 31 December 2022 was £81.9m compared with £63.5m for the prior half year; this increase of 29% was as a result of improvement at almost all Group companies and the addition of SchahlLED, whose revenue is seasonally strong in the last quarter of the calendar year. On a like-for-like basis, excluding the recent acquisition of SchahlLED, revenue increased 12%. Despite varying achievements at subsidiaries, operating profit increased by 24% to £11.0m . There were notable achievements at Thorlux Lighting and continued improvements at the UK companies Philip Payne and Solite, whilst some other companies struggled to some extent to cope with and react to rising costs, in particular material and wage inflation.
The Group had an excellent operational performance, allowing it to catch up on outstanding deliveries: the order backlog reduced, whilst order input generally slowed during the period. Positivity about the short-term order outlook remains, especially at Thorlux (the Group’s largest business), notwithstanding some general concern about the state of the economy as a whole.
Over the last two years, supply shortages have been a significant problem for many businesses, but especially for the Group, since it tends to focus on producing more technologically advanced lighting systems. These products require the use of microprocessors and certain electronic assemblies, which have been particularly scarce in recent times and subject to especially high inflationary pressure as a result. Stock was built up to manage these shortages, taking overall stocks higher than historic norms. Now that supply shortages have mostly been resolved, the Group is in a healthy stock position and all companies have active plans to reduce stocks to more normal levels in coming months.
Thorlux’s new SmartScan generation 2 is now in production and in use on several projects, with thousands of luminaires successfully exploiting the new software and improved platform. SmartScan is now also integrated into products manufactured by most Group companies.
FW Thorpe welcomed SchahlLED Lighting GmbH during the reporting period, and three months of the company’s contributions are included in the operating results. Whilst revenue is consolidated from all Group companies, the headline operating profit number is suppressed by IFRS acquisition adjustments in relation to Zemper and SchahlLED.
Sustainability remains a significant activity taking some of the Group’s attention. In recent months the Thorlux solar PV array has been expanded significantly, and now has a capacity of 1.5MW from 3000+ panels. The construction of the new Famostar warehouse has commenced and will benefit also from solar PV, with a target completion of this summer. Sustainability training has been given to all Group employees, and regular newsletters and cross-team meetings encourage the sharing and rewarding of best practices. Scope 3 emissions data – primarily the lifetime energy use of Group companies’ luminaires at customers’ premises, and upstream energy use in making components at the Group’s myriad of suppliers – have now been collated Group-wide, and there is continued progress, with third-party assistance, towards an improvement plan and a Net Zero strategy.
As a result of ongoing performance as well as a strong balance sheet, the Board has approved an increased dividend of 1.62p (interim 2022: 1.54p) for the six months to 31 December 2022.
High energy costs and the imminent ban on the sale of fluorescent lamps in the UK and EU are both stimulating activity in the Group’s key market sectors. The outlook for the second half remains quite positive, although the revenue growth percentage is unlikely to be maintained at such a high level due to the good performance in the second half of last year.
Mike Allcock
Chairman
16 March 2023
FW Thorpe Plc
CONSOLIDATED INCOME STATEMENT
for the six months to 31 December 2022
| 31.12.22(six months to) | 31.12.21(six months to) | 30.06.22 (twelve months to) | |
| (unaudited) | (unaudited) | (audited) | |
| £’000 | £’000 | £’000 | |
| Revenue | 81,853 | 63,507 | 143,715 |
| Operating profit | 10,979 | 8,836 | 24,715 |
| Finance income | 261 | 208 | 527 |
| Finance expense | (620) | (548) | (1,367) |
| Share of profit of joint ventures | – | – | 228 |
| Profit before income tax | 10,620 | 8,496 | 24,103 |
| Income tax expense | (2,240) | (1,596) | (4,030) |
| Profit for the period | 8,380 | 6,900 | 20,073 |
| Dividend rate per share: | |||
| Interim | 1.62p | 1.54p | 1.54p |
| Final | – | – | 4.61p |
| Special | – | 2.27p | 2.27p |
| Earnings per share | – basic | 7.15p | 5.91p | 17.16p |
| – diluted | 7.15p | 5.88p | 17.13p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 December 2022
| 31.12.22 (six months to) | 31.12.21 (six months to) | 30.06.22 (twelve months to) | |
| (unaudited) | (unaudited) | (audited) | |
| £’000 | £’000 | £’000 | |
| Profit for the period | 8,380 | 6,900 | 20,073 |
| Other comprehensive (expenses)/income | |||
| Items that may be reclassified to profit or loss | |||
| Exchange differences on translation of foreign operations | 1,323 | (299) | (268) |
| 1,323 | (299) | (268) | |
| Items that will not be reclassified to profit or loss | |||
| Revaluation of financial assets at fair value through other comprehensive income * | 82 | 115 | (57) |
| Actuarial gain on pension scheme ** | – | – | 953 |
| Movement on unrecognised pension surplus ** | – | – | (1,143) |
| Taxation | (20) | (29) | 14 |
| 62 | 86 | (233) | |
| Other comprehensive income/(expense) for the period, net of tax | 1,385 | (213) | (501) |
| Total comprehensive income for the period | 9,765 | 6,687 | 19,572 |
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 £82,000 is due to the increase in market value of these investments.
** No interim actuarial valuation undertaken
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
| As at | As at | As at | |
| 31.12.22 | 31.12.21 | 30.06.22 | |
| (unaudited) | (unaudited) | (audited) | |
| Assets | £’000 | £’000 | £’000 |
| Non-current assets | |||
| Property, plant and equipment | 36,372 | 29,129 | 33,818 |
| Intangible assets | 71,601 | 49,125 | 51,865 |
| Investment property | 1,974 | 1,958 | 1,984 |
| Financial assets at amortised cost | 1,622 | 537 | 1,124 |
| Equity accounted investments and joint arrangements | 6,267 | 5,678 | 6,112 |
| Financial assets at fair value through other comprehensive income | 3,553 | 3,909 | 3,470 |
| Deferred income tax assets | 259 | – | 120 |
| 121,648 | 90,336 | 98,493 | |
| Current assets | |||
| Inventories | 37,889 | 27,033 | 32,758 |
| Trade and other receivables | 31,881 | 29,693 | 33,018 |
| Financial assets at amortised cost | 1,800 | 1,800 | 1,800 |
| Short-term financial assets | 5 | 15,613 | 5,079 |
| Cash and cash equivalents | 21,104 | 23,636 | 35,505 |
| Total current assets | 92,679 | 97,775 | 108,160 |
| Total assets | 214,327 | 188,111 | 206,653 |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | (38,274) | (32,934) | (35,801) |
| Financial liabilities | (1,057) | (990) | (332) |
| Lease liabilities | (742) | (303) | (506) |
| Current income tax liabilities | (865) | (308) | (641) |
| Total current liabilities | (40,938) | (34,535) | (37,280) |
| Net current assets | 51,741 | 63,240 | 70,880 |
| Non-current liabilities | |||
| Other payables | (10,810) | (11,089) | (12,880) |
| Financial liabilities | (1,622) | (894) | (1,830) |
| Lease liabilities | (3,534) | (651) | (2,510) |
| Provisions for liabilities and charges | (3,377) | (2,459) | (2,536) |
| Deferred tax liabilities | (4,231) | (1,666) | (4,264) |
| Total non-current liabilities | (23,574) | (16,759) | (24,020) |
| Total liabilities | (64,512) | (51,294) | (61,300) |
| Net assets | 149,815 | 136,817 | 145,353 |
| Equity attributable to owners of the company | |||
| Issued share capital | 1,189 | 1,189 | 1,189 |
| Share premium account | 2,927 | 2,711 | 2,827 |
| Capital redemption reserve | 137 | 137 | 137 |
| Foreign currency translation reserve | 3,131 | 1,777 | 1,808 |
| Retained earnings | |||
| At 1 July | 139,392 | 131,631 | 131,631 |
| Profit for the year attributable to owners | 8,380 | 6,900 | 20,073 |
| Other changes in retained earnings | (5,341) | (7,528) | (12,312) |
| 142,431 | 131,003 | 139,392 | |
| Total equity | 149,815 | 136,817 | 145,353 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 31 December 2022
| 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 2021 | 1,189 | 1,960 | 137 | 2,076 | 131,631 | 136,993 |
| Comprehensive income | ||||||
| Profit for six months to 31 December 2021 | – | – | – | – | 6,900 | 6,900 |
| Other comprehensive income | – | – | – | (299) | 86 | (213) |
| Total comprehensive income | – | – | – | (299) | 6,986 | 6,687 |
| Transactions with owners | ||||||
| Share options exercised | – | 751 | – | – | – | 751 |
| Dividends paid to shareholders | – | – | – | – | (7,617) | (7,617) |
| Share-based payment charge | – | – | – | – | 3 | 3 |
| Total transactions with owners | – | 751 | – | – | (7,614) | (6,863) |
| Balance at 31 December 2021 | 1,189 | 2,711 | 137 | 1,777 | 131,003 | 136,817 |
| Comprehensive income | ||||||
| Profit for six months to 30 June 2022 | – | – | – | – | 13,173 | 13,173 |
| Actuarial gain on pension scheme | – | – | – | – | 953 | 953 |
| Movement on unrecognised pension surplus | – | – | – | – | (1,143) | (1,143) |
| Revaluation of financial assets at fair value through other comprehensive income | – | – | – | – | (172) | (172) |
| Movement on associated deferred tax | – | – | – | – | 43 | 43 |
| Exchange rate differences on translation of foreign operations | – | – | – | 31 | – | 31 |
| Total comprehensive income | – | – | – | 31 | 12,854 | 12,885 |
| Transactions with owners | ||||||
| Share options exercised | – | 116 | – | – | – | 116 |
| Dividends paid to shareholders | – | – | – | – | (4.462) | (4,462) |
| Share-based payment charge | – | – | – | – | (3) | (3) |
| Total transactions with owners | – | 116 | – | – | (4,465) | (4,349) |
| Balance at 30 June 2022 | 1,189 | 2,827 | 137 | 1,808 | 139,392 | 145,353 |
| Comprehensive income | ||||||
| Profit for six months to 31 December 2022 | – | – | – | – | 8,380 | 8,380 |
| Other comprehensive income | – | – | – | 1,323 | 62 | 1,385 |
| Total comprehensive income | – | – | – | 1,323 | 8,442 | 9,765 |
| Transactions with owners | ||||||
| Share options exercised | – | 100 | – | – | – | 100 |
| Dividends paid to shareholders | – | – | – | – | (5,403) | (5,403) |
| Share-based payment charge | – | – | – | – | – | – |
| Total transactions with owners | – | 100 | – | – | (5,403) | (5,303) |
| Balance at 31 December 2022 | 1,189 | 2,927 | 137 | 3,131 | 142,431 | 149,815 |
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months to 31 December 2022
| 31.12.22 (six months to) | 31.12.21 (six months to) | 30.06.22(twelve months to) | |
| (unaudited) | (unaudited) | (audited) | |
| £’000 | £’000 | £’000 | |
| Cash generated from operations | |||
| Profit before income tax | 10,620 | 8,496 | 24,103 |
| Adjustments for | |||
| – Depreciation charge | 2,048 | 1,789 | 3,759 |
| – Depreciation of investment property | 10 | 9 | 19 |
| – Amortisation of intangibles | 1,770 | 1,207 | 3,213 |
| – Profit on disposal of property, plant and equipment | (58) | (111) | (197) |
| – Net finance expense | 359 | 340 | 855 |
| – Retirement benefit contributions in excess of current and past service charge | (73) | (73) | (190) |
| – Share-based payment charge | – | 2 | – |
| – Share of joint venture profit | – | – | (228) |
| – Research and development expenditure credit | (182) | (144) | (306) |
| – Effects of exchange rate movements | 394 | 350 | (520) |
| Changes in working capital | |||
| – Inventories | (2,136) | (3,324) | (8,986) |
| – Trade and other receivables | 3,008 | 2,730 | (603) |
| – Payables and provisions | (3,921) | 348 | 3,870 |
| Cash generated from operations | 11,839 | 11,619 | 24,789 |
| Tax paid | (1,964) | (2,670) | (5,049) |
| Cash flow from investing activities | |||
| Purchase of property, plant and equipment | (4,133) | (1,743) | (5,510) |
| Proceeds from sale of property, plant and equipment | 155 | 219 | 423 |
| Purchase of intangibles | (1,157) | (917) | (2,366) |
| Purchase of subsidiaries (net of cash acquired) | (12,603) | (14,624) | (14,625) |
| Purchase of shares in subsidiaries | (5,293) | (15,286) | (15,219) |
| Purchase of investment property | – | – | (36) |
| Investment in joint venture or associate | – | (4,838) | (4,958) |
| Net sale of financial assets at fair value through Other Comprehensive Income | – | – | 268 |
| Property rental and similar income | 23 | 32 | 113 |
| Dividend income | 102 | 124 | 246 |
| Net withdrawal of short-term financial assets | 5,074 | 7,990 | 18,524 |
| Interest received | 137 | 67 | 218 |
| Net issue of loan notes | (437) | – | (806) |
| Net cash used in investing activities | (18,132) | (28,976) | (23,728) |
| Cash flow from financing activities | |||
| Net proceeds from the issuance of ordinary shares | 100 | 751 | 867 |
| Proceeds from loans | 1,006 | 49 | 236 |
| Repayment of borrowings | (1,787) | (1,039) | (1,271) |
| Payment of lease liabilities | (334) | (148) | (535) |
| Payment of lease interest | (94) | (23) | (139) |
| Dividends paid to company shareholders | (5,403) | (7,617) | (12,079) |
| Net cash used in financing activities | (6,512) | (8,027) | (12,921) |
| Effects of exchange rate changes on cash | 368 | (578) | 146 |
| Net decrease in cash and cash equivalents | (14,401) | (28,632) | (16,763) |
| Cash and cash equivalents at the beginning of the period | 35,505 | 52,268 | 52,268 |
| Cash and cash equivalents at the end of the period | 21,104 | 23,636 | 35,505 |