Annual report and
accounts 2012
Dewhurst worldwide
Financial highlights
Group companies
Agents
2012 2011
£(000) £(000)
Group revenue £51,555 £41,487
Operating profit* £5,605 £4,880
Earnings per share 44.48p 34.35p
Dividends per share 12.02p 6.69p
* Operating profit before goodwill write down and gain on property disposal
Revenue
+24%
Revenue £ million
Operating profit* £ million
2008
2009
2010
2011
2012
36.3
35.8
37.0
41.5
51.6
2008
2009
2010
2011
2012
Operating profit*
+15%
4.4
4.5
4.9
4.9
5.6
Financial highlights 1
Consolidated financial statements 16
Company financial statements 38
Earnings per share pence
Dividend per share pence
Chairman’s statement 2
Consolidated income statement 16
Alan Dewhurst 1923–2012 3
Review of operations 4
Financial review 10
Group five year review 11
Board of directors 12
Report of the directors 13
Consolidated statement of
recognised income and expense 16
Company statement of recognised income
and expense 38
Company balance sheet 39
Consolidated balance sheet 17
Company cash flow statement 40
Consolidated cash flow statement 18
Report of the independent auditor 41
Notes to the accounts 19
Notice of meeting 42
Group companies 43
Advisers and company information 44
Earnings per share
+29%
2008
2009
2010
2011
2012
38.92
38.43
40.97
34.35
44.48
2008
5.76
2009
6.06
2010
2011
2012
6.36
6.69
7.02
12.02†
† Includes special dividend of 5p per share
Dividend per share
+80%
1
Chairman’s statement
It has been an eventful year,
but one in which we have
made good progress
Richard Dewhurst Chairman
Alan Dewhurst
28 April 1923 – 5 October 2012
I am delighted to be able to report record sales and
profits for the Group this year. Sales were up 24% to
£51.6 million (2011: £41.5 million), operating profit
before goodwill and an exceptional gain from the sale
of the property was £5.6 million (2011: £4.9 million) and
profit before tax was £5.4 million (2011: £4.3 million)
up 26%.
This would have been a good performance in any year but
in the current market conditions I believe it is excellent.
Business Secretary Vince Cable cuts the ribbon to open
Dewhurst’s new head office and factory.
The improvement was broadly based, with growth in all three
product divisions. Geographically, sales improved in the UK,
Europe and the Far East. The only area not really showing
improvement was North America which was broadly flat.
The lift and keypad markets held up in the second half, but
the transport sector was more difficult.
For the year as a whole keypad sales and Thames Valley
Controls (TVC) were the strongest contributors to growth. TVC
sales were bolstered by the new Hall Call Destination Product
and good performance on remote monitoring products.
The Group’s employees have performed really well to achieve
these results and I would like to thank them for their
continued effort and dedication.
2
Property
As reported at the half year we moved our headquarters and
main Hounslow factory in December 2011. The team
responsible for this did an excellent job as we moved in on
time according to plan. Inevitably there was some disruption
during January and February as we got to grips with our
new facilities, but we did our best to keep this to a minimum.
I would like to thank our customers for their forbearance
during this time.
The premises were formally opened by the Secretary of State for
Business, Innovation and Skills in June and we were happy to
welcome a number of customers and suppliers to this event.
We completed the sale of our Inverness Road premises in
early March after some lengthy negotiation. This provided a
significant cash boost to the Group and as a result the
directors are proposing a special one off additional dividend
of 5 pence per share.
Acquisitions
During the year we completed our acquisition of ERM on
the basis of our agreement with the shareholders in July
2010. The US market has remained tough, but we have now
recruited a new general manager to drive the business
forward.
Outlook
Keypad sales were unusually high this year. It is anticipated
that these sales will revert to more normal levels in the
coming year.
Our concerns expressed at the half year have proved well
founded as the new year has started slowly. Customer
confidence in the UK has deteriorated and uncertainty has
crept back in. Transport demand remains weak due to
Local Authority and Central Government cutbacks.
However we have some potential in new products coming
on stream during the year and an acquisition opportunity
we are currently pursuing that may help to offset
performance elsewhere.
It is with great sadness that we have to report the death of Alan Dewhurst,
who worked for the company for 46½ years, 29 years as Chairman.
He joined the company in 1951 starting in the Controller Test Department. He
progressed to Head of that department, then on to Head of Product Design and
subsequently added responsibility for Production. He became Chairman in 1962 on the
death of his father Melbourne Dewhurst who had founded the company back in 1919.
It is true to say that father was Dewhurst through and through having been born in a
cottage on Inverness Road that ultimately was demolished and became the Main
Offices – so he worked within a few feet of where he had been born.
Design was his true love and he developed many of the products that became classics
and key elements of the company’s success. He was rightly proud of the Design Award
won in 1976 for the US81 vandal resistant pushbutton, presented to him by the
Duke of Edinburgh. He was able to visualise products in his mind and thought them
through before committing pen to paper. As a result once he had started something he
was able to produce the design very quickly. He worked hard to simplify things, long
before lean manufacturing was talked about and he invested heavily in new
technologies to reduce the costs of production. He introduced injection moulding and
laser cutting to the company, both of which are key technologies for us now.
Father carried us through some very difficult times for UK manufacturing – the 1970s
were particularly tough and many traditional control gear companies disappeared
during that time. In fact Dewhurst plc is the only such company to survive as an
independent entity today. Not only did he carry us through, but he laid the foundations
for our current success focussed particularly on pushbuttons and keypads. The values
he espoused for the business are the core values we hold true to today.
Although in many ways he was conservative, he was also forward looking. I am very
pleased that he was with us to see our move from Inverness Road. Despite his links
with that site he was delighted with our new building and was pleased to be able to
celebrate its opening in June.
He was a demanding boss, expecting high standards of those who worked for him, but
he was also a kind and caring employer. He will be sorely missed.
3
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P
Review of operations
We have achieved broadly
based growth across our
operations this year
David Dewhurst Group Managing Director
We have enjoyed a good year in the majority of our
geographical markets. Over the last three or four years
we have found that end customers have generally held
back from spending unless it is absolutely necessary.
This has flowed through to reduced spending on
modernisation of lifts. However, we have found that
this year many customers have been unable to put off
overdue investment in their lifts any longer and there
has been a definite increase in modernisation work.
We have certainly benefitted in many of our businesses
from the renewed activity that this has created.
In what has been a busy year we have had tremendous input
from all our employees and we are very grateful for their hard
work and significant contribution to this year’s success.
United Kingdom
DEWHURST UK MANUFACTURING
This was an eventful and fruitful year at Dewhurst UK, with
some significant changes taking place.
As we indicated in last year’s report, we decided to restructure
our UK businesses. We have moved the fixture and
component supply for the UK back into Dewhurst UK and this
has been an almost seamless change. Dewhurst UK now
has a Sales Team of three people who have worked hard to
interact with the customer base and build sales of all lift
products but we have especially focussed on fixtures.
We have achieved a reasonable amount of success in terms of
sales growth in this area. In other areas, we have benefitted
from the improved lift market and demand for many of
our components such as displays, pushbuttons, locks and key
switches has increased.
The move from our Inverness Road site to our new facility in
Feltham seems a distant memory but it was a significant
milestone in the year and also in the Company’s history!
The move took place over the last two weeks of December
2011 and the first two weeks of January 2012. It went very
smoothly and essentially to plan. There was not a single day
during the move when production or invoicing was totally
compromised and significantly in January we achieved above
4
budget invoicing in the month when we had carried out the
largest element of our move.
Although things went as well as expected, obviously there
was some impact on production and our on time deliveries
dipped in January and February of 2012. We recovered after
that but achieved only 90%, so we will be working hard
during the coming year to restore on time deliveries to above
95%. The business has undergone a period of about 18
months during which the move has been all consuming and
we have not been able to instigate new lean programmes
across our manufacturing. We are now in a position to once
again focus on our processes and look to improve them
across all areas.
Our design teams have also been busy and have developed a
number of new products. The main focus has been on our
hall lantern products where we are developing new designs
for ‘Blade’ hall lanterns that we will be able to sell not only in
the UK but also through our subsidiary companies around the
world. The Jumbo pushbutton has also been redesigned to
make it both easier to manufacture and to install.
THAMES VALLEY CONTROLS (TVC)
This has been the first year of operation for the newly
reformed Thames Valley Controls. As previously reported, with
Dewhurst UK Manufacturing taking over the supply of the lift
fixtures and components, TVC have focussed their activities
Increased efficiency
in our new factory
New premises
We now have a much cleaner,
brighter and more energy efficient
factory for our employees, which
gives them a better working
environment. We have optimised
the factory layout for our current
demand, but have designed in as
much flexibility as possible so
that we can adapt to potential
future changes.
5
Developing customer
focused products
Destination Control
System
Our system has been integrated
with a turnstile security system
and installed as part of the major
refurbishment of a large office
building in Canary Wharf. Staff
swipe their card to gain access
and are directed immediately
to the correct lift to take them to
their floor.
6
Review of operations
on the manufacture and supply of Lift Control Products and
Lift Monitoring Systems.
TVC have had an excellent first year with strong sales and a
good contribution to Group profits.
The significant development work that we carried out for our
flagship product Navigator: the Ethos Hall Call Destination
System, bore fruit. We delivered a number of these systems
throughout the year. Some of these installations are now fully
commissioned and the feedback from customers and users
alike has been very positive. Further development of the
Navigator product has also taken place in the year, driven by
customer requirements. For example, one project that we
won in Canary Wharf required us to integrate a turnstile
security system into Navigator. When staff swipe their card to
gain access to the lift lobby, a call is automatically registered
with the lifts and the staff are directed immediately to the lift
that will take them to their floor. This speeds up traffic flow
and improves security.
The upturn in the modernisation market also benefitted TVC
and the excellent reputation of our Ethos controller in the
market led to strong sales of the product through the year.
The market remains very price-competitive and we have
worked hard throughout the year to drive down the cost of
manufacture to enable us to stay competitive in the long term.
Demand for our monitoring products has also remained
strong and we have continued to invest in our reporting
system, CMS Anywhere, to ensure that it is compatible with
the wide range of software platforms our customers now use.
TRAFFIC MANAGEMENT PRODUCTS (TMP)
Despite reduced Government spending and increased
competition TMP delivered good sales growth on the
previous year.
Margins however remain under significant pressure as Local
Authorities continue to implement spending cuts with price
becoming the key determinant in product selection.
In response to such threats TMP have commenced a lean and
continuous improvement programme and are working closely
with their supply chain to ensure goals are aligned and the
required efficiency and cost improvement are achieved.
TMP’s commitment to new product development has
continued with the Apollo sign lights, due for launch in
January 2013, which will be followed by further product
launches before the end of next year.
CORTEST
Cortest achieved a record year with significant sales growth
achieved through the delivery of two large PFI schemes.
The client base has continued to expand as we increase both
the number of blue chip engineering companies and Local
Authorities with whom we do business. However, as seen
Our new self-fronting bollard base was launched this year;
it is simpler and performs better than our previous base.
with TMP, Local Authority budget cuts have impacted margins
and restricted our larger opportunities to PFI schemes.
We have made changes to the operational structure during
the year to improve the effectiveness of the business to cope
with fluctuating demand and we will continue to assess how
best to meet these requirements going forward.
Europe
DEWHURST HUNGARY
Hungary had a strong year for sales. Just over half this growth
was generated due to a change in the content of a product
that we supply to a key customer. A relatively expensive
component in the product that was originally free issued, had
to be purchased by Dewhurst Hungary. Unfortunately, it was
then sold on with a relatively low handling charge. Having
said that, demand for all Hungary’s product was strong
throughout the year and even without this change Hungary
would have shown good sales growth.
Throughout the year, the team at Dewhurst Hungary have
carried out a large number of relatively small Kaizen projects
to continuously improve our assembly processes. These have
been quite successful, leading to small but important
reductions in cycle times and also helping to improve our
quality levels.
Despite being under constant price pressure, we are also
under pressure to continuously improve quality standards and
we have been able to drive our number of rejected parts
down quite considerably over the last twelve months. We
have invested in a state of the art Coordinate Measuring
Machine, which allows us to measure the critical dimensions
of components. This ensures that we have good control of
the quality of piece parts, whether they be moulded, die cast
or machined.
North America
DUPAR CONTROLS
Dupar had another solid year and performed in a broadly
similar way to last year. The market in North America
7
Review of operations
continues to be difficult, so to hold their own in this
environment was a creditable achievement.
There has been significant focus throughout the year on
trying to make sure that our products are as quick and simple
to install as possible. We now have a large number of jobs
where customers free issue us their pushbutton control
printed circuit boards. We then fully wire everything up, so
that when our car stations arrive on site all the lift company
needs to do is to connect up to the connectors on these
boards and the installation of the car station is complete.
The Cube Lift Identifier provides all round visibility for
Destination Control Systems with large lift lobbies.
This can save many hours of installation time and is a huge
cost benefit to our customers.
Dupar continue to work hard to continuously improve their
processes. Good progress has been made in ensuring the
minimum of programming is required to interface the
drawings they produce for each job, with their laser cutter
and engraving machines. With jobs moving seamlessly
through these two sections we have been able to improve our
efficiency and throughput at Dupar.
ELEVATOR RESEARCH AND MANUFACTURING (ERM)
It has been another difficult year at ERM but we are confident
that the changes we have made during the year will put us in
a much stronger position for the coming year.
We carried out a major audit of the business early in the year
and this has led to a fairly significant reorganisation of ERM in
terms of the layout of our manufacturing space and also our
product offering. In terms of manufacturing, we have been
able to reduce the space in which we operate and this has
allowed us to vacate two of the buildings that we leased.
We have moved our fixture operation into a newer, more
convenient building (one we were already leasing). Moving
this part of the operation enabled us to have a clean sheet
with regard to layout of our processes, so we now have a
much better flow of work around the manufacturing space.
At the same time we have rationalised our product range and
dropped two product lines which were no longer profitable.
8
These changes leave us with a leaner and more efficient
business, which is more able to compete in the current
environment.
Clive Mann who had been running ERM for the past decade
retired during the year and we welcome Barnet Rogers, who
has taken up the role as the new General Manager of ERM.
He has already implemented a number of positive changes
and we wish him every success in the future.
Australasia and Asia
AUSTRALIAN LIFT COMPONENTS (ALC)
ALC reported a good increase in sales on the back of a
healthy Australian market that benefitted all Group
Companies in the region. Demand for fixture products was
very strong with a number of large modernisation projects
being completed through the year.
ALC aims to be the supplier of choice for high quality
installations in Australia, so it was pleasing that this year we
have provided fixtures for such iconic venues as the Sydney
Opera House and the Melbourne Cricket Ground.
LIFT MATERIAL
Lift Material had a reasonable year, again benefitting from
strong demand for lift components.
In the middle of the year we signed an agreement with
Escalator Handrail Company (EHC) of Canada to distribute
and install their handrails. EHC are a world leader in the
escalator handrail market and have some excellent new
products. We will be focussing on the supply and installation
of their range of thermoplastic handrails. These have the
advantage of superior resistance to delamination, drive,
slippage, dust and vandalism compared with conventional
handrails. These new handrails also have an extended life,
so the frequency of change – out is reduced. After extensive
training, Lift Material are now accredited to carry out the
onsite installation (splicing) of the EHC handrails and in the
last quarter of the year they carried out their first installations.
We are confident that this will be a strong product line for us
over the medium term.
JAS ENGINEERING
In their first full year within the Dewhurst Group JAS had
good sales and although margins improved there is still more
work to be done on improving efficiency. We have carried out
initial lean training and implementation of a number of ideas
generated will lead to some reorganisation of the operation.
DEWHURST HONG KONG
Dewhurst Hong Kong have built on their strong performance
last year with another excellent year of sales and profit growth.
After some slower years, the Hong Kong market has stabilised
and there is a steady flow of major infrastructure projects
which lead to good demand for our products.
Broadening the
scope of our services
Escalator handrails
Traditionally handrails were
manufactured from rubber, but
EHC’s latest product is made from
thermoplastic. Handrails have to
be formed into a continuous loop
by splicing the two ends together.
It is much cleaner and less costly to
splice thermoplastic and Lift
Material are now providing this
service across Australia.
9
Financial review
The sale of the premises has
restored our cash balances to
enhance our financial stability
Jared Sinclair Finance Director
Special extra dividend
5p/share
Dewhurst returned a record year on revenue and
profits with double digit sales growth across all three
business sectors. Strong global sales in keypad products
was aided by £3.1 million of additional pass through
revenue but even without these additional sales, the
keypad growth was still double digit. The lift sector’s
growth came from good fixture and component sales in
Asia and Australasia along with solid sales in the UK
and despite the UK transport sector facing a tough and
challenging year, sales of bollards and non-destructive
testing grew. Overall revenue increased 24.3% from
£41.5 million to £51.6 million whilst operating profit
before goodwill write down and the gain on the
property disposal grew by 14.9% from £4.9 million to
£5.6 million.
Goodwill write down
Despite strong Group results, Dewhurst plc needed to take a
prudent view on three subsidiaries and write down their
respective goodwill amounts. ERM, our US corporation,
faced with a struggling US economy continued to make losses
and so was fully written down. A new general manager has
been recruited and steps have been taken to address the
losses. TMP improved performance, but was still short of its
original purchase valuation and so required a goodwill write
down. And finally, Dewhurst UK Manufacturing Ltd, having
absorbed the Switching Components pushbutton range into
its operations back in 2007, has seen a conversion of
customers across to the Dewhurst pushbutton range over
the years. This now requires its goodwill to be written
down. More information can be found in note 10 to the
accounts.
Gain on disposal of Inverness Road
The sale of the Inverness Road property is detailed in the
report of the directors but as the gain was material at
£3.9 million it has been separately disclosed on the face of
the consolidated income statement. After taking professional
advice it is the company’s belief that capital gains tax roll-over
relief will be available and the transaction has been accounted
for on that basis.
10
Strengthened cash position
Cash flow was once again very good with £4.9 million of cash
being generated from operations despite pension
contributions of £1.4 million. The Group spent £0.8 million,
as planned, completing the re-development of the Hampton
Business Park property prior to moving in as well as spending
£0.6 million acquiring the final stake in ERM. The £4.5 million
net proceeds from the sale of Inverness Road ensured the
Group ended the year with cash and short-term deposits at a
very respectable £11.1 million. This is aligned with the
Group’s philosophy of maintaining a strong cash position
together with minimal borrowing.
We started and finished the year with no borrowing and last
year’s precautionary £2.0 million secured bank overdraft
facility was cancelled.
Pension scheme deficit
A more detailed analysis of the retirement benefit fund assets
and liabilities movements is reported in note 22 under IAS 19,
but this year has seen the scheme deficit increase by
£2.6 million from £9.3 million to £11.9 million. Although the
scheme was closed to future accrual from 1 October 2010
and the company has paid £1.4 million annually since then
into the scheme this and any asset return has been more than
offset by this year’s change in assumptions, specifically the
liability discount used. The liability discount is used to
calculate the net present value of future liabilities and is
traditionally based upon the 15 year AA bond yields. The yield
in the past year has dropped from 5% to 4% and this one
assumption change has had approximately a £6.0 million
negative impact on the scheme position.
The Group will continue to pay a fixed sum of £1.4 million
annually to reduce the defined benefit pension scheme deficit
and all recommendations made by the scheme’s actuary to
eliminate the scheme deficit within an agreed timeframe have
been fully implemented.
Treasury policy
The Group seeks to reduce or eliminate financial risk to
ensure sufficient liquidity is available to meet foreseeable
Group five year review
2008 2009 2010 2011 2012
£(000) £(000) £(000) £(000) £(000)
Revenue 36,326 35,835 36,975 41,487 51,555
Operating profit before goodwill write down
and gain on property disposal 4,352 4,511 4,871 4,880 5,605
Operating profit 4,352 4,511 4,871 4,424 5,660
Profit before taxation 4,679 4,428 4,827 4,320 5,442
As a percentage of total equity 26.2% 22.7% 22.9% 19.9% 25.2%
Taxation 1,238 1,157 1,339 1,428 1,688
Profit after taxation 3,441 3,271 3,488 2,892 3,754
Total equity 17,883 19,480 21,087 21,754 21,564
Earnings per share, basic and diluted 38.92p 38.43p 40.97p 34.35p 44.48p
Dividends per share 5.76p 6.06p 6.36p 6.69p 12.02p
needs and to invest cash assets safely and profitably.
The policies and procedures operated are regularly reviewed
and approved by the board. By varying the duration of its
fixed and floating cash deposits, the Group maximises the
return on interest earned.
With just over half of profit before tax earned and held in
foreign currencies the Group continues to hedge internally
where possible and to consider the need to use derivatives in
the form of foreign exchange contracts to manage its
currency risk, as reported in note 25.
dividend in addition to the normal dividend of 7.02p.
The total dividend for 2012 of 12.02p per share, up 79.7%
against last year’s 6.69p, is covered 3.7 times by earnings.
Total equity declined from £21.8 million to £21.6 million.
Dividends are accounted for when paid or approved by
shareholders, and not when proposed, therefore the
proposed final dividend for 2012 has not been accrued at the
balance sheet date.
There was no change in the number of allotted shares during
the year.
Dividends
Although the pension deficit remains a concern and a liability
to be funded, the directors consider that some of the cash
generated by the sale of Inverness Road should be returned to
shareholders. They are therefore recommending a 5p special
11
Board of directors
Report of the directors
Richard Dewhurst
BA (Eng Sc), ACMA
Chairman, 56, joined in 1985.
Previously with Ford Motor
Co, Ernst & Whinney Senior
Management Consultant.
David Dewhurst
BSc (Elec Eng)
Group Managing Director, 51,
joined in 1987.
Previously with Holmes &
Marchant plc.
Jared Sinclair
BSc, ACA
Finance Director, 42, joined in
1997. Previously with Moores
Rowland, Chartered
Accountants, Audit Senior.
Richard Young
MBA, BSc, CEng, MIET
Managing Director – Thames
Valley Controls, 56, joined in
1996. Previously with MBM
Technology Ltd, Director and
General Manager.
John Bailey
Managing Director – TMP &
Cortest, 42, joined in 2008.
Previously with Brett
Landscaping & Building
Products, Commercial
Director.
Peter Tett
MA, MSc
Non-executive Director, 73,
joined in 2000. Previously with
Halma plc, Director.
The directors present their annual report on the
affairs of the Group together with the financial
statements and auditor’s report for the year ended
30 September 2012.
Results and dividends
The trading profit for the year, after taxation, amounted to
£3.8 million (2011: £2.9 million).
A 5p special dividend in addition to the normal final dividend
on the Ordinary and ‘A’ non-voting ordinary shares of 4.68p
per share (2011: 4.46p) for the financial year ended
30 September 2012 will be proposed at the Annual General
Meeting (AGM) to be held on 5 February 2013. If approved,
this dividend will be paid on 21 February 2013 to members
on the register at 18 January 2013.
An interim dividend of 2.34p per share (2011: 2.23p) was
paid on 28 August 2012.
A final dividend of 4.46p which amounted to £380k for the
financial year ended 30 September 2011 was approved at the
AGM held on 26 January 2012 and was paid on 14 February
2012 to members on the register at 13 January 2012,
compared with 4.24p the previous year (£361k).
Principal activities and review of the business
The company and Group principal activity, in the course of the
year, continued to be the manufacture of electrical
components and control equipment for industrial and
commercial capital goods. The Group maintained its position
as a specialist supplier of equipment to lift, transport and
keypad sectors. A business review of the Group’s operations is
dealt with on pages 4–9, a commentary on treasury policy is
dealt with in the financial review and financial instruments are
disclosed within note 25 to the financial statements. The
directors believe that the key financial performance indicators
relevant to the Group are earnings per share, operating profit,
profit before tax and return on equity which are stated in the
five year review on page 11. The key non-financial
performance indicators relevant to the Group are lead times
and on-time deliveries to our customers. The board is
informed at every meeting of the principal risks and
uncertainties across the Group which could have a material
impact on the Group’s long and short term performance and
action plans to mitigate these risks. The Group’s risk
assessment process is designed to identify, manage and
mitigate business risks.
Change of registered office
On 21 December 2011, having successfully moved into the
new premises, Dewhurst plc changed its registered address
to Unit 9 Hampton Business Park, Hampton Road West,
Feltham, TW13 6DB.
Sale of freehold property
On 4 March 2012, Willowcharm Ltd paid £6.0 million
(£5.0 million plus £1.0 million VAT) to Dewhurst plc for the
freehold property known as Melbourne Works, Inverness
Road, Hounslow, Middlesex, TW3 3LT. Prior to the sale of
Melbourne Works, Dewhurst plc had successfully obtained
residential planning permission for the site to enable it to
realise the maximum possible value to offset against the cost
of the new premises. Melbourne Works was reported in the
books of the company with a net book value of £0.6 million,
giving rise to a profit on disposal of £3.9 million (after
deduction of associated costs of disposal of £0.5 million).
The net cash proceeds from the sale enabled Dewhurst plc to
fully pay down any short-term indebtedness to its bank,
enabling a return to its core strategy of maintaining a strong
cash position together with minimal or no borrowing.
Acquisitions
On 31 July 2012, Dewhurst plc acquired the remaining shares
in Elevator Research & Manufacturing Corp. (ERM) from
Clive Mann (shares held in the name of Mann Family Trust).
The Group acquired the additional 20% stake in ERM for a
total cash consideration of US$0.9 million (£0.6 million) and
at this date the Group had a 100% stake in ERM.
Post balance sheet event
On 11 November 2012, the board signed a conditional
agreement to acquire 70% of the business and assets of the
partnership trading as Dual Engraving from D.E. Corporate Pty
Ltd and Datree Pty Ltd (the ‘Business’ or ‘Dual’).
The agreement is subject to satisfactory due diligence on
the Business.
Dual, based in Perth, Western Australia (WA), is a lift car
interior and fixture manufacturer which works with all the
major lift companies in the local WA market. In addition the
Business supplies lift components to that market, including
products from Dewhurst, Designcom, TL Jones and Memco.
Subject to successful completion, the acquisition of a 70%
stake in Dual demonstrates the company’s commitment to
continue to expand its international operations. Part of the
company’s strategy over recent years has been to seek to
add additional fixture businesses around the world that can
act as an outlet for sales of the company’s components and
add value with local supplies and support for customers.
Dual Engraving is already a customer of the Dewhurst Group,
so this acquisition will not generate additional component
sales, but it will secure those sales.
Share repurchases
The company did not repurchase any shares during the year.
12
13
Report of the directors
Directors
The members of the board during the year were:
Mr R M Dewhurst (chairman)
Mr D Dewhurst (group managing director)
Mr J C Sinclair
Mr R Young
Mr J Bailey
Mr P Tett (non-executive)
The directors retiring by rotation at this year’s Annual General
Meeting are Mr P Tett and Mr J Bailey who, being eligible, offer
themselves for re-election. The unexpired period of Mr P Tett
and Mr J Bailey’s service agreement is less than one year.
During the year and at the date of approval of the accounts,
the Group maintained liability insurance for all directors.
Directors’ share interests
The table below sets out the names of the persons who were
directors of the company during the financial year ended
30 September 2012 together with details of their own and
their families’ beneficial interests in the shares of the company
at that date and corresponding details at 30 September 2011.
30 September 2012
Ordinary ‘A’ ordinary
shares
shares
30 September 2011
‘A’ ordinary
shares
Ordinary
shares
Mr R M Dewhurst
Mr D Dewhurst
Mr J C Sinclair
Mr R Young
Mr J Bailey
Mr P Tett
494,333 123,666 494,333 123,666
69,932
69,932 419,595
419,595
–
1,000
1,000
–
1,000
1,000
–
1,000
1,000
–
1,000
1,000
–
–
–
–
At 30 September 2012 and 30 September 2011 there were
no share options allocated to the directors. During the
financial year no director was materially interested in any
contract which was significant to the Group’s business.
No transactions have taken place between the end of the
financial year and 3 December 2012.
Directors’ emoluments
The remuneration of the directors is shown below:
Salary
and fees
£(000)
Bonus Benefits Pension
in kind
£(000)
£(000)
£(000)
2012
Total
2011
Total
£(000)
£(000)
Executive directors:
122
Mr R M Dewhurst
108
Mr D Dewhurst
89
Mr J C Sinclair
84
Mr R Young
Mr J Bailey
87
Non-executive director:
17
Mr P Tett
137
112
41
73
44
–
3
3
–
–
2
–
14
Substantial shareholdings
At 20 November 2012, the company had been advised of the
following beneficial interests in excess of 3% of the ordinary
voting share capital (other than the holdings shown under
directors’ share interests).
Executors of Mr A Dewhurst
Mrs V E Dewhurst
Ms B Meredith
Ms E Dewhurst
Fidelity Management & Research Fund (Boston)
Mr J H Ridley
366,000
285,000
190,208
175,333
170,500
126,000
At the same date the register shows interests in excess of 3%
of the ‘A’ non-voting ordinary share capital (other than
directors’ holdings) of:
W B Nominees Ltd
Discretionary Unit Fund
Mrs V E Dewhurst
Schweco Nominees Ltd – 16495 Acct
Vidacos Nominees Ltd
TD Waterhouse Nominees Ltd
Executors of Mr A Dewhurst
Schweco Nominees Ltd – 9000 Acct
Ms E Dewhurst
Roy Nominees Ltd
387,000
350,000
337,000
317,500
296,500
191,500
181,000
175,500
167,416
160,000
Employee involvement
Meetings, chaired by the group managing director, are held
with employee representatives. The financial position and
prospects of the company are discussed together with details
of investment and changes in facilities which are planned by
management. Opportunity is given at the meetings to question
senior executives about matters which concern the employees.
Health and safety
Regular attention is given to health and safety with all
reasonable precautions taken to provide and maintain safe
working conditions for both employees and visitors alike,
which comply with statutory requirements and appropriate
codes of practice. In order to minimise the instances of
occupational accidents and illnesses detailed policies and risk
improvement programmes are regularly updated.
Employment policies
The Group is committed to ensuring that:
–
–
10
9
–
262
223
140
166
133
189
164
116
124
116
All employees are treated fairly and equally irrespective of
gender, ethnic origin, religion, nationality, marital status,
sexuality or disability.
The working environment is conducive to achievement and
free from sexual harassment and intimidation.
–
17
17
Full and fair consideration is given to the employment of
disabled persons, having regard to their particular aptitudes
and abilities. Wherever possible, continuing employment is
provided for employees who become disabled with
appropriate arrangements for re-training being made where
necessary.
The Group has a development policy committing it to the
training and continuous development of its employees to
develop their full potential and to achieve a more flexible and
skilled workforce. Dewhurst plc, the company, achieved
IiP (Investors in People) status which was awarded in January
2002 and has since been successfully re-appraised.
Supplier payments policy
The company’s policy concerning the payment of its trade
creditors is to arrange the best possible terms with its
suppliers and then pay as appropriate to those terms, subject
to satisfactory performance by the supplier.
Any contractual or legal obligations would be honoured with
creditors being paid by the agreed dates to satisfy such
contracts and commitments.
Payment procedures are reviewed as required to maintain a
good working relationship, with the supplier.
The average number of days purchases outstanding was
twenty-nine (2011: twenty-eight).
Research and development
The Group continues to invest in research and development
programmes for new products as well as new processes and
technologies to improve overall operational effectiveness.
Political and charitable contributions
The Group has made no political contributions this year
(2011: £Nil).
Charitable donations made by the Group to local schools,
community projects and worthy causes amounted to
£7k (2011: £3k), of which £4k was donated to the UK Lift
Industry Charity.
Going concern
Positive steps to develop sales and control costs have been
taken by management to ensure the company has adequate
resources to continue in operational existence for the
foreseeable future, therefore the directors continue to adopt
a going concern basis in preparing the financial statements.
Auditor
The current directors have taken all the steps that they ought
to have taken to make themselves aware of any information
needed by the Group’s auditor for the purposes of the audit
and to establish that the auditor is aware of that information.
The directors are not aware of any relevant audit information
of which the auditor is unaware.
A resolution will be proposed at the Annual General Meeting
to re-appoint Chantrey Vellacott DFK LLP as auditor and to
authorise the directors to determine their remuneration.
Statement of directors’ responsibilities
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time
the financial position of the company and the Group and
enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and the Group and
for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for preparing the annual report,
the directors’ report and the financial statements in
accordance with the Companies Act 2006. The directors have
prepared the financial statements for the Group and the
company in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
International Accounting Standard 1 requires that financial
statements present fairly for each financial year the
Group’s financial position, financial performance and cash
flows. This requires the faithful representation of the effects
of transactions, other events and conditions in accordance
with the definitions and recognition criteria for assets,
liabilities, income and expenses set out in the International
Accounting Standards Board’s ‘Framework for the preparation
and presentation of financial statements’. In virtually all
circumstances, a fair presentation will be achieved by
compliance with all applicable IFRS. A fair presentation also
requires the directors to:
consistently select and apply appropriate accounting
policies; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the company
will continue in business; and
present information, including accounting policies,
in a manner that provides relevant, reliable comparable and
understandable information; and
provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial
performance.
Financial statements are published on the Group’s website in
accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Group’s website is the
responsibility of the directors. The directors’ responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
By order of the board
Jared Sinclair Secretary
3 December 2012
15
Consolidated financial statements
Consolidated income statement
2012 2011
For the year ended 30 September 2012 Notes £(000) £(000)
Continuing operations
Revenue 2 51,555 41,487
Operating costs 3 (45,895) (37,063)
Operating profit before goodwill write down and gain on property disposal 5,605 4,880
Goodwill write down 10 (3,889) (456)
Gain on disposal of property 3,944 –
Operating profit 5,660 4,424
Share of loss from associate – (29)
Finance income 5 124 62
Finance costs 6 (342) (137)
Profit before taxation 5,442 4,320
Tax on profit 7 (1,688) (1,428)
Profit for the financial year 8 3,754 2,892
Attributable to:
Equity shareholders of the company 3,786 2,924
Non-controlling interests 26 (32) (32)
3,754 2,892
Basic and diluted earnings per share 9 44.48p 34.35p
Consolidated statement of recognised income and expense
2012 2011
Notes £(000) £(000)
Net income/(expense) recognised directly in equity:
Actuarial gains/(losses) on the defined benefit pension scheme 22 (3,619) (2,423)
Exchange differences on translation of foreign operations 49 (41)
Tax on items taken directly to equity 821 640
Net income/(expense) recognised directly in equity in the year (2,749) (1,824)
Consolidated balance sheet
2012 2011
At 30 September 2012 Notes £(000) £(000)
Non-current assets
Goodwill 10 3,555 7,357
Other intangibles 11 125 158
Property, plant and equipment 12 9,669 9,581
Deferred tax asset 19 2,037 1,779
15,386 18,875
Current assets
Inventories 14 4,852 4,269
Trade and other receivables 15 8,421 8,394
Current tax assets – 203
Cash and cash equivalents 16 11,101 5,009
24,374 17,875
Total assets 39,760 36,750
Current liabilities
Trade and other payables 17 5,583 5,222
Current tax liabilities 35 –
Short-term provisions 18 722 475
6,340 5,697
Non-current liabilities
Retirement benefit obligation 22 11,856 9,299
Total liabilities 18,196 14,996
Net assets 21,564 21,754
Equity
Share capital 20 851 851
Share premium account 21 157 157
Capital redemption reserve 21 286 286
Translation reserve 21 2,097 2,059
Retained earnings 21 18,173 18,252
Profit for the financial year 3,754 2,892
Total attributable to equity shareholders of the company 21,564 21,605
Total recognised income and expense for the year 1,005 1,068
Non-controlling interests 26 – 149
Attributable to:
Equity shareholders of the company 1,004 1,071
Non-controlling interests 1 (3)
1,005 1,068
Total equity 21,564 21,754
The financial statements were approved by the board of directors and authorised for issue on 3 December 2012 and were signed
on its behalf by:
Richard Dewhurst Chairman
Jared Sinclair Finance Director
Company Registration Number: 160314
The notes on pages 19 to 37 form part of these financial statements
The notes on pages 19 to 37 form part of these financial statements
16
17
Consolidated financial statements
Notes to the accounts
Consolidated cash flow statement
2012 2011
For the year ended 30 September 2012 Notes £(000) £(000)
Cash flows from operating activities
Operating profit 5,660 4,424
Goodwill write down 3,889 456
Depreciation and amortisation 875 812
Additional (income)/costs to pension scheme (1,399) (1,313)
Exchange adjustments (155) (208)
(Profit)/loss on disposal of property, plant and equipment (3,964) (4)
4,906 4,167
(Increase)/decrease in inventories (583) 202
(Increase)/decrease in trade and other receivables (27) (674)
Increase/(decrease) in trade and other payables 361 191
Increase/(decrease) in provisions 247 126
Cash generated from operations 4,904 4,012
Interest paid (5) (16)
Income tax paid (889) (1,095)
Net cash from operating activities 4,010 2,901
Cash flows from investing activities
Acquisition of subsidiary undertakings 26 (585) (869)
Acquisition of business and assets – (907)
Net proceeds from sale of property, plant and equipment 4,588 7
Purchase of property, plant and equipment (1,374) (5,124)
Development costs capitalised (104) (129)
Interest received 124 61
Net cash generated from/(used in) investing activities 2,649 (6,961)
Cash flows from financing activities
Dividends paid (579) (551)
Net cash used in financing activities (579) (551)
Net increase/(decrease) in cash and cash equivalents 6,080 (4,611)
Cash and cash equivalents at beginning of year 16 5,009 9,593
Exchange adjustments on cash and cash equivalents 12 27
Cash and cash equivalents at end of year 16 11,101 5,009
The notes on pages 19 to 37 form part of these financial statements
18
Note 1 Accounting policies
Basis of preparation
Dewhurst plc prepares its consolidated and company financial
statements on a going concern basis and in accordance with
International Financial Reporting Standards (IFRS) adopted by the
European Union (EU). The Group and company financial
statements have been prepared in accordance with those parts of
the Companies Act 2006 that are applicable to companies
adopting IFRS. The company is registered and incorporated in the
United Kingdom; and quoted on AIM.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to the years presented, unless
otherwise stated. The results have been prepared on the basis of
all IFRS issued by the International Accounting Standards Board
currently effective. The directors consider the effects of standards
issued but not yet effective to be immaterial.
The preparation of financial statements in conformity with IFRS
requires the use of judgements, estimates and assumptions that
affect the reported amounts of assets, liabilities, income and
expenses. The estimates and associated assumptions are based
on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of
which form the basis of making judgements about carrying
values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis and revisions are recognised in the period in which
the estimate or assumption is revised. The key areas where
estimates have been used and assumptions applied are in
impairment testing of goodwill, provisioning, taxation and in
assessing the defined benefit pension scheme liabilities (see
notes 10, 18, 19 and 22 respectively).
The financial statements have been prepared under the historical
cost convention and are presented in sterling to the nearest
thousand (£’000).
Consolidation
The consolidated financial statements incorporate the results of
Dewhurst plc and all of its subsidiary undertakings made up
to 30 September 2012, adjusted to eliminate intra-group
balances, transactions, income and expenses. The Group has
used the acquisition method of accounting to consolidate the
results of subsidiary undertakings, which are included from the
date of acquisition.
Revenue
Revenue is measured at the fair value of sales of goods and
services less returns and sales taxes. Revenue is recognised on
delivery to customers.
Customer loyalty rebates
The cost of customer loyalty rebates is recognised as a cost of
sale, with an accrual equal to the estimated fair value of
the loyalty rebate recognised when the original transaction
occurs. On redemption, the cost of redemption is offset against
the accrual.
Property, plant and equipment
Property, plant and equipment is stated at cost or deemed cost
less accumulated depreciation and any recognised impairment
loss. Depreciation is charged so as to write off the cost over the
assets expected useful life. The depreciation rates used are:
Buildings (Basic Structure)
1½% – on a declining balance basis
Buildings (Fittings)
5% to 20% – on a straight-line basis
Plant and equipment
10% to 331/3% – on a straight-line basis
Investments in subsidiaries
In the accounts of the company, investments held as non-current
assets are stated at cost less provision for impairment.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is
the difference between the fair value of the consideration paid
and the fair value of the assets and liabilities acquired, and is
recognised as an asset and reviewed for impairment at least
annually. Any impairment is recognised immediately in the
income statement and is not subsequently reversed. On disposal
of a subsidiary, the attributable amount of goodwill is included in
the determination of the profit or loss on disposal. Goodwill
arising on acquisitions before the date of transition to IFRS has
been retained at the previous UK GAAP amount subject to being
tested for impairment at that date.
Inventories
Inventories are stated at the lower of weighted average cost and
net realisable value. Cost represents direct materials, labour and
appropriate production overheads. The Group provides for all
inventories where there is more than one year’s usage and where
there is no annual usage therefore the directors consider the
carrying amounts are stated at their fair value after deduction of
appropriate allowances for estimated irrecoverable amounts.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. The tax currently payable is based on taxable
profit for the year. Taxable profit differs from the net profit as
reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are
generally recognised for all material taxable temporary
differences and deferred tax assets are only recognised to the
extent that taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
19
Notes to the accounts
realised, based upon tax rates and laws that have been enacted
or substantively enacted by the balance sheet date. Deferred tax
is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity.
Foreign currencies
Foreign currency transactions of individual companies are
translated at the rates ruling when they occurred. Foreign
currency monetary assets and liabilities are retranslated at the
rates ruling at the balance sheet date. Any differences are taken
to the income statement.
The results of overseas operations are translated at the average
rates of exchange during the year and their balance sheets
translated into sterling at the rates of exchange ruling at the
balance sheet date. Exchange differences which arise from
translation of the opening net assets and results of foreign
subsidiary undertakings and from translating the income
statement at an average rate are taken to reserves. All other
differences are taken to the income statement.
The treatment of tax charges or credits resulting from the
exchange differences reported above match the accounting
treatment and are either taken to reserves or to the income
statement as appropriate.
Research and development
Development expenditure that satisfies the criteria of IAS 38 for
recognition as an intangible asset is capitalised and then
amortised on a straight-line basis over its expected useful life of
up to three years. Expenditure on development activities
that does not meet these criteria along with research activities
are recognised as an expense in the period in which they
are incurred.
Operating leases
Rentals under operating leases are charged to the income
statement in equal annual amounts over the lease term.
Benefits received as incentives to enter into the agreements are
also spread on a straight-line basis over the lease term.
Employee benefits
The Group operates both a defined contribution and a defined
benefit type pension scheme. Contributions in respect of the
defined contribution schemes are charged to the income
statement in the year they fall due. The defined benefit scheme
has been set up under a trust deed with its financial assets held
separately from those of the Group and is controlled by the
Trustees. The pension cost is assessed in accordance with the
advice of an independent qualified actuary to recognise the
expected cost of providing pensions on a systematic and rational
basis over the expected remaining service lives of employees.
The liability recognised in the balance sheet in respect of the
defined benefit pension scheme is the present value of the
defined benefit obligation at the balance sheet date less the fair
value of scheme assets, together with adjustments for
unrecognised actuarial gains and losses and past service costs.
The defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of high-
quality corporate bonds approximating to the terms of the
related pension liability.
20
Actuarial gains and losses are recognised in full in the statement
of recognised income and expense. Current and past service
costs are charged to the income statement under pension costs
in operating expenses. Interest on the pension scheme’s liabilities
and the expected return on the scheme’s assets are recognised
within finance costs in the income statement.
Dividends
Dividend distribution to the company’s shareholders is recognised
as a liability in the Group’s financial statements in the year in
which dividends are approved by shareholders or paid, which
ever is earlier.
Financial instruments
The Group does not hold or issue derivative financial instruments
for speculative purposes.
Trade receivables and payables
Trade receivables do not carry any interest and trade payables are
not interest bearing. Receipts and payments occur over a short
period and are subject to an insignificant risk of changes in value.
The Group provides for all trade receivables that are more than
ninety days overdue therefore the directors consider the carrying
amounts are stated at their fair value after deduction of
appropriate allowances for estimated irrecoverable amounts.
Financial liabilities
Financial liabilities incurred by the Group are classified according
to the substance of the contractual arrangements entered into
and measured at their amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and short-
term deposits that are readily convertible to a known amount of
cash and are subject to an insignificant risk of changes in value.
Provisions
Provisions are recognised for liabilities of uncertain timing or
amount when there is a present legal or constructive obligation
that has arisen as a result of past events, for which it is probable
that an outflow of economic benefit will be required to settle the
obligation, and where the amount of the obligation can be
reliably estimated (see notes 15 and 18).
Note 2 Segment reporting
For management purposes, the Group reports its primary segmental information by geographical destination.
The geographical analysis by significant regions is as follows: Revenue Operating profit
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
United Kingdom 16,481 14,461 1,470 558
Europe 9,984 5,737 1,377 1,055
The Americas 12,307 11,613 338 665
Asia & Australia 15,884 13,320 2,470 2,147
Other 59 50 5 (1)
54,715 45,181 5,660 4,424
Inter-company sales (3,160) (3,694)
Share of (loss)/profit from associates – (29)
Finance income/(costs) (218) (75)
Consolidated revenue/profit before tax for the year 51,555 41,487 5,442 4,320
Assets Liabilities
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
United Kingdom 15,675 12,736 8,844 5,304
Europe 5,828 5,410 2,815 2,769
The Americas 6,867 7,953 3,176 3,620
Asia & Australia 11,255 10,524 3,254 3,188
Other 135 127 107 115
Consolidated assets/liabilities for the year 39,760 36,750 18,196 14,996
Capital additions
Depreciation and amortisation
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
United Kingdom 1,076 5,093 343 246
Europe 113 40 51 66
The Americas 82 1,747 200 212
Asia & Australia 205 920 280 286
Other 2 – 1 2
Total Group 1,478 7,800 875 812
21
Notes to the accounts
Note 2 Segment reporting continued
Note 4 Staff costs and information regarding employees
The secondary segmental reporting is by the following business sectors: Revenue
2012 2011
Sector £(000) £(000)
Lift 34,391 31,462
Transport 4,878 3,923
Keypad 15,446 9,796
54,715 45,181
Inter-company sales (3,160) (3,694)
51,555 41,487
Assets Capital additions
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Lift 30,567 25,627 1,256 7,613
Transport 2,965 5,385 89 142
Keypad 6,228 5,738 133 45
Total Group 39,760 36,750 1,478 7,800
Note 3 Operating costs
2012 2011
£(000) £(000)
Movement in inventory provision obsolescence 25 (55)
Cost of inventories recognised as an expense 25,959 19,525
Staff costs (see note 4) 14,105 12,235
Depreciation 738 657
Amortisation 137 155
Write down of goodwill 3,889 456
Gain on disposal of property (3,944) –
Foreign exchange differences 155 (56)
Other operating charges 4,831 4,146
Operating costs 45,895 37,063
Other operating charges include lease rentals on premises £366k (2011: £313k) and lease rentals on motor vehicles £78k (2011: £72k),
profit on sale of property, plant and equipment £20k (2011: profit of £4k) and auditor’s remuneration detailed below. Expenditure on
research and development was £766k (2011: £728k).
Auditor’s remuneration: The Group The Company
2012 2011 2012 2011
Amounts paid to Chantrey Vellacott DFK LLP and DFK associates £(000) £(000) £(000) £(000)
Statutory audit services 73 69 14 14
Pension audit services 5 5 2 2
Taxation compliance services 11 11 1 1
Other taxation advisory services 64 6 62 4
153 91 79 21
Costs during the year were as follows: The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Wages and salaries 12,477 10,866 676 516
Social security costs 939 807 87 64
Pension costs (see note 22) 689 562 128 24
14,105 12,235 891 604
The average number of employees during the year was: The Group The Company
2012 2011 2012 2011
No. No. No. No.
Office and management 163 169 8 8
Manufacturing 194 190 – –
357 359 8 8
The executive directors comprise the key management personnel of the Group and company in both the current and previous years.
The total amount of the directors’ remuneration was as follows: 2012 2011
£(000) £(000)
Emoluments – Executive directors 905 692
Emoluments – Non-executive directors 17 17
922 709
Four directors became deferred members in the company’s defined benefit pension scheme after the scheme closed to future accrual
on 30 September 2010.
The emoluments of the directors is reported on page 14 of the directors report and the remuneration of the highest paid director
during the year was £262k (2011: £189k). The highest paid director, under the defined benefit scheme has accrued pension of
£113k (2011: £108k) and an accrued lump sum of £2,127k (2011: £1,820k).
Note 5 Finance income
2012 2011
£(000) £(000)
Bank deposit interest 121 61
Other interest receivable 3 1
124 62
22
23
Notes to the accounts
Note 6 Finance costs
2012 2011
£(000) £(000)
Interest payable on bank overdraft and loans (5) (16)
Net costs on defined benefit pension scheme (337) (121)
(342) (137)
Note 7 Tax
2012 2011
Current tax £(000) £(000)
UK corporation tax at 25% (2011: 27%) – –
Adjustment on prior years tax (135) (32)
Overseas taxation 1,260 1,035
1,125 1,003
Deferred tax
Movement in deferred taxation provision 563 425
Tax expense in the income statement 1,688 1,428
The tax assessed for the year is different from the standard rate of corporation tax in the UK. The differences are explained below:
2012 2011
£(000) £(000)
Profit before tax 5,442 4,320
Standard rate of corporation tax in the UK 25.0% 27.0%
Effects of:
Adjustments in respect of prior years (2.5%) (0.7%)
Overseas withholding tax 0.8% 1.5%
Deferred tax 10.4% 9.8%
Additional reduction for R&D expenditure (2.0%) –
Expenses not deductible for tax purposes (0.7%) (4.5%)
Effective tax rate for the year 31.0% 33.1%
Note 8 Profit for the financial year
The Group profit for the year includes £769k (2011: £2,628k) of profit after tax, which has been dealt with in the financial statements
of the holding company. The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006
and has not presented its own income statement in these financial statements.
Note 9 Earnings per share and dividend per share
2012 2011
Weighted average number of shares No. No.
For basic and diluted earnings per share 8,511,398 8,511,398
The calculation of basic and diluted earnings per share is based on the profit for the financial year of £3,786,101 and on 8,511,398
Ordinary 10p and ‘A’ non-voting ordinary 10p shares, being the weighted average number of shares in issue throughout the
financial year.
2012 2011
Paid dividends per 10p ordinary share £(000) £(000)
2011 final paid of 4.46p (2010: 4.24p) (380) (361)
2012 interim paid of 2.34p (2011: 2.23p) (199) (190)
The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,202,198 ‘A’ non-voting ordinary 10p shares, being
the latest number of shares in issue. The directors are proposing a 5p special dividend in addition to the normal final dividend of
4.68p (2011: 4.46p) per share, totalling £824k (2011: £380k). This dividend has not been accrued at the balance sheet date.
24
25
Notes to the accounts
Note 10 Goodwill
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Cost or valuation:
At 1 October 8,938 7,228 – –
Exchange adjustment 94 63 – –
Additions on acquisition of subsidiaries – 1,647 – –
Note 11 Other intangibles
The Group The Company
2012 2011 2012 2011
Development costs £(000) £(000) £(000) £(000)
Cost or valuation:
At 1 October 738 609 65 65
Additions 104 129 – –
Disposal (65) – (65) –
At 30 September 9,032 8,938 – –
At 30 September 777 738 – 65
Amortisation:
At 1 October 580 425 65 60
Charge for the year 137 155 – 5
Disposal (65) – (65) –
At 30 September 652 580 – 65
Net book value:
At 30 September 125 158 – –
At 30 September – prior year 158 184 – 5
All amortisation has been charged to the income statement through operating costs and no intangible items are held as security.
Amortisation and Impairment:
At 1 October 1,581 1,106 – –
Exchange adjustment 7 19 – –
Write down 3,889 456 – –
At 30 September 5,477 1,581 – –
Net book value:
At 30 September 3,555 7,357 – –
Goodwill is allocated at acquisition to the business units that are expected to benefit from that acquisition. The carrying amounts of
goodwill have been allocated as follows:
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
United Kingdom 667 3,957 – –
America – 603 – –
Asia & Australia 2,888 2,797 – –
3,555 7,357 – –
The goodwill relates to two Cash Generating Units (CGU) in the UK, Traffic Management Products business acquired in January 2006
and the Switching Components business acquired in October 2007, two CGUs in America, Elevator Research Manufacturing Corp. and
Winter & Bain acquired in December 2010 and three CGUs in Australia, Australian Lift Components Pty Ltd acquired in February 2000,
Lift Material Australia Pty Ltd acquired in July 2005 and JAS Engineering Pty Ltd acquired in December 2010.
Goodwill values have been tested for impairment by comparing them against the value in use of the relevant CGUs. The value in
use calculations are based on current or projected pre-tax profits, derived from current results or 12 month forecasts approved by the
board, discounted at 5% per annum to calculate their net present value.
The key assumptions used for the ‘value in use’ calculation for these CGUs are the sales and margin projections, the private company
price index (PCPI) multiple applied to forecast profits and the discount rate. Sales growth is not based upon past experience but on
future expectations because of recent product development. Margins are in line with past experience, and both the PCPI multiple and
discount rate are derived from external sources of information and felt to be most appropriate. Based upon these key assumptions the
goodwill impairment charge that arose during the current year is in relation to Switching Components, Traffic Management Products
and Elevator Research Manufacturing Corp with goodwill written down by £160k, £3,130k & £599k (2011: £456k write down on
Winter & Bain) respectively in the financial year.
26
27
Notes to the accounts
Note 12 Property, plant and equipment
The Group The Company
Property Plant and Total Property Plant and Total
equipment equipment
£(000) £(000) £(000) £(000) £(000) £(000)
Cost or valuation:
At 1 October 2010 3,653 6,779 10,432 1,325 344 1,669
Exchange adjustment 33 (10) 23 – – –
Acquired with subsidiary 44 856 900 – – –
Asset under construction 4,924 – 4,924 4,924 – 4,924
Additions 11 189 200 – 2 2
Disposals – (102) (102) – – –
At 1 October 2011 8,665 7,712 16,377 6,249 346 6,595
Exchange adjustment 53 37 90 – – –
Additions 785 589 1,374 765 170 935
Disposals (819) (2,084) (2,903) (816) (344) (1,160)
At 30 September 2012 8,684 6,254 14,938 6,198 172 6,370
The Group The Company
Property Plant and Total Property Plant and Total
equipment equipment
£(000) £(000) £(000) £(000) £(000) £(000)
Depreciation:
At 1 October 2010 716 5,107 5,823 311 306 617
Exchange adjustment 3 5 8 – – –
Acquired with subsidiary 33 374 407 – – –
Charge for the year 82 575 657 10 39 49
Disposals – (99) (99) – – –
At 1 October 2011 834 5,962 6,796 321 345 666
Exchange adjustment 7 7 14 – – –
Charge for the year 164 574 738 93 11 104
Disposals (226) (2,053) (2,279) (224) (344) (568)
At 30 September 2012 779 4,490 5,269 190 12 202
Net book value:
At 30 September 2012 7,905 1,764 9,669 6,008 160 6,168
At 30 September 2011 7,831 1,750 9,581 5,928 1 5,929
Capital commitments contracted by the Group at 30 September 2012 amounted to £73k (2011: £820k) and by the company
£73k (2011: £800k). Capital commitments authorised but not contracted by the Group at 30 September 2012 amounted to
£78k (2011: £21k) and by the company £Nil (2011: £21k).
Note 13 Investments – shares in subsidiary undertakings
The Company 2012 2011
Investments (ordinary shares) in subsidiary undertakings are: £(000) £(000)
Cost:
Dewhurst UK Manufacturing Ltd 175 175
Thames Valley Controls Ltd 300 300
Traffic Management Products Ltd 4,516 4,516
Cortest Ltd 50 50
Dewhurst (Hungary) Kft 72 72
Dupar Controls Inc. 35 35
The Fixture Company 32 32
Elevator Research Manufacturing Corp. 2,390 1,805
Australian Lift Components Pty Ltd 1,798 1,798
Lift Material Australia Pty Ltd 84 84
JAS Engineering Pty Ltd 123 123
Dewhurst Australian Property Pty Ltd 97 97
Dewhurst (Hong Kong) Ltd 1 1
9,673 9,088
Provision for impairment (6,137) (822)
3,536 8,266
The company has thirteen wholly-owned subsidiaries, Dewhurst UK Manufacturing Ltd, Thames Valley Controls Ltd, Traffic
Management Products Ltd (TMP) and Cortest Ltd, registered and principally operating in England, Dewhurst (Hungary) Kft, registered
and principally operating in Hungary, Dupar Controls Inc., registered and principally operating in Canada, The Fixture Company and
Elevator Research Manufacturing Corp. (ERM) registered and principally operating in the United States of America, Australian Lift
Components Pty Ltd, Lift Material Australia Pty Ltd, JAS Engineering Pty Ltd and Dewhurst Australian Property Pty Ltd, all registered
and principally operating in Australia and Dewhurst (Hong Kong) Ltd registered and principally operating in Hong Kong. All companies
have similar principal activities to Dewhurst plc, except TMP and Cortest, which operate solely in the transport sector and Dewhurst
Australian Property Pty Ltd, which operates solely to hold Australian Lift Components Pty Ltd’s property. £3,605k of the investment in
TMP along with the remaining £1,711k investment in ERM (2011: £679k in ERM) has been provided for at the end of this financial year.
Note 14 Inventories
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Raw materials and components 3,075 2,774 – –
Work-in-progress 328 239 – –
Finished goods and goods for re-sale 1,449 1,256 – –
4,852 4,269 – –
There is no material difference between the replacement cost of inventories and the amounts stated above.
28
29
Notes to the accounts
Note 15 Trade and other receivables
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Trade receivables 8,312 8,200 – –
Amounts due from subsidiary undertakings – – 3,910 2,953
Other taxes and social security costs – – – 134
Other receivables 24 88 – –
Prepayments and accrued income 85 106 – –
8,421 8,394 3,910 3,087
Trade receivables are shown net of provision for impairment. The movements in the provision for impairment of receivables were
as follows:
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
At 1 October 242 236 – –
Charge for the year (48) 10 – –
Costs incurred (45) (4) – –
At 30 September 149 242 – –
At the balance sheet date the ageing analysis of trade receivables that were past due (normal terms is 30 days net monthly) but not
provided for are as follows:
Within Up to 1 month Up to 2 months Over 2 months
Total terms overdue overdue overdue
£(000) £(000) £(000) £(000) £(000)
As at 30 September 2012 8,312 6,556 1,266 313 177
As at 30 September 2011 8,200 5,585 1,826 493 296
Note 16 Cash and cash equivalents
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Cash 8,101 5,009 677 301
Short-term deposits 3,000 – 3,000 –
11,101 5,009 3,677 301
Note 17 Trade and other payables
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Trade payables 2,351 2,837 3 306
Other taxes and social security costs 497 338 17 –
Other payables 103 125 41 19
Accruals and deferred income 2,632 1,922 491 255
5,583 5,222 552 580
The directors consider that the carrying amount of trade payables approximates to their fair value.
Note 18 Short-term provisions
The Group The Company
2012 2011 2012 2011
£(000) £(000) £(000) £(000)
Warranty provisions 722 475 – –
Warranties are provided in the normal course of business based on current issues and are costed on an assessment of future claims
with reference to past claims. The provision is in relation to replacement and change-out costs and although it is not possible to
estimate the timing of crystallisation of the potential liability it is expected that it will be utilised during the coming year. Amounts
charged to the Group income statement during the year were £424k (2011: £303k). Amounts utilised by the Group in the year were
£177k (2011: £177k). There were no amounts charged or utilised this year or last year by the company.
Note 19 Deferred taxation
The Group The Company
2012 2011 2012 2011
Deferred tax asset: £(000) £(000) £(000) £(000)
At 1 October 1,779 1,563 2,426 2,254
Transfer directly (to)/from equity 821 641 832 630
Transfer (to)/from income statement (563) (425) (574) (458)
At 30 September 2,037 1,779 2,684 2,426
Deferred tax at 30 September relates to the following: The Group The Company
2012 2011 2012 2011
Deferred taxation £(000) £(000) £(000) £(000)
Defined benefit pension scheme 2,726 2,418 2,726 2,418
Provisions 133 172 (42) 8
Exchange differences on translation of foreign operations (822) (811) – –
Deferred tax asset 2,037 1,779 2,684 2,426
30
31
Notes to the accounts
Note 20 Share capital
2012 2011
Authorised: £(000) £(000)
Shares of 10p each – 4,500,000 Ordinary 450 450
– 9,000,000 ‘A’ non-voting ordinary 900 900
1,350 1,350
2012 2011
Allotted and fully paid: £(000) £(000)
Shares of 10p each – 3,309,200 (2011: 3,309,200) Ordinary 331 331
– 5,202,198 (2011: 5,202,198) ‘A’ non-voting ordinary 520 520
851 851
The Ordinary shares and the ‘A’ non-voting ordinary shares rank in all respects pari passu except that the ‘A’ non-voting ordinary shares
do not carry the right to receive notices, attend or vote at meetings of the company.
Note 21 Changes in equity
The Company
The Group
Share Share Capital Translation Retained Share Share Capital Retained
capital premium redemption reserve earnings capital premium redemption earnings
account reserve account reserve
£(000) £(000) £(000) £(000) £(000) £(000) £(000) £(000) £(000)
At 1 October 2010 851 157 286 2,089 17,704 851 157 286 8,597
Exchange differences on
translation of foreign operations – – – (41) – – – – 8
Actuarial gains/(losses) on defined
benefit pension scheme – – – – (2,423) – – – (2,423)
Tax on items taken directly to equity – – – 11 630 – – – 630
Dividends paid – – – – (551) – – – (551)
Profit for the year – – – – 2,892 – – – 2,628
At 1 October 2011 851 157 286 2,059 18,252 851 157 286 8,889
Exchange differences on
translation of foreign operations – – – 49 – – – – –
Actuarial gains/(losses) on defined
benefit pension scheme – – – – (3,619) – – – (3,619)
Net costs of acquiring the final
stake in ERM (note 26) – – – – (467) – – – –
Tax on items taken directly to equity – – – (11) 832 – – – 832
Dividends paid – – – – (579) – – – (579)
Profit for the year – – – – 3,754 – – – 769
At 30 September 2012 851 157 286 2,097 18,173 851 157 286 6,292
Included in retained earnings is (£10,118k) (2011: (£6,499k)) being the cumulative actuarial gains or (losses) on defined benefit
pension scheme.
Note 22 Retirement benefit obligation
The Group operates pension schemes in the UK, Canada, Australia and the USA, and also complies with Hungarian state legislation.
During the year the UK operated both defined contribution schemes, the assets of which are held in independently administered funds,
and a defined benefit scheme, the assets of which are held in trustee administered funds. The total pension cost for the Group was
£689k (2011: £562k), of which £587k (2011: £562k) relates to defined contribution schemes and £102k (2011: £Nil) relates to the
defined benefit scheme. The Hungarian, Canadian, USA and Australian schemes are of the defined contribution type and the cost to
the Group amounted to £310k (2011: £302k). There was £22k of outstanding charges at the balance sheet date in respect of the
defined benefit scheme (2011: £Nil). On 30 September 2010 the company closed the defined benefit scheme to future accrual and
offered all existing members future pension benefits in a new Group defined contribution scheme. There were still company
contributions during the year of £1,404k per annum into the defined benefit scheme (2011: the company contributed a fixed sum of
£1,404k per annum). This method of calculating the rate and amount has been agreed with the actuary. The percentage contribution
covered the current service accruals and the fixed sum is paid to reduce the fund deficit.
As required under the Welfare Reform and Pensions Act 1999 and Stakeholder Pension Schemes Regulations 2000 the Group has
offered access to a stakeholder pension scheme to employees in its UK-based companies.
The pension cost relating to the UK defined benefit scheme is assessed in accordance with the advice of qualified actuaries using the
new scheme specific funding regime which came into force in September 2005. The latest actuarial valuation of the scheme was on
1 June 2009. Generally, it has been assumed that future investment yields would be at 6.5% per annum (pre-retirement) and 5.0%
(post-retirement) and that increases in earnings would average 4.2% per annum.
At the date of the latest actuarial valuation of the UK scheme, the market value of the assets of the scheme exceeded £15.9 million
and the funding level on the on-going valuation basis was 64%. The 2009 actuarial valuation takes account of secured pensioners
when assessing the assets and liabilities of the fund. All the recommendations made by the scheme’s actuary to eliminate the scheme
deficit have been fully implemented.
IAS 19 Employee Benefits
Under IAS 19 a snapshot is taken of the retirement benefit fund assets and liabilities to coincide with the company’s financial year-end.
Thus movements in equity and bond markets and in discount rates may create some volatility in the calculation of the scheme assets
and liabilities. The FTSE-100 index stood at 5,742 at 30 September 2012 (2011: 5,128).
Assumptions
The following actuarial assumptions, updated to 30 September 2012 by the scheme actuary, have been used in preparing the
disclosures required under IAS 19:
2012 2011
Retail price index expected to rise by 2.4% 3.0%
Pensionable salaries will increase by n/a n/a
Deferred pensions and pensions in payment will increase by 2.4% 3.0%
Liabilities discounted at a rate of 4.0% 5.0%
Expected lifetime for a member retiring at the accounting date – for males 23.1 yrs 23.0 yrs
– for females 24.3 yrs 24.3 yrs
Future expected lifetime for a member retiring in 20 years’ time – for males 25.9 yrs 25.8 yrs
– for females 26.3 yrs 26.3 yrs
32
33
Notes to the accounts
Note 22 Retirement benefit obligation continued
The assets in the scheme and the expected rates of return:
IAS 19 requires the value of annuities purchased in respect of pensioners and widow(er)s to be taken into current year calculations.
Long-term Long-term
rate of return Fair value at rate of return Fair value at Fair value at
expected at 30 Sept 2012 expected at 30 Sept 2011 30 Sept 2010
30 Sept 2012 £(000) 30 Sept 2011 £(000) £(000)
Equities 6.2% 14,282 5.9% 15,074 15,215
Bonds 4.0% 4,402 5.1% 1,293 1,270
Other 3.0% 3,505 3.4% 3,169 3,390
Total fair value of scheme assets 22,189 19,536 19,875
Present value of scheme liabilities (34,045) (28,835) (27,943)
Scheme deficit (11,856) (9,299) (8,068)
Related deferred tax asset 2,726 2,418 2,259
Net pension liability (9,130) (6,881) (5,809)
Amounts charged to operating profit: 2012 2011 2010
£(000) £(000) £(000)
Current service cost – – 299
Curtailment – – 91
Total operating charge – – 390
Amounts charged to other finance costs: 2012 2011 2010
£(000) £(000) £(000)
Expected return on pension scheme assets 1,087 1,256 1,194
Interest on pension scheme liabilities (1,424) (1,377) (1,347)
Net benefit/(cost) (337) (121) (153)
Amounts recognised in the statement of recognised income and expenses (SoRIE): 2012 2011 2010
£(000) £(000) £(000)
Actual return less expected return on pension scheme assets 788 (2,217) (59)
Experience gains and losses arising on the scheme liabilities (159) – 1,119
Changes in assumptions underlying the present value of the scheme liabilities (4,248) (206) (3,557)
Actuarial gains/(losses) recognised in SoRIE (3,619) (2,423) (2,497)
The movement in the scheme assets, liabilities and the net deficit are as follows: 2012 2011 2010
£(000) £(000) £(000)
Deficit in scheme at 1 October (9,299) (8,068) (6,072)
Movement in the year Current service cost – – (299)
Curtailment – – (91)
Contributions 1,404 1,404 1,111
Administration charge (5) (91) (67)
Other finance costs (337) (121) (153)
Actuarial gains/(losses) (3,619) (2,423) (2,497)
Deficit in scheme at 30 September (11,856) (9,299) (8,068)
History of experience gains and losses: 2012 2011 2010
£(000) £(000) £(000)
Difference between the expected and actual return on scheme assets 788 (2,217) (59)
Percentage of scheme assets 3.6% (11.3%) (0.3%)
Experience gains and losses on scheme liabilities (159) – 1,119
Percentage of the present value of scheme liabilities 0.5% – (4.0%)
Total amount recognised in SoRIE (3,619) (2,423) (2,497)
Percentage of the present value of scheme liabilities 10.6% 8.4% 8.9%
Note 23 Lease commitments
Total future minimum lease payments under non-cancellable operating leases for each of the following periods:
The Group The Company
2012 2012 2011 2011 2012 2011
Land and Other Land and Other Other Other
buildings buildings
£(000) £(000) £(000) £(000) £(000) £(000)
Within one year 203 67 236 74 – –
Within two to five years 149 40 310 70 – –
352 107 546 144 – –
Note 24 Related parties
The controlling party of the Group is Dewhurst plc. Transactions between the company and its subsidiaries, which are related parties to
the company, have been eliminated on consolidation. However during the year, in the company’s financial statements, there have been
the following transactions: purchase and sale of goods at arm’s length, group management charges, interest on loans at floating rates
on a commercial basis and dividend income received. All transactions are settled by cash. Any loans given are secured on the assets of
the relevant company.
2012 2011
£(000) £(000)
Management charges to subsidiaries 848 852
Rent charges to subsidiaries 250 265
Interest income received 138 14
Interest income paid – 11
Dividend income received 4,076 3,561
Dividends paid to directors 76 72
Loans and trade receivables due 4,709 4,315
Loans and trade payables due – 1,361
34
35
Notes to the accounts
Note 25 Financial instruments
Note 26 Investments – shares in subsidiary undertakings
On 31 July 2012, Dewhurst plc acquired the remaining shares in Elevator Research & Manufacturing Corp. (ERM). The Group
acquired the additional 20% stake for a total cash consideration of US$0.9 million (£0.6 million). At this date the Group had a 100%
stake in ERM.
Book value Fair value
Details of the transaction: Notes £(000) £(000)
Non controlling interest:
As at 1 October 2011 149 149
Loss to July 2012 (32) (32)
Exchange rate 1 1
As at 31 July 2012 118 118
Consideration 585 585
Net costs taken directly to equity 21 467 467
There are no recognised gains and losses other than the results for the periods.
Cash flows
The net outflow of cash arising from acquisitions was as follows: £(000)
Cash consideration, as above 585
Net outflow of cash in respect of ERM 585
The Group’s policies towards using financial instruments to manage interest rate, liquidity and currency exposure risks are explained
in the financial review on pages 10–11.
Credit risk
The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new
customers before entering contracts. Such credit ratings, taking into account local business practices, are then factored into any
contracts.
Interest risk
The Group is exposed to interest risk but purely on bank deposits. It is Group policy to maximise the return on interest earned whilst
taking adequate steps to monitor the viability of the bank and safe guarding the assets of the Group.
Foreign exchange contracts
During the year the Group used derivatives to manage credit risk. At the year end Dewhurst plc entered into a A$3,350,000 Australian
Dollar foreign exchange contract, in the amount of £2,146,570 sterling, the purpose of which is to hedge against Australian Dollar
currency fluctuations. The contract was stated at its fair value and the Group does not hedge account. This contract matured on
31 October 2012.
Currency and interest rate exposure of financial assets and liabilities
The cash and cash equivalent amount of £11,101k (2011: £5,009k) is made up of cash of £8,101k (2011: £5,009k) and short-term
deposits of £3,000k (2011: £Nil). The cash was invested at overnight rates based on the relevant national LIBOR. Short-term deposits
were fixed for 12 months at an average rate of 2.70% (2011: Nil). Of the cash, £6,670k (2011: £2,533k) is denominated in sterling
with the balance of £4,431k (2011: £2,476k) held in foreign currencies. Other financial assets and liabilities do not attract interest.
The Group
The Company
Floating Fixed Interest Interest Floating Fixed Interest Interest
rate rate free free rate rate free free
assets assets assets liabilities assets assets assets liabilities
Currency and interest profile £(000) £(000) £(000) £(000) £(000) £(000) £(000) £(000)
Sterling 2,534 – 3,707 1,446 298 – – 306
AUS Dollars 1,173 – 1,536 420 1 – – –
US Dollars 559 – 1,749 796 2 – – –
CAN Dollars 466 – 1,050 78 – – – –
Other 277 – 158 97 – – – –
At 30 September 2011 5,009 – 8,200 2,837 301 – – 306
Sterling 3,670 3,000 4,053 1,005 383 3,000 – 3
AUS Dollars 1,878 – 1,448 446 161 – – –
US Dollars 1,288 – 1,689 681 133 – – –
CAN Dollars 688 – 999 125 – – – –
Other 577 – 123 94 – – – –
At 30 September 2012 8,101 3,000 8,312 2,351 677 3,000 – 3
The only operation that holds material monetary assets and liabilities in currencies other than their functional currency is the Hungarian
subsidiary Dewhurst (Hungary) Kft, which holds cash denominated in Sterling with a balance of £448k (2011: £350k) and US Dollars
with a balance of £988k (2011: £321k), trade receivables denominated in Sterling with a balance of £1,236k (2011: £1,118k) and
US Dollars with a balance of £1,035k (2011: £682k) and trade payables denominated in Sterling with a balance of £135k (2011: £263k)
and US Dollars with a balance of £406k (2011: £311k).
Fair value of financial instruments
Fair value is defined as the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed
and willing parties, excluding accrued interest, and is calculated by reference to market rates discounted to current value. Accordingly,
the directors believe that there is no material difference between the carrying amount and the fair value of its financial instruments.
Bank facilities
The Group has no undrawn committed bank overdraft facility (2011: a £2.0 million facility secured upon the new premises being
Unit 9 Hampton Business Park).
36
37
Company financial statements
Company statement of recognised income and expense
2012 2011
£(000) £(000)
Net income/(expense) recognised directly in equity:
Actuarial gains/(losses) on the defined benefit pension scheme (3,619) (2,423)
Exchange differences on translation of foreign operations – 8
Tax on items taken directly to equity 832 630
Net income/(expense) recognised directly in equity in the year (2,787) (1,785)
Profit for the financial year 769 2,628
Total recognised income and expense for the year (2,018) 843
Company balance sheet
2012 2011
At 30 September 2012 Notes £(000) £(000)
Non-current assets
Other intangibles 11 – –
Property, plant and equipment 12 6,168 5,929
Deferred tax asset 19 2,684 2,426
Investments in subsidiaries 13 3,536 8,266
12,388 16,621
Current assets
Trade and other receivables 15 3,910 3,087
Current tax assets 19 53
Cash and cash equivalents 16 3,677 301
7,606 3,441
Total assets 19,994 20,062
Current liabilities
Trade and other payables 17 552 580
552 580
Non-current liabilities
Retirement benefit obligation 22 11,856 9,299
Total liabilities 12,408 9,879
Net assets 7,586 10,183
Equity
Share capital 20 851 851
Share premium account 21 157 157
Capital redemption reserve 21 286 286
Retained earnings 21 6,292 8,889
Total equity 7,586 10,183
The financial statements were approved by the board of directors and authorised for issue on 3 December 2012 and were signed
on its behalf by:
Richard Dewhurst Chairman
Jared Sinclair Finance Director
Company Registration Number: 160314
The notes on pages 19 to 37 form part of these financial statements
The notes on pages 19 to 37 form part of these financial statements
38
39
Company financial statements
Report of the independent auditor
Company cash flow statement
Notes 2012 2011
For the year ended 30 September 2012 £(000) £(000)
Cash flows from operating activities
Operating profit /(loss) (2,543) (296)
Depreciation and amortisation 104 54
Additional (income)/costs to pension scheme (1,399) (1,313)
(Profit)/loss on disposal of property, plant and equipment (3,944) –
Write-down of investments 5,315 679
(2,467) (876)
(Increase)/decrease in trade and other receivables (823) 477
Increase/(decrease) in trade and other payables (28) 186
Cash generated from operations (3,318) (213)
Interest paid (2) (13)
Income tax paid (8) (90)
Net cash from/(used in) operating activities (3,328) (316)
Cash flows from investing activities
Acquisition of subsidiaries undertakings 26 (585) (1,286)
Net proceeds from sale of property, plant and equipment 4,536 –
Purchase of property, plant and equipment (935) (4,926)
Interest received 191 25
Dividends received 4,076 3,561
Net cash generated from/(used in) investing activities 7,283 (2,626)
Cash flows from financing activities
Dividends paid (579) (551)
Net cash used in financing activities (579) (551)
Net increase/(decrease) in cash and cash equivalents 3,376 (3,493)
Cash and cash equivalents at beginning of year 16 301 3,794
Cash and cash equivalents at end of year 16 3,677 301
The notes on pages 19 to 37 form part of these financial statements
40
Independent auditor’s report to the shareholders of
Dewhurst plc.
material misstatements or inconsistencies we consider the
implications for our report.
We have audited the Group and parent company financial
statements (‘the financial statements’) of Dewhurst plc for the
year ended 30 September 2012 which comprise the
consolidated income statement, the consolidated and
company balance sheets, the consolidated and parent
company cash flow statements, the consolidated and parent
company statements of recognised income and expense and
the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRS) as adopted
by the European Union and, as regards the parent company
financial statements, as applied in accordance with the
Companies Act 2006.
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions
we have formed.
Respective responsibilities of directors
and auditor
As explained more fully in the statement of directors’
responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to
audit and express an opinion on the financial statements in
accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board’s Ethical Standards
for Auditors.
Scope of the audit of the financial
statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting
policies are appropriate to the Group’s and the parent
company’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall
presentation of the financial statements. In addition, we read
all the financial and non-financial information in the annual
report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the
state of the Group’s and of the parent company’s affairs as at
30 September 2012 and of the Group’s profit for the year
then ended;
the group financial statements have been properly
prepared in accordance with IFRS as adopted by the European
Union;
the parent company financial statements have been
properly prepared in accordance with IFRS as adopted by the
European Union and as applied in accordance with the
provisions of the Companies Act 2006;
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion the information given in the report of the
directors for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following where
under the Companies Act 2006 we are required to report to
you if, in our opinion:
adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the parent company financial statements to be audited are
not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by
law are not made; or
we have not received all the information and explanations
we require for our audit.
Paul Fenner
Senior Statutory Auditor
for and on behalf of
Chantrey Vellacott DFK LLP
Chartered Accountants and Statutory Auditor
London, 5 December 2012
41
Notice of meeting
Group companies
Notice is hereby given that the ninety third Annual
General Meeting of Dewhurst plc will be held at its
registered office, Unit 9 Hampton Business Park,
Hampton Road West, Feltham, TW13 6DB on 5 February
2013 at 11:00 am. The meeting will be held in order to
consider and, if thought fit, pass resolutions 1 to 6 as
ordinary resolutions.
Ordinary resolutions
1 To receive and adopt the statement of accounts for the
year ended 30 September 2012 and the reports of the
directors and auditor thereon.
2 To declare and approve a 5p special dividend and the final
dividend on the Ordinary and ‘A’ non-voting ordinary shares
to shareholders on the register of members on 18 January
2013.
3 To re-elect as a director Mr P Tett, who retires by rotation
under the Articles of Association.
4 To re-elect as a director Mr J Bailey, who retires by rotation
under the Articles of Association.
5 To re-appoint Chantrey Vellacott DFK LLP as auditor at a fee
to be agreed by the directors.
6 As special business to consider and, if thought fit, pass the
following ordinary resolution: that the company be and is
hereby generally and unconditionally authorised to make
market purchases (within the meaning of section 693(4) of
the Companies Act 2006) of up to an aggregate of 496,380
Ordinary shares and 780,330 ‘A’ non-voting ordinary shares
of 10p each (representing 15% of the issued share capital) in
the company at a price per share (exclusive of expenses) of
not less than 10p and not more than 105% of the average of
the middle market quotations for such Ordinary and ‘A’ non-
voting ordinary shares, as derived from the Stock Exchange
Daily Official List, for the ten dealing days immediately
preceding the day of the purchase; such authority to expire at
the conclusion of the Annual General Meeting to be held in
2014 save that the company may purchase shares at any later
date where such purchase is pursuant to any contract made
by the company before the expiry of this authority.
7 To transact any other ordinary business of the company.
By order of the board
Jared Sinclair Secretary
31 December 2012
Notes
1 All Shareholders who wish to attend and vote at the meeting must
be entered on the company’s register of members no later than 11:00 am
on 3 February 2013 (being 48 hours prior to the time fixed for the
meeting) or, in the case of an adjournment, as at 48 hours prior to the
time of the adjourned meeting. Changes to entries on the register after
that time will be disregarded in determining the rights of any person to
attend or vote at the meeting. ‘A’ non-voting ordinary shares do
not carry the right to attend or vote at meetings of the company.
2 Shareholders entitled to attend and vote at the meeting may appoint
a proxy or proxies to attend, vote and speak on their behalf. A proxy
need not be a member of the company. Investors who hold their shares
through a nominee may wish to attend the meeting as a proxy, or to
arrange for someone else to do so for them, in which case they should
discuss this with their nominee or stockbroker. Shareholders are invited
to complete and return the enclosed Proxy Form. Completion of the
Proxy Form will not prevent a Shareholder from attending and voting at
the meeting if subsequently he/she finds that he/she is able to do so.
To be valid, completed Proxy Forms must be received by the Company
Secretary at the registered office of the company, Dewhurst plc, Unit 9
Hampton Business Park, Hampton Road West, Feltham, TW13 6DB,
by fax at +44 (0)20 8744 8206, with the scanned Proxy Form by email
at cosec@dewhurst.co.uk by no later than 48 hours before the time
appointed for the holding of the meeting, or, in the case of an
adjournment, as at 48 hours prior to the time of the adjourned
meeting.
3 Representatives of Shareholders which are corporations attending
the meeting should produce evidence of their appointment by an
instrument executed in accordance with Section 44 of the Companies
Act 2006 or signed on behalf of the corporation by a duly authorised
officer or agent and in accordance with article 71 of the company’s
Articles of Association.
4 The company, pursuant to Regulation 41 of the Uncertificated
Securities Regulations 2001, specifies that only those holders of
Ordinary Shares registered in the register of members of the company
at 11:00 am on 3 February 2013 (being 48 hours prior to the time fixed
for the meeting) shall be entitled to attend and vote at the Annual
General Meeting in respect of such number of shares registered in their
name at that time. Changes to entries in the register of members after
that time shall be disregarded in determining the rights of any person
to attend or vote at the meeting.
5 A copy of the company’s current Articles of Association will be
available for inspection during usual business hours on any weekday
(Saturdays, Sundays and Public Holidays excluded) at the registered
office of the company until the date of the Annual General Meeting
and at the place of the meeting for 15 minutes prior to and until the
termination of the meeting.
42
Head office
DEWHURST PLC
Unit 9 Hampton Business Park
Hampton Road West
Feltham TW13 6DB
Tel: 020 8744 8200
Fax: 020 8744 8261
cosec@dewhurst.co.uk
www.dewhurst.co.uk
UK subsidiaries
DEWHURST UK
MANUFACTURING LTD
Unit 9 Hampton Business Park
Hampton Road West
Feltham TW13 6DB
Tel: 020 8744 8200
Fax: 020 8744 8261
cosec@dewhurst.co.uk
www.dewhurst.co.uk
David Dewhurst
Managing Director
THAMES VALLEY CONTROLS LTD
Unit 15 Manor Farm Industrial Estate
Flint, Flintshire
Wales CH6 5UY
Tel: 01352 793222
Fax: 01352 793255
info@tvcl.co.uk
www.tvcl.co.uk
Richard Young
Managing Director
TRAFFIC MANAGEMENT
PRODUCTS LTD
Unit 7 Gatwick Distribution Point
Church Road, Lowfield Heath
Crawley
West Sussex RH11 0PJ
Tel: 08456 808066
Fax: 08456 808077
info@traffic-products.co.uk
www.traffic-products.co.uk
John Bailey
Managing Director
CORTEST LTD
Unit 7 Gatwick Distribution Point
Church Road, Lowfield Heath
Crawley
West Sussex RH11 0PJ
Tel: 08456 808044
Fax: 08456 808055
info@corrosion-testing.co.uk
www.corrosion-testing.co.uk
John Bailey
Managing Director
Overseas subsidiaries
DEWHURST (HUNGARY) KFT
H–2038, Soskut
Hrsz. 3518/8
Hungary
Tel: 00 362 356 0550
Fax: 00 362 356 0559
Laszlo Denk
Managing Director
DUPAR CONTROLS INC.
1751 Bishop Street
Cambridge, Ontario
Canada N1T 1N5
Tel: 001 519 624 2510
Fax: 001 519 624 2524
info@dupar.com
www.dupar.com
George Foleanu
General Manager
ELEVATOR RESEARCH
MANUFACTURING CORP.
1417 Elwood Street
Los Angeles
CA 90021 USA
Tel: 001 213 746 1914
Fax: 001 213 749 1355
sales@elevatorresearch.com
www.elevatorresearch.com
Barnet Rogers
General Manager
AUSTRALIAN LIFT COMPONENTS
PTY LTD
5 Saggartfield Road
Minto
NSW 2566
Australia
Tel: 00 612 9603 0200
Fax: 00 612 9603 2700
info@alc.au.com
www.alc.au.com
Chris Carroll
Managing Director
LIFT MATERIAL AUSTRALIA PTY LTD
PO Box 7164
Alexandria, Sydney
NSW 2015
Australia
Tel: 00 612 9310 4288
Fax: 00 612 9698 4990
info@liftmaterial.com
www.liftmaterial.com
Tony Pegg
Managing Director
JAS ENGINEERING (NSW) PTY LTD
26 Kiama Street, Miranda
NSW 2228
Australia
Tel: 00 612 9522 4842
Fax: 00 612 9522 3240
sales@jaseng.com.au
www.jaseng.com.au
Chris Carroll
Managing Director
DEWHURST (HONG KONG) LTD
Unit 19, 7/F, Block A
Hoi Luen Industrial Centre
55 Hoi Yuen Road
Hong Kong
Tel: 00 852 3523 1563
Fax: 00 852 3909 1434
efung@dewhurst.co.uk
www.dewhurst.co.uk
Eric Fung
General Manager
Other overseas
representation
The group maintains overseas
representation in major countries
throughout the world
43
Advisers and company information
Secretary and
registered office
Jared Sinclair
Dewhurst plc
Unit 9 Hampton Business Park
Hampton Road West
Feltham TW13 6DB
Registered No.160314
Advisers
AUDITOR
Chantrey Vellacott DFK LLP
Chartered Accountants
and Statutory Auditor
Russell Square House
10–12 Russell Square
London WC1B 5LF
BANKERS
National Westminster Bank plc
275–277 High Street
Hounslow
Middlesex TW3 1EG
REGISTRARS
Capita IRG plc
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire HD8 0LA
NOMINATED ADVISER
AND BROKER
Seymour Pierce Ltd
20 Old Bailey
London EC4M 7EN
SOLICITORS
Keystone Law
53 Davies Street
London W1K 5JH
44
Design: www.gilldavies.co.uk
www.dewhurst.co.uk