Annual report
and accounts
2018
We are a
global supplier
of quality
components
to the lift,
transport
and keypad
industries
01 Financial highlights
02 Chairman’s statement
03 Dewhurst worldwide
04 Strategic report
09 Principal risks and uncertainties
10 Financial review
11 Group key performance
indicators
12 Board of directors
13 Chairman’s corporate
governance statement
14 Report of the directors
16 Consolidated financial
statements
20 Notes to the accounts
38 Company financial statements
41 Report of the independent
auditor
46 Notice of meeting
47 Group companies
48 Advisers and company
information
01
Financial highlights
A record
year for sales
and profits
supports
continued
dividend
growth
Revenue £ million
Operating profit* £ million
54.5
52.9
6.7
6.2
46.6
45.9
47.2
5.5
5.6
5.5
2014
2015
2016
2017
2018
2018
2014
2015
2016
2017
2018
Earnings per share Pence
Dividend per share Pence
50.21
43.87
40.75
52.65
47.93
13.00†
12.50
12.00
11.00
10.00
9.00
10.00
2014
2015
2016
2017
2018
2018
2014
2015
2016
2017
2018
Revenue
2018
£’000
2017
£’000
54.5m
52.9m
Operating profit*
6.7m
6.2m
Earnings per share
47.93p
52.65p
Dividend per share
12.50p
12.00p
* Operating profit before goodwill
write down, amortisation of acquired
intangibles and gain on property disposal
† Includes special dividend of 3p per share
02
Chairman’s statement
Self-funded
growth gives
more security
in periods of
volatility
Richard Dewhurst
Chairman
Results
It gives me great pleasure to be reporting
record results for the Group again this
year. Group sales for the year to
30 September 2018 increased 3.1%
to £54.5 million (2017: £52.9 million),
despite adverse currency movements
during the period as the pound
strengthened against our main operating
currencies. Adjusted operating profit
(i.e. before amortisation of acquired
intangibles) was £6.7 million (2017:
£6.2 million) and profit before tax was
£6.0 million (2017: £6.0 million).
The lift business in the UK was up
significantly, with 9% of organic growth
and 35% coming from 4 months’
contribution from A&A; in local
currencies, North America was down
slightly as the growth in Canada was
more than offset by the disposal of the
Winter and Bain business in California;
there was good growth in Australia
assisted by a full year contribution from
P&R for the first time. Transportation
business fell slightly during the year and
Keypads dropped back significantly after
their strong year in 2017. Overall,
currency movements have resulted in a
loss on translation on reported sales of
£1.5 million and on profit before tax of
£0.2 million compared to the rates
prevailing last year.
Every year brings a new set of challenges
as our markets, competitors and custom-
er expectations change over time. The
management and staff in our operating
businesses around the world have the re-
sponsibility of achieving their own results
within an agreed set of values, strategies
and budgetary boundaries. These results
are a testament to those staff and we
thank them for their contribution to this
year’s success.
With the continuing strength of the
Group’s performance we are proposing
a 0.5 pence increase in the final dividend
to 9.0 pence representing a 0.5 pence
increase in the total dividend for the
year as a whole to 12.5 pence (2017:
12.0 pence).
Operations and people
The Group made its most significant
acquisition to date in June this year
when it purchased A&A Electrical
Distributors Ltd (‘A&A’). A&A provide a
wide range of components and cable
to the UK lift industry and also have a
general electrical wholesaling division.
The acquisition consumed a considerable
amount of management resource during
the year, both in the due diligence
period leading up to acquisition and in
the integration work that has followed
acquisition. I would like particularly to
thank our Finance Director, Jared Sinclair,
for his unstinting work on this project,
in addition to the new management
team at A&A. Much of that work has
now been completed but there will be
a further stage in early 2019 when we
fully align their systems. The business is
performing in line with our expectations
under the leadership of John Bailey, who
has returned to an executive role with
the Group and we welcome him back.
I am also delighted to welcome Jeremy
Dewhurst to the Group in the role of
Finance Director at A&A.
I am pleased to report that the
restructured ERM business in California
was profitable during the year and is
showing much greater stability. There
is still plenty to do to achieve the
company’s potential but congratulations
are due to Lorilee Allen, who has been
promoted to General Manager, and to
her team for the progress achieved.
We also opened a new Australian Lift
Components sales office in Melbourne in
April this year to improve our customer
service in that market. The Melbourne
market is currently very busy and this
office has proved to be popular with
03
Dewhurst worldwide
WHERE WE OPERATE
our customers, leading to us winning a
number of significant projects.
Company
We have just commenced our hundredth
year of operation, which is quite a
milestone for the Group. Relevant
branding is now displayed on our
website. The business was incorporated
on November 5th 1919 and we look
forward to celebrating our centenary
next autumn.
Outlook
It is currently impossible to predict the
ultimate relationship between the UK
and the EU, so we cannot forecast what
the impact on our business is likely to
be. Because of this uncertainty, those
businesses that import into the UK are
increasing their inventory levels and our
overseas companies that import from the
UK are doing the same. However this can
only cover any disruption for a limited
period and we will have to do our best
to react to events as they unfold. The
only clear impact at this point is that we
would expect to have higher inventory
at the end of the Half Year with an
equivalent impact on cash flow.
Although future demand in the UK
is uncertain, we will have a full year’s
contribution from A&A next year.
Elsewhere lift product demand continues
to be strong in North America and
much of Australia, which is encouraging
as these are key markets for us. On
keypads, demand has bounced back
from the low points of last year and
trading currently seems a little steadier.
NORTH
AMERICA
Canada
Dupar Controls
USA
The Fixture Company
Elevator Research
Manufacturing Corp.
UK, EUROPE AND
MIDDLE EAST
AUSTRALIA
AND ASIA
Hong Kong
Dewhurst (Hong Kong)
Australia
Australian Lift
Components
P&R Liftcars
Lift Material Australia
Dual Engraving
United Kingdom
Dewhurst
A&A Electrical
Distributors
Thames Valley Controls
Traffic Management
Products
Hungary
Dewhurst (Hungary)
UAE
Dewhurst (Middle East)
Product areas
Lift
Sales by region
22%
Lift
Transport
Keypads
Lift
Transport
47%
31%
Employees by region
75
231
89
04
Strategic report
Intelligent
systems
create the
opportunity
to share the
knowledge
of our skilled
engineers
David Dewhurst
Group Managing Director
Business review
The Group’s principal activity in the year
continued to be the manufacture and
distribution of electrical components
and control equipment for industrial and
commercial capital goods. The Group
maintained its position as a speciality
supplier of equipment to lift, transport
and keypad sectors. A business review
of the Group’s operations is dealt with
below in operating highlights and in the
Chairman’s Statement on page 2.
Key performance indicators
The directors believe that the key
financial performance indicators relevant
to the Group are earnings per share,
adjusted operating profit, reported
profit before tax and return on equity
which are stated
on page 11. The key non-financial
performance indicators relevant to the
Group are quality measures and on-time
deliveries to our customers.
in the five year review
Operating highlights
In general our overseas companies
performed well. Inevitably there was
the odd exception, notably Dewhurst
Hungary, who had a particularly difficult
year. In the UK there was no obvious
pattern: some parts of the lift market
were reasonably strong, others were
weaker. Meanwhile the transport market
was essentially stagnant. However, it
was another solid year and certainly our
broad geographic spread of businesses
has sheltered us from the current
vagaries of the UK market.
I would like to join the Chairman in
thanking all our employees across
the Group for their hard work and
contribution to this year’s results.
contribution from A&A Electrical
Distributors.
Dewhurst UK Limited
Sales declined at Dewhurst UK for the
second consecutive year mainly due to
overseas markets being less buoyant
than had been expected. The UK market
was also quite stagnant, with a recurring
theme of projects being delayed.
We have been extremely active on the
product design side. We launched our
first wholly new rail product for many
years. The Train Despatch Equipment
Unit has been developed in conjunction
with Network Rail and brings together
all the components required by a train
despatcher, into one module. The unit
is currently being trialled at Birmingham
New Street Station and in due course
is expected to be rolled out onto the
platforms of many large stations.
For the lift industry we have extended
our Profile Plus Landing Station range
to include three new widths. We have
also launched two new sizes of our US1
touch car operating panel.
Our Operations Team have received three
new Arburg moulding machines into
the factory, continuing our investment
in the latest plant and machinery. We
have also initiated a new program to
explore opportunities with Single Minute
Exchange of Dies to look to significantly
improve our tooling set up times.
Thames Valley Controls (TVC)
After two quite difficult years at TVC,
the company has bounced back with
strong sales growth and a significant
improvement in profits. Demand for
both our controller products and our
monitoring systems increased.
UNITED KINGDOM
Sales in the UK were up overall, as a
result of strong growth from Thames
Valley Controls and the first time
The new requirements of EN81-20 had
created challenges for our manufacturing
team but early in the year these issues
were resolved and the flow through the
Our lift shaft
lighting provides
continuous even
light the length
of the shaft
05
factory improved. We now have four
automated test simulation units which
have contributed significantly in reducing
test times.
The Application Engineering Team
have continued their work with a new
computer aided engineering system to
increase end to end efficiency in the
production of controllers. In the summer
we launched our first controller onto the
shop floor that had been engineered
using this system.
Traffic Management Products (TMP)
We were unable to continue the
momentum that we had built up in
2017 and this year sales fell mainly as a
result of reduced demand for our solar
powered products. TMP have launched
a large number of new products over
the last two years. Whilst some of these
products have become well established
and achieved good growth, others have
not gained the traction we had originally
hoped for. Management are aware of
this challenge and are working with the
sales team to grow the sales of all these
new products.
As we indicated last year, we have taken
the decision to move key manufacturing
processes in house. Good progress
has been made on this project, which
has led to some major changes for
TMP. We have relocated the business
to Birmingham and in our new facility,
have all the plant required for vacuum
forming, rotational moulding, lamination
and assembly of our highway and street
bollards. This should allow us to generate
a significant improvement in both the
gross and net profit of the business in
the future.
A&A Electrical Distributors (A&A)
We acquired A&A in June 2018 from
the founders of the business Alan and
Ann Warren. A&A has over 35 years of
experience in the lift industry and they
06
Strategic report
are the foremost lift component supplier
in the UK. They act as a one stop shop
for key components that are required in
new lift installations and modernisations.
Leading products that A&A supply
include, electrical trailing cable, safety
items such as car top controllers, shaft
lighting as well as many other products.
At their 55,000 square feet warehouse
in North East London, they stock over
30,000 product lines. The focus is very
much on the customer and they look to
ship orders next day on their own
vehicle fleet.
We have the opportunity at A&A to
further improve our customer service by
making products available online. We
also have the opportunity to replicate,
in part, the A&A model to other overseas
businesses in the Group.
We are very pleased to welcome back
John Bailey into an executive role, as
Managing Director of A&A and we are
excited that as we enter our 100th year,
A&A have sold
over 6,000km
of cable in their
lifetime
Jeremy Dewhurst has joined the Group
from Deloitte, to take up the role of A&A
Finance Director.
EUROPE & THE MIDDLE EAST
Dewhurst Hungary
The slowdown in sales that we saw in
the second half of last year continued
through the first half of this year.
Sales were low, mirroring a significant
slowdown in demand for ATM’s. Activity
in the second half did pick up but we
still finished the year with sales down
significantly on previous years.
At the end of the year, we launched the
next generation of keypad for ATM’s.
The plastic version has seen little change
but the stainless version has a new key
design, which is much cleaner, as well as
providing cost benefits to our customers.
Dewhurst Middle East
In our first full year of trading at
Dewhurst Middle East, sales reached an
acceptable level, giving us a good base
for the future.
The nature of the Middle East work
is very much skewed towards large
projects, the timing of which is difficult
to predict. Our objective for the coming
year is to secure baseload sales, so we
can reduce our dependence on the
project work.
NORTH AMERICA
Dupar Controls
We reported in last year’s accounts that
sales had fallen back at Dupar after
many years of growth. This year we
once again had strong growth, with
sales up 18% to a new record level. An
excellent achievement by the team at
Dupar. The operations team have been
quite stretched to achieve this increase
in volumes but we have made good
progress in this area, re-organising the
factory to improve capacity.
07
However, we are finding that space is
a limitation to our growth ambitions
and we are in the process of securing
a site a few miles north of our current
location. Here we intend to build a new,
significantly larger plant to replace our
existing factory. This will be an on-going
project over the next two years.
Elevator Research & Manufacturing
(ERM)
As reported last year, we have
significantly restructured the ERM
business. Originally it was our intention
to mothball the door and cab businesses
but we were able to sell these product
lines, which was a far more beneficial
outcome.
We now have, in ERM, a far simpler
business, solely focussed on fixtures. The
team have made excellent progress this
year. Despite the various distractions,
they have grown fixtures sales during
the year and turned this business around
financially. We now have a strong base
from which we can continue to build the
company over the coming years.
AUSTRALIA & ASIA
Australian Lift Components (ALC)
Sales at ALC were at similar levels to last
year. They have continued their focus on
quality and on time delivery and have a
good reputation in the market.
We have benefitted over the last
twelve months from having an office in
Brisbane. Our customers have confirmed
their preference for local representation.
Accordingly, we opened an office in
Melbourne during the year which has
been very well received by customers.
P&R Lift Cars (P&R)
P&R have had an excellent year.
Demand for their bespoke lift cars has
been high and their performance in
their first full year has greatly exceeded
expectations.
12 billion people
a day depend
on wire rope to
move their lift
08
Strategic report
Inevitably this high demand has had an
impact on senior management, who
have been extremely stretched. Our
challenge over the coming year will
be to provide further support for the
management team.
Earlier in the year we invested in a CNC
router which has helped improve our cab
manufacturing productivity.
Lift Material
We had another strong year at Lift
Material, with sales growing by more
than 10%. The Escalator Division
performed particularly well with a
good increase in new escalator handrail
installations. Increasingly around the
world, but certainly in Australia, we are
suffering from a lack of availability of
skilled labour and resolving this is our
biggest challenge for the coming year.
Dual Engraving (Dual)
The Perth market continues to be quite
soft and sales fell in the year. We were
always aware that Dual was a business
that was almost wholly dependent on
the Perth market. When that market is
weak, then things will be more difficult
for Dual.
We expect the market to improve in the
next twelve months, the project pipeline
is certainly much brighter and sales
should be stronger.
Dewhurst Hong Kong
Sales in the previous year in Hong Kong,
were quite exceptional, boosted by a
significant demand for TMP products.
We took the decision at the end of last
year that it would be preferable for
TMP to service those customers direct,
so Dewhurst Hong Kong are no longer
involved in that market.
Sales of lift products however grew
and Dewhurst Hong Kong had a
successful year.
Approved on behalf of the board.
20,000 Dewhurst
Group car tops
in use in the UK
09
09
200,000
stop buttons
enhancing
industrial safety
Principal risks and uncertainties
Principal risks and uncertainties
RISK
Operational
IMPACT
MITIGATION
Brexit. The uncertainty around the ultimate
relationship between the UK and the EU and how
this will impact business in the UK and trade
flowing in and out of the UK.
Possible fall in sales, an inability
to plan effectively as a business
and the potential for operations
to incur additional costs through
tariffs and transport delays.
Those businesses that import into the UK are increasing
their inventory levels and our overseas companies that
import from the UK are doing the same. However this can
only cover any disruption for a limited period and we will
have to do our best to react to events as they unfold.
Business Control. The geographically diverse
nature of our business means that many
subsidiary companies are remote from our senior
management.
Reduction in control and
increased risk on individual
subsidiary’s performance.
We aim to strike a balance between autonomy and
responsibility of the local management. Senior
management generally visit all subsidiaries regularly to
maintain senior contact directly with the business. We
operate the same IT system across the business so that
information flow is controlled and managed centrally.
Loss of a key customer. Because the Group tends
to operate in niche markets there are limited
numbers of major customers in some of these
markets.
Reduced sales and reduced
profits.
We aim to provide key customers with excellent products
and service at a competitive price. We closely monitor our
performance with these customers to ensure we are
meeting the objectives.
Problems at a key supplier.
Inability to maintain required
service levels.
Where necessary we dual source and/or hold strategic
stocks of particularly time critical key components.
Technological change reducing demand for the
Group’s products. Our products are primarily
human machine interfaces. These are subject to
significant technological change at present. New
ways of interacting with machines are constantly
being developed. Also there is a trend towards
electronic payments, which reduces the demand
for cash and thus for cash machines.
Financial
The Group operates a defined benefit pension
scheme in the UK. This is subject to risks in
relation to liabilities caused by changes in life
expectancy and inflation. It is also subject to risks
regarding the value of and return on investments.
Reduced sales and reduced
profits.
We monitor our markets for innovations and endeavour
to ensure we retain a competitive offering for our
customers, supported by an active product development
programme.
Potential impact on the balance
sheet and on cash flow.
The UK defined benefit schemes were closed to new
future accrual on 30 September 2010. Our investment
strategy is designed to diversify risk and reduce volatility.
Being an international Group, foreign currency is
our most significant treasury risk.
Changes in foreign currencies
can have a significant impact on
profit performance.
Our wide international spread reduces risk to individual
markets but inevitably increases exchange rate risks. We
aim to minimise holdings of non-functional currencies at
companies around the Group, unless there are specific
reasons. The Group does not hedge operating profits.
10
Financial review
The balance
sheet remains
strong despite
record levels
of investment
Jared Sinclair
Finance Director
Trading results
The Group continued its upward trend
with record sales and profits for a second
consecutive year. The Canadian and New
South Wales Australian markets saw the
biggest organic growth in local terms
with all these subsidiaries reporting
record sales. Additional growth in sales
this year also came from the acquisition
of A&A Electrical Distributors Ltd (A&A)
which contributed £3.9 million sales
in the 4 months to September 2018
as well as a first full year of sales from
P&R Lift Cars Pty Ltd. These strong sales
were offset by weaker demand from
our keypad division in Hungary and the
reduction in sales (£1.8 million in 2017)
following the disposal of ERM’s Winter
& Bain division as part of a restructure of
the North American business.
Again currencies had an impact on the
performance of the Group as two thirds
of sales are earned and held in foreign
currencies which are retranslated for
Group reporting. This year resulted in
a decrease in like-for-like sales of £1.5
million or 2.8% and a reduction in profit
before tax of £0.2 million or 3.9%.
Overall, reported revenue increased by
3.1% from £52.9 million to £54.5 million
and adjusted operating profit (before
acquired intangible amortisation) increased
by 8.0% from £6.2 million to £6.7 million.
Solid cash position
Having built the cash position to a very
healthy balance over the last few years
and with cash flows for 2018 again
looking strong, the Group was able to
finance the sizeable acquisition of A&A
from existing resources. Despite spending
£10.5 million on this acquisition the
Group still ended the year with cash at
a respectable £9.4 million, down
£8.7 million from £18.1 million in 2017.
On 7 September 2018, the Group had
also paid a 10% deposit and exchanged
Shareholders’ return
1100p
1000p
900p
800p
700p
600p
500p
400p
300p
200p
100p
Sept
2013
Sept
2014
Sept
2015
Sept
2016
Sept
2017
Sept
2018
Ordinary share price
‘A’ ordinary share price
contracts to purchase the freehold of
a property in Sydney for £2.5 million
(A$4.6 million). This transaction has now
been completed and will be occupied by
Lift Material.
The Group started and finished the year
with no borrowing or bank overdraft
facility.
Pension scheme deficit
For the second year running it is also
pleasing to be able to report a significant
improvement in the pension scheme
deficit. The liability discount rate
continued to edge back up in 2018
to 2.85% (2017: 2.6%) reducing the
liabilities by £2.1 million. This coupled
with the Company continuing to
contribute £1.4 million and the assets of
the scheme performing marginally better
than expected at £1.1 million resulted
in the scheme deficit reducing by £4.2
million from £11.8 million in 2017 to
£7.6 million.
A more detailed analysis of the
retirement benefit fund assets and
liabilities movements is reported in note
21 and all recommendations made
by the scheme’s actuary to eliminate
the scheme deficit within an agreed
timeframe have been fully implemented.
11
39% growth
in dividend
over 5 years
Capital management and treasury
policy
The Group defines capital as total
equity plus net debt. The objective is to
maintain a strong and efficient capital
base to support the Group’s strategic
objectives, provide optimal returns for
shareholders and safeguard the Group’s
assets and status as a going concern.
The Group is not subject to externally
imposed capital requirements and the
Group’s philosophy is to have minimal or
no borrowing where possible.
The Group seeks to reduce or eliminate
financial risk to ensure sufficient
liquidity is available to meet foreseeable
needs and to invest cash assets safely
and profitably. In preparation for the
acquisition of A&A, the Group drew
surplus cash back from its subsidiaries
in the form of dividends and transferred
any short term deposited money at
the Company from its 95-day interest
account into an instant access bank
account. This money was used to
fund the A&A acquisition as well as
support the new business with its post-
acquisition working capital requirements.
This has enabled A&A to function
without the need for a bank overdraft.
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.
The Group continues to hedge foreign
currencies internally where possible but
stopped using derivatives at the start of
the year in the form of foreign exchange
contracts to manage its currency risk, as
reported in note 24.
Dividends
Dividends are accounted for when paid
or approved by shareholders, and not
when proposed, therefore the proposed
Group key performance indicators
2014^
£’000
2015^
£’000
2016^
£’000
2017^
£’000
2018
£’000
Revenue
46,616 45,946 47,159 52,890 54,510
Adjusted operating profit *
5,475
5,588
5,502
6,244 6,743
Operating profit
5,179
5,675
5,410
6,244 6,188
Profit before taxation
4,812
5,318
5,085
5,966 5,983
As a percentage of total equity ^
21.0% 21.6% 20.1% 18.7% 16.2%
Taxation
1,066
1,002
1,577
1,345 1,723
Profit after taxation
3,746
4,316
3,508
4,621 4,260
Total equity ^
22,937 24,570 25,258 31,893 37,008
Earnings per share, basic and diluted
43.87p 50.21p 40.75p 52.65p 47.93p
Dividends per share
9.00p 13.00p 11.00p 12.00p 12.50p
Defective parts per million
On time delivery (%)
n/a
n/a
n/a
3,241 1,236 1,525
n/a
90%
92%
90%
* Operating profit before goodwill write down, amortisation of acquired intangibles
and gain on property disposal
^ As restated (see note 26)
n/a – not available
final dividend for 2018 has not been
accrued at the end of the reporting
period. The total dividend for 2018 of
12.50p per share is 4.2% up on 2017
and is covered 4.0 times by earnings.
Total equity improved from £31.9 million
to £37.0 million primarily as a result of
the strong trading performance in the
year as well as the £4.2m drop in the
pension deficit referred to above.
There was no change in the number
of the total issued share capital of the
Company during the year.
5 December 2018
12
Board of directors
Richard Dewhurst BA (Eng Sc), ACMA
Chairman
Age 62. Joined in 1985.
Previously with Ford Motor Co, Ernst &
Whinney, Senior Management Consultant.
R
David Dewhurst BSc (Elec Eng)
Group Managing Director
Age 57. Joined in 1987.
Previously with Holmes & Marchant plc.
Jared Sinclair BSc, ACA
Finance Director & Company Secretary
Age 48. Joined in 1997.
Previously with Moores Rowland, Chartered
Accountants, Audit Senior.
Richard Young BSc, MBA, CEng, FIET
Managing Director, Thames Valley Controls
Age 62. Joined in 1996.
Previously with MBM Technology Ltd, Director
and General Manager.
John Bailey
Managing Director, A&A Electrical
Distributors Age 48. Joined in 2008.
Previously with Brett Landscaping & Building
Products, Commercial Director.
Committee membership
Remuneration Committee
Meets once per year
R Chairman
R Member
Audit Committee
Meets twice per year
A Chairman
Peter Tett MA, MSc
Non-executive Director
Age 79. Joined in 2000.
Previously with Halma plc, Director.
A
R
Alan Warren
Non-executive Director
Age 61. Joined in 2018.
Previously with A&A Electrical Distributors Ltd,
Director.
13
Chairman’s corporate
governance statement
particularly the audit approach and
key audit matters as detailed on pages
41 to 43.
In light of the size of the Board, the
Board do not consider it necessary to
establish a Nomination Committee.
All members of the Board participate
in the recruitment of members to the
Board. The Remuneration Committee
does not produce a formal report. The
Remuneration Committee considers
Directors’ remuneration based on market
conditions, Group values and business
objectives. We seek to set remuneration
that is competitive and motivational
whilst consistent with our values.
Bonuses for Directors are based on profit
and growth in profit and some Directors
also have bonuses based on achieving
individual personal objectives.
The Board of Directors of Dewhurst
believe that good corporate governance
is a central element of the successful
growth and development of the Group.
The Board and its Committees play a
key role in the Group’s governance by
providing an independent perspective
to the senior management team,
and by seeking to ensure that an
effective system of internal controls
and risk management procedures is in
place. Below describes our corporate
governance structures and processes
which are reviewed regularly and at
least annually.
AIM Rule 26 from 28 September 2018
requires companies to report against an
adopted corporate governance code.
Dewhurst’s Board considers that the
QCA Corporate Governance Code
(‘QCA Code’) is the most suitable
framework for smaller public companies
and, consequently, formally adopted
the QCA Code during its financial year
ended 30 September 2018.
The Board ensures that the Company
adopts proper standards of corporate
governance and, where appropriate, the
principles of best practice as set out in
the QCA Code. Set out on our website
(www.dewhurst.plc.uk) and below
is a summary of how the Company
is applying the key requirements
of the Code.
The Board comprises persons from
technical and professional qualified
backgrounds ensuring there are the
appropriate skills and capabilities
to perform their duties. These are
maintained through continuing
professional development, in-house
training and regular courses to ensure
they are up-to-date. In addition the
Directors commit all the time necessary
to fulfil their roles and there are
processes in place enabling Directors
to take independent advice at the
Company’s expense in the furtherance
of their duties and to have access to
the advice and services of the Company
Secretary.
The Board considers its Non-executive
Directors to be independent in character
and judgement; however none are
technically independent as defined by
the Code.
The full Board meets eight times per year
and deals with all important aspects of
the Group’s affairs. During the year only
Mr A Warren was unable to attend one
executive meeting.
Formal Executive Director performance
evaluations are conducted annually
through appraisals. Each Non-executive
Director’s performance is evaluated as
an outcome of the formal performance
evaluations of the Committee(s) of which
they are a member.
Annual performance evaluations of both
Executive Directors and Non-executive
Directors (via Committee evaluation)
identify and record achievements
and areas for improvement in relation
to annual objectives and performance
of their role, in order to consider
effectiveness. Objectives for the
forthcoming year are defined along
with identification of how achievements
will be met, target dates and details of
resource constraints or issues to ensure
that actions are planned and taken
as a result of the evaluation process.
These objectives and the performance
of the Director are monitored monthly
through formal meetings with the
Chairman or Group Managing Director.
The Committees conduct a self-
assessment of their performance during
the year, measuring their performance
against their Terms of Reference. The
audit committee risks and concerns are
reported in the body of the audit report,
14
Report of the directors
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 2018.
Results and dividends
The trading profit for the year, after
taxation, amounted to £4.3 million
(2017: £4.6 million).
A final dividend on the Ordinary and
‘A’ non-voting ordinary shares of
9.00p per share (2017: 8.50p) for
the financial year ended 30 September
2018 will be proposed at the Annual
General Meeting (AGM) to be held on
5 February 2019. If approved, this
dividend will be paid on 13 February
2019 to members on the register at
18 January 2019. The ex-dividend date
will be 17 January 2019.
An interim dividend of 3.50p per share
(2017: 3.50p) was paid on 21 August
2018.
A final dividend on the Ordinary and
‘A’ non-voting ordinary shares of
8.50p per share (2016: 8.00p) which
amounted to £716k (2016: £678k)
for the financial year ended
30 September 2017 was approved
at the AGM held on 8 February 2018
and was paid on 14 February 2018
to members on the register at
19 January 2018.
Post balance sheet events
On 7 September 2018 Dewhurst
Australian Property Pty Ltd paid a 10%
deposit and exchanged contracts to
purchase the freehold property of Unit
2, 73 Beauchamp Road, Matraville,
Sydney. The property cost A$4.6 million
(£2.5 million) in total and full payment
completed after the year end on
17 October 2018. This property will be
rented to Lift Material Australia Pty Ltd.
Share repurchases
There have been no share purchases
during the financial year.
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)
Mr A Warren (Non-executive) – joined
13 June 2018
The directors retiring by rotation at this
year’s Annual General Meeting are
Mr R Young and Mr P Tett, along with
Mr A Warren who, being eligible, offer
themselves for re-election. The unexpired
period of Mr R Young, Mr P Tett and
Mr A Warren’s service agreement is less
than one year.
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 2018 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 2017.
Ordinary Shares
30 September 2018
‘A’ Ordinary Shares
Ordinary Shares
30 September 2017
‘A’ Ordinary Shares
Mr R M Dewhurst
492,333
Mr D Dewhurst
419,595
123,666
69,932
492,333
123,666
419,595
69,932
Mr J C Sinclair
Mr R Young
Mr J Bailey
Mr P Tett
Mr A Warren
1,000
1,000
1,000
1,000
7,936
–
–
–
–
9,090
1,000
1,000
1,000
1,000
7,936
–
–
–
–
9,090
At 30 September 2018 and 30 September 2017 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.
During the year and at the date of
approval of the accounts, the Group
maintained liability insurance for all
directors.
Substantial shareholdings
At 25 November 2018, 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).
Mrs V E Dewhurst
Fidelity NorthStar Fund
Mrs B Bruce
Ms E Dewhurst
Mr J H Ridley
Mr I Scott
651,000
201,000
190,208
175,333
137,500
100,000
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:
Mrs V E Dewhurst
JIM Nominees Ltd
MI Discretionary Unit Fund
Pershing Nominees Ltd
Hargreaves Lansdown
Nominees Ltd (VRA acct)
Vidacos Nominees Ltd
Interactive Investor Services
Nominees Ltd
Hargreaves Lansdown
Nominees Ltd (15942 acct)
518,000
443,698
330,000
287,000
271,681
248,500
187,258
169,811
Employee involvement
Meetings, chaired by managing directors,
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
15
Directors’ remuneration
The remuneration of the directors is shown below:
Salary
and fees
£(000)
Bonus Benefits Pension
in kind
£(000)
£(000)
£(000)
2018
Total
2017
Total
£(000)
£(000)
Executive directors:
Mr R M Dewhurst
the instances of occupational accidents
and illnesses detailed policies and risk
improvement programmes are regularly
updated.
Mr D Dewhurst
Mr J C Sinclair
Mr R Young
129
127
103
115
44
15
20
6
126
109
39
34
19
–
–
–
3
3
–
–
–
–
–
–
–
–
11
10
–
–
–
–
258
239
153
159
63
15
20
6
239
206
137
133
–
23
19
–
Mr J Bailey (from 4 June 2018)
Non-executive directors:
Mr J Bailey (up to 4 June 2018)
Mr P Tett
Mr A Warren
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.
During the year, Jeffreys Henry LLP were
appointed as the company’s auditors,
Jeffreys Henry LLP have confirmed that
they are willing to continue in office,
and a resolution to reappoint them
as auditors will be proposed at the
forthcoming Annual General Meeting.
Statement of directors’
responsibilities
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the directors
to prepare financial statements for
each financial year. Under that law
the directors have elected to prepare
the financial statements in accordance
with International Financial Reporting
Standards as adopted by the European
Union (“IFRS”). Under company law the
directors must not approve the financial
statements unless they are satisfied that
they give a true and fair view of the
state of affairs of the Company and the
Group and of the profit or loss of the
Group for that period. In preparing these
financial statements, the directors are
required to:
• select suitable accounting policies and
then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• state that the financial statements
comply with IFRS;
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group will continue in business.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s and the Group’s transactions
and 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 hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.
By order of the board
Jared Sinclair
Secretary
5 December 2018
Employment policies
The Group is committed to ensuring that:
• 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.
• 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 on
several occasions.
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.
Financial risks
The Group seeks to reduce or eliminate
financial risk to ensure sufficient
liquidity is available to meet foreseeable
needs and to invest cash assets safely
and profitably. These risks are further
reported in the principal risks and
uncertainties within the strategic report,
the financial review and in note 24.
Going concern
Positive steps to develop sales, control
costs and maintain a strong cash balance
have been taken by management to
16
Consolidated financial
statements
Consolidated statement of comprehensive income
For the year ended 30 September 2018
Continuing operations
Revenue
Operating costs
Adjusted operating profit*
Amortisation of acquired intangibles
Operating profit
Finance income
Finance costs
Profit before taxation
Taxation
Profit for the financial year
Other comprehensive income:
Actuarial gains/(losses) on the defined benefit pension scheme
Deferred tax effect
Tax on items taken directly to equity
Total that will not be subsequently reclassified to income statement
Exchange differences on translation of foreign operations
Total that may be subsequently reclassified to income statement
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive income for the year
Profit for the year attributable to:
Equity shareholders of the company
Non-controlling interests
Total comprehensive income for the year attributable to:
Equity shareholders of the company
Non-controlling interests
2018
Notes
£(000)
2017
(as restated)
£(000)
2
3
11
5
6
7
8
21
54,510
52,890
(48,322)
(46,646)
6,743
(555)
6,188
86
(291)
5,983
(1,723)
6,244
–
6,244
117
(395)
5,966
(1,345)
4,260
4,621
3,080
(524)
140
2,696
(727)
(727)
1,969
6,229
4,039
221
4,260
6,070
159
6,229
3,672
(624)
-
3,048
(104)
(104)
2,944
7,565
4,445
176
4,621
7,410
155
7,565
Basic and diluted earnings per share
9
47.93p
52.65p
* Operating profit before amortisation of acquired intangibles
The notes on pages 20–37 form part of these financial statements
17
Consolidated statement of financial position
At 30 September 2018
Non-current assets
Goodwill
Other intangibles
Property, plant and equipment
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Short-term provisions
Non-current liabilities
Retirement benefit obligation
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Translation reserve
Retained earnings
Total attributable to equity shareholders of the company
Non-controlling interests
Total equity
2018
Notes
£(000)
2017
(as restated)
£(000)
10
11
12
19
14
15
16
17
18
8,598
4,510
9,271
1,639
4,575
98
9,267
2,301
24,018
16,241
6,279
13,920
9,440
5,566
10,011
18,087
29,639
33,664
53,657
49,905
8,185
532
304
9,021
5,567
368
326
6,261
21
7,628
11,751
20
16,649
18,012
37,008
31,893
842
157
295
1,964
32,693
842
157
295
2,629
26,969
35,951
30,892
1,057
1,001
37,008
31,893
The financial statements were approved by the board of directors and authorised for issue on 5 December 2018 and were signed on
its behalf by:
Richard Dewhurst Chairman Jared Sinclair Finance Director
Company Registration Number: 160314
The notes on pages 20–37 form part of these financial statements
18
Consolidated financial
statements
Consolidated statement of changes in equity
For the year ended 30 September 2018
At 30 September 2016 (as previously stated)
Prior year adjustment (see note 26)
At 30 September 2016 (as restated)
Shares issued
Share repurchase
Exchange differences on translation of
foreign operations
Actuarial gains/(losses) on defined benefit
pension scheme
Deferred tax effect
Dividends paid
Profit for the year
Share
capital
£(000)
Share
premium
account
£(000)
Capital
redemption
reserve
£(000)
Translation
reserve
Retained
earnings
£(000)
£(000)
Non
controlling
interest
£(000)
Total
equity
£(000)
847
–
847
–
(5)
–
–
–
–
–
157
–
157
–
–
–
–
–
–
–
–
5
–
–
–
–
–
290
2,034
20,663
589
24,580
–
678
–
–
678
290
2,712
20,663
–
–
–
(217)
589
311
–
25,258
311
(217)
(83)
–
(21)
(104)
–
–
–
–
3,672
(624)
(970)
–
–
3,672
(624)
(54)
(1,024)
4,445
176
4,621
At 30 September 2017
842
157
295
2,629
26,969
1,001
31,893
Exchange differences on translation of
foreign operations
Actuarial gains/(losses) on defined benefit
pension scheme
Deferred tax effect
Tax on items taken directly to equity
Dividends paid
Profit for the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(665)
–
(62)
(727)
–
–
–
–
–
3,080
(524)
140
–
–
–
3,080
(524)
140
(1,011)
(103)
(1,114)
4,039
221
4,260
At 30 September 2018
842
157
295
1,964
32,693
1,057
37,008
The notes on pages 20–37 form part of these financial statements
19
Consolidated cash flow statement
For the year ended 30 September 2018
Cash flows from operating activities
Operating profit
Depreciation and amortisation
Contributions to pension scheme, net of administration fee
Exchange adjustments
(Profit)/loss on disposal of property, plant and equipment
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Cash generated from operations
Interest paid
Tax paid
Net cash from operating activities
Cash flows from investing activities
Acquisition of business and assets
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Development costs capitalised
Interest received
Notes
2018
£(000)
2017
£(000)
6,188
1,572
6,244
975
(1,331)
(1,343)
(155)
36
6,310
(487)
(3,909)
2,618
(22)
4,510
(3)
(1,270)
3,237
25
(9,525)
43
(1,161)
(29)
86
(49)
21
5,848
(703)
290
202
(228)
5,409
(2)
(968)
4,439
(933)
52
(978)
(82)
117
Net cash generated from/(used in) investing activities
(10,586)
(1,824)
Cash flows from financing activities
Dividends paid
Purchase of own shares
Net cash used in financing activities
(1,114)
–
(1,024)
(217)
(1,114)
(1,241)
Net increase/(decrease) in cash and cash equivalents
(8,463)
1,374
Cash and cash equivalents at beginning of year
Exchange adjustments on cash and cash equivalents
Cash and cash equivalents at end of year
16
18,087
16,674
(184)
39
16
9,440
18,087
The notes on pages 20–37 form part of these financial statements
20
Notes to the accounts
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)
as 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 (formerly the Alternative
Investment Market).
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. All
IFRS issued but not yet effective including IFRS 15 ‘Revenue from
Contracts with Customers’ and IFRS 16 ‘Leases’ have not been
applied and whilst the directors have yet to assess their full impact,
initial indications are that they should not materially affect the
Group.
The financial statements have been prepared under the historical
cost convention and are presented in GB Pounds to the nearest
thousand (£’000).
Key judgements and estimates The Group makes judgements
and assumptions concerning the future that impact the application
of policies and reported amounts. The resulting accounting
estimates calculated using these judgements and assumptions
will, by definition, seldom equal the related actual results but are
based on historical experience and expectation of future events.
The key judgements and sources of estimation uncertainty that
have a significant effect on the amounts recognised in the financial
statements are discussed below.
Goodwill impairment The directors review each cash generating
unit (CGU) and calculate whether its goodwill has suffered any
impairment loss, based upon the fair value calculation. The directors
judged the 2018 fair value calculation to be the 2018 EBITDA
multiplied by an externally derived private company price index
(PCPI). This calculation is disclosed further in note 10.
Provisions Provisions have been made for obsolete inventory,
doubtful trade receivables and product warranties. These provisions
are estimates and the actual costs and timing of the future cash
flows are dependent on future events. Any difference between
expectations and the actual future liability will be accounted for in
the period when such determination is made. Details of provisions
are set out in notes 15 and 18.
Income Taxes The Group recognises expected liabilities for tax
based upon an estimation of the likely taxes due, which requires
significant judgement as to the ultimate tax determination of certain
items. The directors determined an element of the closed defined
benefit pension scheme payment could give rise to a potential
current tax saving which under IAS 12 is reportable in the other
comprehensive income (OCI) section of the income statement. The
directors judged the best way to calculate this is to perform two tax
computations, with and without the OCI element, thus determining
the tax difference to be the OCI tax saving. Details of the tax charge
and deferred tax are set out in notes 7 and 19 respectively.
Retirement benefit obligation Determining the value of the
future defined benefit obligation requires judgement in respect of
the assumptions used to calculate present values. These include
inflation, salary increases, liability discount rate and future mortality.
Management makes these judgements in consultation with an
independent actuary. Details of the judgements made in calculating
these transactions are disclosed in note 21, along with sensitivities.
The retirement benefit obligation is most sensitive to changes in the
liability discount rate.
Consolidation The consolidated financial statements incorporate
the results of Dewhurst plc and all of its subsidiary undertakings
made up to 30 September 2018, 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
in accordance with the contracted terms of sale. Normally the
order and price quoted excludes delivery, so revenue is recognised
upon dispatch when the risk in the goods passes to the customer;
otherwise revenue is recognised upon delivery. Revenue may also
be recognised prior to dispatch if the goods are complete but the
customer is unable to take delivery but accepts transfer of risk.
Customer loyalty rebates The cost of customer loyalty rebates
is recognised within sales, with deferred revenue 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 deferred revenue.
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.
Other Intangible assets
Product research and development costs Research expenditure is
written off in the financial year in which it is incurred. Development
expenditure is written off in the financial year in which it is incurred,
unless it satisfies the criteria of IAS 38 for recognition as an
intangible asset. Such expenditure is capitalised in the consolidated
statement of financial position at cost and is amortised through
the consolidated income statement on a straight-line basis over its
estimated economic life of three years.
Acquired intangible assets An intangible resource acquired with
a subsidiary undertaking is recognised as an intangible asset if it is
separable from the acquired business or arises from contractual or
legal rights, is expected to generate future economic benefits and
its fair value can be measured reliably. Acquired intangible assets,
comprising of trademarks and customer relationships, are amortised
through the consolidated income statement on a straight-line basis
over their estimated economic lives of between three and ten years.
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:
21
Property (basic structure) 1½% – on a declining balance basis
5% to 20% – on a straight-line basis
Property (fittings)
10% to 331/3% – on a straight-line basis
Plant and equipment
Investments in subsidiaries
In the accounts of the company, investments in subsidiaries are
held as non-current assets and stated at cost less provision for
impairment.
Inventories Inventories are stated at the lower of weighted average
cost and net realisable value. Cost represents direct materials, labour
and appropriate production overheads on a product-by-product
basis. The Group provides 30% where there is more than one
year’s usage held and for all inventories where there is no usage in
the year. Usage is either units sold or units used as components in
manufacturing.
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 end of the reporting
period. Current tax is charged or credited to the income statement,
except when it relates to items charged to other comprehensive
income (OCI), in which case the current tax is also dealt within the
OCI. As such the current tax savings arising from the OCI element of
the closed defined benefit pension scheme deficit contributions are
also recognised in the OCI as required by IAS 12.
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 end
of the reporting period 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. A deferred tax asset has been recognised
in relation to the pension scheme deficit.
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
realised, based upon tax rates and laws that have been enacted or
substantively enacted by the end of the reporting period. Deferred
tax is charged or credited in the income statement, except when it
relates to items charged or credited through other comprehensive
income, in which case the deferred tax is also dealt with through
other comprehensive income.
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 end of the reporting period. 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 statement of financial
positions translated into GB Pounds at the rates of exchange ruling
at the end of the reporting period. 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 other comprehensive income. 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 other comprehensive income or to the income
statement as appropriate.
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 statement of financial position in
respect of the defined benefit pension scheme is the present value
of the defined benefit obligation at the end of the reporting period
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.
Actuarial gains and losses are recognised in full in the statement of
comprehensive income. 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 in the Group’s financial statements in the year in which
dividends are approved by shareholders or paid, which ever is earlier.
Financial instruments
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. The short-term deposits have maturities of six
months or less.
Derivative financial instruments Derivative financial instruments
are measured at fair value. Changes in the fair value of derivative
financial instruments are recognised as income or expense in the
statement of comprehensive income as they arise.
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).
22
Notes to the accounts
Note 2 Segment reporting
The Group board assess the performance of all segments on the basis of location and reports its primary segmental information by
geographical destination.
The geographical analysis by significant regions is as follows:
United Kingdom
Europe
The Americas
Asia & Australia
Other
Inter-company sales
Finance income/(costs)
2018
£(000)
18,636
7,253
13,682
17,991
745
58,307
(3,797)
Revenue
2017
£(000)
13,759
9,678
14,387
17,807
410
56,041
(3,151)
Operating profit
2017
£(000)
2018
£(000)
1,548
397
1,703
2,597
(57)
1,496
1,298
809
2,731
(90)
6,188
6,244
(205)
(278)
Consolidated revenue/profit before tax for the year
54,510
52,890
5,983
5,966
United Kingdom
Europe
The Americas
Asia & Australia
Other
2018
£(000)
24,037
4,956
10,124
14,309
231
Assets
2017
£(000)
16,045
6,563
11,350
15,109
838
2018
£(000)
7,736
1,910
3,161
3,317
525
Liabilities
2017
£(000)
7,163
2,549
3,932
3,703
665
Consolidated assets/liabilities for the year
53,657
49,905
16,649
18,012
Capital additions
2017
£(000)
2018
£(000)
Depreciation and amortisation
2017
£(000)
2018
£(000)
United Kingdom
Europe
The Americas
Asia & Australia
Other
Total Group
The secondary segmental reporting is by the following business sectors:
Sector
Lift
Transport
Keypad
Inter-company sales
9,852
103
272
251
11
10,489
344
107
271
1,576
5
2,303
907
100
259
290
16
1,572
2018
£(000)
48,036
2,985
7,286
58,307
(3,797)
301
110
246
302
16
975
Revenue
2017
£(000)
42,510
3,519
10,012
56,041
(3,151)
54,510
52,890
23
Lift
Transport
Keypad
Total Group
2018
£(000)
Assets
2017
£(000)
Capital additions
2017
£(000)
2018
£(000)
47,141
42,316
10,104
2,059
4,457
2,249
5,340
303
82
53,657
49,905
10,489
2,026
183
94
2,303
The Group has one major customer who accounts for £6.8 million (2017: £9.6 million) of the keypad revenue which is split across the
United Kingdom, Europe, Asia & Australia and the Americas.
Note 3 Operating costs
Movement in inventory obsolescence provision
Cost of inventories recognised as an expense
Staff costs (see note 4)
Depreciation
Amortisation
Foreign exchange differences
Other operating charges
Operating costs
2018
£(000)
143
24,532
17,650
955
617
(7)
2017
£(000)
(27)
24,363
16,750
901
74
119
4,432
4,466
48,322
46,646
Other operating charges include lease rentals on premises £589k (2017: £604k) and lease rentals on motor vehicles £80k (2017: £80k),
loss on sale of property, plant and equipment £36k (2017: loss of £21k) and auditor’s remuneration detailed below. Expenditure on
research and development was £812k (2017: £710k).
Auditor’s remuneration:
Amounts paid to Jeffreys Henry LLP (2017: Moore Stephens LLP)
Statutory audit services
Amounts paid to Moore Stephens LLP
Pension audit services
Taxation compliance services
Other taxation advisory services
2018
£(000)
68
7
13
17
37
The Group
2017
£(000)
65
6
11
18
35
105
100
2018
£(000)
24
2
1
17
20
44
The Company
2017
£(000)
27
2
1
18
21
48
24
Notes to the accounts
Note 4 Staff costs and information regarding employees
Costs during the year were as follows:
Wages and salaries
Social security costs
Pension costs (see note 21)
The average number of employees during the year was:
Office and management
Manufacturing
2018
£(000)
The Group
2017
£(000)
2018
£(000)
The Company
2017
£(000)
15,682
14,836
1,066
902
1,049
865
17,650
16,750
685
77
83
845
656
76
105
837
2018
No.
184
211
395
The Group
2017
No.
2018
No.
The Company
2017
No.
161
208
369
8
–
8
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:
Emoluments – Executive directors
Emoluments – Non-executive directors
2018
£(000)
851
41
892
2017
£(000)
696
42
738
Two directors also received pension payments into their defined contribution schemes totalling £21k (2017: £19k).
The emoluments of the directors is reported on page 15 of the directors report and the remuneration of the highest paid director
during the year was £258k (2017: £239k). The highest paid director, under the defined benefit scheme has accrued pension of £148k
(2017: £141k) and a transfer value of £3,099k (2017: £2,925k).
Note 5 Finance income
Bank deposit interest
2018
£(000)
86
2017
£(000)
117
25
Note 6 Finance costs
Interest payable on bank overdraft and loans
Net costs on defined benefit pension scheme (note 21)
Note 7 Tax
Current tax
UK corporation tax at 19.0% (2017: 19.5%)
Adjustment on prior years tax
Overseas taxation
Deferred tax
Origination and reversal of temporary differences
Effect of changes in tax rates
2018
£(000)
(3)
(288)
(291)
2018
£(000)
379
8
1,213
1,600
123
–
2017
£(000)
(2)
(393)
(395)
2017
£(000)
(13)
21
1,169
1,177
168
–
Tax expense in the income statement
1,723
1,345
The tax assessed for the year is different from the standard rate of corporation tax in the UK.
The differences are explained below:
Profit before tax
Standard rate of corporation tax in the UK
Effects of:
Adjustments in respect of prior years
Overseas withholding tax
Different rate of tax on overseas earnings
Additional reduction for R&D expenditure
Expenses not deductible for tax purposes
Tax on items taken directly to equity
Other permanent differences
Deferred tax not recognised
Effective tax rate for the year
2018
£(000)
2017
£(000)
5,983
5,966
19.0%
19.5%
0.1%
1.2%
4.8%
(1.2%)
4.3%
2.3%
–
(1.7%)
0.3%
–
4.7%
(1.9%)
(0.2%)
–
0.3%
(0.2%)
28.8%
22.5%
Note 8 Profit for the financial year
The company profit for the year includes £5,321k (2017: £2,786k) 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.
26
Notes to the accounts
Note 9 Earnings per share and dividend per share
Weighted average number of shares
For basic and diluted earnings per share
2018
No.
2017
No.
8,424,898
8,442,843
The calculation of basic and diluted earnings per share is based on the profit for the financial year of £4,038,159 and on 8,424,898
Ordinary 10p and ‘A’ non-voting ordinary 10p shares, being the weighted average number of shares in issue throughout the financial
year. There are no share options issued.
Paid dividends per 10p ordinary share
2017 final paid of 8.50p (2016: 8.00p)
2018 interim paid of 3.50p (2017: 3.50p)
Unclaimed dividends returned – more than 12 years old
Dividends paid – The Company
Dividends paid to non-controlling interest – Dual Engraving Pty Ltd
2018
£(000)
(716)
(295)
–
(1,011)
(103)
2017
£(000)
(678)
(295)
3
(970)
(54)
Dividends paid – The Group
(1,114)
(1,024)
The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,115,698 ‘A’ non-voting ordinary 10p shares, being the
latest number of shares in issue. The directors are proposing a final dividend of 9.00p (2017: 8.50p) per share, totalling £758k (2017:
£716k). This dividend has not been accrued at the end of the reporting period.
Note 10 Goodwill
Cost or valuation:
At 1 October
Exchange adjustment
Additions on acquisition of subsidiaries
At 30 September
Impairment:
At 1 October
Exchange adjustment
At 30 September
Net book value:
At 30 September
2018
£(000)
The Group
2017
£(000)
11,378
10,304
(345)
4,299
(142)
1,216
15,332
11,378
6,803
(69)
6,734
6,860
(57)
6,803
8,598
4,575
Goodwill is allocated at acquisition to the business units that are expected to benefit from that acquisition.
The remaining goodwill relates to five CGUs, four in Australia, Australian Lift Components Pty Ltd acquired in February 2000 – £1,132k
(2017: £1,205k), Lift Material Australia Pty Ltd acquired in July 2005 – £807k (2017: £859k), Dual Engraving Pty Ltd acquired in
February 2013 – £1,259k (2017: £1,340k), P&R Liftcars Pty Ltd acquired in January 2017 – £1,101k (2017: £1,171k) and one in the
UK, A&A Electrical Distributors Ltd acquired in June 2018 – £4,299k (2017: n/a).
27
Goodwill values have been tested for impairment by comparing them against the fair value of the relevant CGUs. The fair value
calculations for 2018 are based on 2018 EBITDA profits multiplied by an externally derived private company price index (PCPI). The
goodwill impairment charge that arose during the current year is nil (2017: nil) and the calculations indicate sufficient headroom such
that a reasonable change to key assumptions would not result in an impairment of the related goodwill.
Note 11 Other intangibles
Cost or valuation:
At 1 October
Exchange adjustment
Additions
At 30 September
Amortisation:
At 1 October
Exchange adjustment
Charge for the year
At 30 September
Net book value:
At 30 September 2018
At 30 September 2017
2018
Acquired
intangibles
£(000)
2018
Other
The Group
2018
Total
£(000)
£(000)
2017
Acquired
intangibles
£(000)
2017
Other
2017
Total
£(000)
£(000)
934
(56)
5,000
5,878
934
(56)
555
1,433
4,445
–
932
1
29
962
834
1
62
897
65
98
1,866
(55)
5,029
6,840
1,768
(55)
617
2,330
4,510
98
945
(11)
–
934
945
(11)
–
934
–
–
853
(3)
82
932
762
(2)
74
834
98
91
1,798
(14)
82
1,866
1,707
(13)
74
1,768
98
91
All amortisation has been charged to the statement of comprehensive income through operating costs and no intangible items are held
as security.
28
Notes to the accounts
Note 12 Property, plant and equipment
Cost or valuation:
At 1 October 2016
Exchange adjustment
Additions
Additions on acquisition of subsidiaries
Disposals
At 1 October 2017
Exchange adjustment
Additions
Additions on acquisition of subsidiaries
Disposals
Property
£(000)
Plant and
equipment
£(000)
The Group
Total
Property
£(000)
£(000)
Plant and
equipment
£(000)
The Company
Total
£(000)
8,626
7,729
16,355
6,197
172
6,369
(6)
24
–
(17)
8,627
(113)
8
–
–
(15)
954
28
(510)
8,186
(143)
1,028
125
(289)
(21)
978
28
(527)
–
–
–
–
–
–
–
–
–
–
–
–
16,813
6,197
172
6,369
(256)
1,036
125
(289)
–
–
–
–
–
–
–
–
–
–
–
–
At 30 September 2018
8,522
8,907
17,429
6,197
172
6,369
Depreciation:
At 1 October 2016
Exchange adjustment
Charge for the year
Disposals
At 1 October 2017
Exchange adjustment
Charge for the year
Disposals
1,491
5,624
7,115
–
197
(16)
(16)
704
(438)
(16)
901
(454)
1,672
5,874
7,546
(36)
189
–
(97)
766
(210)
(133)
955
(210)
At 30 September 2018
1,825
6,333
8,158
Net book value:
666
–
117
–
783
–
114
–
897
At 30 September 2018
6,697
2,574
9,271
5,300
At 30 September 2017
6,955
2,312
9,267
5,414
125
–
9
–
134
–
9
–
791
–
126
–
917
–
123
–
143
1,040
29
38
5,329
5,452
Capital commitments contracted by the Group at 30 September 2018 for property, plant and equipment amounted to £3,059k (2017:
£116k) and by the company is nil (2017: nil). Capital commitments authorised but not contracted by the Group at 30 September 2018
amounted to £382k (2017: £647k) and by the company is nil (2017: nil).
29
Note 13 Investments – shares in subsidiary undertakings
The Company
Investments (ordinary shares) are:
Cost
Provision for impairment
Investments in subsidiary undertakings are:
Cost (after provision for impairment):
Dewhurst UK Ltd
Thames Valley Controls Ltd
Traffic Management Products Ltd
Dewhurst (Hungary) Kft
Dupar Controls Inc.
The Fixture Company
Elevator Research Manufacturing Corp.
Australian Lift Components Pty Ltd
P&R Liftcars Pty Ltd
Lift Material Australia Pty Ltd
Dual Engraving Pty Ltd
Dewhurst Australian Property Pty Ltd
Dewhurst (Hong Kong) Ltd
Additions
A&A Electrical Distributors Ltd (acquired 2 Jun 2018)
2018
£(000)
21,293
(6,827)
2017
£(000)
11,768
(6,827)
14,466
4,941
2018
£(000)
2017
£(000)
175
300
–
72
35
–
–
1,798
933
85
1,445
97
1
175
300
–
72
35
–
–
1,798
933
85
1,445
97
1
4,941
4,941
9,525
–
14,466
4,941
The company has twelve wholly-owned trading subsidiaries, Dewhurst UK Ltd, A&A Electrical Distributors Ltd, Thames Valley Controls
Ltd and Traffic Management Products Ltd (TMP), 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 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. Dual Engraving Pty Ltd and P&R Liftcars
Pty Ltd which principally operate in Australia are not wholly-owned but instead are owned 70% and 75% respectively. Dewhurst
Middle East Elevator Accessories LLC is also not wholly-owned but instead owned 49% because as required by UAE law 51% must be
held by a registered UAE national who has waived their rights to control and any profits generated. All companies have similar principal
activities to Dewhurst plc, except TMP which operates solely in the transport sector and Dewhurst Australian Property Pty Ltd, which
operates solely to hold Australian Lift Components Pty Ltd’s property.
In addition to the trading companies above the following dormant companies are also subsidiaries of the Group – Dewhurst & Partner
Ltd, Dewhurst UK Manufacturing Ltd, Dewhurst Hounslow Property Ltd, Dewhurst Flint Unit 15 Property Ltd, Dewhurst Flint Unit 37
Property Ltd, Dewhurst Middle East Ltd, Switching Components Ltd, LiftStore Ltd, Thames Valley Lift Company Ltd, TVC Monitoring
Ltd, TVC Asset Monitoring Ltd, TMP Solutions Ltd & TMP Professional Services Ltd.
30
Notes to the accounts
Note 14 Inventories
Raw materials and components
Work-in-progress
Finished goods and goods for re-sale
2018
£(000)
2,675
761
2,843
6,279
The Group
2017
£(000)
2018
£(000)
The Company
2017
£(000)
2,710
854
2,002
5,566
–
–
–
–
–
–
–
–
There is no material difference between the replacement cost of inventories and the amounts stated above.
Note 15 Trade and other receivables
Trade receivables
Amounts due from subsidiary undertakings (note 23)
Other receivables
Prepayments and accrued income
2018
£(000)
The Group
2017
£(000)
13,051
9,629
–
331
538
–
130
252
2018
£(000)
–
2,475
28
70
The Company
2017
£(000)
1
1,327
18
21
13,920
10,011
2,573
1,367
Trade receivables are shown net of provision for impairment. The movements in the provision for impairment of receivables were as
follows:
At 1 October
Charge for the year
Costs recovered / (incurred)
At 30 September
2018
£(000)
194
(17)
(4)
173
The Group
2017
£(000)
2018
£(000)
The Company
2017
£(000)
188
8
(2)
194
–
–
–
–
–
–
–
–
At the end of the reporting period the ageing analysis of trade receivables, with normal terms being 30 days net monthly, not provided
for was as follows:
As at 30 September 2018
As at 30 September 2017
These receivables are of good credit quality.
Total
£(000)
13,051
9,629
Within
terms
£(000)
8,585
6,909
Up to
1 month
overdue
£(000)
3,441
1,963
Up to
2 months
overdue
£(000)
858
664
Over
2 months
overdue
£(000)
167
93
31
Note 16 Cash and cash equivalents
Cash
Short-term deposits
Note 17 Trade and other payables
Trade payables
Other taxes and social security costs
Other payables
Accruals and deferred income
2018
£(000)
9,440
–
The Group
2017
£(000)
9,387
8,700
2018
£(000)
3,039
–
The Company
2017
£(000)
1,529
8,700
9,440
18,087
3,039
10,229
2018
£(000)
2,761
978
1,145
3,301
8,185
The Group
2017
£(000)
2018
£(000)
The Company
2017
£(000)
2,146
586
381
2,454
5,567
15
15
30
320
380
–
14
29
363
406
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
Note 18 Short-term provisions
Warranty provisions
2018
£(000)
304
The Group
2017
£(000)
326
2018
£(000)
–
The Company
2017
£(000)
–
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 £66k (2017: credited (£130k)). Amounts utilised by the Group in the
year were £89k (2017: £98k). There were no amounts charged or utilised this year or last year by the company.
32
Notes to the accounts
Note 19 Deferred taxation
Deferred tax asset:
At 1 October (as previously stated)
Prior year adjustment (see note 26)
At 1 October (as restated)
Transfer directly (to)/from other comprehensive income
Foreign exchange on deferred tax
Transfer (to)/from income statement
2018
£(000)
–
–
2,301
(524)
(15)
(123)
The Group
2017
£(000)
2018
£(000)
The Company
2017
£(000)
2,423
678
3,101
(624)
(8)
(168)
–
–
1,998
(524)
–
(177)
2,783
–
2,783
(624)
–
(161)
At 30 September
1,639
2,301
1,297
1,998
Deferred tax at 30 September relates to the following:
Defined benefit pension scheme
Provisions
Deferred tax asset
Note 20 Share capital
Authorised:
Shares of 10p each – 4,500,000 Ordinary
– 9,000,000 ‘A’ non-voting ordinary
Allotted and fully paid:
Shares of 10p each – 3,309,200 (2017: 3,309,200) Ordinary
– 5,115,698 (2017: 5,115,698) ‘A’ non-voting ordinary
2018
£(000)
1,297
342
1,639
The Group
2017
£(000)
1,998
303
2,301
2018
£(000)
1,297
–
1,297
The Company
2017
£(000)
1,998
–
1,998
2018
£(000)
450
900
2017
£(000)
450
900
1,350
1,350
2018
£(000)
331
511
842
2017
£(000)
331
511
842
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.
The share premium reserve arose when shares were issued and sold at above the par value, the capital redemption reserve was
created on the repurchase and cancellation of the Company’s own shares and the translation reserve represents the cumulative foreign
exchange differences on the translation of the net assets of the Group’s foreign operations from their functional currency to the
presentation currency of the parent.
33
Note 21 Retirement benefit obligation
The Group operates pension schemes in the UK, Canada, USA, Australia and Hong Kong, and also complies with Hungarian state
legislation in relation to retirement provision. 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 £902k (2017: £865k). All, apart from £52k (2017: £77k) of defined benefit pension
protection fund levy fees relates to defined contribution schemes. The Hungarian, Canadian, USA, Australian and Hong Kong schemes
are of the defined contribution type and the cost to the Group amounted to £494k (2017: £479k). There was an accrued charge of
£25k at the end of the reporting period in respect of the defined benefit scheme (2017: an accrual of £24k). 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 contributions during the year of £1,404k into the defined benefit scheme (2017:
£1,404k). The funding policy is to review triennially the funding position with the actuary and from that review the trustees, company
and actuary agree the funding arrangements for the next three years until the next review in June 2018. The contributions for next
year will be £1,404k.
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. The latest actuarial valuation of the scheme was on 1 June 2015. It has been assumed that future
investment yields would be at 4.4% per annum (pre-retirement) and 2.9% (post-retirement).
At the date of the latest actuarial valuation of the UK scheme, the market value of the assets of the scheme were £30.2 million (2012:
£21.2 million) and the funding level on the on-going valuation basis was 70% (2012: 59%). The 2015 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 weighted average duration of the liabilities is 20 years and payments from the scheme assets are made on a monthly basis.
Assumptions
The following actuarial assumptions, updated to 30 September 2018 by the scheme actuary, have been used in preparing the
disclosures required under IAS 19:
Retail price index expected to rise by
Pensionable salaries will increase by
Deferred pensions and pensions in payment will increase by
Liabilities discounted at a rate of
Expected return on pension scheme assets
Expected lifetime for a member retiring at the accounting date – for males
– for females
Future expected lifetime for a member retiring in 20 years’ time – for males
– for females
The sensitivities regarding the principal assumptions used are set out below:
2018
3.15%
n/a
3.15%
2.85%
2.85%
21.9 yrs
23.8 yrs
23.3 yrs
25.4 yrs
2017
3.1%
n/a
3.1%
2.6%
2.6%
22.1 yrs
23.9 yrs
23.5 yrs
25.4 yrs
Assumption
Liability Discount Rate
Rate of inflation (RPI)
Rate of mortality
Change in assumption
Impact on plan liabilities
Increase/decrease by 0.1%
Increase/decrease by 0.1%
Increase/decrease by 1 year
Decrease/increase by 1.7%
Increase/decrease by 0.9%
Increase/decrease by 3.1%
IAS 19 requires the value of annuities purchased in respect of pensioners and widow(er)s to be taken into current year calculations.
34
Notes to the accounts
Note 21 Retirement benefit obligation continued
Equities
Bonds
Other
Total fair value of scheme assets
Present value of scheme liabilities
Scheme deficit
Related deferred tax asset
Net pension liability
Fair value at
30 Sept 2018
£(000)
Fair value at
30 Sept 2017
£(000)
Fair value at
30 Sept 2016
£(000)
21,197
12,858
3,649
22,132
10,564
3,500
26,867
2,881
3,825
37,704
36,196
(45,332)
(47,947)
33,573
(49,946)
(7,628)
(11,751)
(16,373)
1,297
1,998
2,783
(6,331)
(9,753)
(13,590)
The amounts charged to operating profit in relation to current service costs are £nil (2017 and 2016: £nil).
Amounts charged to other finance costs:
Interest on pension scheme assets
Interest on pension scheme liabilities
Net benefit/(cost)
Amounts recognised in the statement of comprehensive income (SOCI):
Experience gains and losses arising on the scheme assets
Experience gains and losses arising on the scheme liabilities
Changes in assumptions underlying the present value of the scheme liabilities
Actuarial gains/(losses) recognised in SOCI
History of experience gains and losses:
Experience gains and losses arising on the scheme assets
Percentage of scheme assets
Experience gains and losses on scheme liabilities
Percentage of the present value of scheme liabilities
Total amount recognised in SOCI
Percentage of the present value of scheme liabilities
2018
£(000)
946
2017
£(000)
840
(1,234)
(1,233)
2016
£(000)
1,042
(1,493)
(288)
(393)
(451)
2018
£(000)
177
607
2,296
3,080
2018
£(000)
177
0.5%
607
(1.3%)
3,080
(6.8%)
2017
£(000)
1,730
–
1,942
3,672
2017
£(000)
1,730
4.8%
-
0%
3,672
(7.7%)
2016
£(000)
4,045
218
(9,334)
(5,071)
2016
£(000)
4,045
12.0%
218
(0.4%)
(5,071)
10.2%
35
The movement in the scheme assets, liabilities and the net deficit are as follows:
Deficit in scheme at 1 October
Movement in the year:
Benefits paid
Contributions
Administration charge
Other finance costs
Actuarial gains/(losses)
2018
Assets
£(000)
2018
Liabilities
£(000)
2018
Total
£(000)
2017
Total
£(000)
2016
Total
£(000)
36,196
(47,947)
(11,751)
(16,373)
(12,197)
(946)
1,404
(73)
946
177
946
–
–
(1,234)
2,903
–
1,404
(73)
(288)
3,080
–
1,404
(61)
(393)
3,672
–
1,404
(58)
(451)
(5,071)
Deficit in scheme at 30 September
37,704
(45,332)
(7,628)
(11,751)
(16,373)
Included in retained earnings is £11,823k (2017: £14,903k) being the cumulative actuarial losses on the defined benefit pension scheme.
Note 22 Lease commitments
Total future minimum lease payments under non-cancellable operating leases are as follows:
Within one year
Within two to five years
The Group
2018
Land and
buildings
£(000)
653
1,543
2,196
2018
Other
£(000)
76
110
186
2017
Land and
buildings
£(000)
343
622
965
2017
Other
£(000)
85
102
187
Note 23 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: 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 and repayable on demand.
Management charges to subsidiaries
Purchases from Bailey Consultancy Services Ltd 1
Rent from A&A Electrical Distributors Ltd Retirement Benefit Scheme 2
Rent charges to subsidiaries
Interest income received
Doubtful debts charged to income statement
Dividend income received
Dividends paid to directors
Loans and trade receivables due
Provision on loans and trade receivables due
2018
£(000)
2017
£(000)
1,424
1,732
40
73
255
27
(356)
4,949
134
2,475
–
52
–
255
53
373
2,725
150
1,701
(373)
1 Mr John Bailey, a director of Bailey Consulting Services Ltd and Dewhurst plc, provided consultancy services to the Group of £40k (2017: £36k) as well as charging nil (2017: £16k) for the
reimbursement of travel expenses. There were no outstanding year end expenses.
2 Mr Alan Warren, a Trustee of A&A Electrical Distributors Ltd Retirement Benefit Scheme and director of Dewhurst plc, rented premises to A&A Electrical Distributors Ltd for the 4 months to
September 2018 for £73k (2017:nil). The annual rent amounts to £220k which is paid quarterly in advance.
36
Notes to the accounts
Note 24 Financial instruments
The Group’s policies towards using financial instruments to manage interest rate, liquidity and currency exposure risks are explained
in the financial review on page 11. The Group defines capital as total equity plus net debt. The objective is to maintain a strong and
efficient capital base to support the Group’s strategic objectives, provide optimal returns for shareholders and safeguard the Group’s
assets and status as a going concern. The Group is not subject to externally imposed capital requirements.
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. Credit risk also extends to the banks utilised by the Group. The majority of cash deposits were held by the RBS NatWest bank
£2.7 million (2017: £4.2 million) and the Santander bank – £2.6 million (2017: £8.7 million) at the year end and these banks’ credit
ratings (long term) with Standard & Poor were A– & A respectively.
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 Apart from the previously reported foreign exchange contract that matured on 4 October 2017 the
Group did not use forward contract derivatives to manage credit risk during the year.
Currency and interest rate exposure of financial assets and liabilities The cash and cash equivalent amount of £9,440k (2017:
£18,087k) is made up of cash of £9,440k (2017: £9,387k) and short-term deposits of nil (2017: £8,700k). The cash was invested
at overnight rates based on the relevant national LIBOR. Up to 2 Jan 2018 some short-term deposits were on 95 days notice at an
average yearly rate of 0.80% (2017: 1.05%). Of the cash, £5,326k (2017: £12,650k) is denominated in GB Pounds with the balance of
£4,114k (2017: £5,437k) held in foreign currencies. Other financial assets and liabilities do not attract interest.
Currency and interest profile
GB Pounds
AUS Dollars
US Dollars
CAN Dollars
Other
Floating
rate
assets
£(000)
3,950
2,457
637
2,085
258
Fixed
rate
assets
£(000)
8,700
–
–
–
–
Interest
free
assets
£(000)
3,112
2,318
2,229
1,781
189
1,105
1,449
8,700
384
357
127
173
68
11
–
–
–
–
–
–
The Group
Interest
free
liabilities
£(000)
Floating
rate
assets
£(000)
Fixed
rate
assets
£(000)
The Company
Interest
free
liabilities
£(000)
Interest
free
assets
£(000)
At 30 September 2017
9,387
8,700
9,629
2,146
1,528
8,700
GB Pounds
AUS Dollars
US Dollars
CAN Dollars
Other
5,326
1,728
738
1,358
290
At 30 September 2018
9,440
–
–
–
–
–
–
5,010
3,117
3,105
1,660
159
1,552
3,039
467
410
128
204
–
–
–
–
13,051
2,761
3,039
–
–
–
–
–
–
1
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
15
–
–
–
–
15
The only operations that hold material monetary assets and liabilities in currencies other than their functional currency are Dupar
Control Inc, Dewhurst (Hungary) Kft and Dewhurst Middle East. Dupar holds trade receivables denominated in US Dollars with a
balance of £378k (2017: £168k), Dewhurst (Hungary) Kft holds trade receivables denominated in US Dollars with a balance of £2,092k
(2017: £1,467k) and trade payables denominated in Euros with a balance of £189k (2017: £131k) and Dewhurst Middle East holds
trade receivables denominated in US Dollars with a balance of £167k (2017: nil).
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 (2017: no facility).
37
Note 25 Investments – shares in subsidiary undertakings
On 2 June 2018, Dewhurst plc entered into an agreement to acquire the entire issued share capital of A&A Electrical Distributors
Limited (‘A&A’) for an initial cash consideration of £9.5 million plus a deferred consideration based on profits generated over the next
two years. On top of the £9.5 million, Dewhurst plc also loaned the newly acquired company A&A £1.0 million to repay a debt it had
with A&A Woodford Ltd, an associate company in the previous A&A Group.
Details of the transaction:
Non-Current assets:
Goodwill
Intangibles
Property, plant and equipment
Current assets:
Inventory
Current liabilities:
Creditors
Loan creditor
Total value of assets acquired
Notes
Book value
£(000)
Fair value
£(000)
10
11
12
–
–
125
4,299
5,000
125
866
1,092
(16)
(975)
(16)
(975)
–
9,525
The goodwill and intangibles at A&A arose as a result of the Dewhurst Group investing in the UK lift and electrical distribution industry.
This Acquisition provides an exciting opportunity for A&A and the Dewhurst group to expand its services to the lift industry both in the
UK and other overseas markets. The Acquisition is in line with Dewhurst’s strategy of providing a broad range of high quality products
and services to the lift industry and will be a significant member of the new enlarged Group.
Cash flows
The net outflow of cash arising from acquisition was as follows:
Cash consideration to old owners
Repayment of loan to A&A Woodford Ltd
Cash paid in respect of acquisition of A&A Electrical Distributors Ltd
£(000)
9,525
975
10,500
Since the acquisition date, A&A has contributed £3.9 million of sales and £0.9 million of profits to the Group. If the acquisition had
occurred on 1 October 2017, Group turnover would have been around £62.3 million and Group operating profit for the period would
have been around £8.0 million (before adjusting for any amortisation of acquired intangibles).
Note 26 Prior year adjustment
With regard to the treatment of deferred tax charges or credits resulting from the exchange differences taken to other comprehensive
income previously the Group applied a tax rate of 17% as a deferred tax charge on these amounts.
A review of the requirements of International Accounting Standards 12 – Income Taxes has resulted in the removal of this blanket tax
provision which the directors, following advice, now recognise is a more suitable interpretation of the requirements of the standard.
This adjustment has no cash effect and does not affect the income statement in the current year or in prior periods and only affects
other comprehensive income and the movement in the translation reserve.
Translation reserve:
Translation reserve (as previously stated)
Adjustments to prior year:
Deferred tax effect (2016 and prior)
Deferred tax effect (2017)
Translation reserve (as adjusted)
30 September
30 September
2017
£(000)
2016
£(000)
1,969
2,034
678
(18)
678
–
2,629
2,712
38
Company financial
statements
Company statement of changes in equity
For the year ended 30 September 2018
At 30 September 2016
Share repurchase
Actuarial gains/(losses) on defined benefit pension scheme
Deferred tax effect
Dividends paid
Profit for the year
Share
capital
£(000)
847
(5)
–
–
–
–
Share
premium
account
£(000)
Capital
redemption
reserve
£(000)
157
290
–
–
–
–
–
5
–
–
–
–
At 30 September 2017
842
157
295
Actuarial gains/(losses) on defined benefit pension scheme
Deferred tax effect
Dividends paid
Profit for the year
–
–
–
–
–
–
–
–
–
–
–
–
Retained
earnings
Total
equity
£(000)
£(000)
5,889
(217)
3,672
(624)
(970)
2,786
10,536
3,080
(524)
(1,011)
5,321
7,183
(217)
3,672
(624)
(970)
2,786
11,830
3,080
(524)
(1,011)
5,321
At 30 September 2018
842
157
295
17,402
18,696
The notes on pages 20–37 form part of these financial statements
39
Company statement of financial position
At 30 September 2018
Non-current assets
Property, plant and equipment
Deferred tax asset
Investments in subsidiaries
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Non-current liabilities
Retirement benefit obligation
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total equity
Notes
2018
£(000)
2017
£(000)
12
19
13
15
16
17
5,329
1,297
14,466
5,452
1,998
4,941
21,092
12,391
2,573
3,039
1,367
10,229
5,612
11,596
26,704
23,987
380
380
406
406
21
7,628
11,751
8,008
12,157
18,696
11,830
20
842
157
295
842
157
295
17,402
10,536
18,696
11,830
The financial statements were approved by the board of directors and authorised for issue on 5 December 2018 and were signed on
its behalf by:
Richard Dewhurst Chairman Jared Sinclair Finance Director
Company Registration Number: 160314
The notes on pages 20–37 form part of these financial statements
40
Company financial
statements
Company cash flow statement
For the year ended 30 September 2018
Cash flows from operating activities
Operating profit /(loss)
Depreciation and amortisation
Notes
2018
£(000)
829
123
2017
£(000)
474
126
Contributions to pension scheme, net of administration fee
(1,331)
(1,343)
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from /(used in) operations
Income tax paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Acquisition of business and assets
Interest received
Dividends received
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Dividends paid
Purchase of own shares
Net cash used in financing activities
(379)
(1,206)
(26)
(1,611)
(74)
(1,685)
25
(9,525)
82
4,949
(4,494)
(743)
1,104
(5)
356
(2)
354
(933)
143
2,725
1,935
(1,011)
–
(970)
(217)
(1,011)
(1,187)
Net increase/(decrease) in cash and cash equivalents
(7,190)
1,102
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
16
16
10,229
9,127
3,039
10,229
The notes on pages 20–37 form part of these financial statements
41
Report of the
independent auditor
• the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance
with International Standards on
Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section of
our report. We are independent of
the Company in accordance with the
ethical requirements that are relevant
to our audit of the financial statements
in the UK, including the FRC’s Ethical
Standard as applied to listed entities,
and we have fulfilled our other ethical
responsibilities in accordance with these
requirements. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis for
our opinion.
Conclusions relating to going
concern
We have nothing to report in respect
of the following matters in relation to
which the ISAs (UK) require us to report
to you where:
• the directors’ use of the going concern
basis of accounting in the preparation
of the financial statements is not
appropriate; or
• the directors have not disclosed in the
financial statements any identified
material uncertainties that may cast
significant doubt about the Company’s
ability to continue to adopt the going
concern basis of accounting for a
period of at least twelve months from
the date when the financial statements
are authorised for issue.
Independent auditor’s
report to the members of
Dewhurst plc for the year
ended 30 September 2018
Opinion
We have audited the financial statements
of Dewhurst Plc (the ‘Company’) and
its subsidiaries (the ‘Group’) for the
period ended 30 September 2018 which
comprise the consolidated statement
of income and other comprehensive
income, the consolidated and parent
Company statements of financial
position, the consolidated and parent
Company statements of cash flows,
the consolidated and parent Company
statements of changes in equity and
notes to the financial statements,
including a summary of significant
accounting policies. The financial
reporting framework that has been
applied in the preparation of the Group
financial statements is applicable law
and International Financial Reporting
Standards (IFRSs) as adopted by the
European Union. The financial reporting
framework that has been applied in
the preparation of the parent Company
financial statements is applicable law
and International Financial Reporting
Standards (IFRSs) as adopted by
the European Union, as applied in
accordance with the provisions of the
Companies Act 2006.
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 2018 and
of the Group’s profit for the year then
ended;
• the Group financial statements have
been properly prepared in accordance
with IFRSs as adopted by the European
Union;
• the parent Company financial
statements have been properly
prepared in accordance with IFRS’s
as adopted by the European Union
as applied in accordance with the
provisions of the Companies Act 2006;
and
Our audit approach
Overview
Key audit matters
Key audit matters are those matters
that, in our professional judgment, were
of most significance in our audit of the
financial statements of the current period
and include the most significant assessed
risks of material misstatement (whether
or not due to fraud) we identified,
including those which had the greatest
effect on: the overall audit strategy, the
allocation of resources in the audit; and
directing the efforts of the engagement
team. These matters were addressed in
the context of our audit of the financial
statements as a whole, and in forming
our opinion thereon, and we do not
provide a separate opinion on these
matters. This is not a complete list of all
risks identified by our audit.
• Revenue recognition
• Inventory provisioning
• Carrying value of investments/
intangibles and recoverability of
intercompany loans
• Carrying value of the retirement
benefit obligation
• Accounting for the acquisition in the
year
These are explained in more detail below.
Audit scope
• We conducted audits of the complete
financial information of Dewhurst Plc,
Dewhurst UK Limited, Thames Valley
Controls Limited, Traffic Management
Products Limited and A&A Electrical
Distributors Limited.
• We performed specified procedures
over certain account balances and
transaction classes at other Group
companies.
• Taken together, the Group companies
over which we performed our audit
procedures accounted for 100% of the
absolute profit before tax (i.e. the sum
of the numerical values without regard
to whether they were profits or losses
for the relevant reporting units) and
100% of revenue.
42
Report of the
independent auditor
Key audit matters
Key audit matter
How our audit addressed the key audit matter
Revenue recognition
The Group has 3 main income sources: lift components,
transport and keypad sales. The group had a total turnover of
£54,510,000 for the year to 30 September 2018.
There are risks due to completeness of income and cut off of
revenue at the period end.
Inventory Provisioning
The Group held £6,279,000 of inventory as at 30 September
2018.
There are key assumptions that drive the inventory provision
including the ability to sell older inventory and the realisable
value that will be achieved on sale. A provision for items
looking to be sold off at below cost and a provision for aged
items which there is a concern may ultimately be sold at
below cost.
The Group provides against 30% of the stock value where an
item has no significant movement in the year; and, provides
100% against stock which has not moved during the period.
We understood that each component of the group had
a specific specialisation and focused its sales on its target
market.
We performed substantive tests to validate the revenue
transactions. In addition, we performed cut-off tests to check
that items were recorded in the appropriate period. We
tested the inventory movement, ownership at the period end,
deferred revenue and work in progress.
We reviewed post year end credit notes to check if there was
any material post year end adjustment that related to the
period.
In addition, we checked the provisioning for slow paying
debts and warranty provisions made.
We understood the methodology used to calculate the
inventory provision and determined it was consistent with that
applied in the prior year. We tested the reasonableness of the
Group inventory provision.
We attended the year end stocktakes and tested sheet to
floor and vice versa to agree stock counts.
We compared a sample of inventory items at the reporting
date to the purchase cost and compared this with sales made
around the reporting period or after the year end. For samples
which were components, we traced the item to the bill of
materials for the finished good and compared the total sales
price to the total purchase cost.
We reconciled the inventory values used in the provision
to the general ledger. We reviewed the calculations and
determined that the policy was correctly applied.
Investments/Intangibles carrying value and Company loans to subsidiaries
The Company has investments of £14,466,000 (2017:
£4,941,000). The group had Goodwill and Intangible assets of
£13,108,000 (2017: 4,673,000).
We reviewed the carrying value of the investments and
intangible assets and the loans to fellow subsidiaries.
The review considered the current position of the subsidiaries,
the future outlook and forecasts prepared by management.
The Company has amounts due from Group companies of
£2,475,000 (2017: £1,327,000). The directors have confirmed
these loans are fully recoverable.
Management have performed impairment reviews and have
exercised judgement as to the recovery of these investments
and amounts due.
We reviewed the subsidiary accounts and forecasts and have
assessed the financial position of each subsidiary.
We have also discussed the budgets and forecasts as part
of the going concern review and to consider whether we
believed any investment was impaired. We considered the
loans held by group entities and their ability to service those
loans. We assessed the impairment reviews performed by
management.
43
Key audit matter
How our audit addressed the key audit matter
The analysis work undertaken by the Directors shows that the
Group is expected to remain cash generative and profitable
based on current trading trends. We have assessed and
understood the methodology and assumptions used by the
Directors in their analysis and determined it to be reasonable.
As the majority of the intangibles relates to the acquisition of
A&A Electrical Distributors Ltd during the year we performed
sensitivity analysis on the forecasts to check that the values
arrived at could be supported by a range of performance
outcomes that could be expected from the company.
Audit procedures were designed to ensure that reliance could
be placed on the expert actuary. Additional procedures were
designed to ensure that the calculations used were reasonable
and that they were properly extracted from the report
prepared by the actuary and presented in the consolidated
financial statements.
Carrying value of the retirement benefit obligation
There is a risk that the retirement benefit obligation
amounting to £7,628,000 (2017: £11,751,000) and before
deferred tax adjustment, has been incorrectly stated.
Accounting for the in-year acquisition of A&A Electrical Distributors Ltd
On 2 June 2018, Dewhurst Plc acquired the assets and
business of A&A Electrical Distributors Ltd for a consideration
of £10,500,000. This was a significant acquisition for the
group and resulted in the recognition of £4,299,000 of
goodwill and intangible assets of £5,000,000. Judgement has
been applied by management in determining these amounts.
Management are required to determine the fair value of
the acquired assets and liabilities, including intangibles. The
key assumptions in valuing the intangible assets include the
selection of valuation methodology, and forecast cash flows.
In respect of this acquisition, we identified the key risk as the
valuation of acquired intangible assets.
We obtained the signed contractual agreements relating to
the acquisition and read significant contract terms relevant to
the accounting and disclosures in the financial statements.
We corroborated the underlying information and substantively
tested the accounting entries and supporting workings
and evidence relating to the accounting for the assets and
liabilities acquired.
We evaluated the methodology and tested the mathematical
accuracy of the calculations of the acquisition for the fair
value of the consideration paid and the fair value of the assets
and liabilities acquired.
We reviewed the valuation of stock by the group and checked
the accuracy and valuation of stock on acquisition.
Our application of materiality
The scope of our audit was influenced
by our application of materiality. We
set certain quantitative thresholds
for materiality. These, together with
qualitative considerations, helped us to
determine the scope of our audit and the
nature, timing and extent of our audit
procedures on the individual financial
statement line items and disclosures and
in evaluating the effect of misstatements,
both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgment, we
determined materiality for the financial
statements as a whole as follows:
44
Report of the
independent auditor
Group financial statements
Company financial statements
Overall materiality
£545,000 (30 September 2017: £1,249,000).
£118,000 (30 September 2017: £159,000).
How we determined it
A benchmark of 1% of turnover was used to determine
the materiality for the Group (2017: 4% of net assets).
Rationale for benchmark applied
We believe that for our first year of audit, it was
more appropriate to use turnover of the group as the
appropriate benchmark. This is considered an appropriate
and accepted auditing benchmark.
A benchmark of 1% of net assets.
We believe that using the net asset benchmark for the parent
company is an appropriate and accepted auditing benchmark.
For each component in the scope of our
Group audit, we allocated a materiality
that is less than our overall Group
materiality. The range of materiality
allocated across components was
between £118,000 and £27,250.
We agreed with the Audit and Risk
Committee that we would report to
them misstatements identified during our
audit above £27,250 being 5% of Group
financial materiality as a whole, as well
as misstatements below those amounts
that, in our view, warranted reporting for
qualitative reasons.
An overview of the scope of our
audit
As part of designing our audit, we
determined materiality and assessed
the risks of material misstatement in
the financial statements. In particular,
we looked at where the directors made
subjective judgments, for example
in respect of significant accounting
estimates that involved making
assumptions and considering future
events that are inherently uncertain. As
in all of our audits we also addressed
the risk of management override of
internal controls, including evaluating
whether there was evidence of bias by
the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to
ensure that we performed enough work
to be able to give an opinion on the
financial statements as a whole, taking
into account the structure of the Group
and the Company, the accounting
processes and controls, and the industry
in which they operate.
The Group financial statements are a
consolidation of 16 reporting units,
comprising the Group’s operating
businesses of which 15 components are
trading subsidiaries. Each subsidiary has
its own accounting records and controls
and each reports to the head office
finance team in the UK.
Of the 15 trading subsidiaries, we
identified six which were considered
to be significant components for
the purposes of the Group financial
statements, and which, in our view,
required a full audit of their complete
financial information in order to
ensure that sufficient audit evidence
was obtained. The Group audit team
performed the statutory audit of the four
trading UK subsidiaries, with full-scope
Group instructions issued to the other
two subsidiaries.
In addition, to the significant
components, six subsidiaries were
subject to full-scope audits in local
jurisdictions, which were conducted such
that the audit work was complete prior
to completion of the Group financial
statements. For these non-significant
components, four were operating under
our instruction on a limited scope basis.
For all subsidiaries which are subject to
full-scope audits and had component
auditors, the Group audit team was in
contact, at each stage of the audit, in
line with detailed instructions issued
and through planning calls and regular
written communication with the
component auditors. Specifically, for
all component teams, the Group team
discussed in detail the planned audit
approach at the component level and
following the Group audit team review,
discussed the detailed reported findings
of the audit with each component team.
The remaining trading subsidiaries were
not subject to full-scope audits. Specific
audit procedures on certain balances
and transactions were performed,
based upon component materiality.
This focused on revenue recognition,
inventory valuation and existence and
completeness of related parties.
Other information
The directors are responsible for the
other information. The other information
comprises the information included
in the annual report, other than the
financial statements and our auditor’s
report thereon. Our opinion on the
financial statements does not cover the
other information and, except to the
extent otherwise explicitly stated in our
report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent
with the financial statements or our
knowledge obtained in the audit or
45
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether there is a material
misstatement in the financial statements
or a material misstatement of the other
information. If, based on the work we
have performed, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact. We have nothing to report in
this regard.
Opinions on other matters
prescribed by the Companies Act
2006
In our opinion, based on the work
undertaken in the course of the audit:
• the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
• the strategic report and the directors’
report have been prepared in
accordance with applicable legal
requirements.
Matters on which we are required
to report by exception
In the light of the knowledge and
understanding of the Group and parent
Company and its environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect
of the following matters in relation to
which the Companies Act 2006 requires
us 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 and the part of the
directors’ remuneration report 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.
Responsibilities of directors
As explained more fully in the directors’
responsibilities statement set out on
page 15, the directors are responsible
for the preparation of the financial
statements and for being satisfied that
they give a true and fair view, and for
such internal control as the directors
determine is necessary to enable the
preparation of financial statements that
are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing
the Group’s and parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern and using the going
concern basis of accounting unless the
directors either intend to liquidate the
Group or the parent Company or to
cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected to
influence the economic decisions of users
taken on the basis of these financial
statements.
A further description of our
responsibilities for the audit of the
financial statements is located on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor’s report.
Other matters which we are
required to address
The non-audit services prohibited by
the FRC’s Ethical Standard were not
provided to the Group or the parent
Company and we remain independent
of the Group and the parent Company in
conducting our audit.
Our audit opinion is consistent with the
additional report to the audit committee.
Use of this report
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.
Jonathan Isaacs
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP
Statutory Auditors
Finsgate
5–7 Cranwood Street
London EC1V 9EE
5 December 2018
46
Notice of meeting
Notice is hereby given that the ninety
ninth 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 2019
at 11:00 am. The meeting will be held
in order to consider and, if thought
fit, pass resolutions 1 to 7 as ordinary
resolutions.
Ordinary resolutions
1 To receive and adopt the statement of
accounts for the year ended
30 September 2018 and the reports of
the directors and auditor thereon.
2 To declare and approve a final dividend
on the Ordinary and ‘A’ non-voting
ordinary shares to shareholders on the
register of members on 18 January 2019.
3 To re-elect as a director Mr R Young,
who retires by rotation under the Articles
of Association.
4 To re-elect as a director Mr P Tett, who
retires by rotation under the Articles of
Association.
5 To re-elect as a director Mr A Warren,
who retires by rotation under the Articles
of Association.
6 To re-appoint Jeffreys Henry LLP as
auditor at a fee to be agreed by the
directors.
7 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 767,355 ‘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 2020 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.
8 To transact any other ordinary business
of the company.
By order of the board
Jared Sinclair
Secretary
31 December 2018
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 2019 (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 or the scanned Proxy Form
emailed to 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 2019 (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.
47
Group companies
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
efung@dewhurst.co.uk
www.dewhurst.co.uk
Dewhurst Middle East
Elevator Accessories LLC
Office #5, Level 20
Binary Tower
Business Bay
PO Box 19031
Dubai
United Arab Emirate
Tel: 00 971 4871 6505
info@dewhurstme.ae
www.dewhurstme.ae
OTHER OVERSEAS
REPRESENTATION
The Group maintains overseas
representation in major countries
throughout the world.
HEAD OFFICE
Dewhurst plc
Unit 9, Hampton Business Park
Hampton Road West
Feltham TW13 6DB
Tel: 020 8744 8200
cosec@dewhurst.co.uk
www.dewhurst.plc.uk
UK SUBSIDIARIES
Dewhurst UK Ltd
Unit 9, Hampton Business Park
Hampton Road West
Feltham TW13 6DB
Tel: 020 8744 8200
info@dewhurst.co.uk
www.dewhurst.co.uk
A&A Electrical Distributors Ltd
234-262 Maybank Road
South Woodford
London E18 1ET
Tel: 020 8559 7000
sales@aa-electrical.com
www.aa-electrical.com
Thames Valley Controls Ltd
Unit 15, Manor Farm Industrial Estate
Flint, Flintshire
Wales CH6 5UY
Tel: 01352 793222
info@tvcl.co.uk
www.tvcl.co.uk
Traffic Management Products Ltd
Unit 4, Nightingale Road
Horsham
West Sussex RH12 2NW
Tel: 08456 808066
info@tmp.solutions
www.tmp.solutions
OVERSEAS SUBSIDIARIES
Dewhurst (Hungary) Kft
H-2038, Soskut
Hrsz. 3518/8
Hungary
Tel: 00 362 356 0550
Dupar Controls Inc.
1751 Bishop Street
Cambridge, Ontario
Canada N1T 1N5
Tel: 001 519 624 2510
info@dupar.com
www.dupar.com
Elevator Research
Manufacturing Corp.
1417 Elwood Street
Los Angeles
CA 90021 USA
Tel: 001 213 746 1914
sales@elevatorresearch.com
www.elevatorresearch.com
Australian Lift
Components Pty Ltd
5 Saggartfield Road
Minto, NSW 2566
Australia
Tel: 00 612 9603 0200
info@ausliftcomp.com.au
www.ausliftcomp.com.au
P&R Liftcars Pty Ltd
7 Kiama Street
Miranda, NSW 2228
Australia
Tel: 00 612 9522 4777
info@prlift.com.au
Lift Material Australia Pty Ltd
PO Box 7164
Alexandria, Sydney
NSW 2015
Australia
Tel: 00 612 9310 4288
info@liftmaterial.com
www.liftmaterial.com
Dual Engraving Pty Ltd
104 Howe Street
Osborne Park, WA 6017
Australia
Tel: 00 618 9443 3677
garry@dualengraving.com.au
www.dualengraving.com.au
48
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
AUDITORS
Jeffreys Henry LLP
Chartered Accountants and
Statutory Auditor
5-7 Cranwood Street
London EC1V 9EE
BANKERS
National Westminster Bank plc
275–277 High Street
Hounslow
Middlesex TW3 1EG
REGISTRARS
Link Market Services Ltd
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire HD8 0LA
NOMINATED ADVISER
AND BROKER
Cantor Fitzgerald Europe
1 Churchill Place
Canary Wharf
London E14 5RB
SOLICITORS
Keystone Law
53 Davies Street
London W1K 5JH
Design www.gilldavies.co.uk
www.dewhurst.plc.uk