Annual report and accounts 2019
Our global reach today
We are a global supplier of
quality components to the lift,
transport and keypad industries
Contents
Financial highlights 01
Chairman’s statement 02
100 years of Dewhurst 04
Strategic report 06
Principal risks and uncertainties 10
Financial review 12
Board of Directors 14
Chairman’s corporate governance statement 16
Report of the Directors 17
Consolidated financial statements 20
Notes to the accounts 24
Company financial statements 42
Report of the independent auditor 45
Notice of meeting 50
Group companies 51
Advisers and Company information 52
Financial highlights
Revenue – continuing
Revenue – discontinued
Operating profit* – continuing
Operating profit* – discontinued
Earnings per share (Restated)
Dividend per share
2019
2018
(Restated)
56.4m
45.7m
9.5m
7.7m
1.1m
8.8m
6.0m
0.7m
32.09p
39.41p
13.00p
12.50p
Reporting record results
Revenue £ million
Operating profit* £ million
2015
2016
37.8 45.9^
39.7 47.2^
2017
45.3 52.9^
2015
2016
2017
4.6 5.6^
5.3 5.5^
6.0 6.2^
2018
2019
45.7 54.5^
2018
6.0 6.7^
56.4 65.9^
2019
7.7 8.8^
Earnings per share (Restated) Pence
Dividend per share Pence
2015
2016
2017
2018
2
0
1
8
2019
40.02
38.18
2015
2016
49.81
2017
39.41
32.09
2018
2019
10.00
13.00†
11.00
12.00
12.50
13.00
* Operating profit before goodwill write down, amortisation of acquired intangibles, gain on property disposal and GMP equalisation
† Includes special dividend of 3p per share
^ Total including discontinued operations
01
Chairman’s statement
Results
I am delighted to be able to report record sales and
adjusted operating profit for the Group in this, our centenary
year. Group sales for the year to 30 September 2019
increased 23.4% to £56.4 million on a continuing basis
(2018: £45.7 million), with the benefit of a full year of sales
from A&A Electrical Distributors (A&A). Adjusted operating
profit before amortisation of acquired intangibles and
exceptional pension costs was £7.7 million (2018: £6.0 million)
and profit before tax was £5.2 million (2018: £5.3 million).
These results, as required under IFRS, are presented on the
basis of our continuing business only, with comparatives also
adjusted to exclude the contribution from Thames Valley
Controls Limited (TVC) which was sold on 30 September 2019.
Further details regarding the contribution TVC made in our last
year of ownership is provided in the Financial Review.
In addition to the above results we are reporting a profit on
the sale of TVC of £6.0 million this year. £1.1 million of the
proceeds has been transferred to the pension fund towards
liabilities for TVC pension scheme members, with the balance
being retained for future investment.
In local currencies the lift business in the UK was up
significantly helped by a full years’ contribution from A&A;
North America was broadly flat overall with the US up but
Canada down slightly after strong growth last year; and
there was good growth across all our Australian businesses.
Transportation business fell again during the year, but Keypads
generated modest growth with a major customer increasing
stock in preparation for a model changeover. Overall, currency
movements have not had a material impact on reported sales
this year.
With the continuing strength of the Group’s performance we
are proposing a 0.25 pence increase in the final dividend to
provide a 0.5 pence increase for the year as a whole.
Operations and people
The biggest impact on people this year has been the sale of
TVC. This required a considerable amount of work to get over
the line and I would particularly like to thank Jared Sinclair and
members of his team, Richard Young and David Dewhurst for
their significant contributions and hard work on the project.
Richard Young resigned as a Group Director on the completion
of the sale. I have enjoyed working with Richard for more than
20 years and I would like to thank him for his leadership at
TVC and contribution to the Group overall. I wish him and the
team at TVC continuing success in the future.
We have also expended considerable resources and time on
integrating A&A into our Group-wide processes and IT
systems. We have made good progress on that integration,
but further work remains to be done.
02/03
Richard Dewhurst
Chairman
Overall however, these record results would not have been
possible without the efforts of our staff, and I would like to
both recognise and thank all the staff working for the Group
during the year, including those at TVC, for their contribution
to this year’s success.
Staff from around the UK attended a dinner in the Flight Gallery at the
Science Museum to celebrate our centenary in November.
Centenary
We completed our 100 years in business in November and
are very proud of achieving that milestone. We marked the
centenary with two events at the Science Museum in London
for customers, staff and other stakeholders and by compiling a
history of the business. The events were a fantastic celebration
and a great opportunity for me to thank our staff and various
stakeholders for their loyalty and support over the years.
Reviewing the history was a fascinating journey through our
archives and a lesson on the importance of being able to adapt
to changes in the market. Clearly with digital disruption and
climate change we are facing two very significant challenges
that are not just going to change our market but the whole
economic and physical environment. If we are to last another
hundred years, our business, in common with others, is going
to have to adapt its strategy to use the world’s resources
more sustainably. Change also brings opportunity and we
will be looking to use our strengths and financial resources to
capitalise on opportunities that we identify.
Outlook
Clearly it is challenging to look forward 100 years, but
particularly at the moment where it is difficult to look forward
just one year. We anticipate performance in the UK will
be highly dependent on the result of the General Election
and particularly on whether it produces a clear result that
creates some certainty about our direction of travel or just
prolongs the last three years’ uncertainty. Overseas, in the
USA the market still seems strong, but the Canadian market,
particularly for lift modernisation, appears to be softening;
in Australia the market seems steady, at least for the first half
of the year. Regarding keypads, having gained this year from
sales build up on a new model, we now envisage a reduction
from the rundown in stock of the outgoing product line.
100 years of innovation
With the capabilities of modern CAD
modelling systems we no longer need
the large engineering drawing offices
of 50 years ago.
100 years of Dewhurst
Founded by
Melbourne
Dewhurst (MD) and
Howard Marryat
(Chairman) in
Hatton Garden.
Major projects for
control gear were
delivered during
this period, such as
this 100ft long
control panel for a
refrigerated
warehouse at Hay’s
Wharf, London.
However we
struggled to keep up
with the post war
demand given the
national shortage of
resources.
Alan Dewhurst
takes over as
Chairman on death
of Melbourne
Dewhurst in 1962.
Continued to grow
the business and
extend the
Inverness Road
factory through the
depression era,
completing the
redevelopment of
the site by 1939.
1919
1920s
1930s
1940s
1950s
1960s
Industrial brakes
become a significant
product line.
Moved to Inverness
Road in 1922,
Murray Scott joins
as director and
shareholder.
Becomes a public
company listed on
the London Stock
Exchange in 1948.
Dewhurst staff and
guests travel in a
vintage open top
bus to celebrate the
Company’s 50th
anniversary in 1969.
Dupar Canada, first
overseas company,
established in 1958.
04/05
Richard Dewhurst
takes over as
Chairman in 1991.
We moved from
Inverness Road, our
base for 90 years,
to new premises in
Hampton Business
Park in 2012.
Sir Horace Cutler,
Leader of the Greater
London Council,
demonstrates the
jumbo pushbutton
which Dewhurst
had designed for
the new London
Underground District
line trains.
Started supplying
keypads for bank
ATMs.
2000 saw our
expansion into
Australia with the
purchase of ALC,
the first of 5
acquisitions there.
1970s
1980s
1990s
2000s
2010s
2019
Increased our focus
on pushbuttons
and introduced a
number of product
innovations: tactile
and braille, laser
cut legends, LED
illumination.
Alan Dewhurst
receives the Design
Council award in
1975 from the
Duke of Edinburgh
for the US81
vandal resistant
pushbutton.
Compact pushbutton
launched mid 1990s.
The innovative
TMP Solar powered
traffic bollard is
introduced in 2007.
TVC Hall Call
Despatch system
launched.
In 2018 we
purchased A&A, our
largest acquisition
to date; it has over
30,000 product
lines available to
customers.
Strategic report
Business review
The Group’s principal activity in the year continued to be the
manufacture of electrical components and control equipment
for industrial and commercial capital goods. The Group
maintained its position as a speciality supplier of equipment
to Lift, Transport and Keypad sectors. A review of the Group’s
operations is provided 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, profit before tax and total equity
which are stated in the five-year review on page 13. The key
non-financial performance indicators relevant to the Group are
quality measures and on-time deliveries to our customers.
Operating highlights
As would be expected from a very strong year, the majority
of Group companies performed well and exceeded last year’s
revenues. This year was A&A’s first full year in the Group and
it made a significant additional contribution albeit in line with
management expectations.
The Group’s overseas companies performed well on the whole,
each reporting increased revenue apart from Dupar Controls
(in Canada) where there has been a definite weakening in the
modernisation market, which has held us back.
This has been a landmark year for Dewhurst as we have
celebrated our centenary. We hosted a reception at the Science
Museum attended by customers and other stakeholders,
which was a very successful and fitting way to commemorate
this special milestone. To have achieved 100 years in business
is an achievement that we can all be very proud of. We are
very grateful to all employees, past and present, in all our
companies, who have played a part in reaching this landmark.
UNITED KINGDOM
Dewhurst UK Limited
Sales improved at Dewhurst UK as our drive to increase fixture
sales gained momentum. The UK market was particularly
strong with an increase in demand for infrastructure products,
especially within the rail sector. We fulfilled our first order for
signalisation of a new range of lifts for London Underground
(LUL). We expect further orders over the coming years to
support LUL’s program to install lifts in all their surface stations.
Overseas we started delivery of fixtures for the first of 180
lifts for the new Riyadh Metro. This is a significant order for
Dewhurst UK and the bulk of this contract will be delivered in
the coming year.
06/07
David Dewhurst
Group Managing Director
We have also introduced a number of new products, primarily
to add to our Lift Fixture offering. Our new Unity Fixture
provides a low profile, modern and flexible solution for landing
stations and car stations. We originally designed this for the
Riyadh Metro project but have now launched it globally and
it has been well received. We have also added to our Lift
Indicator range with a number of new offerings based on glass
designs.
Thames Valley Controls (TVC)
It is pleasing to report that in our final year of ownership of
TVC, they continued the growth of the previous year and
revenues increased significantly.
TVC has been an important part of the Dewhurst Group
for over 25 years and it has been a pleasure to work with
the team in Flint. The company is in a strong position with
class leading controller products such as Ethos 2, where we
have ensured that the product is easy to use by focusing on
intuitive diagnostic, commissioning and configuration tools.
Ethos Navigator is the only UK developed Hall Call Destination
control system, which uses unique intelligence to deploy the
lifts in the most efficient way possible. Monitoring products
include CMS Anywhere, a web based remote monitoring
system that enables you to manage your equipment at any
time from anywhere.
However, as we reported in our announcement earlier this
year, the cost and complexity of developing these new
products is becoming increasingly onerous. Vantage Elevator
Solutions, the new owner of TVC, have the resources and scale
of business that will allow them better market leverage of
required future development costs and that will benefit TVC’s
ongoing growth.
We will continue to work with TVC on a number of joint
collaborations and I would like to join the Chairman in
thanking the staff of TVC for all their hard work and wish
them all the best for the future as part of the Vantage group.
Traffic Management Products (TMP)
We had a particularly difficult first half of the year at TMP,
when revenues were especially soft. At the same time the team
at Wednesbury still had a great deal of work to do at the new
factory, ensuring that the plant was running efficiently, refining
the manufacturing and assembly processes and establishing
new Health & Safety and Quality procedures.
There had been a greater turnover of sales staff at TMP than
is ideal and the new sales team needed to restore contacts
throughout the industry. Such activities take time but in the
second half of the year there were definite signs this work was
beginning to pay dividends. We are optimistic this will lead to
strengthening sales in the coming year.
100 years of manufacturing
At its peak our workforce was over 700,
but with modern automated assembly
we can generate greater output more
efficiently.
Strategic report
We have recently launched a new addition to our range of
‘Evo’ self-righting bollards. The new ‘Evo Max’ has more
depth than a standard bollard and therefore delivers maximum
visibility at any angle, making it an ideal bollard to use at
road junctions.
Dupar has always been at the forefront of driving efficiencies
through improved front end processes and this year they
have introduced a new software solution for production
planning to provide greater visibility of progress through the
manufacturing process.
A&A Electrical Distributors (A&A)
Elevator Research & Manufacturing (ERM)
A&A completed their first full year as part of the Dewhurst
Group and it has been a pleasure to get to know the team.
Sales and profits were broadly in line with our expectations
and the management team have worked hard to ensure
that the handover has gone smoothly and any customer
impact from the acquisition minimised. Customer service is
absolutely critical at A&A and John Bailey and his team
are focused on maintaining and improving that aspect of
the business.
The roll out of new products is also very important to the
business and this year we have launched a new LED shaft
lighting system that will be a key product for us in the future.
The product was launched at Liftex 2019, which is the UK’s
Lift Industry exhibition and takes place every three years. It
was fortuitous that the exhibition was held in our centenary
year and we had a major presence at the exhibition with
A&A, TVC and Dewhurst UK all exhibiting. The exhibition was
well attended and provided an excellent shop window for
Dewhurst Group companies.
In the summer we also transitioned A&A from its previous
ERP system to the system that is used across the rest of
the Dewhurst Group. Any change of ERP system is always
a challenge and the team at A&A did an excellent job in
ensuring that any disruption was kept to a minimum.
EUROPE
Dewhurst Hungary
Sales throughout the year for our keypad products were quite
strong. Our major customer had suffered a slowdown in ATM
sales in the previous year but this year sales of their ATMs
recovered, and we have seen the benefit of this with improved
keypad sales.
Towards the end of the year, demand for the next generation
of keypads gained traction and Dewhurst Hungary have done
a very professional job in managing the transition from old
product to new.
NORTH AMERICA
Dupar Controls
Revenues weakened slightly at Dupar due to a softening of
the modernisation market in Canada, that in turn, had an
impact on profits. Demand for fixtures for new installations
continued to be strong and the longer-term outlook remains
encouraging.
Earlier in the year we secured a new site in Kitchener, very
close to our existing factory and we have signed a contract
with our chosen contractor to build a new 52,000 sq. ft
manufacturing facility. This new facility is significantly larger
than our current one and should provide an excellent home for
Dupar for the foreseeable future.
08/09
The team at ERM had another good year in which they have
continued their progress in turning the business around.
Fixture sales grew by 20% as customers returned to ERM
on the back of the excellent customer service that they are
now providing. Profits, although still relatively modest, grew
significantly from the previous financial year.
The market in California remains strong and we look forward
to another year of progress.
AUSTRALIA & ASIA
Australian Lift Components (ALC)
Sales at ALC grew significantly as we really started to see the
benefits of having a local sales engineering presence in both
Brisbane and Melbourne. There was also an increase in the
number of joint projects we secured with P&R Lift Cars for
both car interiors and fixtures.
ALC are beginning to do a reasonable amount of metal
fabrication work for P&R and to support this, we purchased a
new Amada Brake Press, which will significantly improve the
accuracy of our folds and also the length of material that can
be folded.
P&R Lift Cars (P&R)
This has been another good year for P&R as demand for their
high-end lift interiors continues to increase. They have an
enviable reputation for the quality of their work and for the
service they provide.
Given this continuing growth of P&R, we have taken the
opportunity to strengthen the senior management team
during the year to ensure it is able to continue to manage this
expansion.
Lift Material
Sales continued to grow this year at Lift Material.
Once again it was the Escalator division that led the way,
with growth in revenues of over 30% which is a great
achievement.
The escalator component parts tend to be quite bulky and
this is the sector of the business that has seen the strongest
growth. As a consequence, we have found ourselves becoming
increasingly short of space. To protect ourselves from spiralling
rents in Sydney, we have taken the opportunity to purchase a
20,000 sq. ft unit in Botany which is a good location for Lift
Material. This unit should meet our needs for space for the
foreseeable future as well as ensuring that we are in a prime
locality for the business needs.
Dual Engraving (Dual)
Dual revenues increased above expectations this year as the
Perth market recovered, following a couple of quieter years.
100 years of training
From the early days the company trained
significant numbers of apprentices
and that commitment to training and
development continues today.
Strategic report
The team at Dual visited P&R earlier in the year and were able
to see the significant efficiency gains they were deriving from
their CNC router. The decision was therefore made to purchase
a CNC machine for Dual and we expect delivery early in the
new year. This should help improve their capacity over the
coming years.
Sales grew slightly during the year but the current political
unrest in the region is having an impact on all businesses and
ours is no exception. Many projects are being put temporarily
on hold and the first half of next year is expected to be
challenging.
Approved and signed on behalf of the Board
Dewhurst Hong Kong
We welcome Feona Lai as the new General Manager of
Dewhurst Hong Kong and we wish her well in her new role.
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 have increased
their inventory levels and our overseas companies that
import from the UK have done 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 competitve 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.
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.
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.
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.
A proportion of the liabilities are covered by Liability
Driven Investments which more closely match the
movements in the values of liabilities.
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.
Being an international Group, foreign currency is
our most significant treasury risk.
Changes in foreign currencies
can have a significant impact on
profit performance.
10/11
100 years of delivery
Our commitment to customer service
and dependability is as strong as ever,
but we now distribute our products
all around the world.
Financial review
Jared Sinclair
Finance Director
Trading results
The Group continued its upward trend with another year of
record sales and profits. This was supported by a full year
of sales from A&A Electrical Distributors (A&A) which last
year included only four months of trading. In addition, the
Australian east coast companies saw considerable organic
growth in local terms with all these subsidiaries again reporting
record sales.
significantly in September 2019 to 1.80% (2018: 2.85%),
causing the pension liabilities to increase by £8.9 million. The
second was a one-off charge of £0.6 million arising from the
requirement to equalise guaranteed minimum pensions (GMP)
following a High Court ruling in October 2018. It was held
by the Court that pension schemes which were historically
contracted out of state earnings related pensions (SERPS) had
a disparity of benefits available to men and women and that
there was an obligation to equalise benefits as far back as 1990.
Although a significant proportion of the Group’s revenue and
profits are generated and held in foreign currency, foreign
exchange retranslation had a negligible impact on the reporting
performance of the Group this year with like-for-like revenue
and profit before tax impacted by less than 0.5% each.
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.
Overall, reported revenue from continuing operations increased
by 23.4% to £56.4 million (2018: £45.7 million) and adjusted
operating profit (before acquired intangible amortisation
and the pension GMP equalisation charge, explained below)
increased by 28.1% to £7.7 million (2018: £6.0 million).
Solid cash position
Cash returned to a very healthy balance, assisted by the
completion of the sale of TVC on the last day of the year. The
proceeds from the sale, net of TVC’s cash in the business and
transaction costs, amounted to £7.5 million (see note 25).
During the year, the Group spent £2.7 million (A$4.8 million)
on a property for Lift Material as well as £1.2 million (C$2.0
million) on land for Dupar Controls to develop. The Group
ended the year with cash of £17.0 million, up £7.6 million from
£9.4 million in 2018.
On 20 August 2019, the Board authorised the capital
expenditure for Dupar Controls to start development on its
new site. The building is expected to cost £4.8 million
(C$7.6 million) and take about a year from breaking ground
which is imminent. We plan to market the existing factory for
sale next year.
The Group started and finished the year with no borrowing
or bank overdraft facility.
Pension scheme deficit
It is disappointing to report that despite the pension scheme
assets outperforming expectation by £3.3 million and the
Company paying in a total of £2.5 million contributions, the
scheme deficit increased by £3.0 million to £10.6 million in
2019 (2018: £7.6 million). The Company’s contribution this
year included a one-off payment of £1.1 million as a
condition of a Flexible Apportionment Arrangement (FAA) to
transfer TVC’s defined benefit pension scheme obligations to
Dewhurst plc before it was sold.
The two key adverse factors which outweighed these
gains were firstly the liability discount rate which dropped
12/13
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. 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 and does not use derivatives 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
final dividend for 2019 has not been accrued at the end of
the reporting period. The total dividend for 2019 of 13.0p
per share is 4.0% higher than 2018 and is covered 2.8 times
by ‘continuing’ earnings. Total equity improved from £37.0
million to £42.7 million, primarily as a result of a strong trading
performance in the year and cash from the sale of TVC despite
the £3.0 million increase in the pension deficit referred to above.
Following a share repurchase, there was a reduction in the
number of allotted shares during the year, and these have been
fully reported in the Report of the Directors on page 17.
9 December 2019
Group key performance indicators
Revenue – continuing
Revenue – discontinued
Adjusted operating profit* – continuing
Adjusted operating profit* – discontinued
Profit before taxation – continuing
Profit before taxation – discontinued
Taxation – continuing
Taxation – discontinued
Profit after taxation – continuing
Profit after taxation – discontinued
2015
£’000
37,799
8,147
2016
£’000
39,666
7,493
2017
£’000
45,280
7,610
2018
£’000
45,730
8,780
2019
£’000
56,446
9,487
45,946
47,159
52,890
54,510
65,933
4,587
1,001
5,588
4,317
1,001
5,318
1,016
(14)
1,002
3,301
1,015
4,316
5,303
199
5,502
4,886
199
5,085
1,598
(21)
1,577
3,288
220
3,508
6,007
237
6,244
5,729
237
5,966
1,347
(2)
1,345
4,382
239
4,621
6,013
730
6,743
5,253
730
5,983
1,710
13
1,723
3,543
717
7,700
1,077
8,777
5,244
1,077
6,321
2,149
(10)
2,139
3,095
7,079
4,260
10,174
Total equity
24,570
25,258
31,893
37,008
42,680
EPS^ – continuing and discontinued
EPS^ – continuing
Dividends per share
Defective parts per million
On time delivery (%)
50.21p
40.02p
40.75p
38.18p
52.65p
49.81p
47.93p
39.41p
116.23p
32.09p
13.00p
11.00p
12.00p
12.50p
13.00p
n/a
n/a
3,241
1,236
1,525
1,932
90%
92%
90%
90%
* Operating profit before goodwill write down, amortisation of acquired intangibles, gain on property disposal and GMP equalisation
^ Earnings per share (EPS) – basic and diluted
Shareholders’ return
1100p
Sales by region
North America 22%
UK, Europe & Middle East 42%
Australia & Asia 36%
Employees by region
North America 78
UK, Europe & Middle East 200
Australia & Asia 100
Sept
2014
Sept
2015
Sept
2016
Sept
2017
Sept
2018
Sept
2019
Ordinary share price
‘A’ ordinary share price
1000p
900p
800p
700p
600p
500p
400p
300p
200p
100p
Board of directors
Richard Dewhurst BA (Eng Sc), ACMA R
John Bailey
Chairman
Age 63. Joined in 1985.
Previously with Ford Motor Co, Ernst & Whinney,
Senior Management Consultant.
Managing Director, A&A Electrical Distributors Ltd
Age 49. Joined in 2008.
Previously with Brett Landscaping & Building Products,
Commercial Director.
David Dewhurst BSc (Elec Eng)
Peter Tett MA, MSc A R
Group Managing Director
Age 58. Joined in 1987.
Previously with Holmes & Marchant plc.
Non-executive Director
Age 80. Joined in 2000.
Previously with Halma plc, Director.
Jared Sinclair BSc, ACA
Alan Warren
Finance Director & Company Secretary
Age 49. Joined in 1997.
Previously with Moores Rowland, Chartered Accountants,
Audit Senior.
Non-executive Director
Age 62. Joined in 2018.
Previously with A&A Electrical Distributors Ltd, Director.
Richard Young BSc, MBA, CEng, FIET
Managing Director, Thames Valley Controls Ltd
Age 63. Joined in 1996.
Previously with MBM Technology Ltd, Director
and General Manager.
Committee membership
Remuneration committee
Meets once per year
R Chairman R Member
Audit committee
Meets twice per year
A Chairman
14/15
Opposite page
Above A board meeting from 1983.
Left to right: Keith Bossard (Sales Director), Jack Slatter (Production
Director), Alan Dewhurst (Chairman), Neville Turner (Engineering
Director), Colin Johnson (Managing Director).
Below
Left to right: David Dewhurst, Peter Tett, John Bailey, Alan Warren,
Jared Sinclair, Richard Dewhurst.
100 years of management
The management team has changed over
the years, but the values have remained
constant and stability has been provided
by our significant family shareholding.
Chairman’s corporate governance statement
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,
particularly the audit approach and key audit matters as
detailed on pages 45 to 49.
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 met nine times this year and deals with all
important aspects of the Group’s affairs. During the year
Mr A Warren was unable to attend three executive meetings,
Mr D Dewhurst one meeting and Mr P Tett one 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
16/17
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 2019.
Results and dividends
The profit for the year, after taxation, amounted to £10.2
million (2018: £4.3 million).
A final dividend on the Ordinary and ‘A’ non-voting ordinary
shares of 9.25p per share (2018: 9.00p) for the financial year
ended 30 September 2019 will be proposed at the Annual
General Meeting (AGM) to be held on 18 February 2020. If
approved, this dividend will be paid on 26 February 2020 to
members on the register at 17 January 2020. The ex-dividend
date will be 16 January 2020.
An interim dividend of 3.75p per share (2018: 3.50p) was paid
on 20 August 2019.
A final dividend on the Ordinary and ‘A’ non-voting ordinary
shares of 9.00p per share (2017: 8.50p) which amounted
to £758k (2017: £716k) for the financial year ended 30
September 2018 was approved at the AGM held on 5 February
2019 and was paid on 13 February 2019 to members on the
register at 17 January 2019.
Share repurchases
On 25 January 2019 the Company purchased 16,000 of
its own ‘A’ non-voting ordinary 10p shares for £81,600. At
the time of purchase these shares amounted to 0.19% of
the called up share capital of the Company and have been
cancelled.
Details of shares purchased have been notified to the London
Stock Exchange and to the Registrar of Companies.
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 J Bailey
Mr R Young – resigned 30 September 2019
Mr P Tett (Non-executive)
Mr A Warren (Non-executive)
The Directors retiring by rotation at this year’s Annual General
Meeting are Mr J Sinclair and Mr J Bailey who, being eligible,
offer themselves for re-election. The unexpired period of
Mr J Sinclair and Mr J Bailey’s service agreement is less than
one year.
During the year and at the date of approval of the accounts,
the Group maintained liability insurance for all Directors.
Substantial shareholdings
At 22 November 2019, 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
201,300
190,208
175,333
138,500
110,000
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
518,000
449,198
330,000
287,000
Hargreaves Lansdown Nominees Ltd (VRA acct)
261,381
Interactive Investor Services Nominees Ltd
Vidacos Nominees Ltd
Hargreaves Lansdown Nominees Ltd (15942 acct)
Mr J H Ridley
261,021
248,500
182,177
153,100
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 the instances of
occupational accidents and illnesses detailed policies and risk
improvement programmes are regularly updated.
Report of the directors
Directors’ share interests
The table below sets out the names of the persons who were Directors of the Company during the financial year ended
30 September 2019 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 2018.
Mr R M Dewhurst
Mr D Dewhurst
Mr J C Sinclair
Mr R Young
Mr J Bailey
Mr P Tett
Mr A Warren
Ordinary shares
30 September 2019
‘A’ ordinary shares
Ordinary shares
30 September 2018
‘A’ ordinary shares
492,333
123,666
492,333
123,666
419,595
69,932
419,595
69,932
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 2019 and 30 September 2018 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.
Directors’ remuneration
The remuneration of the Directors is shown below:
Salary
£(000)
Bonus
and fees
£(000)
Benefits
£(000)
Pension
in kind
£(000)
2019
Total
2018
Total
£(000)
£(000)
128
134
109
135
–
20
20
303
267
97
54
–
–
–
546
721
3
4
–
–
–
–
–
7
–
–
13
–
–
–
–
434
405
219
189
–
20
20
258
239
153
63
15
20
6
13
1,287
754
117
94
–
10
221
159
Continuing operations
Executive Directors:
Mr R M Dewhurst
Mr D Dewhurst
Mr J C Sinclair
Mr J Bailey (from 4 June 2018)
Non-executive Directors:
Mr J Bailey (up to 4 June 2018)
Mr P Tett
Mr A Warren
Discontinuing operations
Executive Directors:
Mr R Young
18/19
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
9 December 2019
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
ensure the Company has adequate resources to continue in
operational existence for the foreseeable future, therefore the
Directors continue to adopt a going concern basis in preparing
the financial statements.
Auditor
The current Directors have taken all the steps that they ought
to have taken to make themselves aware of any information
needed by the Group’s Auditor for the purposes of the audit
and to establish that the Auditor is aware of that information.
The Directors are not aware of any relevant audit information
of which the Auditor is unaware.
A resolution will be proposed at the Annual General
Meeting to re-appoint Jeffreys Henry LLP as the Company’s
Auditors and to authorise the Directors to determine their
remuneration.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulations.
Consolidated financial statements
Consolidated statement of comprehensive income
For the year ended 30 September 2019
Continuing operations
Revenue
Operating costs
Adjusted operating profit*
Pension charge – GMP equalisation
Amortisation of acquired intangibles
Operating profit
Finance income
Finance costs
Profit before taxation
Taxation
Profit from continuing operations
Discontinued operations
Profit and gain from discontinued operations (net of tax)
Profit for the period
Other comprehensive income:
2019
Notes
£(000)
2018
(Restated)1
£(000)
2
3
21
11
5
6
7
25
8
56,446
45,730
(51,052)
(40,272)
7,700
(639)
(1,667)
5,394
34
(184)
5,244
(2,149)
6,013
–
(555)
5,458
86
(291)
5,253
(1,710)
3,095
3,543
7,079
717
10,174
4,260
Actuarial gains/(losses) on the defined benefit pension scheme
21
(4,559)
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
775
314
(3,470)
308
308
(3,162)
7,012
9,780
394
10,174
6,620
392
7,012
Basic and diluted earnings per share
Basic and diluted earnings per share – continuing operations
9
9
116.23p
32.09p
* Operating profit before amortisation of acquired intangibles and pension GMP equalisation (see Financial review)
1 The prior period income statement and all relevant notes have been restated to reflect the impact of treating Thames Valley Controls Ltd as a discontinued
operation (see note 25)
The notes on pages 24–41 form part of these financial statements
20/21
3,080
(524)
140
2,696
(727)
(727)
1,969
6,229
4,039
221
4,260
6,070
159
6,229
47.93p
39.41p
Consolidated statement of financial position
At 30 September 2019
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
Notes
2019
£(000)
2018
£(000)
10
11
12
19
14
15
16
17
18
9,719
2,831
13,225
2,198
8,598
4,510
9,271
1,639
27,973
24,018
6,010
10,993
16,980
6,279
13,920
9,440
33,983
29,639
61,956
53,657
8,180
249
277
8,706
8,185
532
304
9,021
21
10,570
7,628
20
19,276
16,649
42,680
37,008
841
157
296
2,274
37,847
842
157
295
1,964
32,693
41,415
35,951
1,265
1,057
42,680
37,008
The financial statements were approved by the Board of Directors and authorised for issue on 9 December 2019 and were signed on
its behalf by:
Richard Dewhurst Chairman
Jared Sinclair Finance Director
Company Registration Number:160314
The notes on pages 24–41 form part of these financial statements
Consolidated financial statements
Consolidated statement of changes in equity
For the year ended 30 September 2019
£(000)
Share
capital
Share
premium
account
£(000)
Capital
redemption
reserve
£(000)
Translation
reserve
Retained
earnings
£(000)
£(000)
Non
controlling
interest
£(000)
Total
equity
£(000)
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
–
–
–
–
–
–
At 30 September 2018
Share repurchase
842
(1)
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
(1,011)
4,039
–
–
–
(103)
221
3,080
(524)
140
(1,114)
4,260
157
295
1,964
32,693
1,057
37,008
–
–
–
–
–
–
–
1
–
–
–
–
–
–
–
310
–
–
–
–
–
(82)
–
(4,559)
775
314
(1,074)
9,780
–
(2)
–
–
–
(82)
308
(4,559)
775
314
(184)
394
(1,258)
10,174
At 30 September 2019
841
157
296
2,274
37,847
1,265
42,680
The notes on pages 24–41 form part of these financial statements
22/23
Consolidated cash flow statement
For the year ended 30 September 2019
Cash flows from operating activities
Operating profit – continuing operations
Operating profit – discontinued operations
Operating profit
Depreciation and amortisation
Contributions to pension scheme, net of administration fee & GMP equalisation costs
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 – continuing operations
Tax paid – discontinued operations
Tax paid
Net cash from operating activities
Cash flows from investing activities
Acquisition of business and assets
Proceeds on disposal of a subsidiary (net of cash disposed)
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Development costs capitalised
Interest 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
Notes
2019
£(000)
2018
£(000)
25
5,394
1,077
6,471
2,857
(1,800)
111
(13)
7,626
(838)
888
617
46
8,339
(1)
5,458
730
6,188
1,572
(1,331)
(155)
36
6,310
(487)
(3,909)
2,618
(22)
4,510
(3)
(1,921)
(1,257)
25
10
(13)
(1,911)
(1,270)
6,427
3,237
25
12
–
(9,525)
7,514
57
–
43
(5,233)
(1,161)
(41)
34
(29)
86
2,331
(10,586)
9
(1,258)
(1,114)
(82)
–
(1,340)
(1,114)
Net increase/(decrease) in cash and cash equivalents
7,418
(8,463)
Cash and cash equivalents at beginning of year
Exchange adjustments on cash and cash equivalents
Cash and cash equivalents at end of year
16
9,440
122
18,087
(184)
16
16,980
9,440
The notes on pages 24–41 form part of these financial statements
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.
IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue Recognition’
became effective this accounting period and apart from an update
to the terminology used in the accounting policies note there has
been no material effect of the new standards on the reported
figures. Accordingly, no separate presentation of the impact on
the financial statements is presented. All IFRS issued but not yet
effective including IFRS 16 ‘Leases’ have not been applied and whilst
the Directors have yet to assess their full impact, initial indications
are that it will not materially affect the Group reported profit figure
or net assets figure. Group will however, after allowing for an
inherent incremental borrowing rate, anticipate that property, plant
and equipment will increase in the region of £2.5 million and that
current and non-current liabilities will also increase in the region of
£0.6 million and £1.9 million respectively.
The financial statements have been prepared under the historical
cost convention and are presented in GB Pounds to the nearest
thousand (£’000).
Consolidation The consolidated financial statements incorporate
the results of Dewhurst plc and all of its subsidiary undertakings
made up to 30 September 2019, 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.
and by sale of products which is further analysed within note 2 –
segment reporting.
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 value which has
been redeemed is released from 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:
Revenue Revenue is measured at the fair value of sales of goods
and services less returns and sales taxes. The Group has analysed its
business activities and applied the five-step model prescribed by IFRS
15 to each material line of business, as outlined below:
Property (basic structure) 1½% – on a declining balance basis
5% to 20% – on a straight-line basis
Property (fittings)
10% to 33.3% – on a straight-line basis
Plant and equipment
Sale of products The contract to provide a product is established
when the customer places a purchase order. The performance
obligation is to provide the product requested by an agreed date,
and the transaction price is the value of the product as stated in our
order acknowledgement. The performance obligation is typically
met when the product is dispatched and so revenue is primarily
recognised for each product when dispatching takes place. In some
limited situations when the product is complete but the customer is
unable to take delivery the performance obligation is met when the
customer formally accepts transfer of risk and control even though
the product has not been dispatched.
Sale of services The contract to provide a service is established
when the customer places a purchase order. The performance
obligation is to provide the service requested either by an agreed
date if it relates to the servicing of a specific product or over an
agreed period if it relates to a constant access or monitoring service.
The transaction price is the value of the service as stated in our
order acknowledgement. The performance obligation for a specific
product service is typically met when the service is performed
and so revenue is recognised for each service when the servicing
takes place. The performance obligation for a constant access or
monitoring service is typically met over a time-based measure and
so revenue is recognised for each service on a straight-line basis over
the service period.
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.
The only material revenue of a servicing nature relates to Thames
Valley Controls Ltd which is no longer a continuing operation of
the Group and so, as such, this is analysed within note 25. The
continuing revenue type is all revenue from contracts with customers
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
24/25
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).
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.
Key accounting judgements
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 2019 fair value calculation to be the 2019 EBITDA
multiplied by an externally derived private company price index
(PCPI). This calculation is disclosed further in note 10.
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.
Key accounting estimates
Provisions Provisions have been made for obsolete inventory,
expected credit losses 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.
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, whichever
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 expected
credit losses.
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)
2019
£(000)
17,407
7,847
13,921
21,342
461
60,978
(4,532)
Revenue
2018
(Restated)
£(000)
9,867
7,251
13,673
17,991
745
49,527
(3,797)
Operating profit
2018
(Restated)
£(000)
2019
£(000)
(438)
927
1,299
3,697
(91)
5,394
818
397
1,703
2,597
(57)
5,458
(150)
(205)
Consolidated revenue/profit before tax for the year
56,446
45,730
5,244
5,253
United Kingdom
Europe
The Americas
Asia & Australia
Other
2019
£(000)
24,784
6,096
13,112
17,941
23
Assets
2018
£(000)
24,037
4,956
10,124
14,309
231
2019
£(000)
8,152
2,169
4,149
4,328
478
Liabilities
2018
£(000)
7,736
1,910
3,161
3,317
525
Consolidated assets/liabilities for the year
61,956
53,657
19,276
16,649
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
26/27
Capital additions
2018
£(000)
Depreciation
and amortisation
2018
£(000)
2019
£(000)
9,852
2,104
103
272
251
11
130
283
329
11
907
100
259
290
16
2019
£(000)
1,751
104
1,328
3,205
7
6,395
10,489
2,857
1,572
2019
£(000)
50,690
2,631
7,657
60,978
(4,532)
Revenue
2018
(Restated)
£(000)
39,256
2,985
7,286
49,527
(3,797)
56,446
45,730
Lift
Transport
Keypad
Total Group
2019
£(000)
Assets
2018
£(000)
Capital additions
2018
£(000)
2019
£(000)
54,804
47,141
6,154
10,104
1,893
5,259
2,059
4,457
159
82
303
82
61,956
53,657
6,395
10,489
The Group has one major customer who accounts for £7.0 million (2018: £6.8 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
2019
£(000)
(16)
25,583
17,819
1,055
1,721
(120)
5,010
2018
(Restated)
£(000)
167
20,981
14,037
900
617
(6)
3,576
51,052
40,272
Other operating charges include lease rentals on premises £844k (2018: £589k) and lease rentals on motor vehicles £39k (2018: £57k),
gain on sale of property, plant and equipment £12k (2018: loss of £35k) and auditor’s remuneration to continuing operations are
detailed below. Expenditure on research and development was £349k (2018: £409k).
Auditor’s remuneration:
The Group
The Company
Amounts paid to Jeffreys Henry LLP
Statutory audit services
Amounts paid to BDO LLP
(Moore Stephens LLP merged with BDO LLP)
Pension audit services
Taxation compliance services
Other taxation advisory services
2019
£(000)
72
6
10
17
33
105
2018
(Restated)
£(000)
57
5
9
17
31
88
2019
£(000)
33
3
1
17
21
54
2018
£(000)
24
2
1
17
20
44
Note 4 Staff costs and information regarding employees
Costs during the year were as follows:
The Group
The Company
Continuing operations
Wages and salaries
Social security costs
Pension costs – GMP equalisation
Pension costs – Other (see note 21)
2019
£(000)
15,499
1,028
639
653
2018
(Restated)
£(000)
2019
£(000)
12,667
1,280
781
–
589
141
639
60
2018
£(000)
685
77
–
83
17,819
14,037
2,120
845
Notes to the accounts
Note 4 Staff costs and information regarding employees continued
The average number of employees during the year was:
Continuing operations
Office and management
Manufacturing
The Group
The Company
2019
No.
153
225
378
2018
(Restated)
No.
140
182
322
2019
No.
8
–
8
2018
No
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:
Continuing operations
Emoluments – Executive Directors
Emoluments – Non-executive Directors
2019
£(000)
1,234
40
1,274
2018
(Restated)
£(000)
702
41
743
One Director also received ‘continuing’ pension payments into their defined contribution schemes totalling £13k (2018: £11k).
The emoluments of the Directors are reported on page 18 of the Directors report and the remuneration of the highest paid Director
during the year was £434k (2018: £258k). The highest paid Director, under the defined benefit scheme has accrued pension of £143k
(2018: £148k) and a transfer value of £3,643k (2018: £3,099k).
Note 5 Finance income
Bank deposit interest
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% (2018: 19.0%)
Adjustment on prior years tax
Overseas taxation
Deferred tax
Origination and reversal of temporary differences
Tax expense in the income statement
28/29
2019
£(000)
34
2019
£(000)
(1)
(183)
(184)
2019
£(000)
286
43
1,623
1,952
2018
(Restated)
£(000)
86
2018
(Restated)
£(000)
(3)
(288)
(291)
2018
(Restated)
£(000)
369
8
1,213
1,590
197
120
2,149
1,710
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
2019
£(000)
2018
(Restated)
£(000)
5,244
5,253
19.0%
19.0%
0.8%
0.1%
9.6%
(0.6%)
17.0%
(6.2%)
0.3%
1.0%
0.2%
1.4%
5.5%
(1.4%)
7.2%
2.6%
–
(1.9%)
41.0%
32.6%
Note 8 Profit for the financial year
The Company profit for the year includes £7,110k (2018: £5,321k) of profit after tax, which has been dealt with in the financial
statements of the holding company. The Company has taken advantage of the exemption allowed under section 408 of the
Companies Act 2006 and has not presented its own income statement in these financial statements.
Note 9 Earnings per share and dividend per share
Weighted average number of shares
For basic and diluted earnings per share
2019
No.
2018
No.
8,413,983
8,424,898
The calculation of basic and diluted earnings per share is based on the profit for the financial year of £9,779,773 (continuing profit:
£2,700,374) and on 8,413,983 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
2018 final paid of 9.00p (2017: 8.50p)
2019 interim paid of 3.75p (2018: 3.50p)
Unclaimed dividends returned – more than 12 years old
Dividends paid – The Company
Dividends paid to non-controlling interests – Dual Engraving Pty Ltd & P&R Liftcars Pty Ltd
Dividends paid – The Group
2019
£(000)
(758)
(316)
–
2018
£(000)
(716)
(295)
–
(1,074)
(184)
(1,011)
(103)
(1,258)
(1,114)
The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,099,698 ‘A’ non-voting ordinary 10p shares, being the
latest number of shares in issue. The Directors are proposing a final dividend of 9.25p (2018: 9.00p) per share, totalling £778k (2018:
£758k). This dividend has not been accrued at the end of the reporting period.
Notes to the accounts
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
2019
£(000)
The Group
2018
£(000)
15,332
11,378
82
1,121
(345)
4,299
16,535
15,332
6,734
82
6,816
6,803
(69)
6,734
9,719
8,598
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
(2018: £1,132k), Lift Material Australia Pty Ltd acquired in July 2005 – £807k (2018: £807k), Dual Engraving Pty Ltd acquired in
February 2013 – £1,259k (2018: £1,259k), P&R Liftcars Pty Ltd acquired in January 2018 – £1,101k (2018: £1,101k) and one in the
UK, A&A Electrical Distributors Ltd acquired in June 2018 – £5,420k (2018: £4,299k).
Goodwill values have been tested for impairment by comparing them against the fair value of the relevant CGUs. The fair value
calculations for 2019 are based on 2019 EBITDA profits multiplied by an externally derived private company price index (PCPI). The
goodwill impairment charge that arose during the current year is nil (2018: nil) and the calculations indicate sufficient headroom such
that a 15% change to key assumptions would not result in an impairment of the related goodwill.
Note 11 Other intangibles
2019
Acquired
intangibles
£(000)
2019
Other
The Group
2019
Total
£(000)
£(000)
2018
Acquired
intangibles
£(000)
2018
Other
2018
Total
£(000)
£(000)
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 2019
At 30 September 2018
934
(56)
5,000
5,878
934
(56)
555
1,433
5,878
–
–
962
5
41
6,840
5
41
5,878
1,008
6,886
2,330
4
1,721
4,055
1,433
–
1,667
3,100
2,778
4,445
897
4
54
955
53
65
2,831
4,445
4,510
–
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
All amortisation has been charged to the statement of comprehensive income through operating costs and no intangible items are held
as security.
30/31
Note 12 Property, plant and equipment
Cost or valuation:
At 1 October 2017
Exchange adjustment
Additions
Additions on acquisition of subsidiaries
Disposals
At 1 October 2018
Exchange adjustment
Additions
Disposals
Property
£(000)
Plant and
equipment
£(000)
The Group
Total
Property
£(000)
£(000)
Plant and
equipment
£(000)
The Company
Total
£(000)
8,627
(113)
8
–
–
8,522
67
3,871
–
8,186
(143)
1,028
125
(289)
8,907
111
1,362
(910)
16,813
6,197
172
6,369
(256)
1,036
125
(289)
–
–
–
–
–
–
–
–
–
–
–
–
17,429
6,197
172
6,369
178
5,233
(910)
–
–
–
–
9
–
–
9
–
At 30 September 2019
12,460
9,470
21,930
6,197
181
6,378
Depreciation:
At 1 October 2017
Exchange adjustment
Charge for the year
Disposals
At 1 October 2018
Exchange adjustment
Charge for the year
Disposals
1,672
5,874
7,546
(36)
189
–
(97)
766
(210)
1,825
6,333
21
202
–
83
934
(693)
(133)
955
(210)
8,158
104
1,136
(693)
783
–
114
–
897
–
111
–
At 30 September 2019
2,048
6,657
8,705
1,008
Net book value:
At 30 September 2019
10,412
2,813
13,225
5,189
At 30 September 2018
6,697
2,574
9,271
5,300
134
–
9
–
143
–
10
–
153
28
29
917
–
123
–
1,040
–
121
–
1,161
5,217
5,329
Capital commitments contracted by the Group at 30 September 2019 for property, plant and equipment amounted to £200k
(2018: £3,059k) and by the Company is nil (2018: nil). Capital commitments authorised but not contracted by the Group at
30 September 2019 amounted to £5,078k (2018: £382k) and by the Company is nil (2018: nil).
Notes to the accounts
Note 13 Investments – shares in subsidiary undertakings
The Company
Investments (Ordinary shares) are:
Cost
Provision for impairment
Disposal
Investments in subsidiary undertakings are:
Cost (after provision for impairment):
Dewhurst UK Ltd
A&A Electrical Distributors 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
Disposal
Thames Valley Controls Ltd (sold on 30/09/2019)
2019
£(000)
22,654
(7,002)
(300)
2018
£(000)
21,293
(6,827)
–
15,352
14,466
2019
£(000)
2018
£(000)
–
10,886
300
–
72
35
–
–
1,798
933
85
1,445
97
1
175
9,525
300
–
72
35
–
–
1,798
933
85
1,445
97
1
15,652
14,466
(300)
–
15,352
14,466
The Company has eleven wholly-owned trading subsidiaries, Dewhurst UK Ltd, A&A Electrical Distributors 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 and Lift Material Australia Pty Ltd’s properties.
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, TMP Solutions Ltd
& TMP Professional Services Ltd.
32/33
Note 14 Inventories
Raw materials and components
Work-in-progress
Finished goods and goods for re-sale
The Group
The Company
2019
£(000)
1,832
589
3,589
6,010
2018
£(000)
2,675
761
2,843
6,279
2019
£(000)
2018
£(000)
–
–
–
–
–
–
–
–
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
The Group
The Company
2019
£(000)
2018
£(000)
10,583
13,051
2019
£(000)
–
2018
£(000)
–
–
194
216
–
331
538
1,961
2,475
62
19
28
70
10,993
13,920
2,042
2,573
Trade receivables which relate solely to contracts with customers are shown net of provision for impairment. The movements in the
provision for impairment of trade receivables were as follows:
At 1 October
Charge for the year
Costs recovered / (incurred)
At 30 September
The Group
The Company
2019
£(000)
173
168
(7)
334
2018
£(000)
194
(17)
(4)
173
2019
£(000)
2018
£(000)
–
–
–
–
–
–
–
–
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 2019
As at 30 September 2018
These receivables are of good credit quality.
Note 16 Cash and cash equivalents
Cash
Short-term deposits
Total
£(000)
10,583
13,051
Within
terms
£(000)
8,273
8,585
Up to 1
month
overdue
£(000)
1,822
3,441
Up to 2
months
overdue
£(000)
244
858
Over 2
months
overdue
£(000)
244
167
The Group
The Company
2019
£(000)
2018
£(000)
2019
£(000)
16,980
9,440
9,383
–
–
–
16,980
9,440
9,383
2018
£(000)
3,039
–
3,039
Notes to the accounts
Note 17 Trade and other payables
Trade payables
Other taxes and social security costs
Other payables
Accruals and deferred income
The Group
The Company
2019
£(000)
1,700
864
1,587
4,029
8,180
2018
£(000)
2,761
978
1,145
3,301
8,185
2019
£(000)
13
15
1,383
944
2,355
2018
£(000)
15
15
30
320
380
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
Note 18 Short-term provisions
Warranty provisions
The Group
The Company
2019
£(000)
277
2018
£(000)
304
2019
£(000)
–
2018
£(000)
–
Warranties, which relate to product or service defects identified within 12 months of invoice, 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 (continuing
operations) during the year were £126k (2018: £24k). Amounts utilised by the Group (continuing operations) in the year were £59k
(2018: £68k). There were no amounts charged or utilised this year or last year by the Company.
Note 19 Deferred taxation
Deferred tax asset:
At 1 October
Transfer directly (to)/from other comprehensive income
Foreign exchange on deferred tax
Transfer (to)/from income statement
The Group
The Company
2019
£(000)
2018
£(000)
2019
£(000)
1,639
2,301
1,297
775
(20)
(196)
(524)
(15)
(123)
775
–
(275)
2018
£(000)
1,998
(524)
–
(177)
At 30 September
2,198
1,639
1,797
1,297
Deferred tax at 30 September relates to the following:
Defined benefit pension scheme
Provisions
Deferred tax asset
The Group
The Company
2019
£(000)
1,797
401
2,198
2018
£(000)
1,297
342
1,639
2019
£(000)
1,797
–
1,797
2018
£(000)
1,297
–
1,297
34/35
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 (2018: 3,309,200) Ordinary
– 5,099,698 (2018: 5,115,698) ‘A’ non-voting ordinary
2019
£(000)
450
900
2018
£(000)
450
900
1,350
1,350
2019
£(000)
331
510
841
2018
£(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.
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 (continuing operations) was £1,452k (2018: £749k). All, apart from £639k (2018: nil)
relating to defined benefit pension scheme GMP equalisation and £27k (2018: £52k) of defined benefit pension protection fund levy
fees relates to defined contribution schemes. The active UK, Hungarian, Canadian, USA, Australian and Hong Kong schemes are of the
defined contribution type and the cost to the Group amounted to £786k (2018: £697k). There was an accrued charge of £17k at the
end of the reporting period in respect of the defined benefit scheme (2018: an accrual of £25k). 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 (2018: £1,404k) along with
an additional payment of £1,100k as a condition of a Flexible Apportionment Arrangement (FAA) to transfer TVC’s defined benefit
pension scheme obligations to Dewhurst plc. 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
2021. 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 2018. It has been assumed that future
investment yields would be at 3.7% per annum (pre-retirement) and 2.2% (post-retirement).
At the date of the latest actuarial valuation of the UK scheme, the market value of the assets of the scheme were £37.4 million (2015:
£30.2 million) and the funding level on the on-going valuation basis was 78% (2015: 70%). The 2018 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.
Notes to the accounts
Note 21 Retirement benefit obligation continued
Assumptions
The following actuarial assumptions, updated to 30 September 2019 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
Future expected lifetime for a member retiring in 20 years’ time – for males
– for females
– for females
The sensitivities regarding the principal assumptions used are set out below:
2019
2018
3.05%
n/a
3.05%
1.80%
1.80%
21.5 yrs
23.4 yrs
22.8 yrs
24.9 yrs
3.15%
n/a
3.15%
2.85%
2.85%
21.9 yrs
23.8 yrs
23.3 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%
Decrease/increase by 1.8%
Increase/decrease by 0.1%
Increase/decrease by 1.0%
Increase/decrease by 1 year
Increase/decrease by 3.5%
IAS 19 requires the value of annuities purchased in respect of pensioners and widow(er)s to be taken into current year calculations.
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 2019
£(000)
Fair value at
30 Sept 2018
£(000)
Fair value at
30 Sept 2017
£(000)
28,756
8,773
6,179
21,197
12,858
3,649
43,708
37,704
(54,278)
(45,332)
(10,570)
1,797
(7,628)
1,297
22,132
10,564
3,500
36,196
(47,947)
(11,751)
1,998
(8,773)
(6,331)
(9,753)
The amounts charged to operating profit in relation to current service costs (GMP Equalisation) are £639k (2018 and 2017: £nil).
Amounts charged to other finance costs:
Interest on pension scheme assets
Interest on pension scheme liabilities
Net benefit/(cost)
2019
£(000)
1,097
(1,280)
2018
£(000)
946
(1,234)
2017
£(000)
840
(1,233)
(183)
(288)
(393)
36/37
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
The movement in the scheme assets, liabilities and the net deficit are as follows:
2019
£(000)
3,346
–
(7,905)
(4,559)
2019
£(000)
3,346
7.7%
–
0%
2018
£(000)
177
607
2,296
3,080
2018
£(000)
177
0.5%
607
(1.3%)
2017
£(000)
1,730
–
1,942
3,672
2017
£(000)
1,730
4.8%
–
0%
(4,559)
8.4%
3,080
(6.8%)
3,672
(7.7%)
Deficit in scheme at 1 October
Movement in the year:
Benefits paid
Contributions
Administration charge
Current Service Costs (GMP equalisation)
Other finance costs
Actuarial gains/(losses)
2019
Assets
£(000)
2019
Liabilities
£(000)
2019
Total
£(000)
2018
Total
£(000)
2017
Total
£(000)
37,704
(45,332)
(7,628)
(11,751)
(16,373)
(878)
2,504
(65)
–
1,097
3,346
878
–
–
(639)
(1,280)
(7,905)
–
–
–
2,504
1,404
1,404
(65)
(639)
(183)
(4,559)
(73)
–
(288)
3,080
(61)
–
(393)
3,672
Deficit in scheme at 30 September
43,708
(54,278)
(10,570)
(7,628)
(11,751)
Included in retained earnings is £16,382k (2018: £11,823k) 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
2019
Land and
buildings
£(000)
664
1,017
1,681
The Group
2019
Other
£(000)
41
25
66
2018
Land and
buildings
£(000)
653
1,543
2,196
2018
Other
£(000)
76
110
186
Notes to the accounts
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
Expected credit losses charged to income statement
Dividend income received
Dividends paid to Directors (Company and Group)
Loans and trade receivables due
2019
£(000)
2018
£(000)
1,359
1,424
–
220
230
86
40
73
255
27
(1,200)
(356)
1,403
144
3,161
4,949
134
2,475
1
Mr John Bailey, a Director of Bailey Consulting Services Ltd and Dewhurst plc, provided consultancy services to the Group of nil (2018: £40k) as well as charging nil (2018: nil) 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 12 months to
September 2019 for £220k (2018: £73k). The annual rent is paid quarterly in advance.
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 12. 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
£12.1 million (2018: £2.7 million) and the Santander bank – £0.4 million (2018: £2.6 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 safeguarding the assets of the Group.
Foreign exchange risk
The Group is exposed to foreign exchange risk both on a transactional and translational basis. The Group looks to mitigate
transactional foreign exchange risk by trying to balance its trade in foreign currencies and only hold sufficient currencies to meet its
future needs.
The sensitivities regarding the foreign exchange rate translation however are set out below:
Metric
Group Revenue
Group Profit
Group Net Assets
Change in GB Pounds
Translational Impact
Weaken/strengthen by 10%
Weaken/strengthen by 10%
Increase/decrease by 5.1%
Increase/decrease by 8.5%
Weaken/strengthen by 10%
Increase/decrease by 3.9%
The Group did not use forward contract derivatives to manage credit risk during the year.
38/39
Liquidity risk
At the end of the reporting period the ageing analysis of financial liabilities, with normal terms for trade payables being 30 days net
monthly, was as follows:
As at 30 September 2019
As at 30 September 2018
Total
£(000)
7,257
6,849
Within one
year
£(000)
Within one
to two years
£(000)
Over two
years
£(000)
6,233
6,610
754
–
270
239
Currency and interest rate exposure of financial assets and liabilities
The cash and cash equivalent amount of £16,980k (2018: £9,440k) is made up of cash of £16,980k (2018: £9,440k) and short-term
deposits of nil (2018: nil). The cash was invested at overnight rates based on the relevant national LIBOR. Of the cash, £11,220k (2018:
£5,326k) is denominated in GB Pounds with the balance of £5,760k (2018: £4,114k) held in foreign currencies. Other financial assets
and liabilities do not attract interest.
Currency and interest profile
The Group
Floating
rate
assets
£(000)
5,326
1,728
738
1,358
290
GB Pounds
AUS Dollars
US Dollars
CAN Dollars
Other
At 30 September 2018
9,440
GB Pounds
AUS Dollars
US Dollars
CAN Dollars
Other
11,220
2,634
1,074
1,742
310
At 30 September 2019
16,980
Fixed
rate
assets
£(000)
–
–
–
–
–
–
–
–
–
–
–
–
Interest
free
assets
£(000)
5,010
3,117
3,105
1,660
159
Interest
free
liabilities
£(000)
Floating
rate
assets
£(000)
1,552
3,039
467
410
128
204
–
–
–
–
13,051
2,761
3,039
3,278
3,463
2,288
1,430
124
704
498
135
169
194
9,383
–
–
–
–
10,583
1,700
9,383
The Company
Fixed
rate
assets
£(000)
Interest
free
assets
£(000)
Interest
free
liabilities
£(000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15
–
–
–
–
15
13
–
–
–
–
13
The only operations that hold material monetary assets and liabilities in currencies other than their functional currency are Dupar
Control Inc and Dewhurst (Hungary) Kft. Dupar holds trade receivables denominated in US Dollars with a balance of £158k (2018:
£378k), Dewhurst (Hungary) Kft holds trade receivables denominated in US Dollars with a balance of £1,719k (2018: £2,092k) and
trade payables denominated in Euros with a balance of £113k (2018: £189k).
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 (2018: no facility).
Notes to the accounts
Note 25 Discontinued operations
On 24 September 2019, Dewhurst plc entered into a formal sale agreement to dispose of the entire issued share capital of Thames
Valley Controls Ltd (TVC) to Elevation AcquisitionCo LLC, which trades under Vantage Elevator Solutions (Vantage). The TVC business
was classified as a discontinued operation and consequently, TVC has not been presented as an operating segment in segment
reporting note.
The sale completed on 30 September 2019 and the results of the discontinued operation and the effect of the disposal on the financial
position of the Group were as follows:
Revenue – dispatch of products
Revenue – servicing of products
Revenue – servicing over time
Revenue
Expenses
Operating profit / profit before taxation
Taxation
Profit after tax
Gain on disposal of discontinued operation
Profit and gain from discontinued operations (net of tax)
Cash flows from/(used in) discontinued operation
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Net cash flows for the year from discontinued operations
2019
£(000)
2018
£(000)
8,466
8,005
573
448
411
364
9,487
(8,410)
8,780
(8,050)
1,077
10
1,087
5,992
7,079
730
(13)
717
–
717
2019
£(000)
2018
£(000)
984
(127)
(500)
357
1,514
(117)
(1,500)
(103)
40/41
The net assets of the disposed subsidiary which have been removed from the statement of financial position, were as follows:
Property, plant and equipment
Deferred tax asset
Inventory
Trade and other receivables
Cash and cash equivalents
Total assets
Trade and other payables
Short-term provisions
Total liabilities
Net assets of the disposal
Initial Consideration received in cash and cash equivalents, net of transaction costs
Expected Final Consideration
Gain on disposal of discontinued operation
Net cash inflow arising on disposal:
Consideration received in cash and cash equivalents, net of transaction costs
Less cash and cash equivalents disposed of
Cash received in respect of the disposal of Thames Valley Controls Ltd
2019
£(000)
173
19
1,107
2,094
1,041
4,434
(1,743)
(73)
(1,816)
2,618
8,555
55
5,992
£(000)
8,555
(1,041)
7,514
Taxation of discontinued operations
The gain on sale of discontinued operations qualified for the Substantial Shareholding Exemption and consequently was not subject to
corporation tax.
Company financial statements
Company statement of changes in equity
For the year ended 30 September 2019
At 30 September 2017
Actuarial gains/(losses) on defined benefit pension scheme
Deferred tax effect
Dividends paid
Profit for the year
At 30 September 2018
Share repurchase
Actuarial gains/(losses) on defined benefit pension scheme
Deferred tax effect
Dividends paid
Profit for the year
Share
capital
£(000)
842
–
–
–
–
842
(1)
–
–
–
–
Share
premium
account
£(000)
157
Capital
redemption
reserve
£(000)
295
–
–
–
–
–
–
–
–
Retained
earnings
Total
equity
£(000)
£(000)
10,536
3,080
(524)
(1,011)
5,321
11,830
3,080
(524)
(1,011)
5,321
157
295
17,402
18,696
–
–
–
–
–
1
–
–
–
–
(82)
(82)
(4,559)
(4,559)
775
(1,074)
7,110
775
(1,074)
7,110
At 30 September 2019
841
157
296
19,572
20,866
The notes on pages 24–41 form part of these financial statements
42/43
Company statement of financial position
At 30 September 2019
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
2019
£(000)
2018
£(000)
5,217
1,797
5,329
1,297
15,352
14,466
22,366
21,092
2,042
9,383
11,425
2,573
3,039
5,612
33,791
26,704
12
19
13
15
16
17
2,355
2,355
21
10,570
12,925
380
380
7,628
8,008
20,866
18,696
20
841
157
296
842
157
295
19,572
17,402
20,866
18,696
The financial statements were approved by the Board of Directors and authorised for issue on 9 December 2019 and were signed on
its behalf by:
Richard Dewhurst Chairman
Jared Sinclair Finance Director
Company Registration Number:160314
The notes on pages 24–41 form part of these financial statements
Company financial statements
Company cash flow statement
For the year ended 30 September 2019
Cash flows from operating activities
Operating profit/(loss)
Depreciation and amortisation
Contributions to pension scheme, net of administration fee & GMP equalisation
Write-down and disposal of investments
Notes
(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
Proceeds on disposal of a subsidiary (TVC Ltd)
Purchase of property, plant and equipment
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
2019
£(000)
(2,719)
121
2018
£(000)
829
123
(1,800)
(1,331)
475
–
(3,923)
(379)
531
614
(1,206)
(26)
(2,778)
(1,611)
(5)
(74)
(2,783)
(1,685)
–
(9,525)
8,800
(9)
89
–
–
82
1,403
4,949
10,283
(4,494)
9
(1,074)
(1,011)
(82)
–
(1,156)
(1,011)
Net increase/(decrease) in cash and cash equivalents
6,344
(7,190)
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
16
16
3,039
10,229
9,383
3,039
44/45
Report of the independent auditor
Independent auditor’s report to the members of
Dewhurst plc for the year ended 30 September 2019.
Conclusions relating to going concern
Opinion
We have audited the financial statements of Dewhurst Plc
(the ‘Company’) and its subsidiaries (the ‘Group’) for the
period ended 30 September 2019 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 2019 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
• 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.
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.
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 disposal 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.
Report of the independent auditor
Key audit matters
Key audit matter
Revenue recognition
The Group has 3 main revenue sources: lift components,
transport and keypad sales. The Group had a total turnover of
£56,446,000 for the year to 30 September 2019.
We checked compliance with IFRS 15, Revenue from Contracts
with Customers.
Inventory provisioning
The Group held £6,010,000 of inventory as at 30 September
2019.
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.
How our audit addressed the key audit matter
Each component of the Group has a specific specialisation
and focuses its sales on its target market. A significant
proportion of the Group’s sales comes from the lift market.
The majority of the revenue is for goods transferred at a point
in time. For revenue from sale of services, the majority of this
type of revenue arose from a subsidiary which was disposed
on 30 September 2019.
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 also checked and considered whether the Group had any
material contract assets and liabilities.
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 provision for expected
credit losses and warranty provisions.
We checked 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.
46/47
Key audit matters
Key audit matter
How our audit addressed the key audit matter
Investments/Intangibles carrying value and Company loans to subsidiaries
The Company has investments of £15,352,000 (2018:
£14,466,000). And the Group had Goodwill and Intangible
assets of £12,550,000 (2018: 13,108,000).
The Company has amounts due from Group companies of
£1,961,000 (2018: £2,475,000). 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 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.
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.
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.
The majority of the intangibles relates to the acquisition of
A&A Electrical Distributors Ltd in the prior 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.
Carrying value of the retirement benefit obligation and disclosures of retirement benefit obligations
There is a risk that the retirement benefit obligation amounting
to £10,570,000 (2018: £7,628,000) and before deferred tax
adjustment, has been incorrectly stated.
Management are required to ensure that all retirement benefit
obligations are appropriately disclosed.
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.
We confirm that we reviewed the accounting disclosures
pertaining to retirement benefit obligations.
Accounting for the in-year disposal of Thames Valley Controls Limited
On 30 September 2019, Dewhurst Plc sold the shares of
Thames Valley Controls Limited for a consideration of
£8 million before adjustments. This is the Group’s first
significant disposal of an investment and has resulted in a
reportable gain of £5,992,000. Various judgements have
been applied by management in determining some or part of
the amounts.
Management are required to determine the fair value of the
assets and liabilities disposed and the fair value of the cash and
other consideration received.
We obtained the signed contractual agreements relating to
the disposal 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 disposal and of the fair
value of the consideration received.
Report of the independent auditor
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:
Group financial statements
Company financial statements
Overall materiality
£659,000 (30 September 2018: £545,000).
£209,000 (30 September 2018: £118,000).
How we determined it
A benchmark of 1% of Turnover was used to determine the
materiality for the Group (2018: 1% of Turnover). The figure
arrived at included the turnover from the disposed segment
TVC which had contributed turnover of £9,487,000.
Rationale for benchmark applied
A benchmark of 1% of net assets.
We believe that using the turnover benchmark for the Group is
an appropriate and accepted auditing benchmark.
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 £10,000.
We agreed with the Audit and Risk Committee that we would
report to them misstatements identified during our audit
above £32,950 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 of which 1
component was disposed at the year end. 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.
48/49
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 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 19, 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.
Sachin Ramaiya
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP
Statutory Auditors
Finsgate
5–7 Cranwood Street
London
EC1V 9EE
9 December 2019
Notice of meeting
Notice is hereby given that the one hundredth 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 18 February 2020 at 10:00 am. The meeting will
be held in order to consider and, if thought fit, pass resolutions
1 to 6 as ordinary resolutions.
Ordinary resolutions
1 To receive and adopt the statement of accounts for the year
ended 30 September 2019 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 17 January 2020.
3 To re-elect as a Director Mr J Sinclair, who retires by rotation
under the Articles of Association.
4 To re-elect as a Director Mr J Bailey, who retires by rotation
under the Articles of Association.
5 To re-appoint Jeffreys Henry LLP as Auditor at a fee to be
agreed by the Directors.
6 As special business to consider and, if thought fit, pass
the following ordinary resolution: that the Company be and
is hereby generally and unconditionally authorised to make
market purchases (within the meaning of section 693(4) of
the Companies Act 2006) of up to an aggregate of 496,380
Ordinary shares and 764,955 ‘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 2021
save that the Company may purchase shares at any later date
where such purchase is pursuant to any contract made by the
Company before the expiry of this authority.
7 To transact any other ordinary business of the Company.
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 10:00 am on
16 February 2020 (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 10:00 am on 16 February 2020
(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.
By order of the Board
Jared Sinclair
Secretary
31 December 2019
50/51
Group companies
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
OVERSEAS SUBSIDIARIES
Dewhurst (Hungary) Kft
H-2038, Soskut, Hrsz. 3518/8, Hungary
Tel: 00 362 356 0550
Dupar Controls Inc.
UK SUBSIDIARIES
Dewhurst UK Ltd
1751 Bishop Street, Cambridge, Ontario, Canada, N1T 1N5
Tel: 001 519 624 2510 info@dupar.com
www.dupar.com
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
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
Traffic Management Products Ltd
Unit 4, Nightingale Road, Horsham, West Sussex, RH12 2NW
Tel: 08456 808066 info@tmp.solutions
www.tmp.solutions
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
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 flai@dewhurst.co.uk
www.dewhurst.co.uk
OTHER OVERSEAS REPRESENTATION
The Group maintains overseas representation in major
countries throughout the world.
Advisers and company information
Auditors
Secretary and registered office
Jared Sinclair
Dewhurst plc, Unit 9, Hampton Business Park,
Hampton Road West, Feltham, TW13 6DB
Registered No. 160314
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
5 Churchill Place, Canary Wharf, London, E14 5HU
Solicitors
Keystone Law
53 Davies Street, London, W1K 5JH
52
Design www.gilldavies.co.uk
www.dewhurst.plc.uk