F
W
T
h
o
r
p
e
P
l
c
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
6
Annual Report and Accounts
2016
For the year ended 30 June 2016
24915.04 13 October 2016 3:38 PM Proof 14
Introduction
We specialise in designing and manufacturing
professional lighting systems. We currently
Contents
employ around 600 people and although
Business Overview
each company works autonomously, our skills
and markets are complementary.
Investment Case
•
A well positioned portfolio of companies over
7 different countries
See our current global footprint on pages 04 to 05
• Innovative products with market
leading technology
Read our SmartScan case study on pages 16 to 19
• Strong profit margins and robust balance sheet
Front cover image
Windmill Community Campus, Fife
Further information
To access to further information please visit:
www.fwthorpe.co.uk
Annual Report and Accounts for the year ended 30 June 2016
Highlights
About Us
FW Thorpe At A Glance
Strategic Report
Business Model
Chairman’s Statement
Strategy
Introducing SmartScan
Case Study – Oxford University Hospitals
Principal Risks and Uncertainties
Performance
Introduction to Luxintec
Governance
Board of Directors
Directors’ Report
Statement of Directors’ Responsibilities
Directors’ Remuneration Report
Independent Auditors’ Report to the
Members of FW Thorpe plc
Financial Statements
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated and Company Statement
of Financial Position
Consolidated and Company Statement
of Changes in Equity
Consolidated and Company Statement
of Cash Flows
Notes to the Consolidated Financial Statements
Notice of Meeting
Financial Calendar
01
02
04
08
10
14
16
20
22
24
30
34
36
40
41
44
48
49
50
51
53
54
88
90
24915.04 13 October 2016 3:38 PM Proof 14
Business Overview
Revenue
(£m)
61.4
55.6
55.3
88.9
73.5
Operating Profit
(£m)
16.2
13.7
11.9
11.8
10.8
Basic Earnings
per Share (pence)
11.24
10.12
8.83
8.48
8.12
2012
2013
2014
Restated
2015
2016
2012
2013
2014
Restated
2015
2016
2012
2013
2014
Restated
2015
2016
Diluted Earnings
per Share (pence)
11.21
10.11
8.48
8.12
8.83
Dividend per
Share (pence)
(excluding special dividend)
4.05
3.65
3.25
3.00
1.94
For more information see our
strategy and performance,
pages 14 and 24
2012
2013
2014
Restated
2015
2016
2012
2013
2014
Restated
2015
2016
• Revenue and operating profit boosted by Lightronics acquisition
• Thorlux profitability improved despite relatively flat revenues
• TRT performed strongly, disappointing Compact performance
• SmartScan platform successfully launched
•
Investment in Luxintec grants access to lensing technology and Spanish market
Stock Code: TFW www. fwthorpe.co.uk
01
24915.04 13 October 2016 3:38 PM Proof 14
About Us
Designers, Manufacturers and Suppliers of Professional Lighting Systems –
Our Brand Portfolio
Thorlux Lighting
Key products
• Recessed, surface and
suspended luminaires
• Emergency lighting
systems
• Hazardous area lighting
• High and low bay
luminaires
• Lighting controls
• Exterior lighting
Market sectors
• Commercial
•
Industrial
• Education
• Healthcare
• Manufacturing
Read more on page 25
Description
The Thorlux range of luminaires
is designed, manufactured and
distributed by Thorlux Lighting, a
division of FW Thorpe Plc.
Thorlux luminaires have been
manufactured continuously since
1936, the year Frederick William Thorpe
founded the company.
The company now operates from
the Group’ s modern 16,882m2
self-contained factory in Redditch,
Worcestershire, central England.
Thorlux is well known throughout the
world and provides a comprehensive range
of professional lighting and control systems
for a wide variety of applications.
Compact
Key products
• Recessed and surface
luminaires
• Track systems
Market sectors
• Retail
• Display
• Hospitality
Read more on page 26
Description
Compact Lighting, founded by
FW Thorpe in 1992, designs and
manufactures a complete range of
innovative lighting solutions
for the retail, hospitality and display
environments.
From its purpose-built factory in
Portsmouth, UK, Compact Lighting
offers cost-effective solutions using
the latest LED technology to
a host of global clients.
Philip Payne
Key products
• Emergency exit signage
• Emergency lighting
systems
Market sectors
• Commercial
• Hospitality
• Healthcare
Description
Philip Payne recognises that most
trade emergency exit signage
products are generally designed with
the functional in mind.
Philip Payne offers a backbone range
of quality standard products but
more importantly encourages direct
dialogue with architects and designers
to ensure via product variation or
bespoke work aesthetic aspirations
and requirements are fully met.
Solite
Key products
• Cleanroom luminaries
Market sectors
• Pharmaceutical
• Healthcare
• Education/Research
Description
Solite Europe is a leading
manufacturer and supplier of
cleanroom lighting equipment and
luminaires within the UK and Europe.
They provide luminaires for
laboratories, pharmaceutical and
semi-conductor manufacturing areas
including hospitals, kitchens and
food preparation applications.
Read more on page 26
Read more on page 27
02
Annual Report and Accounts for the year ended 30 June 2016
24915.04 13 October 2016 3:38 PM Proof 14
Business Overview
Portland Lighting
Key products
• Lighting for signs
Market sectors
• Retail
• Hospitality
• Advertising
Description
Portland Lighting designs,
manufactures and supplies innovative
lighting products to the advertising,
brewery, retail and sign lighting
industries.
The company operates from a modern
1,300m2 facility in Walsall, which was
purposely designed to enable the fast
turnaround of customer orders.
Established in 1994, the product range
has continually evolved to ensure that
Portland remains one of the leading
companies in its sector.
TRT Lighting
Key products
• Road and tunnel lighting
• Amenity lighting
Market sectors
•
Infrastructure
• Facilities – car parking
Description
TRT (Thorlux Road and Tunnel)
Lighting, is an independent specialist
division which has evolved from
Thorlux Lighting.
Building on years of lighting
experience, TRT is dedicated to the
design, manufacture and supply of
LED road and tunnel luminaires.
The target of TRT is to produce quality,
efficient, stylish, high performance
LED products that are manufactured
in the UK.
Read more on page 27
Read more on page 28
Lightronics
Key products
• Road lighting
• Amenity lighting
• Outdoor wall and ceiling
luminaries
• Lighting controls
Market sectors
•
Infrastructure
• Facilities – car parking
• Housing
Read more on page 29
Description
Based in Waalwijk, Netherlands,
Lightronics specialises in the
development, manufacture and
supply of external and impact resistant
lighting, which includes street lighting,
outdoor wall and ceiling luminaires as
well as control systems. The majority
of its revenue is derived from the
Netherlands but there is also an export
presence in other European locations.
Lightronics was originally established
in 1946 and has a strong tradition of
solid, reliable products as well as being
known for its innovation. Products are
environmentally friendly in terms of
energy use as well as in the prevention
of light pollution.
Description
Based in Valladolid, in north-west
Spain, Luxintec specialises in the
design, development and manufacture
of innovative and high performance
LED luminaires and lighting systems.
Alongside its range of luminaries for
a variety of market sectors, Luxintec
designs and produces custom LED
lighting solutions for emergency
vehicles, general automotive and
other customer applications.
Luxintec
Key products
• LED industrial luminaries
• LED retail and display
luminaries
• Customised LED
solutions
• LED optics
Market sectors
• Architectural
• Retail
•
Industrial
• Automotive
Read more on page 30
Stock Code: TFW www. fwthorpe.co.uk
03
24915.04 13 October 2016 3:38 PM Proof 14
FW Thorpe At A Glance
Our Global Footprint
1 2 3 4 5 6 7
United Kingdom
Thorlux Lighting, Compact Lighting,
Philip Payne, Solite Europe, Portland
Lighting, TRT Lighting
1 2 3 4 5 6 7
Netherlands
Lightronics
1 2 3 4 5 6 7
Ireland
Thorlux Lighting
1 2 3 4 5 6 7
1 2 3 4 5 6 7
Germany
Thorlux Lighting
1 2 3 4 5 6 7
1 2 3 4 5 6 7
United Arab Emirates
Thorlux Lighting
1 2 3 4 5 6 7Australia
Thorlux Lighting Australasia
1 2 3 4 5 6 7 Spain
Luxintec
•
FW Thorpe Timeline
1936
1940
1960
1965
1989
1990
1992
1996
Established by
Frederick William
Thorpe and his
son Ernest Thorpe.
Spinning circular
reflectors
Moved to
larger
premises to
produce linear
fluorescent
luminaires
Moved again to be
able to cope with
expansion in to
the exterior and
hazardous markets
Floated
on the London
Stock Exchange
Moved to
our Redditch
headquarters
First acquisition
– Mackwell
Electronics
Start up in retail
and display
lighting
Acquired
Philip Payne
emergency
exit signs
04
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Business Overview
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
2005
2009
2011
2013
2014
2015
2016
Transferred
to AIM
Acquired
Solite Europe
Lighting for
clean rooms
Acquisition
of Portland
Lighting
Mackwell
Electronics
disposal
Start-up company
TRT Lighting
Entered the street
lighting market
Creation of an in-
house LED printed
circuit board
production line
Ability to
place 400,000
components
per day
Acquisition
of Lightronics
– Netherlands
Investment
in Luxintec
– Spain
Develop European
market
Sugg Lighting
disposal
Target Spanish
market and
acquire lens
specialism
24915.04 13 October 2016 3:38 PM Proof 14
05
•
Stock Code: TFW www. fwthorpe.co.uk Strategic Report
Business Model
Chairman’s Statement
Strategy
Introducing SmartScan
Case Study – Oxford University Hospitals
Principal Risks and Uncertainties
Performance
Introduction to Luxintec
08
10
14
16
20
22
24
30
Thorlux Headquarters, Redditch
24915.04 13 October 2016 3:38 PM Proof 14
24915.04 13 October 2016 3:38 PM Proof 14
Business Model
Customers come to us for peace of mind. The correct technical solution, professional service,
sustainability of products/services and the ability to support the customer during its warrantable life and beyond.
Our business model is focused on the needs of our customers and the marketplace, with
a robust capital structure that underpins our ability to deliver sustainable growth, innovative products
and excellent customer service.
Market
Commercial
Industrial
Education
Healthcare
Manufacturing
Retail
Display
Hospitality
Pharmaceutical
Research &
Development
Advertising
Infrastructure
Facilities
Housing
Customers
Target Customers
Those responsible for the whole life cycle cost of
the products/services we supply
08
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Read our strategy on pages 14 to 15
See our installation case study on page 20
Design & Development
Manufacturing
Commissioning
Our Key Resources
Design & Innovation
Products, software, lighting design
Continuous product development
Talented People
Continual development
Manufacturing Facilities
UK – multiple sites, Europe – Netherlands, Spain
Continual investment
Financial & Environmental
Sustainability
Financial stability, Carbon Offset Scheme
24915.04 13 October 2016 3:38 PM Proof 14
09
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Andrew Thorpe
Chairman
“. . . revenue reached
a new high of £88.9m
increasing 20.9% over
the previous year.”
Chairman’s Statement
In your company’s 2015/16 financial year to
30 June 2016, I am pleased to report that
revenue reached a new high of £88.9m
increasing 20.9% over the previous year.
Similarly operating profit rose to £16.2m,
an increase of 18.1% in comparison to the
year to June 2015. Once again investment
income fell, due to a continuing reduction
in general bank interest rates.
Most companies in the Group traded
well during 2015/16 either maintaining
or increasing revenue and profit in
comparison to last year. Again, most
credit should go to TRT Lighting, our road
tunnel and street lighting company and to
Lightronics BV, our Netherlands lighting
company purchased last year, both of
whom made substantial progress.
Whilst striving to go forward one must also
be aware of where one’s tail is. Our tail was
trimmed during the 2014/15 year with the
sale of Sugg Lighting. Well, when the tail
has been trimmed then there is a new end
to the tail. This new end is our Compact
Lighting company; started by us in 1992 to
design, produce and manufacture lighting for
retailers. Discussions are in hand as to how the
company can better address the retail sector.
LED continues to be an increasing
percentage of Group sales and for most
projects now the choice is LED. Parts of the
Group still suffer inefficiencies in having
to produce some “traditional” forms of
lighting such as fluorescent and, less so,
high intensity discharge products and this
will continue until the component prices for
this old technology increase further due to
volume reductions. LED component prices
are still reducing but at a slower pace than
in the earlier days of LED. At some point the
two costs will match and LED will be the only
logical choice. Thorlux, within the Group,
suffers most from this malaise although
this year it has been possible to increase
the number of old technology ranges
being withdrawn. LED chip efficiency is still
improving but also at a slower rate meaning
that products throughout the Group are not
having to be updated at quite such a furious
pace as in recent years.
In the last financial year your Group
purchased Lightronics BV in The Netherlands
and this financial year we have made a €1.2m
investment purchasing 40% of Luxintec SL
in Spain. This was mentioned as a Board
approved intention in my six monthly report.
Times are early but good progress is being
made to see how we can assist this ostensibly
LED lens manufacturer move deeper into the
much larger luminaire market.
Group exports, with the assistance of
offices, agents abroad and now with the
inclusion of Lightronics, have increased
during this financial year. A worthy increase
considering that due to the costs of
manufacturing in the UK exporters from
the UK can only ever sell on attributes other
than price. Business in the Group UAE office
is building and there are some “nice” jobs
on the not-too-distant horizon that should
be secured. The office is currently down
to two people but restoration of the third
is imminent. Recent discussions with our
UAE partner may lead to the cementing of
relations with some local companies who
could provide additional regular business.
Investments in this financial year have been
many and varied but only the Luxintec SL
investment of €1.2m and the refurbishment of
the old Thorlux loading deck into 330 square
metres of office space for £0.4m are of notable
individual value. This new space allows Thorlux
to increase the number of Lighting Scheme
Design Engineers as the general move in the
market is that many specifiers, though quite
capable of producing their own lighting
schemes, are preferring to ask those lighting
companies being considered, to complete
schemes for them. This requirement is,
therefore, a commercial necessity rather than a
luxury and is one affecting other companies in
the Group similarly.
Investments in product design and
development continue across the Group
without hindrance and there are a number of
exciting (in lighting terms) new developments
to be introduced in the next year.
Performance for the year to 30 June 2016
allows your Board to recommend a final
dividend of 2.85p per share (2015: 2.55p)
which together with the interim and
special dividends paid in April 2016 gives
a total dividend for the year of 6.05p per
share (2015: 3.65p). Excluding the special
dividend this is an increase of 11.0%.
10
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Thorlux Lighting
The largest part of the Group, with three
hundred and ninety one people, and
manufacturer of commercial and industrial
lighting systems, Thorlux Lighting’s figures
show a solid performance with an increase
in operating profit on flat revenues. These
figures must, however, be viewed in the
knowledge that approximately £1.0m of
regular business was lost, in essence due to
an American take-over of that customer. The
new owners took a different view of how
they wished to service their lighting needs.
Further, there has been a notable reduction
in certain areas of government spending
where the company has been strong.
Despite these setbacks Thorlux managed to
maintain, although not increase, revenue.
The factory re-layout has been in full
swing during the year and many small
investments have been made renewing,
updating and improving many elements of
the manufacturing process. One fairly major
investment at Thorlux during 2015/16 has
been the transformation of an old loading
deck into 330 square metres of office space
at a cost of some £0.4m, and as mentioned
earlier in this report.
The Thorlux Dusseldorf office in Germany
with five people has performed well with
sales of €2.3m in the year to 30 June 2016
and it is currently actively exploring ways to
also allow Thorlux to expand coverage into
Switzerland and Austria, with some orders
having recently been received from the
former. The office in Dublin, Ireland, with
four people and revenue of €2.9m during
the period also performed well. The joint
venture in Australia has disappointed again,
however, and as a result of the situation re-
assessment as mentioned in my six monthly
report we have agreed by mutual consent
with our joint venture partner, to dissolve
this partnership. This dissolution took
place on 1 July 2016 with the result that
FW Thorpe Plc via Thorlux Lighting is now
100% owner of Thorlux Australasia Pty.
I would like, at this time, to thank our
Australian partner for his work and
assistance in helping set up this venture
and also to wish him continued success in
his other business activities.
To counter various areas of business
lacking in vitality at this time Thorlux has
been concentrating on other areas of the
market, with a bolstering of “Business
Development” capabilities. Some areas of
government spending have been squeezed
but others are probably more buoyant than
previously and the company has given
more concentration to the latter with some
notable success.
Further new contacts have been forged
within the retail sector, not delving
into Compact Lighting’s sector of
instore lighting but for back-of-house,
warehousing and external requirements.
Compact Lighting
Compact Lighting is the new tail talked
about in my opening remarks. It has not
performed satisfactorily over many years
and has in most of those years not been a
net contributor to Group results. Its market is
well served by many and various others who,
like Compact, have restricted themselves to
certain areas of retail lighting. In Compact’s
case, to certain areas of instore lighting.
Your Group Board is well aware that it must
be looking to the “sharp end” but, at the
same time, it must be cognisant of what is
happening at the tail. Discussions must be
developed into how Compact Lighting Ltd
can work closer with Thorlux and be turned
into an entity giving better service to the
Group. There will be a concentration in this
regard during 2016/17.
Philip Payne
“Payne’s”, manufacturer of specification exit
signs with twenty three people has produced
another set of pleasing results with another
set of record revenue and profit figures.
UK trading has been reasonably buoyant
but as mentioned last year the company
has also been concentrating, via the Group
UAE office, on marketing in a number of
Middle East countries where incidences
of fire driven disasters have led to strict
regimes of design, technical ability and
certification requirements for emergency
lighting equipment. Philip Payne has
all these attributes and some notable
successes have been gained to reward their
diligence in working to meet these criteria.
The desire to improve and expand continues
at Payne’s with investments throughout the
year including the purchase from Thorlux
of two press-brake sheet metal bending
machines, replaced last year by Thorlux,
and needed to replace their one unreliable
machine. Payne’s has also completed
a necessary renewal of most hardware
running the management system.
One or two notable projects supplied this
year with Philip Payne exit systems are,
to name but a few, The British Museum,
The Palace of Westminster, Winchester
Cathedral and Harrods.
“Thorlux Lighting’s figures
show a solid performance
with an increase in
operating profit on flat
revenues.”
24915.04 13 October 2016 3:38 PM Proof 14
11
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Chairman’s Statement
18.5%
Solite
. . . most successful year
increasing revenue by 18.5%
and operating profit
by 71.0%
£15.6m
Lightronics
. . . adding revenue of £15.6m and
an operating profit of £2.1m . . .
Solite Europe
Solite, maker of cleanroom lighting
and with eighteen people had its most
successful year increasing revenue by
18.5% and operating profit by 71.0%.
Well ensconced now in their new factory
occupied last year Solite has taken over
one or two ranges of more specialist
products from Thorlux; products that are
complementary to their current offering.
These ranges have not yet really been
appreciative to current performance,
however.
Solite, to date, having looked to market
their products in countries adjacent to our
own are beginning to look further afield for
opportunities in their specialist cleanroom
sector.
Portland Lighting
The report on Portland Lighting, maker of
lights for signs, with eighteen people, could
be almost copied from last year.
It was recognised when we purchased
Portland back in 2012 that there was a
limited scope in the UK for great market
strides in their niche area. Taking this, into
account, however, Portland has performed
admirably and “as expected” with sales and
profit only edging up but maintaining its
highest-in-the-Group profit to sales ratio.
Product sales in LED format have increased
their percentage of the whole and trials
of solar powered billboard lighting have
been completed during the year with some
success. I say “some success” as in many
locations there are visual, space, or other
locational restrictions which hamper the use
of this type of technology in particular places.
Portland has made a move, during the
year, to enter the export market but
unfortunately this has met with a false start.
Start number two is under consideration.
TRT
TRT, your Group’s UK manufacturer of road
tunnel and street lighting fittings with forty
two people, has continued to make swift
progress with sales and profit well ahead of
last year.
One serious constraint has been a lack of
space in the premises purchased for them at
start-up and the lack of any suitable larger
alternatives to purchase in the Redditch
area. Since its inception TRT has relied in no
insignificant terms on technical assistance
from Thorlux and for storage and paintwork
assistance and so, as it moves forward, it is
advisable for the former to keep close to
the latter. This arrangement has benefited
both parties as it has also made good use of
spare storage and powder coating capacity
at Thorlux. There are one or two property
opportunities on the horizon which we hope
will move closer soon.
Component sourcing problems
experienced during 2014/15 have to a large
degree been mitigated by increasing stocks
and sourcing some items nearer to home.
Many or most Group products end up being
installed in buildings where we never enter
so it is good to often see TRT products on our
daily travels, lighting the streets. To mention
one of many tunnel lighting projects in which
TRT Lighting are involved, this year the main
entry and exit tunnels to Heathrow Airport are
being re-lit using a TRT LED lighting system.
Lightronics
Lightronics BV our Netherlands
manufacturer of mainly outdoor lighting
with fifty one people and purchased
during the 2014/15 year performed very
well. 2015/16 is the first year in which a full
year’s figures have been included in Group
figures, adding revenue of £15.6m and an
operating profit of £2.1m to those figures.
12
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Their projects throughout the year have been
for numerous Netherlands towns and cities,
as well as major road lighting projects for
Amsterdam. One may ask about synergies
and possible exchange of products with TRT
Lighting in particular but different countries
light areas in different ways with national
preferences and in this instance the Dutch
often prefer more aesthetically orientated
products for street lighting than the UK where
a more functional approach is used. In this
product area this has actually led, so far, to
more Lightronics products being added to
the TRT range than vice versa. Either way is
good for the Group, however.
In regard to the Group wish for Lightronics to
be a launch pad for Group commercial lighting
systems into the Netherlands, this has started
more slowly than we would have wished but
times are early and a second Sales Engineer for
this purpose has just been employed.
Luxintec
It was mentioned in the six monthly
report that your Board has approved an
investment of €1.2m to purchase a minority
40% shareholding in Luxintec SL and this
investment has been completed.
Luxintec with thirty six people has designed
and manufactured LED lenses for the Group
with creditable success for a number of
years and the majority owner and founder
wished to expand his business into the
much larger field of luminaire manufacture.
Times are very early here and, recognising
that FW Thorpe Plc is a minority
shareholder in this instance, talks as to
how Luxintec can utilise Group designs to
accomplish their wishes are ongoing.
Our wish, of course, is that by using Group
designs and assistance Luxintec can grow
substantially selling Spanish manufactured
luminaires into their market; the “made in
Spain” tab seemingly being an important
one for them.
Carbon Offsetting
There has been no increase in plantings
since last year’s figure of 70,324 trees
planted and this pause was signalled in last
year’s report. Your company is now a little
behind in its carbon offset tree planting but
this will most likely be made up this year as
more government grants are now available!
The 3,000 or so trees destroyed due to the
Hymenoscyphus fraxineus fungus (Ash die-
back disease) have now been replaced with
other types. Regrettably the other 7,000
Ash trees will also have to be destroyed and
replaced imminently.
Despite our best efforts, offset tree planting
purchases by our customers are still somewhat
muted although, this year, we will be having
another campaign to try and summon up
interest.
This investment still, however, is often
respectfully mentioned by many of our
existing and potential customers and
“green” credentials are becoming a more
important criteria for numerous firms in
their purchase considerations.
People
Last year I said that we have a serious
number of personnel who have been with
us 25 years and some well over 40 years.
Well, this year we celebrated one gentleman
who has spent 50 years at Thorlux. Peter
Corrigan started as an apprentice metal
spinner at the age of fifteen years old. He
worked through to lead the section and
became our “Master Spinner”. In later years
he took up general and time study duties
timing our various manufacturing operations.
A cricket fan, the company booked a special
London weekend for him and his wife
including a limited over England versus
Pakistan match. Regrettably two weeks before
the weekend, he was taken ill and couldn’t go.
We managed to retrieve most activities for
a later weekend but unfortunately, despite
our best efforts, we couldn’t get England to
play Pakistan again at the Oval!
Peter is now back with us looking well and
much slimmer!
To all those others in the Group may I
express my thanks for making 2015/16
another successful year.
The Future
I seem to say it every year but, yet again, I must
say that the future is uncertain but now for
another and additional reason; “Brexit”. Most
world economies are still not buoyant and this
just adds another economic unknown.
We will, however, continue to concentrate
on areas we think best whilst still hearing
but not necessarily acting upon what others
tell us! Concentrate on selling to the BRICS
our government told us! Brazil isn’t doing
so well, Russia is suffering with low oil
prices and sanctions, India we don’t hear
of much, and China has a reducing growth
rate. All of these countries, by the way,
have very high protectionist import duties
for foreign manufactured goods such as
lighting equipment. We do, however, remain
cautiously optimistic about the year ahead.
We will continue to concentrate in stable
areas and where we have “advantage”,
be it our efficient durable products and
systems for high energy cost markets, our
reliable rugged industrial ranges for rugged
industrial uses or whatever.
However events play-out people will always
need lights.
We will continue on!
Andew Thorpe
Chairman
24915.04 13 October 2016 3:38 PM Proof 14
13
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Strategy
Our products are sold throughout the world. The Group management team is passionate about developing the business for the benefit of
the shareholders, employees and customers. With the energy and ability of our staff we look forward to the future with enthusiasm. Our
aim is to create shareholder value through market leadership in the design, manufacture and supply of professional lighting systems.
Our focus is for long term growth and stability, achieved through the following priorities:
Priority
Progress to date
Future opportunities
Associated risks
Focus on high quality products
1 2 3 4 5 6 7
and good leadership in
technology
Customers continually require new
and innovative ways in which to
reduce the operating costs of their
lighting installations. There is also
the requirement to reduce their
environmental impacts.
1 2 3 4 5 6 7
Continue to grow the customer
base for Group companies
With the continued investment in the
product portfolio and the broad range of
sectors we can service, the focus will be
on expanding our customer base in new
markets and territories.
1 2 3 4 5 6 7
Focus on manufacturing
excellence
Along with continued product
development, the need to innovate the
production process is essential.
•
Introduction of the SmartScan wireless system enhancing controls and
emergency luminaire product ranges
Introduction of wireless controls and monitoring of street/amenity lighting
•
•
• Access to lens and optical technology via investment in Luxintec
Introduction of new LED product ranges and existing ranges further enhanced
• Acquisition of a stake in Luxintec providing access to Spanish speaking markets
•
Industrial sector targeted in The Netherlands utilising Lightronics
• Re-organisation of assembly section at Thorlux
•
Investment in vertical storage units at various sites to improve space utilisation
• Continued investment in manufacturing facilities
• Reduced productivity whilst changes are
A B C D E F G
implemented
• Further development of the wireless controls product ranges
• Continuous research and development
A B C D E F G
Initial product introduction
•
• Product acceptance
• Consider further sales offices overseas
• Potential business development investment
•
Investment in sales personnel in the UK and overseas
• Short term cost increase without immediate return
A B C D E F G
• Prolonged time required to establish FW Thorpe
brands in new territories
A B C D E F G
A B C D E F G
A B C D E F G
and processes
• Learning curve on introduction of new products
• Continued investment in training and personnel development
• Ability to retain staff in competitive local
A B C D E F G
job markets
1 2 3 4 5 6 7
Continue to develop high
quality people
One of our main sources of competitive
advantage, it is imperative we continually
develop and retain talent within the
business.
• Training and development
• Apprenticeship scheme continues
•
Investment in Luxintec
Measuring strategic performance (KPIs) for our shareholders
Revenue
(£m)
61.4
55.6
55.3
88.9
73.5
Operating Profit
(£m)
16.2
13.7
11.9
11.8
10.8
Basic Earnings per
Share (pence)
11.24
10.12
8.48
8.12
8.83
2012
2013
2014
Restated
2015
2016
2012
2013
2014
Restated
2015
2016
2012
2013
2014
Restated
2015
2016
14
Annual Report and Accounts for the year ended 30 June 2016
24915.04 13 October 2016 3:38 PM Proof 14
Focus on high quality products
1 2 3 4 5 6 7
and good leadership in
technology
Customers continually require new
and innovative ways in which to
reduce the operating costs of their
lighting installations. There is also
the requirement to reduce their
environmental impacts.
Introduction of the SmartScan wireless system enhancing controls and
emergency luminaire product ranges
Introduction of wireless controls and monitoring of street/amenity lighting
Introduction of new LED product ranges and existing ranges further enhanced
• Access to lens and optical technology via investment in Luxintec
1 2 3 4 5 6 7
Continue to grow the customer
base for Group companies
• Acquisition of a stake in Luxintec providing access to Spanish speaking markets
Industrial sector targeted in The Netherlands utilising Lightronics
•
•
•
•
•
With the continued investment in the
product portfolio and the broad range of
sectors we can service, the focus will be
on expanding our customer base in new
markets and territories.
Along with continued product
development, the need to innovate the
production process is essential.
1 2 3 4 5 6 7
Focus on manufacturing
excellence
• Re-organisation of assembly section at Thorlux
Investment in vertical storage units at various sites to improve space utilisation
1 2 3 4 5 6 7
quality people
Continue to develop high
One of our main sources of competitive
advantage, it is imperative we continually
develop and retain talent within the
business.
• Training and development
• Apprenticeship scheme continues
•
Investment in Luxintec
Priority
Progress to date
Future opportunities
Associated risks
Read more about our risks on pages 22 to 23
• Further development of the wireless controls product ranges
• Continuous research and development
• Product acceptance
A B C D E F G
•
Initial product introduction
• Consider further sales offices overseas
• Potential business development investment
•
Investment in sales personnel in the UK and overseas
A B C D E F G
• Short term cost increase without immediate return
• Prolonged time required to establish FW Thorpe
brands in new territories
A B C D E F G
A B C D E F G
• Continued investment in manufacturing facilities
• Reduced productivity whilst changes are
A B C D E F G
implemented
A B C D E F G
and processes
• Learning curve on introduction of new products
• Continued investment in training and personnel development
• Ability to retain staff in competitive local
A B C D E F G
job markets
Read about our performance
on pages 24 to 31
For more information see our
Chairman’s Statement,
pages 10 to 13
Stock Code: TFW www. fwthorpe.co.uk
15
24915.04 13 October 2016 3:38 PM Proof 14
Strategic Report
Introducing
Thorlux Lighting – History of Lighting Controls
In 2000 Thorlux developed Smart, an energy efficient system to
control indoor lighting, which has since been used in thousands
of applications, from hospitals to warehouses. Following on from
this, in 2011, Smart External was launched, this utilised the basic
technology of Smart and tailored it specifically for external lighting
control in car parks and other areas. The third system, Scanlight
AT, an automatic testing system for emergency lighting, was
developed back in 2006. Thorlux has now merged these three
systems together into one wireless control system – SmartScan.
SmartScan uses mesh network technology so groups of luminaires
are formed, not by hard wiring, but by addressing. Each device
acts as a repeater, ensuring that data signals always find a suitable
communication path.
The heart of the system is the SmartScan Gateway. This Gateway
uses the mesh network to communicate with individual luminaires,
sending out instructions such as emergency lighting automatic
testing times. It also reads energy performance data and the
emergency lighting status from SmartScan luminaires and
transmits it to the World Wide Web for viewing using tablets,
smart-phones, laptops and computers.
16
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Strategic Report
We have wirelessly combined our 3 market-leading systems:
Smart
Energy Efficient Indoor
Lighting Controls
Smart External
Energy Efficient External
Lighting Controls
Scanlight AT
Scanlight AT
Web-based Emergency
Lighting Testing
and Monitoring
Platform 1
Luminaires operate on a stand-alone basis: Smart luminaires link wirelessly in groups for presence detection and scene setting.
Energy performance data can be retrieved using the SmartScan Programmer. Emergency luminaires are self-test with the addition
that operational status information can be retrieved using the SmartScan Programmer.
Platform 2
The same luminaires are also very simply wirelessly linked into a Gateway which collects and transmits their energy performance
data and emergency lighting operational status information to the World Wide Web for viewing using tablets, smart-phones, laptops
and computers.
Stock Code: TFW www. fwthorpe.co.uk
17
24915.04 13 October 2016 3:38 PM Proof 14
Introducing
SmartScan Website
Platform 2
Delivers full energy
performance reports.
Provides emergency lighting
status information.
Controls emergency lighting
testing dates/times.
Controls external lighting
switching times.
User Friendly
The system is accessed using
a web browser, there is no need
for a specific App or piece
of software.
Remote Access
Records can be accessed remotely
with a username and password.
Off-site Storage
Energy performance data,
emergency lighting testing
records, “as fitted “ drawings,
commissioning certificates
and all the essential emergency
lighting documentation is
stored remotely on the web
server but can be accessed
by anyone who has a username
and password.
smartscan.lighting
18
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Strategic Report
What are the benefits?
System
Flexibility
Excellent Wireless
Reliability
Efficient
Communication
Intelligent
Connectivity
SmartScan utilises a wireless
mesh network. Each device acts
as a repeater, ensuring that data
signals always find a suitable
communication path. Groups
are easily created and changed
providing future flexibility
without altering wiring.
An operational frequency
of 868MHz (922MHz in
Australasia) provides excellent
transmission distances and
better penetration of signals.
Intelligent algorithm with
low transmission of data –
transmits less than 1%
of total time (99% of time
wireless is off ) - reduces
wireless traffic increasing
reliability.
Software uses simple
wait before transmit logic
to ensure error free
transmissions.
Platform 2
Reduced
Installation Costs
The SmartScan Gateway and
compatible Smart, Smart
External and emergency
luminaires simply require
a mains connection. All
communication cables are
replaced by the mesh network
so there is no need for data
cables, additional power
supplies, control modules.
Simple and Fast
Commissioning
Using a single robust hand
held infra-red programmer
all luminaire types can be
very quickly and easily
commissioned, and all
operational settings can
be fine tuned in the future
if desired.
Made in
the UK
Customer assurance that the
system and luminaires are fully
compatible - designed and
manufactured by Thorlux
in the UK. SmartScan builds
on the ultra reliable first
wireless generation of Smart -
SmartTR.
Powerful Information
Collection
The SmartScan Gateway uses
the mesh network to
communicate with individual
luminaires, sending out
instructions such as emergency
lighting automatic testing times.
It also reads energy performance
data and the emergency lighting
status from SmartScan
luminaires and transmits it to
the World Wide Web for viewing
using tablets, smart-phones,
laptops and computers.
Stock Code: TFW www. fwthorpe.co.uk
19
24915.04 13 October 2016 3:38 PM Proof 14
Case Study – Oxford University Hospitals
Michelle Redhead, Linen and Laundry
Services Manager, explains:
“The difference is dramatic.
We need bright light for the
fine sewing work we do, and
previously relied on individual
lamps to boost the overhead
lighting – but not any more!
The new lighting is 100%
brighter, and people coming
in now are taken aback at
how bright it is here. It is so
much better. We were slightly
dreading the inconvenience
of the work, as we thought
it would be disruptive, but it
wasn’t. They worked around
us and there was no disruption
at all.
It has been brilliant. We really
can’t believe the change.”
More information on the Oxford Hospitals’
Hospital Energy Project can be found on the
Hospitals’ website: www.ouh.nhs.uk/about/
developments/energy/default.aspx
Background
2015/16 saw Thorlux complete a number of
projects; of these, a key project for Oxford
University Hospitals demonstrated Thorlux’s
all-round capabilities, from supplying energy
saving products to now co-ordinating their
installation.
The Hospital Energy Project
Oxford University Hospitals is a world
renowned centre of clinical excellence
and one of the largest NHS teaching trusts
in the UK. The Trust is made up of four
hospitals: the John Radcliffe Hospital (which
includes the Children’s Hospital, West Wing,
Eye Hospital, Heart Centre and Women’s
Centre), the Churchill Hospital and the
Nuffield Orthopaedic Centre, all located in
Oxford, and the Horton General Hospital
in Banbury, north Oxfordshire.
The Hospital Energy Project is an Oxford
University Hospitals initiative to improve
the patient environment, decrease carbon
emissions and reduce energy costs. It
includes replacing over 6,000 lights,
alongside installing a new combined
heat and power engine and building
management system. Thorlux were
commissioned to deliver lighting solutions
for the project.
The Lighting Assignment
The Thorlux lighting solution encompassed
a range of activities to deliver target energy
savings of 1,746,301 kWh per annum.
These included:
• Full hospital surveys to identify the
optimal areas for energy saving.
• Lighting design to ensure the
right product strategy for the
right application.
• Manufacturing and supplying products.
•
Installing and commissioning the
solution.
The lighting component of the project
was completed in June 2016.
Read our business model on
pages 08 to 09
20
Key Highlights
• Over 6,000 luminaires replaced in five
months.
• Annual saving in excess of 1,746,301
kWh per year.
• Turnkey supply and installation solution.
Key Benefits
• Annual saving of £115,000 on electricity.
• New luminaires that are up to 90%
more efficient.
• 3,200 fewer lamp replacements per year.
• Estates Department call-out rate
reduced by over 20%.
•
Improved, brighter working
environment in patient and staff areas.
Hospital Example
In the basement on Level 0 of the John
Radcliffe Hospital, 12,000 uniforms are
fitted and 3.5 million items of linen are
handled for laundering each year. The
Linen and Laundry Service is carried out
by 13 staff, four of whom are seamstresses.
The staff’s working environment was
transformed by upgrading the lighting as
part of the Hospital Energy Project.
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016
24915.04 13 October 2016 3:38 PM Proof 14
Principal Risks and Uncertainties
Risk policy and framework
The Board is responsible for the identification and effective management of risks posed to the Group. Due to the impact
certain risks could pose, the Board regularly reviews the likelihood of risks occurring and the potential impact they could
have on the business.
Detailed below is a list of the principal risks facing the business, and the corresponding actions the Board are currently
taking in order to manage them.
Area of risk
Type of risk
Description of risk
Mitigation of risk
A B C D E F G
Strategic
A B C D E F G
Adverse economic
conditions
• Deferred or reduced capital investment plans in market
sectors, which our products are supplied into and are key
sources of revenue for the Group
A B C D E F G
Strategic
Changes in government
A B C D E F G
legislation or policy
A B C D E F G
Competitive environment
A B C D E F G
Strategic
• Reduction in public sector expenditure and changing policy
increases risk to our order book
• Uncertainty of free access to EU markets
• Existing competitors, powerful new entrants and continued
evolution of technologies in the lighting industry eroding our
revenue and profitability
A B C D E F G
A B C D E F G
Price changes
A B C D E F G
A B C D E F G
Business Continuity
A B C D E F G
Operational
• Erosion of revenue and profitability
Operational
• The majority of the Group’s revenues are from products
manufactured in the Redditch facility
• High level of importance attached to environmental management systems,
health and safety and preventative maintenance
Insurance cover is maintained to provide financial protection where appropriate
High 1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
A B C D E F GCredit Risk
Financial
• The Group offers credit terms which carries risk of slow
• Credit policy includes an assessment of the bad debt risk and management of
payment and default
Low 1 2 3 4 5 6 7
=
A B C D E F G
• The Group maintains a credit insurance policy for a significant proportion of its
higher risk customers
debtors
A B C D E F G Movements in currency
exchange rates
Financial
• The Group is exposed to transaction and translation risks.
With some natural hedging in EUR this risk is primarily with
changes in the GBP:USD rates
• The Group has increased its sourcing of materials to maintain a natural hedge
to offset its currency risk from EUR receivables and is considering alternatives to
Low 1 2 3 4 5 6 7
=
minimise the USD risk
Read our strategy on pages 14 to 15
Read our performance on pages 24 to 31
22
24915.04 13 October 2016 3:38 PM Proof 14
Possible impact
on performance
Strategic priorities
impacted upon
Change in
period
• Broad range of customers in differing sectors
• High quality, technically advanced products to differentiate the Group from
High
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
competitors
of winning new business
• Actively seek to identify new opportunities to ensure we maximise our potential
1 2 3 4 5 6 7
• Continue to seek to diversify our customer portfolio to ensure we have an
appropriate spread, mitigating the risk of any industry or specific sector
Medium1 2 3 4 5 6 7
1 2 3 4 5 6 7 =
spending issues
• Develop sales in new markets
• Offering innovative products and service solutions that are technologically
advanced products to enable us to differentiate ourselves from our competitors
Medium
Investing in research and development activities to produce new and evolving
product ranges
Investing in new production equipment to ensure we can keep costs low and
maintain barriers to new market entrants
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
1 2 3 4 5 6 7
1 2 3 4 5 6 7
• Management reviews prices, at least annually, to take into account fluctuations
in costs, in order to minimise the risk of reduction in gross margin, or the loss of
Medium
market share from a lack of competitiveness
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
•
•
•
Annual Report and Accounts for the year ended 30 June 2016
Area of risk
Type of risk
Description of risk
Mitigation of risk
Possible impact
on performance
Strategic priorities
impacted upon
Change in
period
Adverse economic
A B C D E F G
conditions
Strategic
• Deferred or reduced capital investment plans in market
sectors, which our products are supplied into and are key
sources of revenue for the Group
• Broad range of customers in differing sectors
• High quality, technically advanced products to differentiate the Group from
High
competitors
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
Key
Increase in risk
=
= No change in risk
=
Decrease in risk
• Actively seek to identify new opportunities to ensure we maximise our potential
of winning new business
• Continue to seek to diversify our customer portfolio to ensure we have an
appropriate spread, mitigating the risk of any industry or specific sector
spending issues
• Develop sales in new markets
1 2 3 4 5 6 7
Medium1 2 3 4 5 6 7
1 2 3 4 5 6 7 =
• Offering innovative products and service solutions that are technologically
advanced products to enable us to differentiate ourselves from our competitors
Medium
•
•
Investing in research and development activities to produce new and evolving
product ranges
Investing in new production equipment to ensure we can keep costs low and
maintain barriers to new market entrants
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
1 2 3 4 5 6 7
1 2 3 4 5 6 7
A B C D E F G
legislation or policy
Changes in government
Strategic
• Reduction in public sector expenditure and changing policy
increases risk to our order book
• Uncertainty of free access to EU markets
A B C D E F G
Competitive environment
Strategic
• Existing competitors, powerful new entrants and continued
evolution of technologies in the lighting industry eroding our
revenue and profitability
A B C D E F G
Price changes
Operational
• Erosion of revenue and profitability
• Management reviews prices, at least annually, to take into account fluctuations
in costs, in order to minimise the risk of reduction in gross margin, or the loss of
market share from a lack of competitiveness
Medium
1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
A B C D E F G
Business Continuity
Operational
• The majority of the Group’s revenues are from products
manufactured in the Redditch facility
• High level of importance attached to environmental management systems,
health and safety and preventative maintenance
•
Insurance cover is maintained to provide financial protection where appropriate
High 1 2 3 4 5 6 7
1 2 3 4 5 6 7
=
A B C D E F GCredit Risk
Financial
• The Group offers credit terms which carries risk of slow
payment and default
• Credit policy includes an assessment of the bad debt risk and management of
higher risk customers
• The Group maintains a credit insurance policy for a significant proportion of its
debtors
Low 1 2 3 4 5 6 7
=
A B C D E F G Movements in currency
exchange rates
Financial
• The Group is exposed to transaction and translation risks.
With some natural hedging in EUR this risk is primarily with
changes in the GBP:USD rates
• The Group has increased its sourcing of materials to maintain a natural hedge
to offset its currency risk from EUR receivables and is considering alternatives to
minimise the USD risk
Low 1 2 3 4 5 6 7
=
24915.04 13 October 2016 3:38 PM Proof 14
23
Strategic ReportStock Code: TFW www. fwthorpe.co.uk
Performance
2016 Group Company Overview
FW Thorpe Plc is a group of individual
companies that concentrate on particular
market sectors and, in recent years, certain
geographical locations. The Group has
extended its geographical reach with
the establishment of a sales office in the
UAE, the acquisition of Lightronics in the
Netherlands, and, more recently, with
investment in Luxintec SL in Spain (see
page 30 for further details) and by assuming
full control of Thorlux Australasia Pty in
Australia following FW Thorpe’s buy-out of
its joint venture partner in July 2016.
The companies within the Group face
different challenges within their respective
markets, but all share product and technical
expertise that is particularly beneficial with
the continuing development and market
adoption of LED and lighting control
technology.
The Group has continued to progress in
many areas, with numerous new product
introductions, investment in manufacturing
facilities and penetration into new markets.
This progress is underpinned by the
development of market-leading lighting
equipment and the delivery of excellent
customer service.
The following is an overview of the year for
each company.
FW Thorpe – Group Performance
Group total revenue (£m)
exc. Intercompany
54.2
15.5
19.2
64.2
14.1
8.5
2.1
Thorlux
Lightronics
Other companies
Sales by region (£m)
UK
Netherlands
Europe
Other countries
24
Thorlux Application Centre, Redditch
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Thorlux – Revenue £57m, +0%
“. . . the number of orders
received during 2015/16
achieved another record
high and operating profit
also improved when
compared with the
previous year.”
Pershore College, Pershore
Whilst revenue has remained at a similar
level to the previous year, the number of
orders received during 2015/16 achieved
another record high and operating profit
also improved when compared with the
previous year.
Thorlux supplies the broadest product
range of the FW Thorpe Plc companies,
covering multiple market sectors in both
the public and private sectors. Thorlux
continues to be the driving force behind
product development for the rest of the
Group.
Product development has continued to
be a key focus during 2015/16 with the
introduction of SmartScan (see page 16
for further details), a wirelessly integrated
control and emergency lighting system
that can now be offered across the entire
Thorlux range of products. This system
combines two systems that were already
hugely successful in their own right: Smart
for lighting controls and Scanlight for
emergency lighting. The new system will
provide a number of additional benefits,
not least the ability to retrieve via the
internet data about how the lighting is
performing, and the ease of installation,
due to wireless communication.
Following a number of years of capital
investment in manufacturing, 2015/16 has
been a year of consolidation. New vertical
storage units have been added to maximise
the use of available space in the factory.
This has enabled the layout of the assembly
process to be expanded and further
streamlined.
From a selling perspective, Thorlux has
penetrated new markets with its supply
and installation service. A number of
projects have been completed where
Thorlux has taken responsibility for not only
supplying the lighting, but also installing
and commissioning the project as well. This
has resulted in additional revenue of £1.7m
that would otherwise have been lost to
competitors.
With the introduction of SmartScan
and the focus on new business sectors
such as supply and installation, Thorlux
will continue to develop opportunities
to grow the business during the next
financial year and beyond. Exploiting the
expanding global footprint of the Group
will be especially important to counteract
any impact from the UK’s decision to
separate from the European Union. From
a foundation of innovation and market
leading customer service, Thorlux will
continue to strive for growth over the
next few years.
Increase in operating profit
3.8%
24915.04 13 October 2016 3:38 PM Proof 14
25
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Performance
Compact Lighting – Revenue £3.9m, -26%
Compact operates in the retail, display and hospitality sectors.
With challenging delivery schedules and competitive pricing, these
markets can be particularly demanding. Despite an improved result
in 2014/15, the business has taken a disappointing step backwards
in 2015/16.
Business with new customers has been secured but unfortunately
on a smaller scale than anticipated, as these customers award initial
orders before any major roll-out work is placed. There has also been
some success with a new market for Compact: car showrooms.
Projects have been undertaken with the likes of Bentley, Ferrari
and Audi during the year. We remain positive that these new
relationships will prove fruitful in the future, justifying our decision
to invest in the sales organisation and new product tooling.
Compact continues to invest in developing LED products to
strengthen its reputation as an LED innovator, in conjunction with
investment in product tooling to differentiate the company from
the competition. Products launched this year have included many
Hi-Bar variants (a linear product providing recessed or suspended
continuous lines of light) and a new small downlighter, the Mina-S.
In the future the company will continue to promote the Compact
brand to a wider audience, develop the export business further, and
support Group selling activities with its tooled product portfolio
and manufacturing capabilities.
Bentley, Leicester
Philip Payne – Revenue £2.5m, +9%
The architects’ choice, Philip Payne has
achieved another record year in terms of
revenue and return on sales. When it comes
to lighting specifications for emergency exit
signage for the UK’s premier construction
and refurbishment projects, Philip Payne
remains one of the preferred options.
This year has seen considerable investment
in a number of new products designed
to maximise the increases in lumen
performance afforded by the latest
generation of LEDs. These products
maintain the design sympathy expected
by their core audience, to ensure that the
Philip Payne brand continues to be the
default choice for emergency lighting
within the architectural community.
Product variants include high power
versions to comply with local UAE standards
as part of Philip Payne’s strategy to maximise
opportunities from the Group’s UAE
operations. The launch of an emergency
lighting control offering during this last
trading period has been well received in the
UAE, where safety regulations are vigorously
enforced, with Philip Payne systems being
successfully commissioned on a number of
prestigious projects.
Back at home, the brand continues to
be successful, winning its biggest order
ever: to provide the emergency lighting
systems at the £300 million brainchild of
the Duke of Westminster, the Defence and
National Rehabilitation Centre. The centre,
located in 358 acres near Loughborough,
will provide clinical rehabilitation for
injured British military personnel as well
extending expertise for civilians with life
changing injuries. Alongside this, Philip
Payne has enjoyed better than normal
success, adding to its prestigious list of
completed projects, including ongoing
works at the Royal Albert Hall, BBC and
Birmingham Hippodrome, plus new
refurbishments at the Lowry Theatre in
Manchester, Meadowhall Shopping Centre,
the Australian Embassy and Donald Trump’s
Turnberry Resort.
2016/17 will see further investment in
the product portfolio, the introduction
of wireless communication for certain
product ranges, and investment in key
manufacturing capabilities.
26
24915.04 13 October 2016 3:38 PM Proof 14
Winchester University, Winchester
Annual Report and Accounts for the year ended 30 June 2016 Solite – Revenue £2.6m, +19%
Growth at Solite continues. The specialist
cleanroom lighting manufacturer has enjoyed
its best performance since joining the Group
in 2009. Orders, revenue and operating profit
all surpassed previous highs.
Affirming the decision to invest in new
facilities, the first full year of production in
the new factory in Stockport has provided
the platform for Solite to record previously
unmatched sales volumes in 2015/16. The new
factory has provided an ideal environment to
introduce systems, processes and procedures
that were unachievable at the previous site
because of physical constraints. With work now
completed on the product demonstration
area the transition is complete, making Solite’s
Stockport factory one of the most modern
facilities in the Group.
Following its investments in machinery, the
company is able confidently to pitch for
larger projects, affording economies of scale
and improving efficiency and profitability.
Further investments in the sales force have
given Solite the opportunity to expand from
its core clean area lighting markets into
other niche lighting sectors that require the
element of flexible manufacturing which has
been pivotal to recent growth.
The new financial year will start with a good
order book and a focus on a new sector that is
complementary to the Solite product range,
as well as continued development of the clean
area specifications and healthcare projects.
Portland Lighting – Revenue £3.5m, +3%
Salford Royal, Salford
Portland Lighting, the externally
illuminated sign lighting company that
the Group acquired in 2011, continues to
provide excellent returns. 2015/16 was
another successful year, with the company
servicing a very demanding customer base.
The company turns around in excess of
100 customer orders most days, many for
delivery on the same or the following day.
The addition of solar powered derivatives
to the range has broadened product appeal
among clients that need to illuminate
signs and billboards in locations where
the provision of mains electricity may be
problematic or costly. Whilst the opportunity
to use solar power may have limited appeal
in the UK, the potential in sunnier climates is
greater. With a strategy to increase its focus
on exports, the company can expect more
opportunities to use solar technology.
The company’s sales and marketing focus
continues to be on external shop front
sign lighting, the brewery trade and the
advertising billboard companies. 2016/17 will
see Portland increase its focus on expanding
its export market while continuing to build
on its share of the UK market.
Storagebase Self Storage, Wednesbury
24915.04 13 October 2016 3:38 PM Proof 14
27
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Performance
TRT Lighting – Revenue £8.3m, +95%
2015/16 has been another record year for
TRT, building on the positive performance
of 2014/15. A number of large scale
orders for both street and tunnel lighting
have generated a significant increase in
profitability.
TRT has secured and delivered a major
project during the year, with the lighting
of the main passenger tunnel at Heathrow
Airport. Heathrow is the busiest UK airport
and the world’s second busiest cargo port.
The public can only access terminals 2, 3
and 4 via the quad bore 630 metre road
tunnel which passes under the northern
runway. This tunnel serves 41 million
passengers per year and is now lit by
1,316 Verso luminaires controlled by 1,661
individually addressable electronic DALI
drivers.
Production facilities have continued to be
improved to meet the increased demand.
Investment has been made to increase
the available space within the factory by
introducing vertical storage units and
reorganising the factory layout; this has
resulted in the business being able to cope
with recent demand for up to 5,000 units
per month.
Street lighting projects remain competitive,
particularly from a price perspective. TRT
has secured new projects in Lincolnshire
and Milton Keynes, as well as continued
business in Warwickshire, Worcestershire
and a number of London boroughs. The
company has also won amenity lighting
projects, working alongside Thorlux.
Projects have included lighting for car
parks in retail and roadways at airports, as
well as installations in the education and
healthcare sectors.
TRT starts 2016/17 with a good order book
from a street lighting perspective, but
with margins under pressure due to the
weakening pound against both the US
dollar and euro. Improvement of margins
will remain a focus, as well as continued
development of products and improved
efficiency in the order to delivery process.
“TRT has secured and
delivered a major project
during the year, with
the lighting of the main
passenger tunnel at
Heathrow Airport.”
Heathrow Main Tunnel, Hounslow
28
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Lightronics – Revenue £15.6m, new addition
Acquired in April 2015, this is the first full
year for Lightronics within the FW Thorpe
Group. It has been an excellent year, with
record orders, revenue and profitability
– Lightronics has outperformed all
expectations.
Lightronics focuses on the street, amenity
and impact proof lighting segments in the
Netherlands and Northern Europe. A good
proportion of the growth can be attributed
to two main projects: a €2m street lighting
project in Amsterdam, and a €0.9m cycle
path illumination project. Both projects
demonstrate key characteristics of this
business: production flexibility, supply
chain management and speed of product
development. To satisfy the demanding
delivery schedule for the Amsterdam
project, new premises were secured and
additional assembly capacity created within
only a few weeks.
One aspect of FW Thorpe’s strategic plan
when acquiring Lightronics was to enter
the industrial and emergency lighting
segments. Given the demands placed
on the Lightronics business during the
year, progress has not been as expected;
however, a recruitment and marketing plan
has commenced, with some small successes
for Lightronics selling Thorlux products into
its home market and its own products into
the UK market via TRT and Thorlux.
Product development is a key part of the
Lightronics business, as it is for all FW Thorpe
companies. During the year, Lightronics
has further developed its wireless control
software and hardware for street lighting,
with initial trials underway in its local area.
Wireless control products enable users
to control street lighting and retrieve
operational data remotely, and will be further
developed during the coming year.
The challenge for Lightronics in 2016/17
will be to achieve a similar remarkable
result again. The focus will be on continued
product development of street lighting
controls as well as nurturing the industrial
and emergency segments by selling
Thorlux products into the Netherlands.
“It has been an excellent
year, with record orders,
revenue and profitability.”
Cycle Path Lighting, Netherlands
24915.04 13 October 2016 3:38 PM Proof 14
29
Strategic ReportStock Code: TFW www. fwthorpe.co.uk Introduction to
In March 2016, FW Thorpe
acquired a 40% interest in
Luxintec SL – specialists in
the design, development and
manufacturing of LED lighting
systems including sophisticated
light control optics such as
LED lenses.
Based in Valladolid in the north west of
Spain, the company has continued to grow
since its inception in 2006. Thorlux was
one of Luxintec’s inaugural customers, for
the design and development of an early
Thorlux LED lens now widely used in the
Thorlux Scanlight system. Along with
the production of custom LED lighting
solutions for emergency vehicles, general
automotive and other custom applications,
Luxintec offers an impressive range of
LED luminaires serving a variety of market
sectors.
Main growth to date has been achieved in
the local Spanish market, but the company
also has key clients in northern Europe and
Scandinavia. Initially, the product focus
was on the retail sector; however, with
innovative designs for high power LED
luminaires, the company has successfully
migrated into more industrial applications,
winning favour against conventional
lighting schemes on a number of large
scale warehouse and factory projects.
Existing manufacturing facility in Valladolid
Luxintec has a strong research and
development ethos: the company
has developed patented lenses for its
luminaires, which are manufactured under
its ISO 9001 (quality management system)
licence at its ISO 14001 (environmental
management system) approved location.
As part of a jointly approved investment
plan, Luxintec will move to a new facility
which is currently under construction and
due for completion during 2017. Along
with Luxintec’s current sales and marketing
operation and impressive product
development services, the new factory will
house the modern production services and
surface mount line and will see the
planned introduction of new production
technologies, making the Luxintec factory
one of the best equipped facilities in the
Group.
Following FW Thorpe’s investment in
Luxintec, it is hoped that this partnership
will lead to opportunities across the Group
for further product diversity and sales into
new territories.
Luxintec
40% shareholding at a cost of
1. 2m
Members of the Luxintec sales team meet FW Thorpe directors at the Light & Build exhibition,
Frankfurt in March 2016 to toast the future
30
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Industrial application
Luxer – LED product with
specially designed lenses
Retail application
Retail application
24915.04 13 October 2016 3:38 PM Proof 14
Governance
Board of Directors
Directors’ Report
Statement of Directors’ Responsibilities
Directors’ Remuneration Report
Independent Auditors’ Report to the members of FW Thorpe Plc
34
36
40
41
44
Down to Earth Project, Swansea
24915.04 13 October 2016 3:38 PM Proof 14
24915.04 13 October 2016 3:38 PM Proof 14
Andrew Thorpe
Chairman and Joint Group
Chief Executive
Andrew is the grandson of the
company founder, Frederick
William Thorpe. After serving
an apprenticeship with the
company, he has worked in
various parts of the business,
leading to the positions
of Export Sales Director,
Manufacturing Director and
then Managing Director of
Thorlux Lighting. In 2000, he
became Joint Group Chief
Executive and in 2003 Group
Chairman.
Mike Allcock
Joint Group Chief Executive
and Managing Director,
Thorlux Lighting
Mike joined FW Thorpe Plc in
1984 as an apprentice, working
his way to Technical Director for
Thorlux Lighting in 1998, taking
responsibility for the company’s
design programme. He was
appointed Group Technical
Director in 2001, Managing
Director of Thorlux Lighting
in 2003 and Joint Group Chief
Executive in 2010. Mike is a
Chartered Electrical Engineer
and a Fellow of the Institution
of Engineering and Technology.
He is passionate about
developing innovative, high
technology, market-leading
products.
Craig Muncaster
Financial Director and
Company Secretary
Tony Cooper
Manufacturing Director,
Thorlux Lighting
After graduating in Business
Administration, Craig qualified
as a Chartered Management
Accountant in 2000. He has
spent time in the manufacturing
and engineering sectors, more
recently as UK Financial Director
for Durr, which included a
number of overseas ventures
and projects for the wider group.
Tony graduated from
Loughborough University
with a B.Tech in Production
Engineering and Management
in 1984 and became a Chartered
Engineer in 1988. He worked
in various manufacturing
industries, including Mars
Electronics and Thomas & Betts,
before joining Thorlux Lighting
as Manufacturing Director in
1998.
Auditors
PricewaterhouseCoopers LLP
Cornwall Court
19 Cornwall Street
Birmingham
B3 2DT
Bankers
Lloyds
Church Green East
Redditch
Worcestershire
B98 8BZ
Solicitors
SGH Martineau
No 1 Colmore Square
Birmingham
B4 6AA
Nominated Adviser
N+1 Singer
12 Smithfield Street
London
EC1A 9BD
34
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 David Taylor
Managing Director,
Philip Payne.
Ian Thorpe
Non-Executive Director
Colin Brangwin
Non-Executive Director
Peter Mason
Non-Executive Director
David joined FW Thorpe Plc
in 1978 and on completion of
a commercial apprenticeship
leading to an HNC in Business
Studies he worked in various
roles at Thorlux Lighting and
elsewhere within the Group.
In 1996, he became Managing
Director of Philip Payne Limited.
Ian, grandson of the company
founder, was Manufacturing
Director of Thorlux Lighting
from 1978 until 1993 when he
became Personnel Director.
He became a non-executive
director on 1 October 1997
and is a member of the
remuneration committee.
After joining the company in
1963, Colin was appointed a
director in 1969, later as joint
Managing Director, and in
1995 was appointed Chairman.
He became non-executive
Chairman in 2000, resigning
from this role on 30 June 2003.
After studying Electrical
Engineering at Aberdeen
University, Peter qualified as a
Chartered Accountant with
Price Waterhouse in 1976. He
spent time with Planet Group
and TI Group before joining
FW Thorpe Group in 1987 as
Finance Director. He became
Joint Chief Executive in July
2000. He became a non-
executive director in June 2010,
and is the Chairman of the
remuneration committee.
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
BN99 6DA
Registered Office
Registered No
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
FW Thorpe Plc is registered in
England and Wales No. 317886
24915.04 13 October 2016 3:38 PM Proof 14
35
Stock Code: TFW www. fwthorpe.co.ukGovernance Directors’ Report
Principal activity
The main activity of the Group continues to be the design,
manufacture and supply of professional lighting equipment. Each
company within the Group operates in a different market of the
lighting sector.
Business review
The trading results for the year are set out in the Consolidated
Income Statement on page 48 and the Group’s financial position
at the end of the year is set out in the Consolidated and Company
Statement of Financial Position on page 50. A review of the
performance of the business during the financial year and
expected future developments are contained in the Chairman’s
Statement and the Performance section which form part of the
Strategic Report.
Key performance indicators
The directors consider the main financial key performance
indicators (KPIs) to be those disclosed on page 1 (financial
highlights). The two most important KPIs to the business are
revenue and operating profit.
The directors monitor non-financial areas of the business relating
to energy saving and environmental responsibility, market and
product development, customer service and product support on a
regular basis.
Objectives are set for each company within the Group
incorporating financial and non-financial targets which have
appropriate measurements that reflect their nature. These are
monitored regularly at local and Group Board level. During the year
the majority of objectives were achieved or substantially achieved.
Principal risk and uncertainties
The table on pages 22 and 23 details what we consider to be the
principal risks and uncertainties to the business, and how we seek
to manage and mitigate these risks.
The Group has financial risks and seeks to minimise and manage
these by incorporating controls into key functions as part of the
normal business operation.
Details of other risk management procedures are included within
the internal control section of this report and in the financial risk
section within the accounting policies (note 1).
Internal control
The Board of directors has overall responsibility for the system of
internal control and for reviewing its effectiveness throughout
the Group. The internal control systems are designed to meet
the Group’s particular needs and the risks to which it is exposed,
and by their nature can only provide reasonable but not absolute
assurance against misstatement or loss.
The directors have responsibility for maintaining a system of
internal control which provides reasonable assurance of the
effective and efficient operations, internal financial control and
compliance with laws and regulations.
Internal financial control
During the year, a member of the Group finance department
has visited all operating sites to assess their compliance with a
selection of key control procedures and any non-compliance
reported to the Group Board. Any areas of non-compliance noted
as part of this process have been addressed.
In addition, the executive directors regularly visit all operating
sites and review with local management financial and commercial
issues affecting the Group’s operations. Regular financial reporting
includes rolling forecasts and monthly financial reports comparing
performance against plan. These reports are reviewed locally
with a group representative and monitored by the Group Board.
Accordingly, the directors do not consider that an internal audit
department is required.
Other areas of control
During the year and continuing after the year end, the Board has
operated a formal risk identification and evaluation process as part
of a continuous review of the Group’s internal controls. This process
considers financial, operational and compliance risks and includes
participation from senior executives from all operating subsidiaries.
The results of this process to date have been utilised by the Board
to focus the ongoing process for identifying, evaluating and
managing the Group’s significant risks. The programme is utilised
to monitor the potential impact of the risks identified and, where
appropriate, actions are taken to ensure they are effectively
controlled. This process is extended to include a detailed review
of risk, as assessed by local senior executives, and procedures
have been established to ensure that the Group Board is made
aware of any additional significant risks identified and to consider
appropriate action. This process culminated in the provision of a
certificate, by senior executives at the operating sites, confirming
that they have identified and addressed the risks arising in their
business and reported them to the Group Board accordingly
Financial Review
The directors have pleasure in submitting their annual report and
the audited consolidated financial statements of the Group and the
company for the year ended 30 June 2016.
Results and dividends
Revenue increased by 20.9% to £88.9m. Excluding the acquisition
of Lightronics, the increase in revenue was 4.4%. Operating profit
also showed an improvement of 18.1% to £16.2m (6.5% excluding
Lightronics) benefiting from the improved profitability at TRT and
Lightronics, as well as the Thorlux business.
Net finance income declined during the year to £0.1m (2015:
£0.7m), primarily due to payments made in relation to the
acquisition of Lightronics.
The taxation charge reflects an effective tax rate of 20.1% (2015:
18.7%). This is higher than the rate in the previous year due to tax
relief for R&D expenditure being replaced by an R&D expenditure
credit and a higher tax rate in the Netherlands.
36
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Creditor payment policy
The Group’s policy concerning the payment of its trade creditors
is to accept and follow the normal terms of payment amongst
suppliers to the lighting industry. Payments are made when they
fall due, which is usually on the day after the end of the calendar
month following the month in which delivery of goods or services
is made. Where reasonable settlement discount terms are offered
for early payment, these terms are usually taken up. The number of
days represented by the company’s year end trade payables is 45
(2015: 41).
Corporate Responsibility
The Group has the responsibility for managing the challenges that
affect the business on a daily basis; this also includes our impact on
the environment, our workforce, and the community.
Environment
The Group is committed to minimising the environmental impact
of both its manufacturing processes and its products. However,
even with the most responsible approach, some carbon dioxide
(CO2) will be released into the atmosphere as an indirect result of
factory and selling activities and customers’ use of luminaires.
In 2009, FW Thorpe designed an ambitious carbon offsetting
scheme to help compensate for these emissions. The scheme
is now accredited under the Woodland Carbon Code and now
has 70,324 trees planted. The Group requires some 8,000 or so
plantings per annum to offset the CO2 produced by our operations.
On 5 April 2016, the company paid an interim dividend of 1.20p per
share (2015: 1.10p) and a special dividend of 2.00p per share (2015:
nil) amounting to £3,701,000 (2015: £1,272,000). A final dividend
of 2.85p (2015: 2.55p) per ordinary share is proposed amounting
to £3,297,000 (2015: £2,950,000) and, if approved, will be paid on
24 November 2016. Total dividends paid during the year amounted
to £6,651,000 in aggregate (2015: £5,552,000). The final dividend
for 2015 was paid on 19 November 2015.
Cash and liquidity management
The Group’s cash is managed in accordance with the treasury
policy. Cash is managed centrally on a daily basis to ensure that
the Group has sufficient funds available to meet its needs and
invests the remainder. The majority of cash is placed with approved
counterparties either on overnight deposit or time deposit. There
are a series of time deposits which are maturing on a rolling cycle in
order to meet regular business payments, with a margin for larger
regular and one-off payments as well as seasonal variation in cash
requirements.
The Group primarily trades in sterling. There is an exposure to
foreign currency as the Group buys and sells in foreign currencies
and maintains currency bank accounts in US Dollars, Australian
Dollars, UAE Dirhams and Euros. The activities of buying and selling
in foreign currency are broadly matched with currencies bought
and sold as required in order to minimise currency exposures.
Larger exposures would be hedged in order to reduce the risk of
adverse exchange rate movement. There were no currency hedging
derivatives in place at 30 June 2016 or 30 June 2015.
Pension scheme position and funding
A triennial actuarial valuation at 30 June 2015 has been completed.
This valuation showed that the pension scheme position remains
in surplus and a funding level for the future has been agreed
between the trustees of the scheme and the directors of the
company. The directors consider it unlikely that any changes to
the present funding levels will have any significant effect on the
strength of the company’s balance sheet.
Group research and development activities
The Group is committed to research and development activities in
order to maintain its market share in the industrial and commercial
lighting market. These activities encompass constant development
of both new and existing products to ensure that a leading position
in the lighting market is maintained.
During the year the Group spent £1,681,000 (2015: £1,542,000) on
capitalised development costs, which includes internal labour.
Property, plant and equipment
The directors are of the opinion that the market value of the
freehold land and buildings is in excess of their net book value.
Whilst it is considered that the market value is significantly greater
than the net book value for many of the Group’s properties as a
result of being acquired between one and over twenty years ago,
management consider that undertaking formal valuation exercises
would be costly for limited value and consequently no formal
exercise has been undertaken.
24915.04 13 October 2016 3:38 PM Proof 14
37
Stock Code: TFW www. fwthorpe.co.ukGovernance Directors’ Report
Employee policies
Employees are kept informed of matters of concern to them
as employees by publication and distribution of a company
newsletter and other notices, or by specially convened meetings.
Committees representing the different groups of employees meet
regularly to ensure the views of employees are taken into account
in making decisions that are likely to affect their interests.
The involvement of employees in the Group’s performance is
encouraged by various incentive schemes including a profit related
bonus scheme.
Information on the financial and economic factors affecting
the performance of the Group is made available twice yearly at
the time of publication of the interim and annual statements to
shareholders.
The Group is committed to developing a safe and healthy working
environment for all employees consistent with the requirements of
the Health and Safety at Work Act. Within the constraints of health
and safety, disabled people are given full and fair consideration
for job vacancies. Depending on their skills and abilities, disabled
people enjoy the same career prospects as other employees, and
if employees become disabled every effort is made to ensure their
continued employment, with appropriate training where necessary.
Policies for recruiting employees are designed to ensure equal
opportunities irrespective of colour, ethnic or national origin,
nationality, sex or marital status.
Modern slavery
Our Modern Slavery Act disclosure is published on our corporate
website (www.fwthorpe.co.uk) in the responsibility section.
Charitable gifts
During the year the Group gave £5,563 (2015: £7,372) for charitable
purposes. This is made up of donations to UK charities for
children’s welfare of £150, cancer care of £350, healthcare of £100,
educational schemes of £2,550, emergency aid and homelessness
of £50 and local causes of £2,363.
Directors
The directors of the company during the year and at the date of
this report are set out on pages 34 and 35.
The directors retiring by rotation are I A Thorpe, C Muncaster and
D Taylor who, being eligible, offer themselves for re-election.
The contracts for C Muncaster and D Taylor are terminable on 12
months’ notice. I A Thorpe does not have a service contract with the
company.
Directors’ Share Interests
The details of the directors’ share interests are set out in the
directors’ remuneration report on page 43.
Directors’ Indemnities
As permitted by the Articles of Association, the directors have the
benefit of an indemnity which is a qualifying third party indemnity
provision as defined by section 234 of the Companies Act 2006.
The indemnity was in force throughout the last financial year and
is currently in force. The company also purchased and maintained
throughout the financial year directors’ and officers’ liability
insurance in respect of itself and its directors.
Board Constitution
The company continues to be proprietorial in nature and the directors
act as a unitary Board and as a consequence are unable to see the
benefits of splitting the Board into sub-committees and in particular of
constituting audit and nomination committees as matters that would
normally be considered by an audit or nomination committee are
addressed by the full Board with the non-executive directors present
and the auditors attending as appropriate.
A remuneration committee has been established with the
following people serving on it:
P D Mason
Non-executive director and Chairman of the committee.
I A Thorpe
Non-executive director.
Terms and conditions for the operation of this committee are in
place and it meets as and when required. The committee’s report is
presented on pages 41 to 43.
Where there is a requirement for a senior personnel or subsidiary
board appointment a sub-committee is formed. Any appointment
to the Group Board would involve all Board members in the
selection process.
The Board meets regularly during the year and has a schedule of
matters reserved for its approval, which only the Board may change.
Substantial Shareholdings
At 12 October 2016, the company had received notification of
the following interests in 3% or more of the issued share capital,
excluding holdings of directors:
FMR LLC 6,619,000 shares (5.6%)
Mrs B Thorpe 4,759,389 (4.0%)
Relations with Shareholders
Directors are kept informed of the views of shareholders by
face-to-face contact at the company’s premises on the day of the
Annual General Meeting and, if appropriate, by meeting with major
shareholders at other times during the year.
Directors’ Authority to Issue Shares
In previous years, at the Annual General Meeting, shareholders
have been asked to pass resolutions to authorise the directors to
allot shares for cash or to grant rights to subscribe for, or to convert
any security into, shares in the company and to allow them to do so
(and also to sell treasury shares) in certain circumstances without
first offering the shares in question to existing shareholders.
38
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 As the directors have no intention of exercising these authorities,
it has been decided not to renew them at the forthcoming Annual
General Meeting.
This will not, however, prevent shares from being allotted or
treasury shares being sold to individuals who exercise options
under any share option scheme of the company.
Purchase of Own Shares
Resolution number 8 set out in the notice of the Annual General
Meeting will, if it is approved, allow the company to exercise the
authority contained in the Articles of Association to purchase its
own shares. The Board has no firm intention that the company
should make purchases of its own shares if the proposed authority
becomes effective, but would like to be able to act quickly if
circumstances arise in which such a purchase would be desirable.
Purchases will only be made on the Alternative Investment Market
and only in circumstances where the directors believe that they are
in the best interests of the shareholders generally. Furthermore,
purchases will only be made if the directors believe that they would
result in an increase in earnings per share.
The proposed authority will be limited by the terms of the
special resolution to the purchase of 11,893,559 ordinary shares
representing 10% of the company’s issued ordinary share capital at
12 October 2016 and a nominal value of £118,936.
The minimum price per ordinary share payable by the company
(exclusive of expenses) will be 1p. The maximum to be paid will
be an amount not more than 5% above the average of the middle
market quotations for ordinary shares of the company as derived
from the Alternative Investment Market on the five business days
immediately preceding the date of each purchase. The company
may either cancel any shares which it purchases under this
authority or transfer them into treasury, and subsequently sell
or transfer them out of treasury or cancel them. The maximum
number of shares and the permitted price range are stated in order
to comply with statutory and Stock Exchange requirements and
should not be taken as representative of the number of shares (if
any) which may be purchased, or the terms of such a purchase.
The authority will lapse on the date of the Annual General Meeting
of the company in 2017. However, in order to maintain the Board’s
flexibility of action it is envisaged that it will be renewed at future
Annual General Meetings.
Corporate Governance
As a company whose shares are traded on the Alternative Investment
Market of the London Stock Exchange Plc, the company is not required
to comply with the Principles of Good Governance and Code of
Best Practice (“The UK Corporate Governance Code”, or the “Code”).
However, the Board considers the Quoted Companies Alliance’s
“Corporate Governance Guidelines for Smaller Quoted Companies”
(the QCA Guidelines) relevant due to the size and complexity of the
company. The QCA Guidelines apply key elements from the Code and
other relevant guidance to the needs of small and mid-size quoted
companies for which the Code may not be entirely or directly relevant.
The directors consider that the company applies the principles of
best practice with the exception of the matters listed below.
• There are no independent Board members.
• The Board does not have an independent audit committee.
The directors believe that the exceptions, which are more fully
explained in the sections relating to the Board constitution and
the directors’ remuneration report, are appropriate for the size and
context of the Group’s business.
Statement on the Provision of Information to
Auditors
Each of the directors confirms that, as far as he is aware, there is
no relevant audit information of which the company’s auditors are
unaware, and that he has taken all the steps he ought to have as a
director to make himself aware of any relevant audit information, and
to establish that the auditors are aware of that information. The above
is in accordance with the provisions of section 418 of the Companies
Act 2006. The auditors have direct access to all members of the Board
and attend and present their reports at appropriate Board meetings.
The Board considers, at least annually, the relationships and fees in
place with the auditors to confirm their independence is maintained.
Independent Auditors
The auditors, PricewaterhouseCoopers LLP, have expressed their
willingness to continue in office and a resolution for their re-
appointment will be proposed at the next Annual General Meeting.
Going Concern
The directors confirm that they are satisfied that the Group and
company have adequate resources, with £18.3m cash and £14.9m
short-term deposits, to continue in business for the foreseeable
future, and for this reason, they continue to adopt the going
concern basis in preparing the accounts.
Approval of Strategic and Directors’ Report
The directors confirm that the information contained within the
Strategic Report on pages 6 to 31 and the Directors’ report on pages
36 to 39 is an accurate representation of the Group’s strategy and
performance.
By order of the Board
C Muncaster
Director
12 October 2016
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
Company Registration Number: 317886
24915.04 13 October 2016 3:38 PM Proof 14
39
Stock Code: TFW www. fwthorpe.co.ukGovernance Statement of Directors’ Responsibilities
The directors are responsible for preparing the annual report and
the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have prepared
the Group and company financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
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 the affairs of the Group and the company 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 whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company and 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
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 company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board
C Muncaster
Director
12 October 2016
40
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 Directors’ Remuneration Report
The Board has prepared this report to the shareholders, taking into
account sections 420 to 422 of the Companies Act 2006 and AIM
Rule 19.
The Board has delegated the responsibility for the executive
directors’ remuneration to the remuneration committee. The scope
of their responsibilities includes the executive directors’ service
contracts, salaries and other benefits, which comprise their terms
and conditions of employment.
Remuneration Committee
The current members of the remuneration committee are the non-
executive directors P D Mason (Chairman of the committee) and
I A Thorpe.
The committee has met as and when required during the financial
year. No member of the committee has any personal financial
interest in the matters to be decided other than as shareholders.
There are no conflicts of interest arising from cross-directorships or
day-to-day involvement in running the business. The committee
has access to market data when considering the remuneration of
the executive directors.
Remuneration Policy – Executive Directors
The aim of the committee is to ensure that the executive directors
are fairly rewarded for their responsibilities and contribution to
the performance of the Group. The committee seeks to achieve
this with a combination of performance and non-performance
related remuneration designed to attract, retain and motivate the
directors.
In establishing the salaries of the directors, the committee takes
into account the responsibilities and performance of the individual
together with data from comparable organisations and indicative
trends for the business and its economic sector.
The remuneration package consists of the following elements.
1. Basic salary, benefits in kind and other benefits. The salary is
determined in August each year, unless there has been a change
in responsibilities, where an adjustment will be made at the
same time. The benefits in kind mainly consist of the provision
of a car and health insurance. A director may choose to take
a cash allowance instead of a car. Other benefits consist of
pension arrangements and life assurance.
2. Annual bonus. The bonus is made up of two elements. The first
element relates to the operating profit of the business unit for
which the director has specific performance responsibilities. The
second element relates to the operating profit of the Group as
a whole. The bonuses are paid in September and relate to the
period ending on 30 June in the same year.
Remuneration Policy – Non-Executive Directors
The Board as a whole determines the remuneration of the non-
executive directors. The Board takes into account the contribution
made and the relative time spent on the company’s affairs. The
non-executive directors do not receive bonuses. Their benefits in
kind consist of the provision of health insurance.
Directors’ Service Contracts
A B Thorpe and M Allcock have service contracts terminable
on two years’ notice. A M Cooper, C Muncaster and D Taylor have
service contracts terminable on one year’s notice. P D Mason,
C M Brangwin and I A Thorpe do not have formal service contracts
with the company.
Performance Graph
The graph below shows the comparative data for the FTSE AIM
share index and the FTSE Fledgling share index, rebased to 100,
as these are considered to be the most appropriate comparative
indices for the company’s business.
350
300
250
200
150
100
50
30-06-2011
30-06-2012
30-06-2013
30-06-2014
30-06-2015
30-06-2016
F W Thorpe
AIM All Share
FTSE Fledgling
24915.04 13 October 2016 3:38 PM Proof 14
41
Stock Code: TFW www. fwthorpe.co.ukGovernance Directors’ Remuneration Report
Directors’ Emoluments (Audited)
Executive directors
A B Thorpe
M Allcock
D Taylor
A M Cooper
C Muncaster
Non-executive directors
C M Brangwin
I A Thorpe
P D Mason
Total emoluments
2016
Salary/fees
£’000
2016
Bonus
£’000
2016
Benefits
£’000
212
221
114
127
140
26
26
26
892
145
150
66
89
102
–
–
–
552
27
13
16
11
12
11
14
4
108
2016
Total
£’000
384
384
196
227
254
37
40
30
1,552
2015
Total
£’000
370
359
172
206
225
37
40
30
1,439
The directors’ emoluments exclude contributions to the pension scheme.
Directors’ Pension Arrangements
M Allcock, A M Cooper and D Taylor are members of the defined contribution section of the FW Thorpe Retirement Benefits Scheme.
M Allcock and D Taylor have a final salary guarantee as they were previously members of the defined benefit section. C Muncaster has
a personal pension to which the company contributes.
C M Brangwin, I A Thorpe, A B Thorpe and P D Mason are retired members of the defined benefit section.
The FW Thorpe Retirement Benefits Scheme is a funded, HMRC approved occupational pension scheme. The scheme is divided into two
sections – a defined benefit scheme and a defined contribution scheme. The defined benefit section was closed to new members on
1 October 1995.
The defined benefit section aims to provide a maximum pension of two-thirds of pensionable salary at normal retirement date. M Allcock’s
and D Taylor’s pensionable salary includes an average of the previous three years’ profit bonus. Defined contribution members contribute
up to 5% of basic salary and the company contributes up to 9.5%.
All the executive directors are covered by life assurance benefit of four times pensionable salary. In addition, the defined benefit scheme
members are entitled to a spouse’s pension on death.
The following directors, excluding those classified as pensioners, had accrued entitlements under the defined benefit section of the
pension scheme.
M Allcock
D Taylor
Value of
accrued pension
at 30 June 2016
£pa
108,120
63,776
Director’s
contributions
during the year
£
15,571
7,083
Normal
pension age
65
65
Change in value
of accrued
pension since
30 June 2015
£pa
19,891
7,237
Age at year end
48
54
The following table shows the contributions paid by the company in respect of those directors participating in the defined contribution
section of the pension scheme.
A M Cooper
2016
£’000
10,737
2015
£’000
10,767
C Muncaster has a personal pension which is not part of the company scheme, and the following contributions have been made during
the year.
C Muncaster
42
24915.04 13 October 2016 3:38 PM Proof 14
2016
£’000
11,933
2015
£’000
10,983
Annual Report and Accounts for the year ended 30 June 2016 Directors’ Shareholdings
The directors listed below were in office during the year. Directors’ interests in the share capital of the company at 30 June 2016 and 1 July
2015 were as follows:
Executive directors
A B Thorpe
M Allcock
D Taylor
A M Cooper
C Muncaster
Non-executive directors
C M Brangwin
I A Thorpe
P D Mason
Ordinary shares of 1p Beneficial
2016
2015
27,602,700
114,000
55,913
84,000
–
27,602,700
114,000
55,913
84,000
–
7,731,550
25,047,120
1,626,370
7,731,550
25,047,120
1,626,370
On 21 January 2016 C M Brangwin reduced his joint non-beneficial interest in 1,700,000 shares to nil shares (2015: 1,700,000 shares).
The market price of the company’s shares at the beginning and end of the financial year was 175p and 224p respectively and the range of
market prices during the year was from 174p to 250.7p.
Executive Share Ownership Plan (ESOP)
Share options were granted during 2014, under the company’s ESOP, to the company’s executive directors and certain directors of
subsidiary companies. The plan allows the vesting of options subject to the achievement of performance targets, being annual growth of
pre-tax Earnings Per Shares in excess of RPI plus 3% over a five-year period. The options that were granted to the executive directors are
detailed in the table below:
Date Granted
Share Options
Exercise price (p)
M Allcock
A B Thorpe
C Muncaster
24 October 2014 24 October 2014 24 October 2014 24 October 2014 24 October 2014
200,000
124
200,000
124
200,000
124
200,000
124
200,000
124
A M Cooper
D Taylor
There have been no other changes in the interests of the directors in the share capital of any company in the Group during the period
1 July 2016 to 12 October 2016.
Approved by the Board and signed on its behalf by:
C Muncaster
Director
12 October 2016
24915.04 13 October 2016 3:38 PM Proof 14
43
Stock Code: TFW www. fwthorpe.co.ukGovernance Independent Auditors’ Report
to the Members of FW Thorpe Plc
Report on the financial statements
Our opinion
In our opinion:
• FW Thorpe Plc’s group financial statements and company
financial statements (the “financial statements”) give a true and
fair view of the state of the group’s and of the company’s affairs
as at 30 June 2016 and of the group’s profit and the group’s and
the company’s cash flows for the year then ended;
• the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union;
• the company financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union and
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.
What we have audited
The financial statements, included within the Annual Report,
comprise:
• the Consolidated and Company Statement of Financial Position
as at 30 June 2016;
• the Consolidated Income Statement and Consolidated
Statement of Comprehensive Income for the year then ended;
• the Consolidated and Company Statement of Cash Flows for
the year then ended;
• the Consolidated Statement of Changes in Equity and Company
Statement of Changes in Equity for the year then ended; and
• the notes to the financial statements, which include a summary
of significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in the
preparation of the financial statements is IFRSs as adopted by the
European Union and, as regards the company financial statements,
as applied in accordance with the provisions of the Companies Act
2006, and applicable law.
In applying the financial reporting framework, the directors have
made a number of subjective judgements, for example in respect
of significant accounting estimates. In making such estimates,
they have made assumptions and considered future events.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion, 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
Other matters on which we are required to report
by exception
Adequacy of accounting records and information and
explanations received
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
• we have not received all the information and explanations we
require for our audit; or
• adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the company financial statements are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you
if, in our opinion, certain disclosures of directors’ remuneration
specified by law are not made. We have no exceptions to report
arising from this responsibility.
Responsibilities for the financial statements
and the audit
Our responsibilities and those of the directors
As explained more fully in the Directors’ Responsibilities
Statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland) (“ISAs (UK &
Ireland)”). Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only
for the company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
44
24915.04 13 October 2016 3:38 PM Proof 14
Annual Report and Accounts for the year ended 30 June 2016 What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland).
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of:
• whether the accounting policies are appropriate to the group’s
and the company’s circumstances and have been consistently
applied and adequately disclosed;
• the reasonableness of significant accounting estimates made by
the directors; and
• the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the
directors’ judgements against available evidence, forming our
own judgements, and evaluating the disclosures in the financial
statements.
We test and examine information, using sampling and other
auditing techniques, to the extent we consider necessary to
provide a reasonable basis for us to draw conclusions. We obtain
audit evidence through testing the effectiveness of controls,
substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information
in the Annual Report to identify material inconsistencies with the
audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course of performing the
audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
Andrew Hammond (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Birmingham
12 October 2016
24915.04 13 October 2016 3:38 PM Proof 14
45
Stock Code: TFW www. fwthorpe.co.ukGovernance Financials
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated and Company Statement of Financial Position
Consolidated and Company Statement of Changes in Equity
Consolidated and Company Statements of Cash Flows
Notes to the Financial Statements
Notice of Meeting
Financial Calendar
48
49
50
51
53
54
88
90
Windmill Community Campus, Fife
24915.04 13 October 2016 3:38 PM Proof 14
24915.04 13 October 2016 3:38 PM Proof 14
Consolidated Income Statement
For the year ended 30 June 2016
73,544
(41,314)
32,230
(6,181)
(12,331)
–
13,718
727
–
(50)
14,395
(2,691)
11,704
(253)
11,451
2015
pence
10.12
10.11
(0.22)
(0.22)
9.90
9.89
2016
£’000
2015
£’000
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income
Operating profit
Finance income
Finance costs
Share of loss of equity accounted investments
Profit before income tax
Income tax expense
Profit for the year from continuing operations
Loss for the year from discontinued operations
Profit for the year
Notes
2
3
7
7
32
8
88,946
(50,000)
38,946
(8,455)
(14,532)
236
16,195
702
(627)
(1)
16,269
(3,270)
12,999
–
12,999
Earnings per share from continuing operations attributable to the equity holders of the company during the year
(expressed in pence per share)
Basic and diluted earnings per share
– Basic
– Diluted
– Basic
– Diluted
– Basic
– Diluted
Continuing operations
Continuing operations
Discontinued operations
Discontinued operations
Total
Total
Notes
24
24
24
24
24
24
2016
pence
11.24
11.21
–
–
11.24
11.21
The notes on pages 54 to 87 form part of these financial statements.
The company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the company income
statement.
The profit for the company for the year was £13,661,000 (2015: £11,118,000).
48
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2016
Profit for the year:
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
– Arising in year
– Reclassified in year
Exchange differences on translation of foreign operations
– Arising in year
– Reclassified in year
Taxation
Items that will not be reclassified to profit or loss
Actuarial loss on pension scheme
Movement on unrecognised pension scheme surplus
Other comprehensive income/(expense) for the year, net of tax
Notes
2016
£’000
12,999
2015
£’000
11,451
15
23
30
30
(74)
–
1,627
–
60
1,613
(1,285)
1,095
(190)
1,423
(152)
–
(21)
–
30
(143)
(247)
18
(229)
(372)
Total comprehensive income for the year attributable to equity shareholders
14,422
11,079
The notes on pages 54 to 87 form part of these financial statements.
24915.04 14 October 2016 9:27 AM Proof 12
49
Stock Code: TFW www. fwthorpe.co.ukFinancials Consolidated and Company
Statement of Financial Position
As at 30 June 2016
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Investment property
Loans and receivables
Equity accounted investments
Available-for-sale financial assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Other financial assets at fair value through profit or loss
Short-term financial assets
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Current income tax liabilities
Total current liabilities
Net current assets
Non-current liabilities
Retirement benefit deficit
Other payables
Provisions for liabilities and charges
Deferred income tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Foreign currency translation reserve
Retained earnings
Total equity
Group
Company
Notes
2016
£’000
2015
£’000
2016
£’000
2015
£’000
11
10
31
14
29
32
15
23
18
19
20
16
17
21
30
21
22
23
25
26
26
26
14,900
15,183
–
2,131
4,980
936
3,348
27
41,505
18,863
21,914
389
14,910
18,295
74,371
115,876
(16,700)
(1,963)
(18,663)
55,708
–
(4,619)
(1,088)
(799)
(25,169)
90,707
1,189
656
137
1,606
87,119
90,707
13,834
14,349
–
2,171
4,760
–
3,018
17
38,149
17,762
19,698
389
9,358
19,176
66,383
104,532
(14,656)
(2,051)
(16,707)
49,676
–
(3,838)
(102)
(1,021)
(21,668)
82,864
1,189
656
137
–
80,882
82,864
8,525
3,381
13,682
6,926
4,980
936
3,348
-
41,778
11,311
22,988
389
14,910
16,471
66,069
107,847
(13,504)
(1,601)
(15,105)
50,964
–
(4,619)
(507)
(600)
(20,831)
87,016
1,189
656
137
–
85,034
87,016
7,848
3,558
13,682
7,027
4,760
–
3,018
–
39,893
11,817
18,169
389
9,358
18,868
58,601
98,494
(12,062)
(1,515)
(13,577)
45,024
–
(3,838)
(102)
(835)
(18,352)
80,142
1,189
656
137
–
78,160
80,142
The notes on pages 54 to 87 form part of these financial statements.
The financial statements on pages 48 to 87 were approved by the Board on 12 October 2016 and signed on its behalf by
A B Thorpe
C Muncaster
Company Registration Number: 317886
50
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016
Consolidated Statement of
Changes in Equity
For the year ended 30 June 2016
Notes
Balance at 1 July 2014
Comprehensive income/(expense)
Profit for the year to 30 June 2015
Actuarial loss on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Exchange differences on translation of foreign operations
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2015
Comprehensive income/(expense)
Profit for the year to 30 June 2016
Actuarial loss on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Transfer to foreign currency translation reserve
Exchange differences on translation of foreign operations
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2016
30
30
15
23
9
6
30
30
15
23
23
9
6
Share
capital
£’000
1,189
Share
premium
account
£’000
656
Capital
redemption
reserve
£’000
137
Foreign
currency
translation
reserve
£’000
–
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(21)
1,627
1,606
–
–
–
1,606
Retained
earnings
£’000
75,305
11,451
(247)
18
(152)
30
(21)
11,079
(5,552)
50
(5,502)
80,882
12,999
(1,285)
1,095
(74)
14
46
21
–
12,816
(6,651)
72
(6,579)
87,119
Total
equity
£’000
77,287
11,451
(247)
18
(152)
30
(21)
11,079
(5,552)
50
(5,502)
82,864
12,999
(1,285)
1,095
(74)
14
46
–
1,627
14,422
(6,651)
72
(6,579)
90,707
The notes on pages 54 to 87 form part of these financial statements.
24915.04 14 October 2016 9:27 AM Proof 12
51
Stock Code: TFW www. fwthorpe.co.ukFinancials Company Statement of
Changes in Equity
For the year ended 30 June 2016
Notes
Balance at 1 July 2014
Comprehensive income/(expense)
Profit for the year to 30 June 2015
Actuarial loss on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Exchange differences on translation of foreign operations
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2015
Comprehensive income/(expense)
Profit for the year to 30 June 2016
Actuarial loss on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Transfer to foreign currency translation reserve
Exchange differences on translation of foreign operations
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2016
30
30
15
23
9
6
30
30
15
23
23
9
6
The notes on pages 54 to 87 form part of these financial statements.
Share
capital
£’000
1,189
Share
premium
account
£’000
656
Capital
redemption
reserve
£’000
137
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
–
–
–
–
–
–
137
Retained
earnings
£’000
72,882
11,118
(247)
18
(152)
30
13
10,780
(5,552)
50
(5,502)
78,160
13,661
(1,285)
1,095
(74)
14
42
–
–
13,453
(6,651)
72
(6,579)
85,034
Total
equity
£’000
74,864
11,118
(247)
18
(152)
30
13
10,780
(5,552)
50
(5,502)
80,142
13,661
(1,285)
1,095
(74)
14
42
–
–
13,453
(6,651)
72
(6,579)
87,016
52
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 Consolidated and Company Statements
of Cash Flows
For the year ended 30 June 2016
Group
Company
Cash flows from operating activities
Cash generated from operations
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangibles
Purchase of subsidiary (net of cash acquired)
Disposal of subsidiary
Purchase of investment property
Purchase of available-for-sale financial assets
Sale of available-for-sale financial assets
Equity accounted investments acquired
Property rental and similar income
Dividend income
Net (purchase)/sale of deposits
Interest received
Receipt of loan notes
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Dividends paid to company’s shareholders
Net cash used in financing activities
Effects of exchange rate changes on cash
Net (decrease)/increase in cash in the year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes on pages 54 to 87 form part of these financial statements.
Notes
27
2016
£’000
2015
£’000
2016
£’000
18,946
(3,323)
15,623
13,315
(1,280)
12,035
13,737
(2,307)
11,430
(2,543)
122
(1,764)
–
–
(28)
(404)
–
(936)
74
177
(5,552)
314
200
(10,340)
–
(6,651)
(6,651)
487
(881)
19,176
18,295
(3,271)
167
(1,621)
(6,392)
(561)
(36)
(100)
371
–
154
149
6,280
301
1,261
(3,298)
(1,920)
(5,552)
(7,472)
–
1,265
17,911
19,176
(1,782)
85
(1,404)
–
–
(24)
(404)
–
(936)
348
1,973
(5,552)
217
200
(7,279)
–
(6,651)
(6,651)
103
(2,397)
18,868
16,471
32
9
17
2015
£’000
10,894
(1,254)
9,640
(1,409)
139
(1,418)
(8,700)
(327)
(1,340)
(100)
371
–
409
1,414
6,280
304
1,261
(3,116)
–
(5,552)
(5,552)
–
972
17,896
18,868
24915.04 14 October 2016 9:27 AM Proof 12
53
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
1 Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements and company financial statements
(the “financial statements”) are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
FW Thorpe Plc is incorporated in England and Wales. The company is domiciled in the UK. The company is a public limited company
which is listed on the Alternative Investment Market. The address of its registered office is Merse Road, North Moons Moat, Redditch,
Worcestershire, B98 9HH.
Basis of preparation
The consolidated and company financial statements of FW Thorpe Plc have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006
applicable to Companies reporting under IFRS. The financial statements have been prepared on a going concern basis, under the historical
cost convention, as modified by available-for-sale financial assets, financial assets and financial liabilities (including derivative instruments)
at fair value through the profit and loss.
The company and Group has adopted all IAS and IFRS adopted in the EU except for IAS 34, as AIM-listed companies are not required to
adopt IAS 34. The company and Group has not early adopted any other standards or interpretations not yet endorsed by the EU.
The Group has not yet adopted certain new standards, amendments and interpretations to existing standards, which have been published
but are only effective for our accounting periods beginning on or after 1 January 2015 or later periods. These new pronouncements are
listed below:
Amendment to IAS 1, “Presentation of financial statements on the disclosure initiative” (effective 1 January 2016)
Amendment to IFRS 10 and IAS 28 on investment entities applying the consolidation exemption (effective 1 January 2016)
Amendment to IFRS 10 and IAS 28 on sale or contribution of assets (effective 1 January 2016)
Amendments to IAS 27, “Separate financial statements” on the equity method (effective 1 January 2016)
Amendments to IAS 16, “Property, plant and equipment” and IAS 41, “Agriculture”, regarding bearer plants (effective 1 January 2016)
Amendment to IAS 16, “Property, plant and equipment” and IAS 38, “Intangible assets”, on depreciation and amortisation (effective
1 January 2016)
Amendments to IFRS 11 “ ‘Joint Arrangements’ on acquisition of an interest in a joint operation” (effective 1 January 2016)
Annual improvements 2014 (effective 1 January 2016)
IFRS 14, “Regulatory deferral accounts” (effective 1 January 2016)
IFRS 15, “Revenue from contracts with customers” (effective 1 January 2017)
IFRS 9, “Financial Instruments” (effective 1 January 2018)
IFRS 15 “Revenue from contracts with customers” (effective 1 January 2018)
IFRS 16 “Leases” (effective 1 January 2019)
The directors are currently evaluating the impact of the adoption of these standards, amendments and interpretations in future periods,
although it is anticipated that the impact will be immaterial.
No new or amended standards were adopted for the year ending 30 June 2016.
The accounts for the year ended 30 June 2015 have been delivered to the Registrar of Companies, and the auditors’ report was unqualified
and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.
The financial statements are presented in pounds sterling, rounded to the nearest thousand.
54
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 1 Accounting Policies continued
The preparation of financial information in conformity with the basis of preparation described above requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s and Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the consolidated financial information, are disclosed in the critical accounting estimates and judgements section.
Basis of consolidation
The financial statements for FW Thorpe Plc incorporate the financial statements of the company and its subsidiary undertakings.
A subsidiary is a company controlled directly by the Group and all the subsidiaries are wholly owned by the Group. The Group achieves
control over the subsidiaries by being able to influence financial and operating policies so as to obtain benefits from their activities.
Intra-group transactions, balances, income and expenses are eliminated in preparing consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration agreement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed on a
business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the
recognised amounts of the acquiree’s identifiable net assets.
Equity accounted investments
The Group’s interests in equity accounted investments comprise interests in joint ventures and an associate.
Joint ventures are all entities over which the Group exercised joint control. Associates are those entities in which the Group has significant
influence, but not control or joint control, over the financial and operating policies. Investments in joint ventures and associates are
accounted for by the equity method of accounting and are initially recognised at cost.
The Group discloses its share of the result of the equity accounted investments on the face of the income statement. The Group also
discloses its share of the net assets on the face of the balance sheet.
Unrealised gains on transactions between the Group and its equity accounted investments are eliminated to the extent of the Group’s
interest in the joint venture and that unrealised losses are also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
The carrying amount of each equity accounted investment is tested for impairment by comparing its recoverable amount with its carrying
amount whenever there is an indication that the investment may be impaired.
Revenue recognition
The Group recognises revenue when the amount of revenue can be reliably measured, when it is probable that future economic
benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities. The amount of revenue is not
considered to be reliably measurable until all contingencies relating to the sale have been resolved. Revenue comprises the fair value of
the consideration received or receivable for the sale of goods and services. The Group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is subsequently recognised
based upon the goods and services provided, when these goods have been delivered to the customer or the service performed, excluding
VAT and trade discounts.
Interest income
Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired the Group
reduces the carrying amount to its recoverable amount, being the estimated cash flow discounted at the original effective interest rate of
the instrument, and continues unwinding the discount as interest income.
Interest on impaired loans is recognised using the original effective interest rate.
Dividend income
Dividend income is recognised when the right to receive payment is established.
24915.04 14 October 2016 9:27 AM Proof 12
55
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
1 Accounting Policies continued
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments,
is identified as the Group Board.
The Group is organised into eight operating segments based on the products and customer base in the lighting market. The largest
businesses, on an ongoing basis, are Thorlux and Lightronics Participaties B.V. The six remaining operating segments have been
aggregated into the “other companies” reportable segment based upon their size, comprising the entities Compact Lighting Limited,
Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited and Thorlux Lighting LLC.
Pension costs
The Group operates a hybrid defined benefit and defined contribution pension scheme. The basis of the Group’s hybrid pension scheme
provides benefits to members based upon the following:
• Service before 1 October 1995, benefits provided are defined benefit in nature (the ”pure“ defined benefit element);
• Service after 1 October 1995, has two elements:
• For members joining pre-1 October 1995, benefits provided are the maximum of their defined contribution pension and their defined
benefit pension (the ”defined benefit underpin“ element);
• For members joining post-1 October 1995, benefits provided are defined contribution in nature (the “pure defined contribution”
element).
The contributions of all three elements are paid into one pension scheme, where the contributions and assets are segregated and ring-
fenced from each other. The assets of the scheme are invested and managed independently of the finances of the Group. Pension costs
are assessed in accordance with the advice of an independent qualified actuary. Costs include the regular cost of providing benefits,
which it is intended should remain at a substantially level percentage of current and expected future earnings of the employees covered.
Variations from the regular pensions cost are spread evenly through the income over the remaining service lives of current employees.
Contributions made to the defined benefit scheme are charged to the income statement in the period in which they are made.
The liability or surplus recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past-service
costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. In the
defined benefit underpin element of the scheme the liabilities reflect the greater of the defined contribution or defined benefit liabilities.
For the defined benefit underpin element of the scheme each member is tested to see whether the pension on a defined contribution or
defined benefit basis is higher. The liabilities shown in the pensions note are based on the greater of the two liabilities for each member,
which in almost all cases is the defined benefit liability. For the service cost, again tests are performed to see which is the higher for each
member out of the company’s share of the defined contribution payments or the company’s share of accruing benefits on a defined
benefit basis. The higher of these two figures for each member is then used to give the total service cost; again the defined benefit cost is
the higher for the vast majority of members.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates
of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in
the statement of comprehensive income in the period in which they arise.
Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees
remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line
basis over the vesting period.
For defined contribution plans and pure defined contribution elements, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as employee benefit expense in the income statement as
they fall due, or as an accrued or prepaid expense. Prepaid contributions are recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available. A defined benefit surplus is only recognised if it meets the following criteria: if the Group
has an unconditional right to a refund; or if the Group can realise it at some point during the life of the plan or when the plan liabilities are
settled. If the criteria are not met then a defined benefit surplus is not recognised.
56
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 1 Accounting Policies continued
Foreign currencies
Transactions in foreign currency are converted to sterling using the exchange rate applicable to the date of the transaction. Foreign
currency gains and losses resulting from the settlement of foreign currency transactions at a different time are recognised in the income
statement. Currency exchange differences arising from holding monetary assets or liabilities in a foreign currency are fair valued at the
balance sheet date in accordance with prevailing exchange rates and resulting gains or losses are recognised in the income statement.
Taxation
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it
arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the
timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Dividend distribution
Final dividend distribution to the company’s shareholders is recognised as a liability in the Group’s financial statements in the period in
which the dividends are approved by the company’s shareholders.
Interim dividends are recognised as a liability in the Group’s financial statements when approved by the directors.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses where applicable. Cost includes
the original purchase price together with the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is calculated on a straight-line basis to write down the cost less estimated residual value of all plant and equipment assets by
equal instalments over their expected useful life. The rates generally applicable are:
Freehold land
Buildings
Plant and equipment
Nil
2%–10%
10%–33%
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. Assets are reviewed for
impairment where there is an indication that the carrying value may not be recoverable.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
administrative expenses in the income statement.
Leases
Operating leases, and payments made under them, are charged to the income statement on a straight-line basis over the term of the
lease.
24915.04 14 October 2016 9:27 AM Proof 12
57
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
1 Accounting Policies continued
Intangible assets
Development costs
The Group undertakes development activities on an ongoing basis. Part of these costs relate to projects where the benefit is received in
the short term (less than one year) and part relates to longer term projects where the benefit is expected to be received for several years
to come. Costs associated with the shorter term activities are expensed as and when they are incurred. Costs associated with the longer
term projects are capitalised as an intangible asset and amortised over the expected life of the benefit, generally at 33.33% per annum,
commencing when the asset is available for use within the business. Development assets are recognised as intangible assets when the
following criteria are met:
•
It is technically feasible to complete the intangible asset so that it will be available for use;
• Management intends to complete the intangible asset and use or sell it;
• There is an ability to use or sell the intangible asset;
•
It can be demonstrated how the intangible asset will generate probable future economic benefits;
• Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available;
and
• The expenditure attributable to the intangible asset during its development can be reliably measured. Other development
expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
The economic success for development activities is uncertain and carrying amounts are reviewed at each balance sheet date for
impairment in accordance with IAS 36.
Development assets are valued at cost less accumulated amortisation and any impairment losses.
Fishing rights
Fishing rights are stated at cost less accumulated impairment where applicable. The rights are not amortised, but assessed annually for
impairment.
Goodwill
Goodwill is stated at cost less accumulated impairment where applicable. Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the net assets of the acquired subsidiary undertaking at the date of acquisition. Goodwill is reviewed
for impairment at least annually or more frequently if events or changes in circumstances indicate a potential impairment. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
Software costs
Software costs are stated at cost less accumulated amortisation and impairment where applicable. Amortisation is calculated on a
straight-line basis to write down the cost less estimated residual value over its useful life. The amortisation rates are between 20% and
50% per annum.
Patent costs
Patents are stated at cost less accumulated amortisation. Amortisation is calculated on a straight-line basis to write down the cost less
estimated residual value over its useful life. The amortisation rate is 20%.
Other intangible assets
An intangible asset acquired in a business combination is recognised at fair value to the extent it is probable that the expected future
economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. Intangible assets principally
relate to brand names and technology which were valued discounting estimated future net cash flow from the asset. The cost of
intangible assets is amortised through the income statement on a straight-line basis over their estimated economic life.
58
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 1 Accounting Policies continued
Investment properties
Investment properties are recognised at cost, and then subsequently cost less accumulated depreciation and (if applicable) any
accumulated impairment losses. Freehold land is not depreciated.
In the company accounts land and buildings (and integral fixtures and fittings) not occupied by the company are included within
investment property.
Investments in subsidiaries
Investments in subsidiaries are held at cost less impairment. Cost includes directly attributable costs of investment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined by the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production
overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less
the costs of completion and selling expenses. Provision is made against the cost of slow-moving, obsolete and other stock lines based on
the net realisable value.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method,
less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than
30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between
the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income
statement within “distribution costs”. When a trade receivable is uncollectable, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited against “distribution costs” in the income statement.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets held for trading and are measured at their fair values.
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups are classified as assets held for sale when their carrying amount is to be recovered principally
through a sale transaction and a sale is considered highly probable. They are stated at the lower of their carrying amount and fair value
less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use and a
sale is considered highly probable.
Short-term financial assets
Short-term financial assets are defined as cash term deposits with banks with an original term of three months and over.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, on demand deposits and short-term deposits with banks with an original term less
than three months.
Current asset investments
Current asset investments are valued at fair value. Changes in fair value are recognised in the income statement.
Available-for-sale financial assets
The fair value of quoted investments is based on current bid prices. Changes to fair value are recognised in the statement of
comprehensive income.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
24915.04 14 October 2016 9:27 AM Proof 12
59
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
1 Accounting Policies continued
Provisions
Provisions are recognised in the balance sheet when a Group company has a present obligation (legal or constructive) as a result of a past
event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure
required to settle the present obligation at the balance sheet date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where appropriate, the risks specific to the liability. A provision for restructuring
is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced
or has been announced to those affected by it. In accordance with the Group’s published environmental policy and applicable legal
requirements, a provision for site restoration in respect of contaminated land is recognised when land is contaminated.
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the
unavoidable cost of meeting its obligations under the contract.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
Retirement benefit obligations
The Group recognises its obligations to employee retirement benefits. The quantification of these obligations is subject to significant
estimates and assumptions regarding life expectancy, discount and inflation rates and the rate of increase in pension payments. In making
these assumptions the Group takes advice from an independent qualified actuary about which assumptions best reflect the nature of
the Group’s obligations to employee retirement benefits. These assumptions are regularly reviewed by our actuaries Cartwright Benefit
Consultants Ltd to ensure their appropriateness.
Warranty
The Group makes provisions for the warranty provided with the terms and conditions of sale to the customer based on past experience
together with specific provisions for known issues. There are quality control procedures in place to ensure that products reaching
customers are of a high standard. The technical support areas record all warranty issues in order that problems can be identified that
may affect a wider customer base. Additionally, product failures are tested thoroughly to examine technical failures and strategies are
developed to minimise and correct issues arising from that examination. The Group works closely with its suppliers to ensure a low failure
rate for components.
Intangible assets
IFRS 3 requires the identification of acquired intangible assets as part of a business combination. The methods used to value such
intangible assets require the use of estimates. Future results are impacted by the amortisation periods adopted and changes to the
estimated useful lives would result in different effects on the income statement and balance sheet.
Goodwill is not amortised but is tested annually for impairment. Tests for impairment are based on discounted cash flows and
assumptions (including discount rates, timing and growth prospects), which are inherently subjective.
Development costs
The Group undertakes development activities and the commercial viability of these activities is assessed on a continual basis. The Group
makes assumptions about the future value of the work based on past experience of similar development projects and the feedback from
the marketplace about future expectations for technological development. The Group seeks to minimise the risk of product development
failure by engaging with others to overcome technological difficulties and by regularly assessing the expectation of the market.
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, commodity price risk and security price
risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group’s financial performance. The Group may use derivative financial instruments
to hedge certain risk exposures.
60
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 1 Accounting Policies continued
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect
to the Euro, US Dollar, Australian Dollar and Arab Emirate Dirham. Foreign exchange risk arises from future commercial transactions
denominated in a currency that is not the entity’s functional currency as well as bank account balances, trade and other receivables as well
as trade and other payables denominated in currencies other than sterling. The Group has carried out an exercise to evaluate the effect of
a movement of 1% in each currency other than sterling, and the results are not significant. The risk is managed by maintaining relatively
low currency balances and selling or buying currency when required.
(ii) Price risk
The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance
sheet either as available-for-sale or at fair value through profit or loss.
The Group has investments in UK listed securities of other entities and these are publicly traded on the London Stock Exchange. The
nature of the list of investments held means the investments can go up and down in value.
(iii) Commodity price risk
The Group has an exposure to the risk of commodity price changes, in particular, metals. The Group seeks to minimise the risk by agreeing
prices with major suppliers in advance.
(iv) Interest rate risk
The Group is exposed to interest rate risk because it has cash investments and short-term financial assets which are mostly interest-
bearing. The effect of a reduction in interest rates is to reduce financial income. There are no borrowings and the Group has no exposure
to the risk of increased interest cost other than pension scheme interest cost.
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables
and committed transactions. For banks and financial institutions, only independently rated parties with a minimum Fitch rating of F1
are accepted. If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk
control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual
risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation of credit limits is regularly
monitored.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the ability to close out market
positions. Management monitors rolling forecasts of the Group’s liquidity reserve, which comprises cash and cash equivalents together
with short-term financial assets (note 16) on the basis of expected cash flow. All external current liabilities are expected to mature within
four months.
Capital risk management
The Group’s policy has been to maintain a strong capital basis in order to maintain investor, customer, creditor and market confidence. This
sustains future development of the business, safeguarding the Group’s ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders or issue new shares. From time to time the Group purchases its own shares in the market; the timing of these purchases is
dependent on market prices, to ensure such transactions are sufficiently beneficial for the company, its earnings per share and returns to
investors. The Group continues to seek to maintain the balance of these returns, while strengthening the reserves and equity position of
the company, via continued profitability and structured growth.
24915.04 14 October 2016 9:27 AM Proof 12
61
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
1 Accounting Policies continued
The Group has a long-standing policy not to utilise debt within the business, providing a robust capital structure even within the toughest
economic conditions. The Group’s significant cash resources allow such a position, but also require close management to ensure that
sufficient returns are being generated from these resources. The Group’s policy with regard to the cash resources is to ensure they
generate sufficient returns, whether by investment in business activities, such as plant and equipment, or assessing suitable opportunities
to grow the business, or the physical investment of these funds to ensure appropriate returns to investors.
The Group is able to maintain its current capital structure because there are no externally imposed capital requirements, and there were
no changes in the Group’s approach to capital management during the year.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
Fair value estimation
Financial instruments
Financial instruments that are measured at fair value are disclosed in the consolidated financial statements in accordance with the
following fair value measurement hierarchy:
i) Quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1)
ii) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices),
or indirectly (that is, derived from prices) (level 2)
iii) Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3)
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Other assets and liabilities
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value
of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest
rate that is available to the Group for similar financial instruments.
Share capital
Ordinary shares are classified as equity.
Where any Group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly
attributable incremental costs (net of income taxes), is deducted from the equity attributable to the company’s equity holders until the
shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders.
Share based payments
Senior executives of the Group receive remuneration in the form of share based payments. The fair value of the shares or share options
granted is recognised over the vesting period to reflect the value of the employee services received. The charge relating to grants to
employees of the company is recognised as an expense in the profit and loss account.
The fair value of options granted, excluding the impact of any non-market vesting conditions, is calculated using established option
pricing models. The probability of meeting non-market vesting conditions, which include profitability targets, is used to estimate the
number of share options which are likely to vest.
62
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 2 Segmental Analysis
(a) Business segments
The segmental analysis is presented on the same basis as that used for internal reporting purposes. For internal reporting FW Thorpe
is organised into eight operating segments based on the products and customer base in the lighting market – the largest business
is Thorlux, which manufactures professional lighting systems for industrial, commercial and controls markets. The recently acquired
Lightronics business is a material subsidiary, and is therefore disclosed separately. The six remaining operating segments have been
aggregated into the “other companies” reportable segment based upon their size, comprising the entities Compact Lighting Limited,
Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited and Thorlux Lighting LLC.
FW Thorpe’s chief operating decision-maker (CODM) is the Group Board. The Group Board reviews the Group’s internal reporting in order
to monitor and assess performance of the operating segments for the purpose of making decisions about resources to be allocated.
Performance is evaluated based on a combination of revenue and operating profit. Assets and liabilities have not been segmented, which
is consistent with the Group’s internal reporting.
Thorlux
£’000
Lightronics
£’000
Other
companies
£’000
Inter-
segment
adjustments
£’000
Total
continuing
operations
£’000
Year to 30 June 2016
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit
Net finance income
Share of loss of joint venture
Profit before income tax
Year to 30 June 2015
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit
Net finance income
Share of loss of joint venture
Profit before income tax
54,157
2,409
56,566
11,699
15,524
60
15,584
2,103
19,265
2,401
21,666
2,189
–
(4,870)
(4,870)
204
54,192
2,329
56,521
11,267
3,275
–
3,275
481
16,077
1,781
17,858
1,944
–
(4,110)
(4,110)
26
88,946
–
88,946
16,195
75
(1)
16,269
73,544
–
73,544
13,718
727
(50)
14,395
Inter segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc and adjustments to profit
related to stocks held within the Group that were supplied by another segment.
b) Geographical analysis
The Group’s business segments operate in four main areas: the UK, the Netherlands, the rest of Europe and the rest of the World. The home
country of the company, which is also the main operating company, is the UK.
UK
Netherlands
Europe
Other countries
2016
£’000
64,231
14,113
8,529
2,073
88,946
2015
£’000
61,317
3,899
6,239
2,089
73,544
The vast majority of assets and capital expenditure are in the UK, and cannot be split geographically in relation to the Group’s revenues.
24915.04 14 October 2016 9:27 AM Proof 12
63
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
3 Group Operating Profit
Group operating profit is stated after charging/(crediting):
Profit on sale of property, plant & equipment
Rental income from investment property
Depreciation of investment property
Depreciation of property, plant & equipment
– owned property
Operating lease rentals
– plant and machinery
– other
Amortisation of intangible assets
Research and development expenditure credit
Currency (gains)/losses recognised in income statement
Services provided by the company’s auditors
Fees payable to the company’s auditors for audit of consolidated and company financial statements
Fees payable to the company’s auditor and its associates for other services
Audit of company’s subsidiaries
Taxation advisory services
2016
£’000
(89)
(126)
68
1,455
245
239
2,277
(236)
(45)
2016
£’000
89
48
–
137
2015
£’000
(102)
(118)
–
1,300
149
207
1,484
–
234
2015
£’000
49
90
5
144
It is the Group’s practice to employ PricewaterhouseCoopers LLP on assignments additional to their statutory audit duties where their
expertise and experience with the Group are important.
Other operating income consists of the research and development expenditure credit of £236,000 (2015: £nil). This is a credit provided
by the UK government for carrying out research and development. In prior years this credit was included as a deduction from the tax
expense.
4 Other Gains – Net
Other financial assets at fair value through profit or loss (note 20)
Fair value gains
Other financial assets at fair value consist of units in a sterling cash fund.
2016
£’000
–
2015
£’000
1
64
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 5 Employee Information
The average monthly number of employees employed by the Group (including executive directors) during the year is analysed below:
Production
Sales and distribution
Administration
Total average headcount
Employment costs of all employees (including executive directors)
Wages & salaries
Social security costs
Other pension costs
2016
Number
273
135
183
591
2016
£’000
20,519
2,115
1,074
23,708
2015
Number
258
119
170
547
2015
£’000
18,794
1,912
941
21,647
Other pension costs include contributions to pension schemes and other employer’s pension related charges comprising life assurance
of £80,000 (2015: £73,000), pension administration and professional charges of £94,000 (2015: £95,000) and private pension schemes
amounting to £71,000 (2015: £77,000).
Contributions to the defined contribution section amounted to £261,000 (2015: £276,000) and contributions to other schemes
administered independently of the FW Thorpe pension schemes amounted to £327,000 (2015: £202,000).
Directors’ Emoluments
Aggregate emoluments
Contributions to money purchase schemes
Highest paid director
Total of emoluments and amounts receivable
2016
£’000
1,552
23
1,575
2016
£’000
384
2015
£’000
1,439
22
1,461
2015
£’000
370
In addition the highest paid director is a pensioner of the retirement benefits scheme with an annual pension of £138,000 (2015:
£134,000).
At 30 June 2016 retirement benefits were accruing to M Allcock and D Taylor (2015: M Allcock and D Taylor) under the defined benefit
scheme and to A M Cooper (2015: A M Cooper) under the defined contribution scheme.
Further details are provided in the directors’ remuneration report on pages 41 to 43.
24915.04 14 October 2016 9:27 AM Proof 12
65
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
6 Share Based Payment Charge
The Group operates a share based remuneration scheme, created to motivate and retain those employees responsible for the continued
success of the Group.
The Executive Share Ownership Plan (ESOP) allows for the vesting of options subject to the achievement of performance targets, being
annual growth of pre-tax Earnings per Share in excess of RPI plus 3% over a five-year period.
Rather than issue new shares, the company will utilise shares that are already held in treasury to satisfy options.
Under IFRS 2, an expense is recognised in the income statement for share based payments, calculated on the fair value at the date of
grant. The application of IFRS 2 gave rise to a charge of £72,000 (2015: £50,000) for the period.
At 30 June 2016, there were no options exercisable (2015: nil) under the ESOP.
a) Details of changes in the number of awards outstanding during the year are set out below:
Outstanding at 1 July 2015
Granted during the year
Exercised during the year
Forfeited during the year
Lapsed during the year
Outstanding at 30 June 2016
Options
1,700,000
–
–
–
–
1,700,000
Exercise price
(p/s)
124
–
–
–
–
124
The weighted average contractual life of the share based payments outstanding at the end of the year is 8.3 years.
b) Fair value calculations
The fair value of the share options granted during the year were calculated using the methods, principle assumptions and data set out
below:
Method used
Date of grant
Share price at date of grant (p/s)
Exercise price (p/s)
Expected option life (years)
Vesting period (years)
Expected volatility
Expected dividend yield
Risk free rate
Fair value per share (p/s)
Black–Scholes
24 October 2014
124
124
3 – 7
3 – 7
23% – 28%
3.02%
1.06% – 1.90%
18.61 – 21.07
Expected volatility was determined by calculating the annualised standard deviation over the daily changes in the share price, and
measured against historical share price movements over the number of years vesting period prior to the grant of the options.
Cash-settled share based payment charge
Arising from the acquisition of Lightronics Participaties B.V., the Group entered into a cash-settled share based payment arrangement
with certain employees of Lightronics Participaties B.V. Under this arrangement, the Group is committed to purchase the 43% of the share
appreciation rights held by these employees, between the third and sixth anniversaries of the acquisition, calculated by a pre-determined
earnings multiple used to value the initial investment.
Under IFRS 2, an expense is recognised in the income statement for share based payments, calculated on the fair value at the date of
grant. The application of IFRS 2 gave rise to a charge of £122,000 (2015: £26,000) for the period. The total liability at 30 June 2016 was
£148,000 (2015: £26,000).
The fair value of the share based payment was calculated by estimating the additional payment due to the relevant employees, assuming
an earnings growth of 3% per annum, and using the pre-determined earnings multiple.
66
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 7 Finance Income
Finance income
Current assets
Interest receivable
Non-current assets
Fair value adjustments on loans
Dividend income on available-for-sale financial assets
Net rental income
Finance cost
Current liabilities
Interest payable
Share appreciation right distributions
Net finance income
2016
£’000
2015
£’000
396
45
177
84
702
3
624
627
75
358
65
149
155
727
–
–
–
727
The share appreciation right distributions represents payments made in relation to the acquisition of Lightronics Participaties B.V. On
acquisition, share appreciation rights were granted over 35% of the share capital of Lightronics Participaties B.V., of which 57% are held
by external investors. entitling them to dividends. The Group has accounted for this distribution of dividends from Lightronics Participaties
B.V. to the external investors as a finance expense.
8 Income Tax Expense
Analysis of income tax expense in the year:
Current tax
Current tax on profits for the year
Adjustments in respect of prior years
Total current tax
Deferred tax
Origination and reversal of temporary differences
Total deferred tax
Income tax expense
2016
£’000
3,726
(268)
3,458
(188)
(188)
3,270
2015
£’000
2,807
(184)
2,623
68
68
2,691
The tax assessed for the year is higher (2015: lower) than the standard rate of corporation tax in the UK of 20.00% (2015: 20.75%). The
differences are explained below:
Profit before income tax
Profit on ordinary activities multiplied by the standard rate in the UK of 20.00% (2015: 20.75%)
Effects of:
Expenses not deductible for tax purposes
Accelerated tax allowances and other timing differences
Adjustments in respect of prior years
Foreign profit taxed at higher rate
Other
Tax charge
The effective tax rate was 20.1% (2015: 18.7%).
24915.04 14 October 2016 9:27 AM Proof 12
2016
£’000
16,269
3,254
349
(158)
(268)
97
(4)
3,270
2015
£’000
14,395
2,987
72
(181)
(184)
21
(24)
2,691
67
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
8 Income Tax Expense continued
A change to the UK corporation tax rate was announced in the Chancellor’s Budget on 16 March 2016. The change announced is to reduce
the main rate to 17% from 1 April 2020. Changes to reduce the UK corporation tax rate to 19% from 1 April 2017 and to 18% from 1 April 2020
had already been substantively enacted on 26 October 2015.
As the change to 17% had not been substantively enacted at the balance sheet date its effects are not included in these financial
statements. The overall effect of that change, if it had applied to the deferred tax balance at the balance sheet date, would be to reduce
the deferred tax liability by an additional £68,000 and increase the tax expense for the period by £23,000.
9 Dividends
Dividends paid during the year are outlined in the tables below:
Dividends paid (pence per share)
Final dividend
Special dividend
Interim dividend
Total
2016
2.55
2.00
1.20
5.75
2015
2.20
1.50
1.10
4.80
A final dividend in respect of the year ended 30 June 2016 of 2.85p per share, amounting to £3,297,000, is to be proposed at the Annual
General Meeting on 17 November 2016 and, if approved, will be paid on 24 November 2016 to shareholders on the register on 28 October
2016. The ex-dividend date is 27 October 2016. These financial statements do not reflect this dividend payable.
Dividends proposed (pence per share)
Final dividend
Special dividend
Dividends paid
Final dividend
Special dividend
Interim dividend
Total
Dividends proposed
Final dividend
Special dividend
2016
2.85
–
2016
£’000
2,950
2,314
1,387
6,651
2016
£’000
3,297
–
2015
2.55
–
2015
£’000
2,545
1,735
1,272
5,552
2015
£’000
2,950
–
68
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 10 Intangible Assets
Group 2016
Cost
At 1 July 2015
Currency translation
Additions
Write-offs and transfers
At 30 June 2016
Accumulated amortisation
At 1 July 2015
Currency translation
Charge for the year
Write-offs and transfers
At 30 June 2016
Net book amount
At 30 June 2016
Group 2015
Cost
At 1 July 2014
Additions
Acquisition of a subsidiary
Write-offs
At 30 June 2015
Accumulated amortisation
At 1 July 2014
Charge for the year
Write-offs
At 30 June 2015
Net book amount
At 30 June 2015
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand
name
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
9,063
909
–
–
9,972
600
–
–
–
600
5,797
28
1,681
(1,052)
6,454
1,947
1
1,882
(1,052)
2,778
1,583
208
–
–
1,791
356
37
182
–
575
9,372
3,676
1,216
657
79
–
–
736
198
20
97
–
315
421
1,039
14
251
(109)
1,195
901
1
86
(109)
879
316
150
–
–
–
150
120
–
30
–
150
182
–
–
–
182
–
–
–
–
–
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand
name
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
3,503
–
5,560
–
9,063
600
–
–
600
4,961
1,542
122
(828)
5,797
1,491
1,284
(828)
1,947
311
–
1,272
–
1,583
311
45
–
356
8,463
3,850
1,227
174
–
483
–
657
174
24
–
198
459
907
60
72
–
1,039
800
101
–
901
138
150
–
–
–
150
90
30
–
120
30
182
–
–
–
182
–
–
–
–
Total
£’000
18,471
1,238
1,932
(1,161)
20,480
4,122
59
2,277
(1,161)
5,297
Total
£’000
10,188
1,602
7,509
(828)
18,471
3,466
1,484
(828)
4,122
Write-offs relate to development assets where no further economic benefits will be obtained.
–
182
15,183
182
14,349
Amortisation and impairment of £2,277,000 (2015: £1,484,000) is included in the administrative expenses.
The Group tests intangible assets annually for impairment, or more frequently if there are indications of impairment. A discounted cash
flow analysis is computed to compare the discounted estimated future operating cash flows to the net carrying value of the goodwill and
other intangible assets for each operating segment or business as appropriate.
24915.04 14 October 2016 9:27 AM Proof 12
69
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
10 Intangible Assets continued
The tests are based on the following assumptions:
• Cash flows for the 12 months are based upon the Group’s annual budget;
• Cash flows beyond the budget period, typically up to five years, are based on the annual budget cash flows with a growth rate of 2%;
• The estimated cash flows are discounted using a pre-tax discounted rate based upon the Group’s estimated weighted average cost of
capital of 10%.
Any impairments identified as a result of the analysis are expensed to the income statement. The test is dependent on management
estimates and judgements, in particular in relation to the forecasting of future cash flows, and the discount rate applied to these cash flows.
The Group performed various sensitivity analyses which involved reducing future cash flows by up to 25%, reducing terminal growth rates
by up to five percentage points, or increasing pre-tax discount rates by up to 100 bps. The results of these analyses showed that, despite
significantly lower post-tax operating cash flows, or increased pre-tax discount rates, the carrying value of goodwill and other intangible
assets continued to exceed their value in use.
Company 2016
Cost
At 1 July 2015
Additions
Write-offs and transfers
At 30 June 2016
Accumulated amortisation
At 1 July 2015
Charge for the year
Write-offs and transfers
At 30 June 2016
Net book amount
At 30 June 2016
Company 2015
Cost
At 1 July 2014
Additions
Write-offs
At 30 June 2015
Accumulated amortisation
At 1 July 2014
Charge for the year
Write-offs
At 30 June 2015
Net book amount
At 30 June 2015
Goodwill
£’000
Development
costs
£’000
Software
£’000
Patents
£’000
5,023
1,330
(979)
5,374
1,737
1,641
(979)
2,399
803
220
(80)
943
743
61
(85)
719
150
–
–
150
120
30
–
150
600
–
–
600
600
–
–
600
–
600
–
–
600
600
–
–
600
–
4,415
1,348
(740)
5,023
1,342
1,135
(740)
1,737
3,286
751
52
–
803
648
95
–
743
60
150
–
–
150
90
30
–
120
30
Fishing
rights
£’000
182
–
–
182
–
–
–
–
Total
£’000
6,758
1,550
(1,059)
7,249
3,200
1,732
(1,064)
3,868
Total
£’000
6,098
1,400
(740)
6,758
2,680
1,260
(740)
3,200
182
–
–
182
–
–
–
–
182
3,558
Write-offs relate to development assets where no further economic benefits will be obtained.
2,975
224
–
182
3,381
Goodwill
£’000
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
For development costs, the Group capitalises employee costs and directly attributable material costs necessary to design, construct and
test new and improved product ranges and technology. These costs are only capitalised where they meet all the criteria set out in IAS 38.
Where development costs relate to products or technologies that are not expected to generate future economic benefits, do not meet the
requirements of IAS 38 or relate to research, they are charged to the income statement.
70
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 11 Property, Plant and Equipment
Cost
At 1 July 2015
Currency translation
Additions
Disposals
Transfers
At 30 June 2016
Accumulated depreciation
At 1 July 2015
Currency translation
Charge for the year
Disposals
Transfer
At 30 June 2016
Net book amount
At 30 June 2016
Freehold
land and
buildings
£’000
11,079
–
462
–
–
11,541
2,358
–
209
–
–
2,567
Group
Plant and
equipment
£’000
16,585
20
2,074
(349)
80
18,410
11,472
2
1,246
(316)
80
12,484
Freehold
land and
buildings
£’000
Company
Plant and
equipment
£’000
5,403
–
464
–
–
5,867
1,618
–
100
–
–
1,718
13,549
–
1,285
(225)
5
14,614
9,486
–
889
(197)
60
10,238
Total
£’000
27,664
20
2,536
(349)
80
29,951
13,830
2
1,455
(316)
80
15,051
Total
£’000
18,952
–
1,749
(225)
5
20,481
11,104
–
989
(197)
60
11,956
8,974
5,926
14,900
4,149
4,376
8,525
Freehold land which was not depreciated at 30 June 2016 amounted to £1,033,000 (2015: £1,033,000) (Group and company).
Cost
At 1 July 2014
Additions
Acquisition of a subsidiary
Transfer to investment property
Disposals
At 30 June 2015
Accumulated depreciation
At 1 July 2014
Charge for the year
Transfer to investment property
Disposals
At 30 June 2015
Net book amount
At 30 June 2015
Freehold
land and
buildings
£’000
10,910
1,438
–
–
(1,269)
11,079
2,306
203
–
(151)
2,358
Group
Plant and
equipment
£’000
15,979
1,760
100
–
(1,254)
16,585
11,495
1,097
–
(1,120)
11,472
Freehold
land and
buildings
£’000
10,910
50
–
(5,557)
–
5,403
2,306
98
(786)
–
1,618
Company
Plant and
equipment
£’000
12,649
1,285
–
–
(385)
13,549
8,952
849
–
(315)
9,486
Total
£’000
26,889
3,198
100
–
(2,523)
27,664
13,801
1,300
–
(1,271)
13,830
Total
£’000
23,559
1,335
–
(5,557)
(385)
18,952
11,258
947
(786)
(315)
11,104
8,721
5,113
13,834
3,785
4,063
7,848
24915.04 14 October 2016 9:27 AM Proof 12
71
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
12 Commitments
(a) Capital commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:
Property, plant and equipment
Group
Company
2016
£’000
84
2015
£’000
427
2016
£’000
77
2015
£’000
408
(b) Operating lease commitments
The Group leases premises under non-cancellable operating lease agreements. The lease terms are between one and four years (2015: one
and four years), and the lease agreements are renewable at the end of the lease period at market rate.
Additional information
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Within one year
Within two to five years
Over five years
Group
Company
Land and
buildings
2016
£’000
415
528
–
943
Land and
buildings
2015
£’000
200
399
–
599
Land and
buildings
2016
£’000
9
3
–
12
Land and
buildings
2015
£’000
18
2
–
20
13 Financial Instruments by Category
All financial instruments measured at fair value are categorised as level 2 in the fair value measurement hierarchy, whereby the fair value is
determined by using valuation techniques, except for £3,737,000 (2015: £3,407,000) of fixed rate listed investments included in available-
for-sale and other financial assets at fair value through profit or loss that are classified as level 1. The valuation techniques for level 2
instruments use observable market data where it is available, for example quoted market prices, and rely less on estimates.
The accounting policies for financial instruments have been applied to the line items below:
Group
30 June 2016
Assets as per balance sheet
Loans and receivables
Available-for-sale financial assets
Other financial assets at fair value through the profit and loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Loans and
receivables
£’000
Available-
for-sale
£’000
4,980
–
–
20,567
14,910
18,295
58,752
–
3,348
–
–
–
–
3,348
Assets at
fair value
through
the profit
and loss
£’000
–
–
389
–
–
–
389
Total
£’000
4,980
3,348
389
20,567
14,910
18,295
62,489
72
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 13 Financial Instruments by Category continued
Group
30 June 2015
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Company
30 June 2016
Assets as per balance sheet
Loans and receivables
Available-for-sale financial assets
Other financial assets at fair value through the profit and loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Company
30 June 2015
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
The above analysis excludes prepayments.
Loans and
receivables
£’000
Available-
for-sale
£’000
4,760
–
–
18,586
9,358
19,176
51,880
–
3,018
–
–
–
–
3,018
Loans and
receivables
£’000
Available-
for-sale
£’000
4,980
–
–
22,247
14,910
16,471
58,608
–
3,348
–
–
–
–
3,348
Loans and
receivables
£’000
Available-
for-sale
£’000
4,760
–
–
17,644
9,358
18,868
50,630
–
3,018
–
–
–
–
3,018
Assets at
fair value
through
the profit
and loss
£’000
–
–
389
–
–
–
389
Assets at
fair value
through
the profit
and loss
£’000
–
–
389
–
–
–
389
Assets at
fair value
through
the profit
and loss
£’000
–
–
389
–
–
–
389
Total
£’000
4,760
3,018
389
18,586
9,358
19,176
55,287
Total
£’000
4,980
3,348
389
22,247
14,910
16,471
62,345
Total
£’000
4,760
3,018
389
17,644
9,358
18,868
54,037
24915.04 14 October 2016 9:27 AM Proof 12
73
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
13 Financial Instruments by Category continued
Liabilities as per balance sheet
Trade and other payables (excluding statutory liabilities)
Deferred consideration
Financial liabilities are measured at amortised cost.
Group
Company
30 June
2016
£’000
14,372
4,472
30 June
2015
£’000
12,721
3,838
30 June
2016
£’000
12,006
4,472
30 June
2015
£’000
10,670
3,838
The Group and company did not have derivative financial instruments at 30 June 2016 or 30 June 2015. All assets and liabilities above are
considered to be at fair value.
14 Investment Property
Cost
At 1 July 2015
Additions
Disposals
Transfers
At 30 June 2016
Accumulated depreciation
At 1 July 2015
Charge for the year
Disposals
Transfer
At 30 June 2016
Net book amount
At 30 June 2016
At 30 June 2015
Freehold
land and
buildings
£’000
1,009
–
–
–
1,009
–
58
–
–
58
Group
Other
£’000
1,162
28
–
–
1,190
–
10
–
–
10
Freehold
land and
buildings
£’000
6,601
–
(4)
75
6,672
736
176
–
24
936
Total
£’000
2,171
28
–
–
2,199
–
68
–
–
68
Company
Other
£’000
1,162
28
–
–
1,190
–
–
–
–
–
Total
£’000
7,763
28
(4)
75
7,862
736
176
0
24
936
951
1,009
1,180
1,162
2,131
2,171
5,736
5,865
1,190
1,162
6,926
7,027
The following amounts have been recognised in the income statement:
Rental income
Direct operating expenses arising from investment properties
that generate rental income
Group
Company
2016
£’000
126
2015
£’000
118
2016
£’000
394
2015
£’000
373
(96)
(18)
(205)
(105)
The investment property and land, for the Group, consists of property held for investment purposes, a property with land and fishing
rights by the River Wye, and land designated for woodland in Monmouthshire.
Investment property of £1,318,000 (2015: £1,288,000) is freehold land and therefore not depreciated; the property element includes
accumulated depreciation of £337,000 (2015: £269,000) which relates to the property occupied by Mackwell Electronics Ltd. At the date
of disposal of this business, the cumulative value of depreciation of the property occupied by Mackwell Electronics Ltd was £269,000. The
associated fishing rights for the property by the River Wye are included in intangible assets.
A fair value exercise was undertaken in August 2014 of the land by the River Wye and the land in Monmouthshire which has resulted in a
valuation of £1.5m, which is greater than the carrying value of those specific investment properties.
The company’s investment properties consist of land and buildings used by subsidiaries in their normal course of business. The company
receives rental income from the subsidiaries for the use of these premises and incurs amortisation costs.
Each investment property generates rental income.
74
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 15 Available for sale Financial Assets
Group and company
Beginning of year
Net additions/(disposals)
Revaluation
2016
£’000
3,018
404
(74)
3,348
2015
£’000
3,441
(271)
(152)
3,018
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group commits to purchase
or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets are
subsequently carried at fair value.
There were no impairment provisions on available-for-sale financial assets in 2016 or 2015.
Available-for-sale financial assets comprise listed equity in the UK, and are almost entirely denominated in UK Pounds.
None of these assets is either past due or impaired.
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial
assets is impaired. For equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security
below its cost is evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative
loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss – is removed from equity and recognised in the Consolidated Income Statement. Impairment losses
recognised in the Consolidated Income Statement on equity instruments are not reversed through the Consolidated Income Statement.
16 Short-term Financial Assets
Group and company
Beginning of year
Net additions/(disposals)
2016
£’000
9,358
5,552
14,910
2015
£’000
15,638
(6,280)
9,358
The short-term financial assets consist of term cash deposits in sterling with an original term in excess of three months.
The banks where the deposits are held are rated “A” by Fitch, with a specific rating of “F1” for short-term funds.
17 Cash and Cash Equivalents
Cash at bank and in hand
Group
Company
2016
£’000
18,295
2015
£’000
19,176
2016
£’000
16,471
2015
£’000
18,868
The banks where the funds are held are rated “A” by Fitch, with a specific rating of “F1” for short-term funds.
18 Inventories
Raw materials
Work in progress
Finished goods
Group
Company
2016
£’000
12,806
1,882
4,175
18,863
2015
£’000
10,914
3,363
3,485
17,762
2016
£’000
5,457
1,660
4,194
11,311
2015
£’000
5,588
2,726
3,503
11,817
The cost of inventories recognised as an expense and included in cost of sales amounted to £38,052,000 (2015: £30,111,000). The amount
of write-down in inventory to net realisable value is £672,000 (2015: £888,000)
24915.04 14 October 2016 9:27 AM Proof 12
75
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
19 Trade and Other Receivables
Current
Trade receivables
Other receivables
Prepayments and accrued income
Amounts owed by subsidiaries
Total
Group
Company
2016
£’000
19,879
688
1,347
–
21,914
2015
£’000
18,181
405
1,112
–
19,698
2016
£’000
12,882
674
741
8,691
22,988
2015
£’000
11,924
403
525
5,317
18,169
Amounts owed by subsidiaries are unsecured, interest free and have no fixed date for repayment.
Trade receivables past due date not provided
Group
Company
2016
£’000
995
2015
£’000
1,873
2016
£’000
786
2015
£’000
582
A significant proportion of the amounts past due date were settled shortly after the end of the financial year, and taken together with the
credit insurance policy and good credit history, the directors consider that there is no impairment and the trade receivables are therefore
stated at their fair value, which equals their book value.
Provisions are made for bad debts when an undisputed debt is three months past due date or earlier if an adverse event occurs. A
significant proportion of the trade receivables are insured. The policy covers 90% of the debt in the event of a claim for default. The bad
debt provision includes the remaining 10% of the default in the event of a potential claim. No bad debt provision is made in respect of
trade receivables from Government departments or agencies. At 30 June 2016 the bad debt provision for the Group amounted to £78,000
(2015: £69,000) and for the company £4,000 (2015: £11,000).
During the year the following amounts were written off:
Bad debts written off
Bad debts recovered
Net bad debt expense
Group
Company
2016
£’000
15
(8)
7
2015
£’000
33
(6)
27
2016
£’000
7
–
7
2015
£’000
9
(3)
6
At 30 June 2016, trade receivables were due to the Group and company in the following currency denominations:
Due in £ Sterling
Due in € EURO
Due in UAE Dirham
Due in Australian Dollars
Due in $ United States Dollars
Group
Company
2016
£’000
14,583
4,095
339
695
167
19,879
2015
£’000
13,892
3,561
242
486
–
18,181
2016
£’000
10,800
1,220
–
695
167
12,882
2015
£’000
10,430
1,008
–
486
–
11,924
The other assets within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group
does not hold any collateral as security.
76
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 20 Other Financial Assets at Fair Value through Profit and Loss
The Group and company have units in a sterling cash fund. At 30 June 2016 this amounted to £389,000 (2015: £389,000).
Sterling cash fund
21 Trade and Other Payables
Current liabilities
Trade payables
Other payables
Social security and other taxes
Accruals and deferred income
Amounts owed to subsidiaries
Non-current liabilities
Other payables
2016
£’000
389
2015
£’000
389
2016
£’000
7,920
1,334
2,328
5,118
–
16,700
4,619
4,619
Group
Company
2015
£’000
8,840
844
1,934
3,038
–
14,656
3,838
3,838
2016
£’000
4,502
387
1,498
3,852
3,265
13,504
4,619
4,619
2015
£’000
5,347
642
1,392
1,936
2,745
12,062
3,838
3,838
Amounts owed to subsidiaries are unsecured, interest free and have no fixed date of repayment. Non-current liabilities is a commitment to
purchase the outstanding share appreciation rights in the subsidiary, Lightronics Participaties B.V.
22 Provisions for Liabilities and Charges
At 1 July 2015
Transfer from accruals and deferred income
Additions
Utilisation
At 30 June 2016
Analysis of total provisions
Non-current
Total
WEEE
provision
£’000
102
–
–
–
102
Group
Warranty
provision
£’000
–
518
525
(57)
986
WEEE
provision
£’000
102
–
–
–
102
Company
Warranty
provision
£’000
–
304
101
–
405
Group
Company
2015
£’000
102
102
2016
£’000
507
507
Total
£’000
102
518
525
(57)
1,088
2016
£’000
1,088
1,088
Total
£’000
102
304
101
–
507
2015
£’000
102
102
WEEE provision
A potential liability exists for the future cost of disposal of products under the WEEE legislation for a transitional period between the
adoption of the WEEE legislation in the European Union in August 2005 and the effective date in the UK of 1 July 2007.
From 1 July 2007 the Group has followed Regulation 9 of the legislation and amended the terms of sale to its customers so that the
customer is responsible for the actual costs of WEEE at the time of disposal.
Although the timescale of the utilisation of this provision cannot be predicted with certainty, it is expected that it will not be utilised
before 30 June 2017.
Warranty provision
The provision for warranty is in accordance with the accounting policy described in note 1.
24915.04 14 October 2016 9:27 AM Proof 12
77
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
23 Deferred Income Tax
Deferred income tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
The net movement on the deferred income tax account is as follows:
Beginning of year
Income statement charge/(credit)
Tax credited directly to equity
Acquired due to purchase of subsidiary
Currency translation
End of year
Group
Company
2015
£’000
17
(1,021)
(1,004)
2016
£’000
–
(600)
(600)
Group
Company
2015
£’000
(887)
(68)
30
(7)
(72)
(1,004)
2016
£’000
(835)
179
56
–
–
(600)
2016
£’000
27
(799)
(772)
2016
£’000
(1,004)
188
60
–
(16)
(772)
2015
£’000
–
(835)
(835)
2015
£’000
(842)
(23)
30
–
–
(835)
The movement in Group deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of
balances within the same tax jurisdiction, is as follows:
Deferred tax assets
At 1 July 2014
Charged to the income statement
Discontinued operations
Charged directly to equity
At 1 July 2015
Credited to the income statement
Charged directly to equity
At 30 June 2016
Deferred tax liabilities
At 1 July 2014
Charged to the income statement
Charged directly to equity
Acquired due to purchase of subsidiary
At 1 July 2015
Charged/(credited) to the income statement
Credited directly to equity
Currency translation
At 30 June 2016
Accelerated tax
depreciation
£’000
36
(12)
(7)
–
17
11
(1)
27
Accelerated tax
depreciation
£’000
70
22
–
72
164
(104)
(4)
16
72
Retirement
benefit
obligations
£’000
–
–
–
–
–
–
–
–
Research &
development
(£’000)
694
34
–
–
728
10
(37)
–
701
Other
£’000
–
–
–
–
–
–
–
–
Fair value &
other timing
differences
(£’000)
159
–
(30)
–
129
(83)
(20)
–
26
Total
£’000
36
(12)
(7)
–
17
11
(1)
27
Total
£’000
923
56
(30)
72
1,021
(177)
(61)
16
799
78
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 23 Deferred Income Tax continued
The deferred income tax credited/(charged) to equity during the year is as follows:
Deferred tax credited/(charged) to equity
Tax on revaluation for sale of financial assets
Impact of deferred tax rate change
Group
Company
2016
£’000
14
46
60
2015
£’000
30
–
30
2016
£’000
14
42
56
2015
£’000
30
–
30
24 Earnings Per Share
Basic and diluted earnings per share for profit attributable to equity holders of the company
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average
number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company and held as treasury shares.
Basic
Weighted average number of ordinary shares in issue
Profit attributable to equity holders of the company (£’000)
Basic earnings per share (pence per share) continuing operations
Basic earnings per share (pence per share) discontinued operations
Basic earnings per share (pence per share) total
Diluted
Weighted average number of ordinary shares in issue (fully diluted)
Profit attributable to equity holders of the company (£’000)
Diluted earnings per share (pence per share) continuing operations
Diluted earnings per share (pence per share) discontinued operations
Diluted earnings per share (pence per share) total
25 Share Capital
Allotted and fully paid
118,935,590 ordinary shares of 1p each (2015: 118,935,590 ordinary shares of 1p each)
The ordinary shareholders each have one vote per share.
Movements in treasury shares included in share capital
Share capital at 1 July and 30 June
Number of shares held in treasury at 30 June
2016
115,675,590
12,999
11.24
–
11.24
2016
115,938,805
12,999
11.21
–
11.21
2015
115,675,590
11,451
10.12
(0.22)
9.90
2015
115,706,334
11,451
10.11
(0.22)
9.89
Group and Company
2016
£’000
2015
£’000
1,189
1,189
Group and Company
2016
£’000
2015
£’000
33
3,260,000
33
3,260,000
There were no shares issued during the year (2015: nil). There are 1,700,000 (2015: 1,700,000) share options outstanding at the year end.
24915.04 14 October 2016 9:27 AM Proof 12
79
Stock Code: TFW www. fwthorpe.co.ukFinancials
Notes to the
Financial Statements
For the year ended 30 June 2016
26 Other Reserves
Share premium account
Capital redemption reserves
Foreign currency translation reserve
Group
Company
2016
£’000
656
137
1,606
2,399
2015
£’000
656
137
–
793
2016
£’000
656
137
–
793
2015
£’000
656
137
–
793
In order to improve the visibility of the financial statements, a foreign currency translation reserve has been created to show the value of
translation gains in the statement of other comprehensive income.
27 Cash Generated from Operations
Group
Company
Cash generated from continuing operations
Profit before income tax
Depreciation charge
Amortisation/impairment of intangibles
Profit on disposal of property, plant and equipment
Finance (income)/expense
Retirement benefit contributions in excess of current and past service charge
Share of loss from equity accounted investment
Share based payment charge
Research and development expenditure (credit)/charge
Effects of exchange rate movements
Changes in working capital
– Inventories
– Trade and other receivables
– Payables and provisions
Cash generated from continuing operations
The cash generation from discontinued operations is as follows:
2016
£’000
16,269
1,523
2,277
(89)
(75)
(190)
1
193
(236)
182
(1,128)
(2,094)
2,313
18,946
2015
£’000
14,395
1,288
1,484
(104)
(727)
(229)
50
76
–
(28)
(1,707)
(3,659)
2,215
13,054
Cash generated from discontinued operations
Profit before income tax
Depreciation charge
Finance income
Changes in working capital
– Inventories
– Trade and other receivables
– Trade and other payables
Cash generated from discontinued operations
Total cash generated from operations
Continuing operations
Discontinued operations
Total cash generated from operations
2016
£’000
16,040
1,164
1,732
(57)
(4,346)
(190)
1
46
(165)
182
506
(3,057)
1,881
13,737
2016
£’000
–
–
–
–
–
–
–
2016
£’000
18,946
–
18,946
2015
£’000
13,272
1,049
1,260
(88)
391
(2,563)
(229)
141
76
1
(133)
(3,574)
1,291
10,894
2015
£’000
(233)
12
7
84
189
202
261
2015
£’000
13,054
261
13,315
80
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 28 Related Party Transactions
The following amounts relate to transactions between the company and its related undertakings:
2016
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting LLC
Lightronics Participaties B.V.
2015
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting LLC
Lightronics Participaties B.V.
Balances due to and from the company by related entities were as follows:
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting LLC
Lightronics Participaties B.V.
Total
Purchases
of goods
£’000
158
552
596
–
940
–
19
Purchases
of goods
£’000
135
507
386
–
753
–
–
Sales
of goods
£’000
51
63
373
–
1,527
385
10
Sales
of goods
£’000
74
52
351
–
1,683
159
–
Sales
of services
£’000
48
38
33
25
64
–
–
Sales
of services
£’000
4
1
7
2
19
–
–
Dividends
paid to
company
£’000
–
500
50
750
–
–
2,067
Dividends
paid to
company
£’000
–
500
15
750
–
–
–
Amounts due to related
party at 30 June
Amounts due from
related party at 30 June
2016
£’000
(51)
(813)
(510)
(1,675)
(216)
–
–
(3,265)
2015
£’000
(32)
(981)
(146)
(1,533)
(53)
–
–
(2,745)
2016
£’000
1,339
15
128
10
4,243
1,101
1,708
8,544
2015
£’000
1,645
–
68
–
3,104
500
–
5,317
Trading balances arise from transactions of goods and services carried out under normal commercial terms.
Cash resources are managed centrally by the company and result in balances owed to and from the company when cash is transferred.
The key management personnel are the Group Board directors; their interests are disclosed in the directors’ remuneration report on pages
41 to 43. There are 6 employees who are related parties (2015: 6). Total remuneration for the period was £252,000 (2015: £218,000).
24915.04 14 October 2016 9:27 AM Proof 12
81
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
28 Related Party Transactions continued
Mackwell Electronics Limited is a related party because there is a connection between a director of the company, C M Brangwin, and
N A Brangwin who is a director of Mackwell Electronics Limited. During the year the company sold goods to Mackwell amounting to
£nil (2015: £3,000), purchased goods amounting to £1,453,000 (2015: £2,152,000), and sold services of £nil (2015: £nil). At the year end
there were trade balances due to Mackwell Electronics Limited of £102,000 (2015: £332,000) and £12,000 due from Mackwell Electronics
Limited (2015: £1,000). The company is owed £950,000 (2015: £950,000) in respect of the loan notes issued to the company as part of the
sale agreement (note 29), plus accrued interest of £65,000 (2015: £51,000) at the balance sheet date. The company owns the premises
occupied by Mackwell Electronics Limited and rent is charged of £102,000 per annum (2015: £102,000). The rent is comparable to
commercial rents for similar buildings in the area.
N A Brangwin is a related party because there is a connection between a director of the company, C M Brangwin, and N A Brangwin. The
company is owed £300,000 in respect of a loan made to N A Brangwin at the same time as the sale of Mackwell Electronics. The loan is
secured with shares in FW Thorpe with a current value in excess of the loan amount. At 30 June 2016 there was accrued interest due to the
company of £10,000 (2015: £7,000).
29 Loan Notes
Mackwell Electronics Limited
Following the disposal of Mackwell Electronics Limited on 2 December 2011, the Group acquired loan notes of £2,000,000 as part of the
consideration. The loan notes are repayable on 2 December 2016 and attract two different rates of interest: £1,625,000 at 1% over the Bank
of England base rate and £375,000 at 4% over the Bank of England base rate.
No repayment was received during the year, thus the balance due at 1% over the Bank of England base rate is £950,000 (2015: £950,000).
The balance due at the higher interest rate of 4% above the Bank of England base rate is £nil (2015: £nil).
The outstanding loan note tranche at 1% over the Bank of England base rate of £950,000 has been subject to a fair value adjustment in
respect to the interest rate. The carrying value has been adjusted to reflect a commercial interest rate of 4.2% over the Bank of England
base rate, which is considered to be a rate that Mackwell Electronics Limited would incur in the external market. With the loan notes due
for repayment on 2 December 2016, the fair value adjustment has now fully unwound as the fair value of that tranche of loan notes is
considered to be £950,000.
Sugg Lighting Limited
Following the disposal of Sugg Lighting Limited on 6 February 2015 the Group acquired loan notes of £1,634,000 secured on the freehold
property. As at 30 June 2016, the outstanding value of these loan notes was £1,576,920 (2015: £1,588,336).
The loan notes to Sugg Lighting Limited are secured on the freehold property and repayable in monthly instalments to be fully repaid ten
years from drawdown on 6 February 2015. The interest rate applied to these loan notes is 3% over Bank of England base rate.
Lightronics Participaties B.V.
Part of the acquisition of Lightronics Participaties B.V. included partial funding of the 35% share appreciation rights held by existing
shareholders and management. This was achieved by the issue of a loan of €4,200,000, of which €1,000,000 were repaid immediately
after the completion of the acquisition. At the date of the financial statements, the loan notes balance was €2,952,000 (2015: €3,200,000)
equating to £2,453,000 (2015: £2,267,000) at the end of year exchange rate. The loan notes are repayable on or before the sixth
anniversary (1 April 2021) and attract an interest rate of 4%.
82
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 30 Pension Scheme
The Group operates a funded hybrid pension scheme for employees in the UK. The scheme is approved by the Inland Revenue under
Chapter 1 Part XIV of the Income and Corporation Taxes Act 1988. Membership is contracted in to the second state pension. The basis of
the Group’s hybrid pension scheme is to provide benefits to members based on the following:
• For service prior to 1 October 1995, the benefits provided are defined benefit in nature.
• For service from 1 October 1995, the benefits provided have two elements depending on the date that the member joined the pension
scheme.
• For members joining before 1 October 1995, benefits provided are the higher of their defined contribution pension and their defined
benefit pension.
• For members joining on or after 1 October 1995, benefits provided are defined contribution in nature.
The contributions of the pure defined contribution, the defined benefit underpin and pure defined benefit elements are paid into one
pension scheme, where the contributions and assets are segregated and ring-fenced from each other.
For the defined benefit underpin element of the scheme, each member is tested to see whether the pension on a defined contribution or
defined benefit basis is higher. The liabilities shown in the pensions note are based on the greater of the two liabilities for each member,
which in almost all cases is the defined benefit liability. For the service cost, again, tests are performed to see which is the higher for each
member out of the company’s share of the defined contribution payments or the company’s share of accruing benefits on a defined
benefit basis. The higher of these two figures for each member is then used to give the total service cost; again the defined benefit cost is
the higher for the vast majority of members.
The assets of the scheme are held separately from the assets of the Group, being invested in Managed Funds. Contributions by the
Group to the scheme during the year ended 30 June 2016 amounted to £691,000 (2015: £705,000). Contributions are determined by an
independent qualified actuary on the basis of triennial valuations using the Project Unit Method.
The date of the most recent actuarial valuation was 30 June 2015, and at that date the value of the fund was £31,704,000. This was
sufficient to cover 102% of the value of the benefits accrued to members after allowing for future increases in earnings. In arriving at the
actuarial valuation, the following assumptions were adopted:
Price inflation
Salary increases
Discount rate
Revaluation for deferred pensioners
3.40%
5.05%
3.60%
2.40%
The figures at 30 June 2015 have been updated as at the balance sheet dates in order to assess the additional disclosures required under
IAS 19 as at 30 June 2016 by an independent qualified actuary using the following major assumptions:
Price inflation
Salary increases
Discount rate
Revaluation for deferred pensioners
Pension increases in payment of 5% pa or RPI if less
Pension increases in payment of 2.55% pa or RPI if less
Life expectancy at age 65 – men
Life expectancy at age 65 in 20 years – men
Life expectancy at age 65 – women
Life expectancy at age 65 in 20 years – women
2016
3.00%
3.00%
2.90%
2.00%
2.90%
2.00%
23.0 years
24.0 years
25.0 years
26.0 years
2015
3.40%
3.40%
3.80%
2.40%
3.30%
2.20%
23.0 years
24.4 years
24.9 years
26.4 years
2014
3.50%
3.50%
4.30%
2.50%
3.30%
2.20%
22.9 years
24.3 years
24.8 years
26.3 years
2013
3.40%
3.50%
4.60%
2.50%
3.30%
2.25%
24.2 years
26.2 years
26.6 years
28.5 years
2012
2.80%
4.55%
4.40%
2.05%
2.75%
2.10%
22.5 years
24.4 years
24.9 years
26.8 years
24915.04 14 October 2016 9:27 AM Proof 12
83
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
30 Pension Scheme continued
The statement of financial position figures required under IAS 19 are as follows:
30 June 2016
30 June 2015
30 June 2014
30 June 2013
30 June 2012
Expected
long-term
rate of return
£’000
Value
£’000
2.90% 14,968
2.90% 19,311
1,237
2.90%
Expected
long-term
rate of return
£’000
n/a
3.80%
n/a
35,516
(33,731)
1,785
Expected
long-term
rate of return
£’000
n/a
4.30%
n/a
Value
£’000
13,696
16,486
1,522
31,704
(28,824)
2,880
Expected
long-term
rate of return
£’000
n/a
4.60%
0.50%
Value
£’000
12,796
14,707
1,448
28,951
(26,053)
2,898
Expected
long-term
rate of return
£’000
6.20%
4.40%
0.50%
Value
£’000
11,829
13,267
1,545
26,641
(24,959)
1,682
Equities
Bonds
Other
Total market value of
assets
Present value of
scheme liabilities
Surplus in the scheme
Amounts recognised in statement of financial position
The amounts recognised in the statement of financial position are determined as follows:
Present value of funded obligations
Fair value of plan assets
Surplus in the scheme
Less restriction of surplus recognised in the statement of financial position
Liability recognised in the statement of financial position
Movement in defined benefit obligation
The movement in the defined benefit obligation over the year is as follows:
At 1 July
Current service cost
Interest cost
Contributions by plan participants
Actuarial losses
Benefits paid
At 30 June
Movement in the fair value of the plan assets
The movement in the fair value of the plan assets of the year is as follows:
At 1 July
Expected return in plan assets
Actuarial gains
Employer contributions
Employee contributions
Benefits paid
At 30 June
84
24915.04 14 October 2016 9:27 AM Proof 12
2016
£’000
(33,731)
35,516
1,785
(1,785)
–
2016
£’000
(28,824)
(501)
(1,092)
(342)
(4,010)
1,038
(33,731)
2016
£’000
31,704
1,205
2,612
691
342
(1,038)
35,516
Value
£’000
9,744
12,484
1,596
23,824
(23,809)
15
2015
£’000
(28,824)
31,704
2,880
(2,880)
–
2015
£’000
(26,053)
(476)
(1,105)
(340)
(1,695)
845
(28,824)
2015
£’000
28,951
1,249
1,304
705
340
(845)
31,704
Annual Report and Accounts for the year ended 30 June 2016 30 Pension Scheme continued
Amounts recognised in income statement
The amounts recognised in the income statement are as follows:
Current service cost
Net interest cost
Actuarial gain recognised in statement of comprehensive income for the year
Actual return less expected return on pension scheme assets
Experience (losses)/gains arising on the scheme liabilities
Changes in assumptions underlying the present value on the scheme liabilities
Movement in recovery plan liability
Net interest income
Restriction of pension scheme surplus
Actuarial loss recognised in the statement of comprehensive income
Cumulative actuarial loss recognised in the statement of comprehensive income at 1 July
Actuarial (loss)/gain recognised in the statement of comprehensive income for the year
Cumulative actuarial loss recognised in the statement of comprehensive income at 30 June
2016
£’000
501
–
501
2016
£’000
2,612
(1,401)
(2,609)
–
113
1,095
(190)
2016
£’000
(3,036)
(1,285)
(4,321)
2015
£’000
476
–
476
2015
£’000
1,304
(142)
(1,553)
–
144
18
(229)
2015
£’000
(2,789)
(247)
(3,036)
The restriction in the scheme surplus is excluded from the cumulative actuarial gain recognised in the statement of comprehensive
income. As a result of the most recent valuation, and in light of the non-recognition of the pension scheme surplus, the recovery plan
liability of £189,000 (2015: £189,000) is included in Other Payables.
The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current
investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the statement of financial
position date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective
markets.
The actual return on plan assets over the year ending 30 June 2016 was £3,817,000 (2015: £2,553,000) or 12.0% (2015: 8.1%). The Group
expects to pay £627,000 contributions (2015: £730,000) into the pension scheme during the forthcoming year.
24915.04 14 October 2016 9:27 AM Proof 12
85
Stock Code: TFW www. fwthorpe.co.ukFinancials Notes to the
Financial Statements
For the year ended 30 June 2016
30 Pension Scheme continued
History of experience gains and losses recognised in the statement of comprehensive income
2016
2015
2014
2013
2012
£’000
%
£’000
%
£’000
%
£’000
%
£’000
%
2,612
1,304
Difference between the expected and actual return on
scheme assets
Percentage of scheme assets
Experience loss/(gain) on scheme liabilities
Percentage of the present value of scheme liabilities
Changes in assumptions underlying the present value
of the scheme liabilities
Percentage of the present value of scheme liabilities
Movement in recovery plan liability
Percentage of the present value of scheme liabilities
Net interest income
Percentage of the present value of scheme liabilities
Restriction of pension scheme surplus
Percentage of the present value of scheme liabilities
Amount which has been recognised in the SOCI
Percentage of the present value of the scheme
liabilities
(1,401)
(2,609)
–
113
–
(1,285)
(142)
(1,553)
–
144
–
(247)
7%
4%
8%
0%
0%
0%
4%
4%
0%
5%
0%
0%
0%
1%
767
(99)
58
(189)
87
–
624
1,061
(438)
191
–
47
–
861
3%
0%
0%
1%
0%
0%
2%
193
227
(1,830)
–
–
–
(1,410)
4%
2%
1%
0%
0%
0%
3%
1%
1%
8%
0%
0%
0%
6%
31 Group Companies
The parent company has the following investments as at 30 June 2016 and 30 June 2015:
Name of undertaking
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Lightronics Participaties B.V.
Lightronics B.V.
Lightronics GmbH
Country of
incorporation
England
England
England
England
England
Netherlands
Netherlands
Germany
Description of
shares held
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary €0.01 shares
Ordinary €454 shares
Ordinary €1 shares
Proportion of nominal value of
issued shares held by group and
company
100%
100%
100%
100%
100%
100%
100%
100%
86
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 31 Group Companies continued
The principal activities of these subsidiaries are:
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Lightronics Participaties B.V.
Lightronics B.V.
Lightronics GmbH
– design and manufacture of lighting solutions for retail applications
– design and manufacture of illuminated signs
– design and manufacture of cleanroom lighting equipment
– design and manufacture of lighting for signs
– design and manufacture of lighting for roads and tunnels
– holding company
– design and manufacture of external and impact resistant lighting
– design and manufacture of external and impact resistant lighting
The cost of investment in subsidiaries is as follows:
Investment in subsidiaries – cost
The movement in the investment and provisions is as follows:
At 1 July 2015 and 30 June 2016
Group
Company
2016
£’000
–
2015
£’000
–
2016
£’000
13,682
2015
£’000
13,682
Costs
£’000
13,682
Provision
£’000
–
32 Equity Accounted Investments
The Group has a joint venture in Australia with its local agent. The venture is jointly controlled with equal voting rights with the Group
holding a 51% interest. Thorlux Lighting Australasia Pty Ltd is registered in Queensland and operates from a sales office in Melbourne. The
Group has applied the equity method of accounting to recognise this interest. On the 1 July 2016, the Group increased its shareholding to
100%, by purchasing the 49% shareholding of LCA Holdings Pty Ltd for a nominal sum.
The Group has a joint venture in United Arab Emirates. Thorlux Lighting LLC is registered in United Arab Emirates and operates from a sales
office in Abu Dhabi. The Group has applied the proportionate consolidation method of accounting to recognise this interest.
The Group invested €1,200,000 for 40% of the share capital of Luxintec S.L., a company based in Spain. The Group has applied the equity
method of accounting to recognise this interest.
At 1 July
Additions
Share of (loss)/profit
Exchange rate movement
Impairment provision
At 30 June
Group
Company
2016
£’000
–
936
(1)
1
–
936
2015
£’000
57
–
(50)
(7)
–
–
2016
£’000
–
936
–
–
–
936
2015
£’000
141
–
–
–
(141)
–
33 Events After The Statement Of Financial Position Date
There were no significant events between the statement of financial position date and the approval of these financial statements.
24915.04 14 October 2016 9:27 AM Proof 12
87
Stock Code: TFW www. fwthorpe.co.ukFinancials Notice of Meeting
Notice is hereby given that the eightieth Annual General Meeting of FW Thorpe Plc will be held at Merse Road, North Moons Moat,
Redditch, Worcestershire, B98 9HH on 17 November 2016 at 3.15 pm to transact the following business:
Ordinary business
1. To receive and adopt the Annual Report and Accounts for the year ended 30 June 2016.
2. To declare a final dividend.
3. To re-elect Mr I A Thorpe as a director.
4. To re-elect Mr C Muncaster as a director.
5. To re-elect Mr D Taylor as a director.
6.
To re-appoint PricewaterhouseCoopers LLP as auditors of the company, to hold office until the conclusion of the next General
Meeting at which accounts are laid before the company and to authorise the directors to fix the auditors’ remuneration.
Special business
To consider and, if thought fit, to pass the following resolutions which will be proposed in the case of 7 as an ordinary resolution and in
the case of 8 as a special resolution.
7.
8.
That the directors’ remuneration report (as set out on pages 41 to 43 of the Annual Report and Accounts) for the year ended 30 June
2016 be approved.
That the company be generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of
the Companies Act 2006) of ordinary shares of 1p each of the company provided that:
(a)
the maximum number of ordinary shares hereby authorised to be acquired is 11,893,559;
(b) the minimum price which may be paid for any such share is 1p;
(c)
the maximum price which may be paid for any such share is an amount equal to 105% of the average of the middle market
quotations for an ordinary share in the company as derived from the Alternative Investment Market for the five business days
immediately preceding the day on which such share is contracted to be purchased;
(d)
the authority hereby conferred shall expire on the date of the Annual General Meeting of the company in 2017; and
(e)
the company may make a contract to purchase its ordinary shares under the authority hereby conferred prior to the expiry of such
authority, which contract will or may be executed wholly or partly after the expiry of such authority, and may purchase its ordinary
shares in pursuance of any such contract.
Notes
1.
2.
3.
4.
5.
Copies of the directors’ service contracts will be available for inspection during usual business hours, at the registered office of the company on any weekday (Saturdays and
public holidays excepted) from the date of this notice until the date of the meeting and also at the meeting for at least 15 minutes prior to, and until the conclusion of, the
meeting.
To be entitled to attend and vote at the meeting (and for the purposes of the determination by the company of the votes they may cast), members must be registered in the
Register of Members of the company at 6.30 pm on 15 November 2016 (or, in the event of any adjournment, 6.30 pm on the date which is two days before the time of the
adjourned meeting). Changes to the Register of Members of the company after the relevant deadline shall be disregarded in determining the rights of any person to attend
and vote at the meeting.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and vote on his or her behalf. A proxy need not also be a
member but must attend the meeting to represent you. Details of how to appoint the Chairman of the meeting or another person as your proxy using the form of proxy are
set out in the notes on the form of proxy. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the Chairman)
and give your instructions directly to them.
To appoint more than one proxy, an additional proxy form(s) may be obtained by contacting the company’s registrars, Equiniti, Aspect House, Spencer Road, Lancing, West
Sussex BN99 6DA, or you may photocopy the proxy form. Please indicate in the box next to the proxy holder’s name the number of shares in relation to which they are
authorised to act as your proxy. Please also indicate by ticking the box provided if the proxy instruction is one of multiple instructions being given.
A reply paid form of proxy is enclosed with shareholders’ copies of this document. To be valid, it should be lodged with the company’s registrars, Equiniti, Aspect House,
Spencer Road, Lancing, West Sussex, BN99 6DA, so as to be received not later than 3.15 pm on 15 November 2016 or 48 hours before the time appointed for any adjourned
meeting or, in the case of a poll taken subsequent to the date of the meeting or adjourned meeting, so as to be received no later than 24 hours before the time appointed for
taking the poll.
88
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 6.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Annual General Meeting and any
adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, (www.euroclear.com)
and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in
accordance with Euroclear UK & Ireland’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message
must be transmitted so as to be received by the issuer’s agent ID RA19, by 3.15 pm on 15 November 2016 (or, in the case of an adjournment of the Annual General Meeting,
not later than 48 hours before the time fixed for the holding of the adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland does not make available special procedures
in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of
the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed (a) voting service provider(s), to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
The company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities 2001 (as amended).
7.
8.
As at 12 October 2016 (being the last practicable day prior to the publication of this notice), the company’s issued share capital consists of ordinary shares of 1p each, carrying
one vote each. Excluding 3,260,000 shares held in treasury, the total voting rights in the company as at 12 October 2016 are 115,675,590.
Appointment of a proxy will not preclude a member from subsequently attending and voting at the meeting should he or she subsequently decide to do so. You can only
appoint a proxy using the procedures set out in these notes and the notes to the form of proxy.
By order of the Board
C Muncaster
Director
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
12 October 2016
24915.04 14 October 2016 9:27 AM Proof 12
89
Stock Code: TFW www. fwthorpe.co.ukFinancials Financial Calendar
2016
17 October
Posting of the Annual Report and Accounts
17 November
Annual General Meeting
24 November
Payment of final dividend
2017
March
April
Announcement of interim results
Payment of interim dividend
September
Announcement of results for the year
90
24915.04 14 October 2016 9:27 AM Proof 12
Annual Report and Accounts for the year ended 30 June 2016 24915.04 13 October 2016 3:38 PM Proof 14
F
W
T
h
o
r
p
e
P
l
c
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
6
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
England
Tel: + 44 (0)1527 583200
Fax: + 44 (0)1527 584177
Incorporating:
www.fwthorpe.co.uk
24915.04 13 October 2016 3:38 PM Proof 14