Annual Report
and Accounts
2021
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Welcome to the
2021 Annual Report
WHO WE ARE
We specialise in designing and
manufacturing professional
lighting systems.
We currently employ over 700
people and although each company
works autonomously, our skills and
markets are complementary.
INVESTMENT CASE
01
A well-positioned
portfolio of companies
across seven different
countries
02
Innovative products
with market-leading
technology
03
Strong profit margins
and robust balance
sheet
Read more on
pages 28 to 37
Read more on
pages 20 to 24
Read more on
pages 80 to 85
OUR PURPOSE
Provide technically advanced
lighting solutions that deliver
long-term lowest cost of
ownership.
OUR VALUES
OUR VISION
Maintain a consistently respected
and profitable organisation with
an environmental conscience.
Integrity
Honesty
Longevity
Visit us online at:
www.fwthorpe.co.uk
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Highlights
FINANCIAL HIGHLIGHTS
Revenue (£m)
+4.0%
Operating Profit (£m)
+17.7%
2021
2020
2019
2018
2017
117.9
113.3
110.6
109.6
105.4
2021
2020
2019
2018
2017
19.2*
16.3
17.6**
19.5
18.4
*
2021 excludes the exceptional item in respect of
Lightronics fire £1.6m
** 2019 excludes the profit on disposal of property of £1.9m
Basic Earnings Per Share
(Pence)
Diluted Earnings Per Share
(Pence)
+18.5%
+18.6%
2021
2020
2019
2018
2017
13.57
11.45
13.91
13.91
12.54
2021
2020
2019
2018
2017
13.52
11.40
13.83
13.81
12.47
Dividend Per Share
(Pence)
+2.5%
2021
2020
2019
2018
2017
5.80*
5.66
5.53
5.40
4.90
* 2021 dividend excludes the special dividend
Read more about our financial
performance on pages 40 to 41
OPERATIONAL HIGHLIGHTS
• Revenue continued to move
forward, supported by large
scale orders and Services
• Operating profit recovered
strongly from prior year, no
impact from fire at Lightronics
• Results suppressed by some
smaller companies, overseas
sales offices
• Operating cash generated
remained robust at £21.9m
CONTENTS
Business Overview
Highlights
FW Thorpe at a Glance
Strategic Report
Chairman’s Statement
Marketplace
Business Model
Strategy
Strategy in Action:
01
04
10
14
18
20
Lightronics Fire: ‘From the Ashes’ 22
Case Study:
Worcester’s Big Parade for St
Richard’s Hospice, Worcester
Key Performance Indicators
Strategy in Action:
IBRB, University of Warwick
Strategy in Action:
United Lincolnshire Hospital
NHS Trust
Operational Performance
Strategy in Action:
23
24
25
26
28
Product innovation: Flexbeam 38
39
COVID-19 update
Financial Performance
40
Principal Risks and Uncertainties 42
46
s172 statement
Sustainability
48
Case Study:
54
58
60
66
67
SmartScan Radar
Our Governance
Board of Directors
Directors’ Report
Statement of Directors’
Responsibilities
Directors’ Remuneration Report
Independent Auditors’ Report
to the Members of FW Thorpe Plc 71
Our Financials
Consolidated Income Statement 80
Consolidated Statement of
Comprehensive Income
Consolidated and Company
Statements of Financial Position 82
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated and Company
Statements of Cash Flows
Notes to the Financial
Statements
Notice of Meeting
Financial Calendar
86
130
132
84
83
85
81
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Business OverviewStrategic ReportOur GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.uk Resilience for the Future
01
Our improved financial
performance ...
• We have had a improved financial
• We have had a strong order
performance, mainly attributed
to our largest division, Thorlux
Lighting with support from the
Netherlands companies.
• Our Netherlands companies –
there has been a strong recovery
following the fire at Lightronics back
in September 2020.
Read more about our operating
performance on pages 28 to 37
performance over this year
despite challenging economic
conditions, with revenue of £117.9m
and operating profit of £19.2m.
In addition, we had net cash
generated from operating activities
of £21.9m.
• We have a strong balance sheet
and profit margins with sufficient
reserves.
Read more about our financial
performance on pages 40 to 41
02
along with a focus on
sustainability ...
• Environmental issues are also a
• We have family principles and a
significant focus for us: We carry the
LSE Green Mark; we continue to plant
trees (149,849 trees planted to date);
we invest in installing solar panels at
our UK factories; and we monitor CO2
emissions.
• Energy saving products are a
substantial part of the business, as
well as our carbon offset, we continue
to invest in solar to reduce our
emissions.
Read more about our environmental
initiatives on pages 48 to 53
supportive culture. Our employees
are fundamental to our success; we
provide them with development
and training, and we have a well-
being policy. We also have an
apprentice scheme, and we invest in
management training.
• We support local communities by
giving to charities - this year, we
gave £23,000.
02
02
Annual Report and Accounts for the year ended 30 June 2021
Annual Report and Accounts for the year ended 30 June 2021
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Our improved financial
performance ...
along with a focus on
sustainability ...
03
and strong product
innovation …
• Product design and development
is fundamental to our operations.
We maintain a competitive
advantage with market-leading
products, utilising technology to
attract new customers and retain
them.
• We engage in continuous
product development – products,
software/controls, and lighting
•
design. We have also focused on
the further development of our
SmartScan wireless system.
In addition, our diversified
product portfolio gives us the
ability to supply a complete
project – from “boiler room to
boardroom, and beyond”.
• Our Group spend on capitalised
R&D this year was £1.5m.
Read more about our products on
pages 6 to 7
Read more about our operating
performance on pages 28 to 37
04
… means that we have
resilience for the future.
This results in long-term value for
us and for our stakeholders.
• A well-positioned portfolio of companies
across seven different countries, along with
serving many market sectors with a variety
of products, means that we have resilience
in the current economic climate and for the
future.
Read more about our investment
case on pages 20 to 21
Stock Code: TFW www.fwthorpe.co.uk
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Business OverviewStrategic ReportOur GovernanceOur Financials
FW Thorpe at a Glance
THE COMPLETE SERVICE
OFFERING WE PROVIDE...
OUR STRATEGIC PILLARS...
Design &
Development
£1.5m
(2020: £1.3m)
Manufacturing
£0.3m
Investment in solar at
Group facilities
Services
£4.4m
Revenue from this service
(2020: £3.0m)
Read more about our service
offering on pages 18 to 19
FOCUS ON HIGH QUALITY
PRODUCTS AND GOOD
LEADERSHIP IN TECHNOLOGY
CONTINUE TO GROW THE
CUSTOMER BASE FOR GROUP
COMPANIES
FOCUS ON
MANUFACTURING
EXCELLENCE
CONTINUE TO
DEVELOP HIGH
QUALITY PEOPLE
Read about our strategic pillars on pages 20 to 21
FW THORPE TIMELINE
1936
1940-1960
1965
1989
1990-1996
2005
2009-2011
2013
Floated
on the London
Stock Exchange
Moved to
our Redditch
headquarters
Established by
Frederick William
Thorpe and
his son Ernest
Thorpe. Spinning
circular reflectors
Moved to larger
premises twice
to cope with the
expansion into
linear fluorescent
luminaires,
and to enter
the exterior
and hazardous
markets
Transferred
to AIM
First acquisition
– Mackwell
Electronics
Start-up in retail
and display
lighting
Acquired
Philip Payne
emergency
exit signs
Start-up
company TRT
Lighting
Entered the
street
lighting market
Acquired
Solite Europe
Lighting for
clean rooms
Acquisition
of Portland
Lighting
Mackwell
Electronics
disposal
04
Annual Report and Accounts for the year ended 30 June 2021
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OUR GLOBAL FOOTPRINT
01
03
07
02
04
05
Revenue by region (£m)
2.1
12.5
28.9
2021
2.7
12.2
06
28.7
2020
74.4
69.7
01
02
03
UNITED KINGDOM
Thorlux Lighting,
Philip Payne,
Solite Europe,
Portland Lighting,
TRT Lighting
NETHERLANDS
Lightronics, Famostar
IRELAND
Thorlux Lighting
04
05
06
07
GERMANY
Thorlux Lighting
UNITED ARAB EMIRATES
Thorlux Lighting
AUSTRALIA
Thorlux Lighting Australasia
SPAIN
Luxintec
UK
Netherlands
Rest of Europe
Rest of the World
Read about our marketplace on
pages 14 to 17
Read about our performance
on page 28
2014
2015
2016
2017
2018
2019
2020
2021
Creation of an
in-house LED
printed circuit
board production
line
Ability to
place 400,000
components
per day
Acquisition
of Lightronics
– Netherlands
Develop
European market
Sugg Lighting
disposal
Minority
investment
in Luxintec
– Spain
Target Spanish
market and
acquire lens
specialism
Acquired
remaining share
capital in Thorlux
Australasia
Target Australian
market, improve
performance
Acquired
Famostar –
Netherlands
Improved
emergency
lighting product
offering
Compact
Lighting business
successfully
merged with
Thorlux Lighting
Portsmouth
facility sold
All operating
businesses
housed in Group-
owned property
Maintained
operations
during COVID-19
pandemic
Lightronics
recovers from
factory fire with
improved results
Sustainability
focus
Stock Code: TFW www.fwthorpe.co.uk
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Business OverviewStrategic ReportOur GovernanceOur Financials FW Thorpe at a Glance continued
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.
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.
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
Retail, Display
•
and Hospitality
Read more on pages 30 to 31
Read more on page 32
DESCRIPTION
Solite Europe is a leading
manufacturer and supplier of
clean room lighting equipment
and luminaires within the UK
and Europe.
Solite provides luminaires for
laboratories, pharmaceutical
and semi-conductor
manufacturing areas including
hospitals, kitchens and food
preparation applications.
KEY PRODUCTS
• Clean room
luminaires
MARKET SECTORS
•
Pharmaceutical
• Healthcare
•
Education/Research
and Development
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 1,394m2 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.
Read more on page 33
Read more on page 34
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Annual Report and Accounts for the year ended 30 June 2021 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 company 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.
TRT produces quality, efficient,
stylish, high performance
LED products that are
manufactured in the UK.
KEY PRODUCTS
•
Road lighting
• Amenity lighting
• Outdoor wall and
ceiling luminaires
Lighting controls
•
MARKET SECTORS
•
•
Infrastructure
Facilities –
car parking
• Housing
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.
Read more on page 35
Read more on page 36
DESCRIPTION
Based in Velp, Netherlands,
Famostar specialises in the
development, manufacture and
supply of emergency lighting
products. Revenue is derived
from the Netherlands, where it is
considered one of the foremost
brands in the market.
Famostar was originally
established in 1947, with each
product being designed and
manufactured at its own
production facility. Famostar has
a reputation for designing and
manufacturing reliable luminaires
offering solutions for sectors
including commercial, industrial,
education and retail applications.
Read more on page 37
Emergency lighting
knowledge and expertise
is key to the success of the
business. Famostar offers
both the correct technical
solution and unique
proposals to complement
the needs of the customer.
KEY PRODUCTS
Emergency
•
exit signage
Emergency
lighting systems
•
MARKET SECTORS
• Commercial
Industrial
•
•
Education
Retail and Hospitality
•
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Business OverviewStrategic ReportOur GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.uk CONTENTS
23
24
10
14
18
20
Chairman’s Statement
Marketplace
Business Model
Strategy
Strategy in Action:
Lightronics Fire: ‘From the Ashes’ 22
Case Study:
Worcester’s Big Parade for St
Richard’s Hospice, Worcester
Key Performance Indicators
Strategy in Action:
IBRB, University of Warwick
Strategy in Action:
United Lincolnshire Hospitals
NHS Trust
Operational Performance
Strategy in Action:
Product innovation: Flexbeam
Strategy in Action:
COVID-19 update
Financial Performance
Principal Risks and Uncertainties
s172 statement
Sustainability
Case Study:
SmartScan Radar
39
40
42
46
48
26
28
38
25
54
54
08
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Annual Report and Accounts for the year ended 30 June 2021 Strategic
Report
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Chairman’s Statement
Mike Allcock
“
Whilst I am pleased
with the improved
performance under such
circumstances, there is
an element of wondering
what could have been, for
a second year running. In
the coming months there
are significant challenges
to deal with, especially
related to component
shortages affecting
everyone in the Group.”
Mike Allcock
Chairman and Joint Chief Executive
After a year of very difficult
trading conditions for many
companies, I would like to start by
thanking the management and
workforce across FW Thorpe Plc for
their total commitment to Group
operations in the last 12 months.
Without their dedication, I would
not be able to report the improved
operating results below.
Whilst I am pleased with the improved
performance under such circumstances,
there is an element of wondering what
could have been, for a second year
running, had the Group not encountered,
and continued to encounter, difficulties
associated with the COVID-19 pandemic,
the ongoing fallout from Brexit in the UK,
and worldwide supply shortages.
On a positive note, within the Group we
have once again started the new financial
year with a very strong order book,
exceeding our expectations in most
companies, especially Thorlux Lighting,
and we look forward to more normal
trading conditions returning soon.
The Annual Report and Accounts
contains a more detailed overview of the
COVID situation and how it is being dealt
with across the Group, together with a
closer appraisal of the performance of
each Group company.
GROUP RESULTS
Year-end revenue grew again in the year,
despite various operational difficulties,
culminating in an overall increase of
4.0%, at £118m. A high proportion of the
growth is attributed to Thorlux Lighting,
but there were notable performances
too from TRT Lighting, exceeding £10m
revenue for the first time, and Solite
and Portland Lighting, recovering well
from reduced levels last year, and truly
solid performances from the Dutch
contingent, especially Lightronics, having
to cope with the near-total destruction
Morgan Cars
of its manufacturing facility early in
autumn 2020. More on this later.
Philip Payne’s market, of high-end
hospitality venues and central London
offices, was adversely affected the
most in the Group by the pandemic,
with no traditional large scale orders
materialising. A solid year of battening
down the hatches and controlling costs
resulted in a subdued but profitable year
overall.
Final Group operating profit (before
exceptional item) for the year ended up
17.7% at £19m – another creditable result,
all things considered.
The Group’s continued robust balance
sheet and strong cashflow performance
allows the Board to recommend a final
dividend of 4.31p per share (2020: 4.20p)
for the year to 30 June 2021, which gives
a total of 5.80p (2020: 5.66p) and an
increase of 2.5%. It has been a number
of years since the Group paid a special
dividend, so I am pleased to recommend
a special dividend of 2.20p per share
(2020: nil).
10
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Annual Report and Accounts for the year ended 30 June 2021 however, there is nothing like a face to
face meeting, and it is only recently that
these have restarted on a gradual basis.
This has, for example, made it harder for
general new starters in the sales team,
and specifically for a new venture for
Philip Payne attempting to increase,
with new recruits, its sales efforts into
end users.
In coming months there are significant
challenges to deal with, especially related
to component shortages affecting
everyone in the Group. All companies are
dealing with severe shortages and rising
costs for many of the basic components
necessary for making Group luminaires,
such as steel, plastics, cardboard,
electronic components and microchips.
Although the Group has a strong cash
position and can afford to stock up, the
reality is that this has not been possible
and stocks have reduced. Not receiving
reliable delivery dates from suppliers,
even for goods planned months in
advance, is making day to day operations
tense and frustrating. Individual
companies’ service levels have declined
– particularly at Thorlux Lighting, which
is now quoting significantly longer lead
times than are normal or desirable.
To add to these difficulties, Brexit has
resulted in a number of workers from
Group factories returning home to
mainland Europe. There is a reduced
pool of labour in the UK to replace
them, which is not helpful during a
period in which the Group is recruiting
heavily to support its requirement to
ramp up production output. Various
improvement plans are in place, but there
may be some disruption in output and
service levels until later in the autumn.
GENERAL OVERVIEW
All businesses have targeted further
growth this year, and early signs are
positive, with order intake overall for the
Group at record levels. The Group has
found it particularly hard to forecast the
ongoing stability of orders, given the
uncertainty of the general economic
situation. Orders have certainly held up
better than expected; within the Group,
we believe that during uncertainty
customers have been less inclined to
take chances with lesser known brands
and have stuck with tried and tested
and more local manufacturers. Certain
export markets have improved, such
as Germany and Norway, but generally
export projects have been harder to
win, reinforcing the point made above.
Nevertheless, Group companies’ overall
resilience to various adverse trading
conditions has again been proven
throughout the financial year.
The Group’s use of technology has
been good, rolling out new up to
date systems such as Office 365 just
before the pandemic. For sales people,
COLIN MICHAEL BRANGWIN
22 November 1937 –
7 June 2021
The only son of Kenneth and
Marjorie Brangwin, Colin grew up
in Sutton Coldfield. Educated at
Oundle School, where he excelled at
maths and physics, he later went on
to graduate in electrical engineering
at university.
Following his father into the
business, Colin joined FW Thorpe
in 1963, becoming a Director in
1969 before being appointed
Managing Director and then
Chairman of the Group in 1995.
Colin was instrumental in some of
the senior appointments still within
the Group today, and as a well-
respected electrical engineer he
mentored many of those employees
during their earlier careers with the
company.
Colin married Rosemary Timings
in October 1963 at Holy Trinity in
Sutton Coldfield and they went on
to have three children Stephanie,
Joanna and Nicholas. New Quay,
Wales, was the focus of a large part
of family life for the Brangwins.
Colin was a proficient sailor and rose
through the ranks of the yacht club
to become commodore in 1992.
Once the children had left home,
sailing cruises formed many holidays
for Colin and his wife Rosemary,
visiting places such as South
America and Egypt. Colin stayed
deeply involved with the yacht club
throughout his life, either racing his
boat Sarissa or helping behind the
scenes.
Colin retired from FW Thorpe in
2016. In his later life, Colin took
great pleasure in supporting and
photographing his grandchildren at
dancing shows, athletics, football,
school shows and much more.
Colin is survived by his wife
Rosemary, two daughters, Stephanie
and Joanna, son Nicholas and seven
grandchildren.
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Chairman’s Statement continued
Brexit also created operational difficulties
in the early part of the calendar year,
with finished goods for delivery to the
EU extensively stuck in ports for long
periods, and inbound component
supplies hampered in a similar way.
Some customers in Germany have
actively moved away from the Group as
a result, although within the Group we
have managed to successfully route some
orders through Lightronics to mitigate
some of the trading impacts.
I am pleased to report that the Group
has successfully completed the earn-
out period with the investors and
management team in the Netherlands.
I am also delighted to report that the
Group has successfully secured the
ongoing services of the management
team. I take this opportunity to thank
all the Group’s Dutch colleagues for
their excellent work in recent years –
a successful example of just what can
be achieved, working collaboratively,
that the Group aspires to with all its
companies and future investments.
As mentioned in my interim statement,
Lightronics suffered a devastating
fire in September 2020. It is of credit
to the local management that, on
the morning following the fire, new
temporary premises were secured and
a recovery plan codenamed Project
Restart commenced. Production output
soon recovered and overall, incredibly,
Lightronics managed to achieve similar
performance to that of the prior year,
even improving margins slightly through
material cost reductions. Plans for the
new building, which will have around
75% more manufacturing space than the
previous unit, have received planning
consent, and construction will commence
shortly. Insurance claims have been
recovered, as expected. Famostar, too,
is actively developing its site for future
expansion, with a greater warehouse area
planned and plans generally for a larger
operation in the future.
Indeed, all companies have developed
individual plans for growth. For example,
Portland Lighting, whose customer base
has been in steady decline for the last few
12
years, has developed new products into
two completely new market sectors to
strengthen its own resilience to market
movements in a similar way to the Group
as whole.
On the sustainability front, within
the Group we continue to develop
and implement strategies to improve
our credentials even further – an
activity first started in earnest with an
improvement programme back in 2010.
A few months ago, I visited the Group’s
tree planting scheme in Devauden,
Monmouthshire, some 10 years on from
when I ceremonially planted the first
tree there with the government minister
for the environment and sustainable
development. Currently 149,849 saplings
have been planted, with many well on
their way to reaching maturity, with the
scheme winning independent awards in
the process. Fewer trees will be planted
in future, as the Group will have less
grid supplied energy to offset, having
completed a project during the year
to fit solar PV panels to most Group
company factory roofs, with a target of
self-generating around 40 to 50% of the
Group’s energy. Many Group directors,
me included, have switched to fully
electric vehicles; of course, during the
daytime, whilst we are sitting at our desks
working, our cars are charging, pollution
free, in front of the building. Apart from
the obvious green benefits, the Group’s
solar investments are expected to pay
back in as little as five years, so it is good
news for lowering our cost base too.
All Group companies, on the product
front, are taking circularity seriously,
further minimising the use of plastics and
environmentally damaging materials,
targeting even longer lifetimes, and
making products simpler to upgrade or
recycle at the end of their lifetime. More
and more of the Group’s customers
demand solutions that are kind to the
environment – good news for local
manufacturing wherever possible.
The Group is undergoing a three year
improvement programme, using
an external third party assessor,
to better measure and improve its
green credentials and certify them to
appropriate standards in an independent
and reliable way. The Board feels this
is important, because the credibility of
some claims in the market is generally
questionable.
Throughout the pandemic, FW Thorpe
has continued its policy of independence
and has not claimed government
assistance such as furlough monies at
any stage. Even during periods of layoff
and during COVID-related absences,
employees have been paid in full. I am
proud of what has been achieved by
everyone concerned – those working
diligently from home, and those
arriving daily at the Group’s busy
and COVID-secure factories.
Alphen and Rijn, the Netherlands
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Annual Report and Accounts for the year ended 30 June 2021 Investments in lighting controls
technology, and in particular in the ability
of those systems to co-communicate with
other systems, continues at pace. Later in
the year, Thorlux will release the second
generation of SmartScan, building on
the reliable and successful SmartScan
system first launched in 2016, which won
the 2019 Queen’s Award for Enterprise
in the Innovation category. The system,
now being used extensively by many
companies across the Group, will be faster
and smarter, and importantly will provide
more data and analytics for customers
to use in new ways to help streamline
their operations, using the Group’s
luminaires as a method of collecting and
transporting information. Investments
this year in new improved electronics,
especially but not limited to those for
outdoor areas, have brought cost downs,
enabling customers to achieve paybacks
in shorter times.
ACQUISITION
I mentioned last year that the Group
remained acquisitive but was waiting
until business again stabilised to some
extent. I am pleased to report that,
having put acquisition projects on
hold last spring and following further
discussions, on 5 October 2021 F W
Thorpe acquired a majority stake in
Electrozemper S.A., trading as Zemper,
which has manufactured emergency
lighting luminaires in Ciudad Real, Spain,
since 1967.
Zemper has a complete range of
emergency lighting, an area of business
well liked by FW Thorpe for being
somewhat niche and specialised. The
factory is self-contained, with its own
plastic moulding production, electronic
printed circuit board assembly lines,
robotic assembly techniques and end of
line testing.
Generally, Zemper operates in markets
where the Group currently only has a
very small market share. Zemper’s largest
revenue is derived from Spain, France
and Belgium. Zemper’s annual revenue
is €20m, with EBITDA over €4m. The deal
structure is similar to that agreed for the
Dutch acquisitions, and management is
part of the ongoing project.
The Board sees long term synergies and
collaboration possibilities with other
companies in the Group whilst further
penetrating wider geographical markets.
I welcome to F W Thorpe Plc the
employees of Zemper and wish them
long and successful careers as part of
the team.
PERSONNEL
I would like to thank my whole team for
their continued support and diligence
through such challenging times. I hope
that some stability will return in this
financial year, and I look forward to
being able more regularly to visit Group
operating sites again soon.
MICHAEL DAVID LIPPOLD
OBE
3 May 1930 – 11 August 2021
Born in London in 1930, Mike
Lippold was the son of Fred, Chief
Electrical Engineer at Argus Press in
the City of London, and Winifred, a
travelling salesperson selling hats to
fashion boutiques.
Mike began his working life in
the stock market, but his love of
international travel soon saw him
move into sales, progressing from
selling packet soup at a local market
to becoming Sales Director of
Benjamin Electrical.
After joining FW Thorpe in 1970,
Mike advanced to become Joint
Managing Director of Thorlux
OUTLOOK
Whilst still carrying some increased
manufacturing costs, all companies are
capable of producing increased revenue
in the coming year. As mentioned earlier,
the Group as a whole commenced
the new year with a good order book,
especially at Thorlux Lighting.
There remain some difficulties, though,
caused by component supply shortages,
some capacity restraints and ongoing
COVID-related disruption.
Mike Allcock
Chairman and Joint Chief Executive
5 October 2021
Lighting and then Chairman of
the Group. During his career at FW
Thorpe, Mike was responsible for UK
and export sales. He retired in 2002.
Mike became President of the UK
Lighting Industry Federation (now
the Lighting Industry Association;
LIA), was Master of the livery
company the Worshipful Company
of Lightmongers and chaired the
Church Floodlighting Trust. Mike’s
charitable efforts were rewarded in
2001 when he was honoured with
the OBE for his role in floodlighting
400 churches across the UK as part of
the millennium celebrations.
As hobbies, Mike enjoyed social
tennis, bridge and fishing, but
his passion was sailing, which he
continued late into his 80s with his
amphibious boat Mr Toad. After
retiring from FW Thorpe, Mike
moved to Portscatho, in Cornwall,
where he lived a long and peaceful
retirement.
Michael is survived by his wife Judy,
daughter Jane, son David and four
grandchildren.
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview
Marketplace
HOUSING
COMMERCIAL
INDUSTRIAL
EDUCATION
HEALTHCARE
MANUFACTURING
RETAIL
14
Annual Report and Accounts for the year ended 30 June 2021
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DISPLAY
HOSPITALITY
PHARMACEUTICAL
RESEARCH &
DEVELOPMENT
ADVERTISING
INFRASTRUCTURE
FACILITIES
Stock Code: TFW www.fwthorpe.co.uk
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Marketplace continued
UK
+7%
Revenue
•
Increased business from
target sectors
• Services revenue
increased with improved
gross contribution
Europe
+2%
Revenue
• Additional business in
Germany
Netherlands
+1%
Revenue
• Fall in Lightronics revenue
offset by Famostar growth
Improved operating profit
at both businesses
•
Other countries
-22%
Revenue
• Dampened demand in
both Australia and the UAE
Do your competitors
have an interest in
each of these markets
as well?
We have both domestic
and international
competition across all of
these markets, from listed
multinationals to solid
private businesses. We
continue to differentiate
ourselves with product
and systems innovation,
combined with excellent
customer service through
the life cycle of a project.
Are you in each of
these markets in all of
the geographies you
operate within?
We tend to focus on
particular product ranges
and technologies in new
territories. We continue to
work with existing partners
and our Group presence
in certain countries to
drive export sales growth.
We continue to focus on
building our reputation by
targeting certain sectors in
these territories.
How did you continue
to navigate through
the impact of COVID on
your day to day
operations?
Our priority remained
the health and wellbeing
of our employees whilst
balancing the requirements
of our customers. We
separated the business in
to distinct “bubbles” and
introduced lateral flow
testing on a weekly basis
in an attempt to avoid
an outbreak in any of our
facilities. Detailed risk
assessments were updated
on a regular basis to enable
us to continue operating
at our manufacturing sites.
See page 39.
Which market sectors
are growing?
There is growth in a
number of areas that
continues to justify our
investment in business
development.
Reduction in some sectors
was offset by growth in
certain target areas.
We will consider how
we deploy our existing
selling resources over the
next few years in order to
target specific sectors and
territories.
Which sectors are you
focusing on?
Our product and solution
portfolio continues to
evolve and can cater for a
variety of different sectors.
We continue to focus on
specific sectors that are
investing but with some
renewed endeavour on
those that have reduced in
previous years.
16
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Annual Report and Accounts for the year ended 30 June 2021 Increase in demand
for technology
International
economic conditions
Globalisation
What this means
• Countries are recovering from
COVID-19 at varying pace
• Certain sectors and businesses
starting to recover but could
take time
• Pressure on global supply chains
– raw material price pressure,
component shortages
What this means
• Responding to the demands of
our traditional customers who are
developing a global footprint
• Harmonisation of technology from
the adoption of LED brings the
threat of increased competition
from both Far Eastern and Western
economies
• Recent global pandemic highlights
the need for resilience in the supply
chain
Opportunity it provides
• Certain sectors will continue or
potentially increase investment
• Governments have indicated the
intention to invest to support
economies
• Potential to win market share
Opportunity it provides
• Chance to establish ourselves in new
territories with established customers
in the countries we currently supply
into
• New sourcing opportunities – pricing,
quality, technology
from competitors who struggle to
recover
• Potential for customers to reconsider
sourcing strategies and buy “local”
What this means
•
Evolution of controls technology –
wireless
• Connectivity with the internet and
other devices – the Internet
of Things
• Ability to offer customers
additional functionality by adding
different sensor technology and
presenting data
The Group has seen a shift in LED
sales, moving from 3% to 90% of
total revenue in recent years
•
Opportunity it provides
Improves ability to hold
•
specification business with our own
controls offering
• Potential to supply retrofit projects
with wireless controls where wired
controls were cost prohibitive
• Offer solutions to provide additional
data specific to the market sector
• Demand for retrofit installations
replacing fluorescent lighting
for LED, replacing product with
wirelessly controlled technology
driving energy saving
How we are responding
•
Ensure our businesses are not reliant
on any one sector in particular
• Continue to develop innovative
product solutions in all our
businesses
Target sectors where demand is
stable or increasing
•
• Redirect sales focus as appropriate
How we are responding
•
SmartScan was introduced in 2016
and continues to evolve with the
latest generation due for launch
late 2021
Further development of the
SmartScan platform, bringing other
non-lighting devices into the web
portal
•
• Occupancy profiling, air quality
sensing, and the ability to change
colour temperature are all features
• All new product developments are
LED based
• Continual review of LED technology
offerings to take advantage of the
latest advances and ensure we are
offering the best solutions to our
customers
Stock Code: TFW www.fwthorpe.co.uk
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How we are responding
• Working with global customers
• Continual development of the
supply chain
• Potential to establish new offices
in chosen locations to support
both customer and supply chain
development in the future
17
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Business Model
Customers come to us for peace of mind. They want the correct technical solution, professional
service, sustainability of products/services and the ability to provide support during a product’s
warrantable life and beyond.
Our business model is focused on the needs of customers and the marketplace, with a robust
capital structure that underpins our ability to deliver sustainable growth, innovative products
and excellent customer service.
THE KEY RESOURCES
WE UTILISE...
THE SERVICE OFFERING
WE PROVIDE...
THE KEY MARKETS
WE SERVE...
Design &
Development
£1.5m
Group spend on
capitalised R&D
(2020: £1.3m)
Commercial
Industrial
Education
Healthcare
Manufacturing
Commercial
Industrial
Education
Healthcare
Manufacturing
Retail
Retail
Display
Display
Hospitality
Pharmaceutical
Hospitality
Pharmaceutical
Research &
Development
Research &
Development
Advertising
Infrastructure
Facilities
Advertising
Infrastructure
Facilities
Housing
Housing
Manufacturing
Commercial
Commercial
Industrial
Industrial
Education
Education
Healthcare
Manufacturing
Healthcare
Manufacturing
Retail
Retail
Display
Display
£0.3m
Investment in solar at
Hospitality
Group facilities
Hospitality
Pharmaceutical
Pharmaceutical
Research &
Development
Research &
Development
Advertising
Infrastructure
Advertising
Infrastructure
Facilities
Facilities
Housing
Housing
Design & Innovation
Continuous product
development – products,
software/controls, lighting
design
Talented People
Continual development
Manufacturing
Facilities
UK – multiple sites,
Europe – Netherlands, Spain
Continual Investment
Financial &
Environmental
Sustainability
Financial stability, Carbon
Offset Scheme
Commercial
Commercial
Commercial
Industrial
Hospitality
Services
Industrial
Industrial
£4.4m
Education
Revenue from this service
(2020: £3.0m)
Pharmaceutical
Healthcare
Research &
Development
Research &
Development
Hospitality
Pharmaceutical
Education
Healthcare
Manufacturing
Education
Healthcare
Manufacturing
Retail
Retail
Display
Display
Manufacturing
Retail
Advertising
Infrastructure
Advertising
Infrastructure
Display
Facilities
Facilities
Housing
Housing
Commercial
Industrial
Hospitality
Education
Pharmaceutical
Healthcare
Research &
Development
Manufacturing
Advertising
Retail
Infrastructure
Display
Facilities
Housing
18
Hospitality
Pharmaceutical
Research &
Development
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Advertising
Infrastructure
Facilities
Housing
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Annual Report and Accounts for the year ended 30 June 2021 SOLUTIONS PROVIDED
FOR CUSTOMERS...
THE VALUE GENERATED...
Target
Customers
THOSE RESPONSIBLE FOR
THE WHOLE LIFE CYCLE
COST OF THE PRODUCTS/
SERVICES SUPPLIED
Solutions Provided
• Energy efficiency
• Low maintenance
• Rapid installation
• Longevity of product
• Low total cost of ownership
Customers
Short-term
Replacement of ageing technology
with improved lighting systems
Long-term
Innovative lighting that delivers cost
savings and additional benefits, such
as data capture and presentation
Shareholders
Short-term
Opportunity to invest in a company
that pays a progressive dividend and
with a robust balance sheet
Long-term
Sustainable profit growth
drives future shareholder returns
OUR REVENUE DRIVERS
Specification –
renovations, new
build, energy
saving, compliance,
technology adoption
Diversified product
portfolio gives the
ability to supply a
complete project –
“boiler room to board
room, and beyond”
Cross-selling
opportunities
with other Group
companies to offer
a complete solution
to a wide variety of
sectors
Employees
Short-term
Opportunity to work with an
innovative market leading company
within the lighting industry
Long-term
Continual development with a variety
of Group companies in a number of
different territories
Environment
Short-term
Build on the work of many years,
delivering energy saving products
and continuing our carbon offset
programme
Long-term
Develop and implement our
sustainability strategy
Communities
Short-term
Employment opportunities and
supporting local charities
Long-term
Providing sustainable employment in
the local areas where our businesses
are located
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview 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:
OVERVIEW OF STRATEGY
• Strategy was designed to
build on the values that
have been at the core of the
company since its inception.
FW Thorpe has been built on
product innovation – design
and product development is
fundamental.
• The Group is product led.
This enables us to maintain
competitive advantage with
marketing leading products,
utilising technology to retain
and attract new customers.
• Sustainable growth is key to
our stakeholders – targeting
new customers in existing
or new territories, using our
product portfolio to drive into
new sectors.
• Control of the manufacturing
processes is of utmost
importance – key processes
are kept in-house with
targeted investment in new
machinery as required.
• Family principles for example
how we treat our people
fundamental to our success
– internal development,
training and experience. The
Group prides itself on the
development of people from
within the organisation –
maintaining our values.
20
FOCUS ON HIGH QUALITY
PRODUCTS AND GOOD
LEADERSHIP IN TECHNOLOGY
CONTINUE TO GROW
THE CUSTOMER BASE
FOR GROUP COMPANIES
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.
Progress to date
• Continued enhancement of
features for the SmartScan
wireless system
Integration of lens and optical
technology into certain ranges
•
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.
Progress to date
• Targeted approach in the
Netherlands with Thorlux
industrial product portfolio
Introduce Famostar product
portfolio to territories where the
Group has a presence
Introduce selected Luxintec
product to the UK via Thorlux
•
•
Future opportunities
• Further development of
SmartScan
• Continuous research and
development
• Targeted acquisition
Associated risks
C
•
•
Product acceptance
Initial product introduction
Strategy in Action
Case Study:
Smartscan Radar
Flexbeam
Future opportunities
• Consider further sales offices
overseas
• Potential business development
•
investment
Investment in sales personnel in
the UK and overseas
• Targeted acquisition
Associated risks
A C D J
•
•
Short-term cost increase without
immediate return
Prolonged time required to establish
FW Thorpe brands in new territories
Strategy in Action
Case Study:
IBRB, University of Warwick
United Lincolnshire Hospitals NHS Trust
Read more on page 54
Read more on page 25 and 27
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Annual Report and Accounts for the year ended 30 June 2021 FOCUS ON MANUFACTURING
EXCELLENCE
CONTINUE TO DEVELOP
HIGH QUALITY PEOPLE
Our Values
Along with continued product
development, the need to innovate
the production process is essential.
Talent is one of our main sources
of competitive advantage and it is
imperative we continually develop
and retain it within the business.
Progress to date
• Training and development
• Apprentice scheme continues
Investment in management
•
training
Progress to date
• Rebuild of Lightronics factory
following fire in 2020, due for
completion spring 2022 – increase
capacity by 75% to plan for future
expansion
• Famostar facility to be extended
in 2022
• Solar on all factory roofs to reduce
electricity demand and improve
carbon footprint
• Continue to utilise former TRT facility
Future opportunities
• Continued investment in
manufacturing facilities
Future opportunities
• Continued investment in training
and personnel development
Associated risks
C E
Associated risks
C
I
•
•
Reduced productivity while changes
are implemented
Learning curve on introduction of
new products and processes
•
•
Ability to retain staff in competitive
local job markets
Potential loss of UK personnel from
the EU due to Brexit
Read more on page 22
Integrity Honesty Longevity
Risks key
A Adverse economic
conditions
B Changes in government
legislation or policy
C Competitive environment
D Price changes
E Business continuity
F Credit risk
G Movements in
currency exchange
H Cyber security
I
Exit from the
European Union
J Global pandemic
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Strategy in Action
Lightronics Fire:
‘From the ashes’
In the Chairman’s statement
last year, he reported that
Lightronics experienced a fire
on 23 September 2020 at its
facility in the Netherlands.
Thanks to the swift action of the fire
service, no one was injured and the
fire was prevented from spreading to
the warehouse and offices. However,
damage to the assembly area and
the European Application Centre
was significant. The Centre, which
had been nominated for the Sign
+ Award, has had to be completely
dismantled and will be rebuilt in
due course.
Fortunately, there was a limited
impact on stock, which enabled the
rapid resumption of production. With
the support of the Group, Lightronics
secured a temporary facility and
assembly began within 24 hours of
the fire, with production lines set up
for street and area luminaires as well
as tunnel lighting. The sales team
contacted customers regarding the
status of current orders, the majority
of which were still delivered on time.
The site is now cleared and ready
for the reconstruction of the new
improved facility, which will begin in
September with completion planned
for spring 2022. The construction
of the new Application Centre will
follow. Insurance claims are now
settled, and production output and
efficiency are recovering to near
normal levels.
Following the fire, the Board
completed an independent enhanced
fire risk review of all its operations,
and actions are continuing to do
everything possible to manage and
mitigate risks of this nature.
“
The fire at Lightronics
on 23 September was,
of course, a terrible
disaster. At that moment
we could have done one
of two things: either sat
down and done nothing
or put our shoulders to
the wheel and given it
100%. We did the latter.
We no longer looked
back at what had been,
but forward to the future.
Thanks to this spirit from
the entire team we were
back to full production
by the beginning of
November and all the
backlog was cleared by
the end of November.
We did all this during a
coronavirus crisis, and I
am incredibly proud of
my team.”
Jos Spapens
Managing Director – Lightronics
Lightronics factory in Waalwijk, the Netherlands
22
Annual Report and Accounts for the year ended 30 June 2021
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Case Study
Worcester’s Big Parade for St
Richard’s Hospice, Worcester
Each elephant is sponsored by
a company and designed by an
artist. The artists, both well known
and undiscovered, submitted their
designs, and after much deliberation
Thorlux chose ‘The Elephant Tree’
by local artist Marnie Maurri. The
theme connects with the Company’s
environmental initiatives, particularly
the FW Thorpe carbon offsetting
scheme.
As part of this year’s charitable
contribution, the directors of
Thorlux Lighting have chosen
to donate to St Richard’s
Hospice in Worcester, a local
hospice that cares for adults
with a serious progressive
illness, improving their quality
of life from diagnosis, during
treatment and to their last days.
This year the hospice has organised
an elephant sculpture trail, with a
minimum of 30 individually designed
elephants displayed throughout
the streets and public spaces of
Worcester city from Monday 12 July
to Sunday 5 September 2021. At the
end of the period, the sculptures
will be auctioned to raise funds for
the hospice’s care of patients, loved
ones and bereaved people across
Worcestershire.
“
We’re very aware of
the care St Richard’s
provides to patients
and families locally.
It’s a charity that strikes
a chord with the team
here.
When we heard about
the elephant parade, we
thought it was a great
way to support our
hospice heroes.”
Craig Muncaster
Joint Chief Executive, Group
Financial Director
Stock Code: TFW www.fwthorpe.co.uk
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Key Performance Indicators
The following key performance indicators are considered to be the most appropriate for measuring
how successful the Group has been in meeting its strategic objectives.
Revenue (£m)
Operating Profit (£m)
+4.0%
+17.7%
Basic Earnings Per Share
(Pence)
+18.5%
2021
2020
2019
2018
2017
117.9
113.3
110.6
109.6
105.4
2021
2020
2019
2018
2017
19.2*
16.3
17.6**
19.5
18.4
2021
2020
2019
2018
2017
13.57
11.45
13.91
13.91
12.54
Performance in 2021
• Built on 2020 performance
• Revenue growth across the
Group, driven by Thorlux, TRT
and Famostar
Performance in 2021
•
Impacted by Services and larger
scale projects at Thorlux
• Growth in the Netherlands and
TRT improvement
• Suppressed by overseas sales
• Other companies recovered but
offices
not to pre-COVID levels
*
2021 excludes the exceptional item in respect of
Lightronics fire £1.6m
** 2019 excludes the profit on disposal of property of £1.9m
Performance in 2021
• Driven by operating results
and exceptional profit from
Lightronics fire
Increased number of shares due
to exercise of executive share
options
•
Operating Cash (£m)
Co2 Offset (tonnes)
+12.9%
-22.4%
2021
2020
2019
2018
2017
21.9
19.4
21.6
20.7
18.5
2021
2020
2019
2018
2017
2,181
2,810
2,558
2,687
3,287
Renewable Energy Usage
(kWh)
+145.9%
2021
2020
321,236
790,030
Performance in 2021
•
•
Increased due to operating results
Reduction in stock as Brexit
protection unwound, mainly at
Thorlux
Performance in 2021
•
Investment in solar energy
generating capacity at factories in
UK and Netherlands
• Further investment in solar and
carbon offset capacity planned in
the future
Performance in 2021
• Solar generation, renewable
sources
• Solar panels installed between
autumn 2019 and spring 2021
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Annual Report and Accounts for the year ended 30 June 2021 Strategy in Action
IBRB, University of Warwick
The new Interdisciplinary
Biomedical Research Building
(IBRB) includes state-of-the
art laboratory space where
researchers investigate how
cells and tissues perform
mechanical functions. The
IBRB is the university’s most
environmentally sustainable
space on campus so far. It
demonstrates real progress
towards the university’s aim of
reaching net zero carbon from
direct emissions and the energy
it buys by 2030.
As an established supplier, Thorlux
Lighting was asked to design
an installation that would both
complement the architecture of
the building while providing a low
energy and low maintenance lighting
solution.
High performance LED luminaires
combined with the SmartScan
wireless management system were
selected for all areas within the IBRB.
The SmartScan luminaires have in-
built energy usage monitoring and
users have instant access to energy
performance data via the SmartScan
website. The information displayed
on the website can be accessed from
anywhere using a computer, laptop,
tablet or smart-phone.
“
The SmartScan system also has the
ability to provide occupancy profiling
information. The data collected from
the SmartScan Sensor, incorporated
into the luminaire, can be used to
monitor room occupancy even when
the lamp is turned off. SmartScan
interactive drawings provide a simple
and effective method of viewing
system information. The occupancy
profile for each sensor is displayed
by a range of colours from grey
(no occupancy) through to red
(occupied continuously throughout
the selected hour).
Within the laboratory areas Colour
Active luminaires have been
installed. The daily ColourActive
cycle is configured via the SmartScan
website. Preset regimes follow the
natural daylight rhythm, or specific
settings can be set and tailored
as required. This gives the user
complete freedom to set a colour
temperature regime that suits the
building’s usage pattern. Colour
temperatures are set at hourly
intervals on the website, where they
are processed and transmitted to the
building’s ColourActive Gateway.
As one of the
university’s approved
suppliers, Thorlux
was set the challenge
of creating an energy
efficient, smart building
lighting solution which
complements the
building’s architecture
whilst also being
low maintenance.
I believe Thorlux has
excelled in this and also
brought innovation
in the form of smart
lighting controls and
circadian rhythm
simulation to meet
user requirements.”
Paul Holland
Electrical Design Engineer at the
University of Warwick.
Stock Code: TFW www.fwthorpe.co.uk
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Strategy in Action
United Lincolnshire
Hospitals NHS Trust
Lincolnshire, United Kingdom
“
The Trust received a
grant from the National
Energy Efficiency Fund
for £2.6 million, enabling
the replacement of
around 12,000 light
fittings with modern
LED fittings with smart
technology that means
lights turn off after a
period of y and money
for the Trust.”
Claire Hall
Associate Director of Strategic
Business Planning at ULHT.
United Lincolnshire Hospitals
NHS Trust (ULHT) is one of the
biggest acute hospital trusts
in England, serving a local
population of 720,000. The
Trust worked with sustainability
consultant ETL on an Energy
Performance Contract (EPC) to
procure and appoint an energy
supplier, and installed Thorlux
SmartScan standard and
emergency luminaires across
its main hospital sites – Lincoln
County, Grantham Hospital, and
Pilgrim Hospital in Boston.
The programme aims to build long
term energy resilience and make lasting
enhancements to the patient care
environment at the three hospitals.
The primary aims of the new lighting
scheme are to improve lighting levels
and minimise energy usage, through
the use of Smart controls, while
providing a safe and comfortable
environment for the public and staff.
The ULHT expects to cut annual
carbon emissions by 7,712 tonnes
across the three key hospitals.
Claire Hall, Associate Director of
Strategic Business Planning at
ULHT, says: “Sustainability, energy
efficiency, and carbon reduction
are at the heart of our management
policy. We have already made great
strides in reducing our carbon
footprint. By upgrading and investing
in sustainable technologies, it’s our
ambition to reduce this by 28% by the
end of 2021.”
Thorlux Lighting proposed a new
installation that would combine
the necessary energy savings with
an improved quality of lighting
throughout the buildings. This
recommendation was based on
installing the Thorlux SmartScan
monitoring and management system,
which incorporates Smart intelligent
lighting control. Integral Smart
sensors monitor ambient light and
presence, and control output to the
correct level; they dim and switch
when there is sufficient daylight,
and illuminate only when the area
is occupied. Thorlux SmartScan
luminaires have delivered a 91%
energy saving compared with
the previous lighting installation,
resulting in electrical operating
savings of £398,570 per annum.
Claire Hall says, “The Trust received
a grant from the National Energy
Efficiency Fund for £2.6 million,
enabling the replacement of around
12,000 light fittings with modern LED
fittings with smart technology that
means lights turn off after a period of
inactivity, saving energy and money
for the Trust.”
SmartScan automatically controls
the emergency lighting test regime,
monitoring the status of each
luminaire and reporting daily to
the SmartScan website. SmartScan
emergency luminaires test according
to the schedule specified in BS EN
62034:2012 (automatic test systems
for battery powered emergency
escape lighting) and display current
status via a bi-colour LED. The
SmartScan website allows users
to view current status information
as well as full historic data when
required. The hospitals recognise
that significant savings that can
be achieved by removing the task
of manually testing thousands of
emergency luminaires every month.
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Operating performance
Group Total Revenue (£m)
Excluding Intercompany
16.4
31.5
2021
70.0
Thorlux
Netherlands companies
Other companies
Revenue By Region (£m)
Excluding Intercompany
2.1
12.5
28.9
2021
74.4
UK
Netherlands
Rest of Europe
Rest of the World
FW THORPE: 2021 GROUP COMPANY OVERVIEW
Group’s businesses this financial year
has been on maintaining operations
whilst navigating the various
restrictions imposed and balancing
customer demand.
TRT built on the results of last year.
Most other UK companies in the
Group made a decent recovery;
however, they still traded below pre-
COVID levels.
Results at the Group’s overseas sales
offices in Australia and the UAE
were disappointing, with colleagues
severely affected in their ability to
visit customers and sell products.
The Group’s Dutch companies
deserve special mention. Both
Lightronics and Famostar grew their
operating profit – a remarkable feat
given that Lightronics’ operations
were severely hampered in late
September and October 2020 by the
fire that destroyed the manufacturing
capacity of the business.
Revenue continued to be supported
by some major projects and
services; the latter made little profit
contribution, however, therefore
dampening returns at an operating
profit level. Continued new product
introductions, investment in
manufacturing facilities, and sales
into new markets have, though,
helped the Group deliver respectable
results yet again, even against the
backdrop of uncertainty.
The Group continues to be
underpinned by the development of
market-leading lighting equipment
and the delivery of excellent
customer service.
The following is an overview of
2020/21 for each company.
FW Thorpe Plc encompasses
individual companies that
concentrate on particular
market sectors and
geographical locations. The
companies provide the Group
with diversity as well as risk
mitigation, as they do not
compete with one another and
are complementary.
The companies within the Group
can be affected differently by trends
and economic impacts within their
respective markets. The continuing
development and market adoption of
LED and lighting controls technology
allows Group companies to share
the benefits of their product and
technical expertise, differentiating
themselves from competitors.
Improved Group performance in
2020/21 was driven by increased
revenues at Thorlux and a solid
performance by the businesses in the
Netherlands.
The COVID-19 pandemic still
hampered Group companies’ ability
to increase production capacity when
required, due to social distancing
measures and lack of availability
of labour. Companies also faced
increased costs for cleaning and for
lateral flow testing of employees.
The Group continued to support its
employees with full pay when they
were off work due to illness or to
COVID-19 isolation requirements; it
maintained its independence by not
accessing any government support
packages.
During the COVID-19 pandemic, it
has been important for the Group to
protect and support its employees
as well as consider the long-
term impact of its actions on the
Group’s customers, reputation and
independence.
Beyond the health and safety of
employees, the focus of all the
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Annual Report and Accounts for the year ended 30 June 2021 SUMMARY OF THE
COVID-19 SITUATION
• Safety measures remained in
place at facilities, lateral flow
testing introduced in 2020 to
protect the work force and
ensure minimal disruption in
manufacturing.
• Majority of Group businesses
have recovered strongly,
slow recovery at Philip Payne,
Australia and the UAE.
• No government support
accessed again this year, unlike
a number of our domestic
and international competitors
with a presence in the UK.
Continued support for our
employees where necessary.
• Results hampered by COVID-19.
Increased costs for testing,
financial support of hourly
paid, lost productivity and
management time.
WMG Degree Apprenticeship Centre, University of Warwick
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THORLUX LIGHTING
The company delivered another
strong performance, with
improved operating profit.
Order levels reached an all-
time high, supported by major
projects from a number of
sectors, resulting in a strong
order backlog to start the new
financial year. Operational
efficiency also improved.
Revenue continues to be supported
by growth in services; however, £2.2m
of revenue from services earned
lower margins than lighting sales and
had a dilutive impact on operating
results. Providing surveying, project
management and installation services
does, however, augment the ability
of Thorlux to secure significant-value
product orders which in turn provide
characteristic margin levels.
Following the introduction of a
new managing director, reported
last year, initiatives are underway
to build on this year’s improvement
in performance, merging some
new ideas with years of embedded
lighting industry know-how.
The ability of Thorlux to cover
the broadest portfolio of sectors
with its vast range of products, as
well as its stable 85-year history,
have supported growth this year.
Brexit threatened to undermine
the company’s ability to sell into
Europe; however, with the support of
Thorlux’s customers and the Group’s
businesses based in the European
Union, the company has overcome
most obstacles. Unfortunately, some
significant customers inevitably
became frustrated by Brexit-related
disruption.
Overseas sales offices had less
success this year – except in Germany,
where more positive results were
achieved predominantly from one
new large SmartScan customer.
Despite achieving lower revenues,
the Ireland team supported order
successes in Spain, South Africa, and
in the UAE, where it supported an
internationally recognised company’s
expansion plans.
£73.3m
Revenue +7%
(2020: +4%)
“
The FW Thorpe
board is pleased that
Thorlux achieved
another record year
for orders despite the
economic uncertainty
faced throughout the
financial year.”
WMG Degree Apprenticeship Centre, University of Warwick
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Annual Report and Accounts for the year ended 30 June 2021 Amenity lighting, Stratford upon Avon
The bedrock of any FW Thorpe
company is innovation, a key
principle that Thorlux was founded
upon. Product development
continues, with several new products
and enhancements of existing ranges
launched this year.
Whilst it may seem to have been
a quiet year on the investment
front, several smaller projects have
been implemented, including
compressed air unit replacements
and improvements to fire prevention
companywide.
SmartScan continues to deliver, with
revenues growing significantly again
this year. In-house development work
continues on new and enhanced
features, helping to secure orders
in sector-specific areas as well as
supporting growth in Germany.
Further information on how
SmartScan is evolving can been seen
on page 54.
Thorlux has continued its investment
in green technologies – for example,
in electric vehicles to replace
traditional or hybrid technologies
and improve the company’s carbon
footprint – and this will continue into
the next financial year.
The FW Thorpe board is pleased that
Thorlux achieved another record
year for orders despite the economic
uncertainty faced throughout
the financial year. Economic
commentators seem to be signalling
some positive momentum in the UK;
however, there is some adversity for
the company to navigate in terms
of raw material price increases and
component shortages.
Thorlux starts 2021/22 with a
significant order book and the
opportunity to secure further large
scale orders. Continuing to target
specific sectors and territories will be
crucial to ongoing success.
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PHILIP PAYNE
The recovery at Philip Payne
this year was slower than
anticipated. In part, this could
be due to the sector mix that
the business operates within
and the lack of major projects.
Architecturally pleasing products and
an impressive portfolio of projects
continue to underpin the company.
Whilst there have been no projects
of significant value, projects are no
less notable and include the Jumeirah
Carlton Tower Hotel in Knightsbridge,
Westminster Chapel, Symphony Hall
Birmingham, the Royal Courts of
Justice, and Lord’s Cricket Ground.
Overseas projects include Haramain
high-speed railway in Jeddah, Saudi
Arabia, and an opera house in Egypt.
Philip Payne’s iteration of the Thorlux
SmartScan platform, Specto-XT,
continues to have a positive impact
on revenues despite relatively flat
overall performance. Projects were
secured in a variety of sectors,
including in a castle.
Philip Payne struggled to gain
traction in its collaboration
with Famostar this year, despite
investment in the sales resource;
COVID-related restrictions in place
for much of the year made it difficult
to engage with potential new
customers. Some success has been
achieved, with small orders secured
in a few different sectors. Renewed
selling vigour following reduced
restrictions should see a positive
impact in 2022 and increase the
Group’s market share of smaller end
user clients.
Export revenues improved this year,
with a good example of Group co-
operation: Philip Payne supported a
project in Spain that was specified by
Thorlux in Ireland and delivered by
Luxintec.
The only significant investment at
Philip Payne in 2021 was in sales and
marketing activities associated with
selling the Famostar range; these
investments are expected to achieve
more orders next year.
During the coming year, the company
will also focus on further marketing
investment to support the recovery
and growth in revenue. Whilst the
target for 2021 was to recover to
previous revenue levels, this target
now has to be shifted to 2022.
£2.8m
Revenue +3%
(2020: -20%)
“
Whilst the target for
2021 was to recover
to previous revenue
levels, this target now
has to be shifted to
2022.”
Morgan Cars
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Annual Report and Accounts for the year ended 30 June 2021 SOLITE
The Solite business made a
strong recovery, driven by
clean-room lighting projects
in the pharmaceutical and
healthcare sectors. Cross-selling
has also helped drive revenues
this year, with continued
collaboration between the sales
office in Ireland and the Thorlux
UK team helping to secure
multiple projects.
Solite’s strength is its ability to
offer variations of its standard
range of products to suit specific
customer requirements. A particular
collaboration with Thorlux produced
some good revenue and helped
ensure the continued support of two
key customers for the Group in the
retail sector.
Solite was affected significantly by
day-to-day operational difficulties
related to the COVID-19 pandemic,
probably due to its geographical
location near Greater Manchester
which seemed to suffer more than
many parts of the UK.
Nevertheless, strict control measures
and, on occasion, twice-weekly
testing of all employees kept the
business operational.
Raw material shortages have resulted
in material price inflation, but some
well-managed forward ordering has
helped minimise the impact.
Solite increased its performance
quite markedly compared with the
prior year. Investments in sales and
marketing have delivered a return to
almost pre-COVID revenue levels; the
next target is to move beyond this
with a focused approach.
There are plans to strengthen Solite’s
management team in 2021/22 and
target further growth within the
company’s traditional markets
sectors whilst also more vigorously
pursuing new market sectors. Solite
will continue to focus on improving
its product portfolio to keep ahead of
the competition.
Yet again, Solite starts the new
financial year with a solid order book.
£3.2m
Revenue +19%
(2020: -21%)
“
Investments in sales
and marketing have
delivered a return to
almost pre-COVID
revenue levels; the
next target is to move
beyond this with a
focused approach.”
Solar Panel Manufacturer, Wroclaw, Poland
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PORTLAND LIGHTING
Given the company’s reliance
on orders for supply into the
retail and hospitality sectors,
the results achieved by Portland
in the economic climate of the
last 12 months are all the more
impressive.
During the final quarter of the
2019/20 financial year, for a number
of weeks, Portland had almost zero
order intake. During 2020/21 also, the
business has been subjected to lower
levels of activity around periods of
lockdown; however, Portland finished
the financial year strongly.
The company has been supported by
a collaboration project with Thorlux,
delivering a bespoke solution to
a specific retail customer by re-
engineering an existing product.
Portland’s new product design
team, created in 2020 to support
the increased requirement of the
company for targeted innovation
and development, delivered the
customised product.
Portland continues to develop export
opportunities for its core products,
although success has been limited.
A more varied product portfolio
has been an ambition of the Group
for some time, in response to the
decline in Portland’s traditional
markets. There has been significant
progress, with two new product
ranges ready for launch into two new
market sectors – one for sales into
the domestic market sector, the other
related to lighting road crossings.
Portland has made strategic
recruitments to target these sectors,
and some benefit is expected to
materialise in 2022.
Whilst there has been some recovery
in Portland’s core market, the
company needs to continue to focus
on delivering revenue growth from
specific products aimed at new
sectors.
£2.8m
Revenue +16%
(2020: -17%)
“
A more varied product
portfolio has been
an ambition of the
Group for some time,
in response to the
decline in Portland’s
traditional markets.
There has been
significant progress,
with two new product
ranges ready for
launch.”
New Leisurelux range
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Annual Report and Accounts for the year ended 30 June 2021 TRT LIGHTING
TRT improved both revenue
and operating profit again
this financial year. Despite
having to close its facility for
two weeks in January 2021 due
to COVID-19, TRT responded
well to the setback, posting
impressive revenue figures
during the remaining months of
the financial year to surpass the
highs of 2019/20 and break the
£10m revenue marker for the
first time since its inception.
Revenue has been boosted by a
large scale tunnel refurbishment
project on the M25 motorway and
the company’s continued support of
large scale rail projects in conjunction
with Thorlux. TRT expects further
tunnel projects to be given the go-
ahead in 2021/22 and demand in
street lighting to be maintained.
Operational improvement projects
at TRT seem to have stalled this year;
however, the team has had a number
of COVID-related challenges to deal
with. TRT will continue efforts to
improve the company’s return on
sales in the coming years.
TRT is no different to the rest
of the Group in its need for
continuous product development
and innovation. The Optio range
has continued to gain traction,
giving customers a one-size-fits-all
approach to street lighting solutions.
Also, several patent applications
have been granted. Sustainability is
becoming a key criterion for certain
customers; here TRT has offered a
retrofit solution for tunnel enclosures,
leaving the main carcass intact whilst
rejuvenating the light-generating
portion for many years to come. TRT’s
street lighting range is made from
recycled aluminium and offers the
ability for maintenance engineers to
replace components, increasing the
longevity of a product that already
had a significant design life.
TRT starts the new financial year
with a reduced order book but with
a significant project for Thorlux in
the rail sector. The company will
target further growth this year, with
operational improvements back on
the agenda if there are no COVID-
related distractions.
£10.5m
Revenue +8%
(2020: +14%)
“
TRT’s street lighting
range is made from
recycled aluminium
and offers the ability
for maintenance
engineers to replace
components,
increasing the
longevity of a product
that already had a
significant design life.”
Cuilfail Tunnel, Lewes
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LIGHTRONICS
£22.5m
Revenue -1%
(2020: -3%)
(Constant currency -2% (2020: -3%))
“
Fantastic set of
results, considering
the business was
ravaged by fire, losing
its full manufacturing
capabilities during late
September and into
October 2020.”
Lumièrepark in Almere, the Netherlands
These words are not used
lightly in the Group – but
what a fantastic set of results,
considering the business was
ravaged by fire, losing its full
manufacturing capabilities
during late September and
into October 2020. Although
revenues were lower, operating
results improved. This is
testament to the efforts of the
team at Lightronics but also
the willingness of the customer
base to stick with the company
during that difficult period.
There were no projects of significant
note this financial year, just a good
day-to-day order intake. Business was
derived from both the street lighting
and impact-proof segments. Sales
into both Germany and France were
at similar levels.
Success distributing Thorlux’s
industrial products was again limited,
at £0.5m (2020: £0.5m). The Group
remains confident that the market
in the Netherlands is receptive to
energy-saving high technology
solutions, but the route to market
through Lightronics continues to
stutter. To this end the Group has
changed its approach: Lightronics will
continue to market Group products
to its existing customer base, but
Famostar will take the lead from
2021/22 onwards, given its success in
introducing SmartScan to the market
this year and its closer relationship
with end users, the more traditional
customers of Thorlux Lighting in
the UK.
Development of products for its
core markets is fundamental for
Lightronics’ continued success.
Working with other Group
companies on collaborative product
development projects is also key
– particularly with Thorlux, and
with TRT, given they share similar
customer bases and product
portfolios. In August 2020, Thorlux
launched the unique Radar wireless
presence detection system in the
UK; Lightronics has now adopted the
system for its own market. Various
components from the Lightronics
portfolio have also benefited the
TRT amenity range, saving the need
for separate UK design and tooling
investment.
Unfortunately, the European
Application Centre (known locally as
the Experience Centre) was destroyed
by the 2020 fire. This was devastating
for the team involved in this project,
given their effort in creating it. The
European Application Centre will be
re-established as part of the factory
rebuild that should be completed
during the 2021/22 financial year,
increasing assembly manufacturing
space by 75% and setting the
business up for the long term.
Improving on these results will be
a challenge; however, given the
performance of the Lightronics team
during the last financial year, the
challenge is one they can certainly
respond to. The first target is to build
on the improved profitability of
2020/21 with increased revenue; this
will be tough given the raw material
price increases and electronics
component shortages that the Group
is experiencing at this time.
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Annual Report and Accounts for the year ended 30 June 2021 FAMOSTAR
Watertoren Amersfoort, the Netherlands
Famostar has posted another
set of impressive results;
growth has continued since the
company joined the Group in
2017. Growth has been achieved
through targeted customer
activity to increase market
share as well as supplementing
revenues by delivering projects
incorporating the Thorlux
SmartScan platform.
Traditionally, Famostar business
has been derived from the
Netherlands. Famostar is developing
a distribution channel in the UK
utilising Philip Payne’s local presence
in the emergency lighting market.
Additional UK selling resource has
been recruited and the first initial
orders have been received despite the
difficulties of finding and visiting new
clients during this last year.
There has also been some notable
progress selling SmartScan
technology developed by Thorlux
into the Netherlands. Famostar has
integrated SmartScan technology
(electronic designs and software) into
its existing product portfolio and
has delivered projects into a variety
of sectors, with a number in the
pipeline for 2021/22. Furthermore, the
SmartScan website and system are
now supported in six languages.
Whilst Famostar continues to evolve
and enhance its existing product
portfolio, a new product has also
been added. D-sign is a sleek
emergency exit sign with a modern
aesthetic that is easy to install. The
product won a Red Dot award for
product design in 2021.
Following the purchase of the
Famostar building and neighbouring
land in 2019, plans to expand the
current facility are being finalised.
£9.3m
Revenue +5%
(2020: +12%)
(Constant currency +4%
(2020: +12%))
“
There has also been
some notable progress
selling SmartScan
technology developed
by Thorlux into the
Netherlands.”
The larger facility will facilitate future
company growth and remove the
reliance on external storage, reducing
the associated costs in transporting
and double handling. This investment
is expected to be completed during
the 2022/23 financial year.
Last year’s annual report noted the
pessimistic economic outlook in the
Netherlands and the impact this could
have on both of the Group’s Dutch
companies; however, both companies’
results have exceeded expectations
this year. Famostar will continue to
focus on its strategic objectives of
growing the business outside the
Netherlands and selling SmartScan
technology into the domestic market.
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Strategy in Action
Product innovation:
Flexbeam
the sound performance of Flexbeam,
which can assist the building acoustic
engineers during building design.
Flexbeam can also be supplied
without the lighting element for
applications where more sound
absorption is needed in addition to
the luminaires, affording a coherent
overall solution.
COMFORTABLE, GLARE FREE
LIGHTING
The optics within Flexbeam are
common to both Flexline and
Flexview and were developed
within the FW Thorpe group in
association with Luxintec. The high
degree of glare control is ideal for
commercial spaces where glare can
cause discomfort. The patented
optical system combined with a glare
controlling reflector system provide
high efficiency whilst still achieving
superb glare control.
SUSTAINABILITY
With sustainability and circular
economy principles becoming
increasingly important considerations
for all manufactures, Flexbeam
has not only been designed
for performance but also to be
environmentally friendly. The sound
absorbing body is manufactured
from 65% recycled PET (polyethylene
terephthalate), with over 47 recycled
plastic bottles used in every
Flexbeam. The material is also 100%
recyclable at the end of life. This
is combined with a 100,000 hour
life and the ability to service the
luminaire throughout its life.
By combining a long and reliable
lifetime, serviceability, and
recyclability at the end of life,
Flexbeam is an ideal choice for
sustainable lighting and acoustic
solutions.
In 2021, Thorlux launched
Flexbeam, a stylish suspended
luminaire with acoustic
attenuation designed to reduce
sound reverberation and echo.
By combining high performance
low glare lighting with a
luminaire body that absorbs
sound, two important functions
within a space can be combined
into a single product – reducing
cost and de-cluttering the
ceiling.
Flexbeam joins the Flex System
family and shares the same high
performance optics as used on the
Flexline and Flexview luminaires
launched in 2019.
With the trend continuing for
commercial spaces to have open and
exposed ceilings, providing the right
acoustic performance can often be a
challenge. Sound absorbing panels
can be used – either suspended
from the ceiling or fixed to the walls
– in order for the space to meet
recommended sound reverberation
limits. The materials used are
constructed in such a way that they
absorb the sound and increase the
rate of reverberation decay. The faster
the sound decays, the lower the
reverberation time – thus improving
voice and audio clarity.
SOUND PERFORMANCE
The Flexbeam body is manufactured
from a special sound absorbing
material. Thorlux worked with a
leading acoustics provider and
carried out independent acoustic
testing at the sound research
laboratories at the University of
Salford in Manchester. These tests
provided a full technical report on
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Strategy in Action
COVID-19 update
With COVID-19 lockdown restrictions
continuing into 2021, a wide range of
enhanced protocols have remained
in place at all FW Thorpe factory and
office locations to ensure compliance
with, and to exceed, government
guidelines. Measures include infra-red
temperature screening technology at
the entrances to each site, designated
sanitation stations, and changes to
workspaces and shift patterns. FW
Thorpe continues to support those
staff working from home with the
latest IT facilities and to digitise
processes, reducing the need to
transfer paper and to minimise
contact on site. The company also
reopened a mothballed 13,000
square feet factory to enable both
TRT and Thorlux to spread out and
achieve compliance with the 2m
social distancing guideline. It is
expected that this additional resource
will stay open until the end of the
autumn period.
Shortly after Christmas, the TRT
facility in Redditch experienced
significant disruption due to a
number of COVID-positive cases
and was closed for two weeks as a
result. In the face of national infection
rates rising, the management team
decided to research lateral flow test
kits. We purchased a considerable
number of tests in order to test all
office based and factory employees
on, typically, a weekly basis. We
decided to control and manage
testing ourselves to give complete
flexibility about how, where and
when to conduct tests.
By April approximately 4,000 tests
had been carried out, allowing
us to maintain a safe operating
environment as well as manage any
infections detected. On numerous
Stock Code: TFW www.fwthorpe.co.uk
occasions we were able to detect
positive cases and proactively isolate
asymptomatic cases. This, together
with compliance with working within
pre-set zones (bubbles), wearing PPE,
social distancing and washing hands,
allowed us to keep the businesses
fully functioning. That the Group
businesses kept working is a credit
to our employees for supporting and
adhering to the measures. With the
infection rate steadily falling at the
end of April, the decision was made
to reduce testing rates in some parts
of the Group.
The lockdown and ongoing
restrictions have had an impact
on all of us within the Group.
As a company, we prioritise the
health, safety and welfare of all our
employees. In March we introduced
an Employee Assistance Programme
(EAP) and priority GP online helplines.
The EAP provides confidential access
to licensed professional counsellors
and work/life specialists who are
available for short-term assistance.
The service offers the support and
resources needed to address any
personal challenges and/or concerns
that may affect personal well-being
and/or work performance. The EAP
is a company funded benefit.
Temperature screening at Thorlux
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It is confidential and free to all
employees as well as their eligible
family members.
With the recent easing of lockdown
in the UK, we will continue to review
our procedures and protocols and
will adapt them accordingly over the
coming weeks and months in line
with government advice.
Lateral flow testing at Thorlux
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Financial Performance
“
The increase in Group
profitability can be
attributed in the main
to the Thorlux and
Netherlands businesses.
The results have
still been hampered
with increased costs
of lost working time
and increased safety
measures due to
COVID-19.”
Craig Muncaster
Joint Chief Executive, Group Financial
Director and Company Secretary
Netherlands with a higher headline rate
and the substantively enacted higher
future UK tax rate. The effective tax
rate for UK companies is lower than the
current corporation tax rate due to patent
box relief driven by the Group’s product
innovations.
From a cash perspective, insurance
proceeds of £3.4m were received during
the year, £2.5m of this is earmarked
for the rebuilding of the Lightronics
manufacturing facility. An exceptional
profit of £1.6m has been reflected
following settlement of the claim.
In April 2021, the Company paid an
interim dividend of 1.49p per share
(2020: 1.46p) amounting to £1,736,000
(2020: £1,698,000). A final dividend of
4.31p (2020: 4.20p) per ordinary share and
a special dividend of 2.20p (2020: nil) per
ordinary share are proposed amounting
to £5,028,000 (2020: £4,886,000) and
£2,567,000 (2020: nil) respectively.
If approved the dividends will be paid on
25 November 2021. Total dividends paid
during the year amounted to £6,631,000
in aggregate (2020: £6,468,000). The
final dividend for 2020 was paid on
26 November 2020.
The events of the last year or so
highlighted the Group’s financial strength
and robust balance sheet. We actively
decided to support our employees and
not to access Government schemes
whilst maintaining an increased dividend,
this continued in 2020/21.
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 that
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
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 2021.
RESULTS AND DIVIDENDS
Revenue increased by 4.0% to £117.9m
with operating profit (before exceptional
item) increased by 17.7% to £19.2m,
reversing the decline of last year and
moving Group profitability forward.
The increase in Group profitability can be
attributed in the main to the Thorlux and
Netherlands businesses. The remaining
UK companies all posted positive
contributions but the overall results for
the other companies were dampened by
the results from our overseas sales offices
in the UAE and Australia.
The last quarter of 2020 was severely
impacted by COVID-19 dampening
last year’s results, whilst this was not
the case in 2021 the results have still
been hampered with increased costs
of lost working time, increased safety
measures including lateral flow testing
of employees and increased cleaning
regimes.
The operating results were further
suppressed by the provision of an
additional £1.5m (2020: £2.0m) to
finalise the pay-outs on the Lightronics
and Famostar earn-outs due to the
continuing success of both businesses.
These payments have been made during
September 2021.
Net finance expense increased this year
to £0.7m (2020: £0.4m). The net income
has reduced from previous years due
to the accounting treatment of the
Lightronics and Famostar acquisitions
and continued low interest rates on our
cash deposits.
The taxation charge represents an
effective rate of 21.5% (2020: 16.5%).
The rate is higher than the previous year
driven by increased profits from the
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Annual Report and Accounts for the year ended 30 June 2021 Group Total Revenue (£m)
Excluding Intercompany
+4.0%
2021
117.9
2020
2019
2018
2017
113.3
110.6
109.6
105.4
Group PBT (£m)
Profit before tax
+26.3%
2021
2020
2019
2018
2017
20.1*
15.9
19.6**
19.6
18.4
* 2021 includes exceptional item in
respect of Lightronics fire £1.6m
** 2019 includes profit on the disposal
of property of £1.9m
£137.0m
Net Assets
(2020: £128.3m)
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 2021 or
30 June 2020.
PENSION SCHEME POSITION
AND FUNDING
The latest triennial actuarial valuation
was completed as at 30 June 2018. 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
statement of financial position.
GROUP RESEARCH AND
DEVELOPMENT ACTIVITIES
The Group is committed to research
and development activities in order
to maintain its market share in the
sectors and territories we operate.
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
£1,516,000 (2020: £1,322,000) 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. While 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 20
years ago, management considers that
undertaking formal valuation exercises
would be costly for limited value and
consequently no formal exercise has
been undertaken.
Investment this year was significantly
reduced compared to previous
years. The main capital expenditure
focused on the underpinning of our
sustainability credentials with a £0.2m
investment in solar panels for certain
UK manufacturing facilities.
CREDITOR PAYMENT POLICY
The Group’s policy concerning the
payment of its trade creditors is to accept
and follow the normal terms of payment
among 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 43 (2020: 44). The Group
continues to report on payment practices
and performance as per UK legislation.
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 as well
as the previous year. 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.
Craig Muncaster
Joint Chief Executive, Group Financial
Director and Company Secretary
5 October 2021
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Principal Risks and Uncertainties
RISK MANAGEMENT PROCESS
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 is currently taking in
order to manage them.
The Board
Strategic risk assessment at Executive level
Principal Risks
Strategic
Operational
Financial
Group Companies
Risk assessment at an individual company level
Type
of risk
Description
of risk
Mitigation of risk
Possible
impact on
performance
Strategic
priorities
impacted
upon
Change
in period
• Broad range of customers in
High
differing sectors
• High quality, technically
advanced products to
differentiate the Group from
competitors
• Actively seek to identify new
opportunities to ensure we
maximise our potential of
winning new business
Medium
• 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
Deferred or
reduced capital
investment
plans in market
sectors, which
our products are
supplied into and
are key sources of
revenue for the
Group
Impact of
COVID-19 on
domestic and
global economies
Reduction in
public sector
expenditure and
changing policy
increases risk to
our order book
Increased
complexity of
access to EU
markets
1
2
4
2
4
Area of risk
A
Adverse
economic
conditions
Strategic
B
Changes in
government
legislation or
policy
Strategic
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Annual Report and Accounts for the year ended 30 June 2021 Type
of risk
Description
of risk
Mitigation of risk
Area of risk
C
Competitive
environment
Strategic
Existing
competitors,
powerful new
entrants and
continued
evolution of
technologies
in the lighting
industry eroding
our revenue and
profitability
D
Price changes Operational
Erosion of
revenue and
profitability
E
Business
continuity
Operational
The majority
of the Group’s
revenues are
from products
manufactured
in the Redditch
facility
F
Credit
risk
Financial
The Group offers
credit terms
which carry risk
of slow payment
and default
G
Movements
in currency
exchange
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
Strategic
priorities
impacted
upon
Change
in period
1
2
3
4
1
2
2
3
2
2
Possible
impact on
performance
Medium
Medium
• Offering innovative products
and service solutions that are
technologically advanced
products to enable us to
differentiate ourselves from
our competitors
•
•
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
• 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
• High level of importance
High
attached to environmental
management systems, health
and safety and preventative
maintenance
Insurance cover is maintained
to provide financial protection
where appropriate
Increased production flexibility
with the ability to build
products in more than
one manufacturing facility
•
•
• Credit policy includes an
Low
•
•
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
The Group has increased
its sourcing of materials to
maintain a natural hedge to
offset its currency risk from
EUR receivables, whilst at the
same time buying EUR and
USD when the exchange rate
is favourable, compared to our
operational rates, to minimise
the risk
Low
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Principal Risks and Uncertainties continued
Area of risk
Type
of risk
Description
of risk
Mitigation of risk
Possible
impact on
performance
Strategic
priorities
impacted
upon
Change
in period
H
Cyber
security
Operational
I
Exit from the
European
Union
Strategic
A breach of IT
security could
result in the
inability to
operate systems
effectively and
efficiently or
the release of
inappropriate
information
Increased
complexity
of access to
EU markets,
customers
in certain EU
territories
actively moving
business from UK
companies
J
Global
pandemic –
COVID-19
Operational
Potential
disruption to
operations from
further outbreak
of COVID-19
1
3
4
2
4
2
3
• Continual review and
Medium
monitoring of potential risks
• Computers encrypted where
necessary to protect data
• Cyber security awareness
training for employees
ongoing
• With the Group having a
Medium
manufacturing presence in two
EU countries, the Netherlands
and Spain, this leaves us ideally
placed to react to any negative
trade barriers that may be
imposed on the UK
• Continue to develop closer
working relationship with
these entities, sharing
product development, market
knowledge and operational
expertise to ensure we have
the flexibility to adapt to any
changes in the future
• Creation of legal entity in
Republic of Ireland to route
all EU business in the future to
ease the process of customers
trading with us
Risk assessments, preventative
measures including lateral
flow testing when required,
temperature screening,
distancing and hygiene
measures in place
Additional component stock
held at some companies to
mitigate any supply chain
disruption
Potential to utilise
manufacturing facilities at
other Group companies
•
•
•
High
STRATEGIC PRIORITIES KEY
RISKS KEY
Focus on high quality products and good leadership in technology
Increase in risk
Continue to grow the customer base for Group companies
Focus on manufacturing excellence
Continue to develop high quality people
No change in risk
Decrease in risk
1
2
3
4
44
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Annual Report and Accounts for the year ended 30 June 2021 Principal Risks and Uncertainties continued
Prince Henry’s High School, Evesham
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview s172 statement
STAKEHOLDER ENGAGEMENT
The Group has the responsibility for managing the challenges that affect the business on a daily basis;
this also includes our impact on our key stakeholders. Our ability to engage and work constructively
with these stakeholders underpins the long-term success and sustainability of the Group.
The directors are aware of their duty under Section 172(1) of the Companies Act 2006 to act in the way they consider, in
good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and
in doing so have regard (amongst other matters) to:
• The likely consequence of any decision in the long term
• The interest of the Company’s employees
• The need to foster the Company’s business relationships with suppliers, customers and others
• The impact of the Company’s operations on the community and the environment
• The desirability of the Company maintaining a reputation for high standards of business conduct
• The need to act fairly between members of the Company.
The Board considers its key stakeholders to be its employees, customers, shareholders, suppliers and the communities
and environment we operate within.
Key stakeholders and how we engage with them:
Stakeholder group
Why we engage
How we engage
Employees
The right people, capabilities and
engagement across the Group is the platform
to drive our long-term success
• Employee committees
• Health & safety committees
• Employee appraisals, training and
Customers
Understanding the needs of our customer is
fundamental. We aim to deliver the correct
technical solution, professional service,
sustainability of products/services and
support the customer during a product’s
warrantable life and beyond
development
• Communication via web portal, notices
and company newsletter
• Group board meetings held periodically
at different company sites
• Meetings/maintaining close relationships
via regional sales or business
development teams
• Providing Continuing Professional
Development seminars and education
opportunities
• Company websites
• Customer specific events, including trade
shows
• Order execution – from lighting design,
through to delivery, installation and
commissioning
46
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Annual Report and Accounts for the year ended 30 June 2021 Stakeholder group
Why we engage
How we engage
Shareholders
Trust from our shareholders is key to
delivering our strategy and long-term
success. We endeavour to provide fair,
balanced and meaningful information to
shareholders and potential investors to
ensure they understand our performance
and strategy
Suppliers
We need to maintain reliable relationships
with suppliers for mutual benefit and ensure
they are meeting our standards, from value
for money, quality, through to business ethics
Communities &
Environment
The Group is committed to be a responsible
member of the community and considers the
environmental impacts of the customer’s use
of our products as well as our own operations
• Trading updates at appropriate times
• Regulatory News Service
•
Investor meetings and presentations,
including company visits
• Dedicated Group website
• Annual and Interim reports
• Annual General Meetings
• Meetings and negotiations with key
suppliers
• Site visits
• Quality management reviews and audits
• Attending supplier forums and
trade shows
• Support local and national charities
• Engagement with local MPs and
Chambers of Commerce
• Members of appropriate trade and
industry bodies
• Carbon offset scheme in place since 2009,
accredited under the Woodland Carbon
Code
• Recent investment in solar panels in the
UK and Netherlands facilities
• Products and systems support energy
saving and carbon reduction – London
Stock Exchange Green Economy mark
in 2020
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The journey so far and the UN
Sustainable Development Goals
INTRODUCTION TO SUSTAINABILITY AT FW THORPE
The Group is committed to addressing today’s
sustainability challenges and opportunities,
adjusting its business strategy accordingly.
Understanding the needs of customers, key
stakeholders and the expectations they have is
central to ensuring that the Group prioritises the
most critical issues and operates a responsible
and sustainable business.
Sustainability has been at the core of FW Thorpe for many years.
Products are designed for longevity using recyclable materials,
and the Group’s direct carbon impact has been measured for
over a decade, with emissions offset using its own independently
certified tree planting scheme since 2009. Thorlux Smart
technology has been saving energy for customers as well as
reducing their carbon impact since 2003.
FW Thorpe now holds the Green Economy Mark, which identifies
companies and funds listed on the London Stock Exchange that
generate between 50 and 100% of total annual revenues from
products and services that contribute to the global green economy.
Y
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The journey so far: the Group’s progress
so far and plans for the future
Over the last two decades, FW Thorpe has sought to
address its carbon impact, by working towards carbon
neutrality for its manufacturing and distribution
operations. This has led to a major employee engagement
programme on energy efficiency of its operations, as
well as significant recent investments in renewable
energy generation with the addition of roof-top solar
photovoltaic (PV) panels to the Group’s manufacturing
facilities. This investment in solar PV panels will enable the
Group to generate 40 to 50% of its own electricity usage
when the project is completed.
Since 2009, FW Thorpe has been planting trees on its own
land in Wales to offset Group emissions each year. To date
149,849 trees have been planted, offsetting 32,000 tonnes
of CO₂. A further 30,000 trees will be planted by the
end of 2023. The Board is now working to certify Group
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Annual Report and Accounts for the year ended 30 June 2021
operations as carbon neutral with an
established third party, to recognise
the immense activity and investment
in decarbonisation.
The Group plans to further reduce
waste and apply the principles of a
circular economy across all businesses
and supply chains. Designing more
products that can last even longer
and can be refurbished, repurposed
and recycled, helps to reduce
pressure on the world’s resources.
The target is to develop a net-zero
plan in 2022, setting science-
based targets to reduce carbon
emissions not only in the Group’s
own operations but also in both its
upstream and downstream activities
in step with society’s progress in
achieving the goal of the UN Paris
Agreement on climate change.
The Group’s sustainability
framework – aligning
with the UN Sustainable
Development Goals
The 17 Sustainable Development
Goals (SDGs) were launched in
2015 by the UN, aiming to end
poverty and create a life of dignity
and opportunity for all, within
the boundaries of the planet. The
SDGs define global sustainable
development priorities and
aspirations for 2030 and seek to
mobilise global efforts among
governments, business and civil
society around a common set
of targets.
FW Thorpe activities align most
closely with five UN SDGs, covering
the themes of good health and
well-being, affordable clean energy,
decent work and economic growth,
responsible consumption and
production, and climate action.
Ensure healthy lives and promote well-being
for all at all ages
•
The Group is committed to developing a safe and healthy
working environment, consistent with the Health and
Safety at Work Act. With one of the key competitive
advantages of the Group being its people and that
it operates multiple manufacturing sites, a safe and
healthy working environment is key to the operation
of the business. Thorlux was awarded ISO 45001:2018
(occupational health and safety management systems )
certification in 2019, with Portland, TRT and Lightronics
achieving it in 2021, and all UK Group companies targeted
to achieve this standard in the near future.
The Group is committed to designing products that
improve the working environment. For example, the
Flex System offers comfortable low glare lighting with a
choice of three optics to match the light distribution and
luminaire brightness to the needs and users of the space.
Thorlux has developed a product – SmartScan – that
monitors the temperature, humidity and CO₂ levels
of individual rooms, and presents the data to users.
SmartScan technology, through the provision of
advanced air quality information, allows the Group to
have a positive impact on people’s health and safety.
The mental health and well-being of employees is high
on the agenda for the board. The Group offers a fully
funded Employee Assistance Programme (EAP) and 24/7
GP video helpline that make available the support and
resources needed to address any personal challenges
and/or concerns that may affect well-being and/or work
performance. The EAP is confidential and free to all
employees as well as their eligible family members.
See page 52 for more information on our safe and healthy
working environment
Ensure access to affordable, reliable,
sustainable and modern energy for all
•
For many years, the Group has focused on, and leads
the way in, developing products with greater energy
efficiency, which has a direct impact on reducing
electricity usage and prolonging the lifetime of luminaires.
SmartScan technology can monitor and report on energy
usage and provide energy saving tools. For example, lights
can be dimmed automatically in response to the ingress of
daylight and/or absence of people in an area.
The Group has now installed solar PV units on the roofs
of most of its UK manufacturing facilities, as well as at
Lightronics in the Netherlands. Further investment will be
made in both the UK and Netherlands facilities to reduce
consumption from traditional electricity sources. Any
remaining consumption will be delivered from renewal
sources from 2022 onwards. Over their operational
lifetimes, the installations are expected to deliver a total
CO₂ reduction of 6,113 tonnes and financial savings of
over £2,600,000.
The Group is actively switching company vehicles to
electric or hybrid technology.
•
•
•
•
•
•
See page 51 to read more about our energy saving products
Stock Code: TFW www.fwthorpe.co.uk
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Our GovernanceOur FinancialsStrategic ReportBusiness Overview Sustainability
The journey so far and the UN
Sustainable Development Goals continued
•
Promote sustained, inclusive
and sustainable economic
growth, full and productive
employment and decent work
for all
• As one of four strategic priorities, the
Group is dedicated to continuing to
develop high quality people, focusing
on training and development,
apprenticeship schemes and
management training. Not only
do these initiatives build careers
and have a positive impact on
employment, but this strategic pillar
helps to develop the Group’s key
competitive advantage and increase
commercial viability.
The policies in place for non-
discrimination within the workplace
and hiring allow the Group to focus
on inclusion as well as developing
its people.
The Group’s Modern Slavery
Act disclosure is published
on the corporate website
(www.fwthorpe.co.uk) in the
company documents section.
Thorlux has recently introduced
formal flexibility policies to improve
employees’ work/life balance.
Throughout the COVID-19 pandemic,
the Group paid employees in full.
The Group pays employees above
minimum wage rates as well as an
additional annual profit share bonus
for all those who meet eligibility
criteria.
•
•
•
•
See page 52 to read more about
employee training and development
and our policies
Ensure sustainable
consumption and
production patterns
•
The Group’s in-house team are
constantly working on product designs
to reduce the volume of materials
used and are committed to increasing
the use of renewable and recycled
materials in new products. Recently,
Thorlux introduced Flexbeam, which
utilises recycled plastic bottles for
major parts of its construction. Also,
both the Visio and Flexbar products
have been designed to reduce
material content.
The Group has a policy of socially
responsible purchasing of raw
materials from ethical sources. All
materials used in manufacture comply
with the directive on Restriction of
Hazardous Substances in Electrical
and Electronic Equipment (RoHS). The
recycled content of all raw materials
is being established and increased
wherever possible.
The Group’s products have always
been engineered to last. All luminaires
are tested to ensure they can
withstand the harshest climatic and
environmental conditions – water,
dust, impacts, vibrations, heat, wind –
with the longest possible lifetimes.
•
•
• An increasing number of Group
company luminaires have gear
trays that can be simply upgraded
or replaced whilst maintaining the
existing body and diffuser. TRT
recently upgraded a previous tunnel
project in the UK by replacing the
light engines, giving the installation a
further 10 years of design life.
Thorlux has moved from paper to
digital installation guides, saving over
1.3 million sheets of paper per annum.
•
• Portland saved the use of 76,200m
of traditional plastic bubble wrap
packaging replacing with cardboard
wrap which is 100% recycled.
See page 38 for more information about
our low carbon material focus and
recycling efforts
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OUR SUSTAINABILITY FOCUS AREAS:
The link between the Group’s sustainability journey and
its strategic priorities related to its products, operations,
business model and people is vital to the long-term
success of the business.
At this stage of the evolution of its sustainability strategy, the
Group will consider the topics below as part of the evaluation
of its material impacts on the environment and society.
The Group will endeavour to set realistic targets and
measure its progress in the future.
Products (Design & Innovation)
New products
• Design principles –
circularity focus, recycled/
renewable content
• Life times – e.g. 100,000
hours operation
• Energy efficiency
• Smart technology
• Health & Well being –
Flexview
• Minimum certification
against circularity standard
Sourcing
• Electronic components
• Plastics
• Metals
• Wiring
• Packaging
Supply chain
• Determine sourcing criteria
with key suppliers
Operations (Manufacturing Excellence)
“Responsible production”
Energy usage
• Own solar generation
• Source from renewables
• Continue carbon offset
programme
Waste
• Reduce waste to landfill
Distribution
• Hybrids/EV, shipping routes
• Packaging – type, return/
reuse
• Goods in – shipping routes,
air freight, packaging
External activities
• Sales & engineering fleet –
Hybrids/EV/hydrogen
• Consider travel policy –
trains, air travel
• Ability for certain staff to
work at home – reduced
travel
• EV charging at work using
solar energy suppliers
Business Model (Grow our customer base)
• New products supporting
• Refurbishment/reuse
green economy
• Existing products that
support the green economy
– e.g. Smart, SmartScan
business – replacement
light engines, upgraded
controls
• Alternative financing
models for customer
projects
People (Develop High Quality People)
• Health & safety measures
– ISO 45001
• Training and development
• Employment of young
people – continued support
of apprenticeship scheme
• Diversity, gender pay
• Responsible wage/salary
rates
• Flexible working
Take urgent action to
combat climate change and
its impacts
•
Through individual products
and the development of
SmartScan technology, the
Group is actively addressing
risks and opportunities due to
climate change and thus having
a positive impact on energy
efficiency.
Thorlux is collaborating with
WMG Business, through an
Innovate UK Knowledge Transfer
Partnership, to further ensure
that the principles of circular
innovation and sustainability
are embedded at the heart of its
business. WMG is an academic
department at the University
of Warwick and is the leading
international role model
for successful collaboration
between academia and the
public and private sectors,
driving innovation in applied
science, technology and
engineering.
The Group is also focusing
on reducing emissions
within its manufacturing. A
carbon-offsetting scheme
was established in 2009, with
approximately 8,000 trees a year
planted to offset the Group’s
direct emissions.
The Group considers the
source of raw materials when
designing new products. A
recent new product, Flexbeam,
is manufactured utilising 47
recycled plastic bottles in each
acoustic attenuation panel.
•
•
•
• A focus on responsible
manufacturing and design, to
reduce environmental impacts,
is key in the Group’s efforts to
help combat climate change.
See page 52 for our emissions
reporting, and page 53 for how we
are making a meaningful difference
Stock Code: TFW www.fwthorpe.co.uk
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ENVIRONMENT
Greenhouse gas emissions
The table below shows the Group’s greenhouse gas emissions for the year
ended 30 June 2021.
Scope 1: Direct emissions from own operations
Scope 2: Indirect emissions from purchased energy
(mainly electricity)
Total Scope 1 and Scope 2 emissions
Intensity metric: tonnes of CO2
per £1m of sales
2021
1,628
553
2,181
2020
1,821
989
2,810
18.50
24.79
The methodology used to calculate our emissions uses current government
published conversion factors.
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 an ambitious carbon-offsetting scheme was launched to help
compensate for these emissions. The scheme is now accredited under the
Woodland Carbon Code and now has 149,849 trees planted. The Group
requires around 8,000 plantings per annum to offset the CO2 produced by our
operations.
Global Energy Use
The table below shows the Group’s energy use for the year.
2021
Electricity
Gas
Total
2020
Electricity
Gas
Total
UK
GWh
2.450
4.558
7.008
UK
GWh
2.884
5.041
7.925
Rest of
World
GWh
0.385
0.037
0.422
Rest of
World
GWh
0.458
0.034
0.492
Total
GWh
2.835
4.595
7.430
Total
GWh
3.342
5.075
8.417
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.
CHARITABLE GIFTS
During the year the Group gave
£22,992 (2020: £24,349) for charitable
purposes. This is made up of
donations to UK charities for cancer
care of £2,500, healthcare of £2,553,
educational schemes of £1,995,
Oxfam £885 and local causes of
£15,059.
MODERN SLAVERY
Our Modern Slavery Act disclosure
is published on our corporate
website (www.fwthorpe.co.uk) in the
company documents section.
The Green Economy
Mark (above) identifies
London-listed
companies and funds
that generate between
50% and 100% of total
annual revenues from
products and services
that contribute to the
global green economy.
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FW THORPE, MAKING A MEANINGFUL DIFFERENCE: OUR CONTRIBUTIONS IN 2021
Economic – we generate value
Contribution to UK
economy
£19.2m
Tax paid, collected
(2020: £18.0m)
We are investing
in the future
£1.5m
We support the national
wage bills
£33.8m
Capitalised R&D expenditure
(2020: £1.3m)
(2020: £32.7m)
£22,992
Charitable donations
(2020: £24,349)
23
Number of charities
(2020: 31)
Community
11
Patents
10
Granted
1
Pending
Innovation
696
People employed
(2020: 688)
17
Apprentice employment
(2020: 16)
Employee
engagement
Environment
149,849
Total trees
planted
(2020: 149,849)
790,030
kWh of electricity per annum
from solar panels
(2020: 321,236)
2,181 tonnes
CO2 offset per annum
(2020: 2,810)
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview Case Study
SmartScan
Radar
A further innovative feature
has been added to the highly
successful Thorlux SmartScan
lighting management system.
SmartScan Radar uses the latest
high frequency sensor technology,
which is mounted integrally to the
luminaire, negating the need to
have the sensor visible from the
outside. This is ideal for applications
where the luminaire aesthetics are
particularly important or where
the impact rating of the luminaire
is critical. SmartScan Radar uses a
24GHz high frequency sensor to
detect movement, ensuring fewer
detection errors than traditional 5GHz
‘microwave’ solutions. SmartScan
Radar even has the ability to provide
daylight linked energy savings by
turning the luminaire off when
sufficient daylight is present, despite
the sensor being inside the luminaire.
FEATURES AND BENEFITS
• Radar presence detectors
are integral to the luminaire,
providing improved vandal
resistance and aesthetics.
• Unique 24GHz sensor has
increased sensitivity to small
movements whilst being
less prone to false detection
than traditional ‘microwave’
technology.
• Light levels, detection range
(sensitivity), time delays
and security levels are fully
programmable via the SmartScan
Programmer.
• New advanced SmartScan
technology allows photocell
control with the LED lamp on
or off.
• Full status monitoring is
available via the SmartScan
website.
• Automatic testing and record
keeping of emergency
luminaires is available via the
SmartScan website.
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Our GovernanceOur FinancialsStock Code: TFW www.fwthorpe.co.ukStrategic ReportBusiness Overview CONTENTS
Board of Directors
Directors’ Report
Statement of Directors’
Responsibilities
Directors’ Remuneration Report
Independent Auditors’ Report to
the Members of FW Thorpe Plc
58
60
66
67
71
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Governance
Report
Stock Code: TFW www.fwthorpe.co.uk
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Strategic ReportOur FinancialsBusiness OverviewOur Governance Board of directors
COMMITTEE KEY
R
Remuneration Committee
TENURE
1
1
2021
6
<5 years
<10 years
>10 years
MIKE ALLCOCK
Chairman, Joint Group
Chief Executive
CRAIG MUNCASTER
Joint Group Chief
Executive, Group Financial
Director and Company
Secretary
JAMES THORPE
Business Development
Director, Thorlux
Lighting
DAVID TAYLOR
Managing Director,
Philip Payne
Appointment/Background:
Appointment/Background:
Appointment/Background:
Appointment/Background:
After graduating in Business
Administration, Craig qualified
as a Chartered Management
Accountant in 2000. He has
spent time in the manufacturing
and engineering sectors,
previously as UK Financial
Director for Durr, which included
a number of overseas ventures
and projects for the wider
Group. He joined FW Thorpe
in 2010 and was appointed
Joint Group Chief Executive in
July 2017.
Key Areas of Expertise/
Responsibility:
Financial Management,
Commercial/Legal Risk,
Investor Relations, Mergers
& Acquisitions, Company
Secretarial
James graduated from Swansea
University with a BSc in 2000.
He spent 13 years in the IT
industry, involved in a variety
of public and private sector
contracts before joining FW
Thorpe in 2013. During his
time as Business Development
Manager at Thorlux, he has
been responsible for securing a
number of high profile projects
which have contributed to the
growth of revenue derived
from the healthcare sector.
James is the great grandson
of the Company founder and
was appointed as a director in
July 2017.
Key Areas of Expertise/
Responsibility:
Sales & Marketing, Business
Development, Digital Marketing
David joined FW Thorpe 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.
Key Areas of Expertise/
Responsibility:
Manufacturing, Business
Management, Financial
Management, Industry
Knowledge
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 and
became Managing Director of
Thorlux Lighting in 2003. 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. He
became Joint Group Chief
Executive of FW Thorpe in 2010
and Chairman in July 2017.
Key Areas of Expertise/
Responsibility:
Lighting & Controls Technology,
Product Design/Management,
Industry Knowledge, Marketing,
Strategy
58
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Annual Report and Accounts for the year ended 30 June 2021
TENURE
1
1
2021
6
<5 years
<10 years
>10 years
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
Central Business Exchange
Midsummer Boulevard
Central Milton Keynes
MK9 2DF
BANKERS
Lloyds
Church Green East
Redditch
Worcestershire
B98 8BZ
SOLICITORS
Keystone Law
48 Chancery Lane
London
WC2A 1JF
Pinsent Masons LLP
19 Cornwall Street
Birmingham
B3 2FF
NOMINATED ADVISER
N+1 Singer
12 Smithfield Street
London
EC1A 9BD
REGISTRARS
Equiniti
Aspect House
Spencer Road
Lancing
BN99 6DA
REGISTERED OFFICE
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
REGISTERED NO
FW Thorpe Plc is registered in
England and Wales No. 317886
ANDREW THORPE
Non-Executive Director
PETER MASON
Non-Executive Director
IAN THORPE
Non-Executive Director
TONY COOPER
Non-Executive Director
Appointment/Background:
Appointment/Background:
Appointment/Background:
Appointment/Background:
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, positions he held
until July 2017. In July 2019
Andrew became a non-
executive director and member
of the remuneration committee.
Key Areas of Expertise/
Responsibility:
R
Manufacturing, Product Design/
Management, Sales & Marketing,
Industry Knowledge, Strategy,
Governance
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 in 1987 as Finance
Director. He became Joint
Chief Executive in July 2000. In
June 2010 he became a non-
executive director and Chairman
of the remuneration committee
following the appointment of
his successor.
Key Areas of Expertise/
Responsibility:
R
Financial Management,
Governance, Company
Secretarial, Industry Knowledge
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.
Key Areas of Expertise/
Responsibility:
R
Manufacturing, Human
Resources, Governance, Industry
Knowledge
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.
Tony became a non-executive
director in April 2020.
Key Areas of Expertise/
Responsibility:
Manufacturing, Business
Management, Industry
Knowledge, Project
Management
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Directors’ Report
The directors present their Directors’
report with the audited consolidated
financial statements of the Group and
the Company for the financial year
ended 30 June 2021.
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 80
and the Group’s financial position
at the end of the year is set out in
the Consolidated and Company
Statements of Financial Position
on page 82. A review of the
performance of the business during
the financial year and expected
future developments are contained
in the Chairman’s Statement, the
Operational Performance section and
the Financial 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
24 (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 a number of objectives were
achieved.
PRINCIPAL RISKS AND
UNCERTAINTIES
The table on pages 42 to 44
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.
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.
PROPOSED DIVIDEND
Details of the proposed dividend are
disclosed in the Financial Performance
section on page 40.
DIRECTORS
The directors of the Company during
the year and at the date of this report
are set out on pages 58 and 59.
The directors retiring by rotation are
D Taylor, C Muncaster, P D Mason
who, being eligible, offer themselves
for re-election. D Taylor and C
Muncaster have service contracts
terminable on 12 months’ notice.
DIRECTORS’ SHARE INTERESTS
The details of the directors’ share
interests are set out in the directors’
remuneration report on page 69.
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
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Annual Report and Accounts for the year ended 30 June 2021 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.
A B Thorpe
Non-executive director.
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 67 to 70.
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 5 October 2021, the Company had
received notification of the following
interests in 3% or more of the issued
share capital, excluding holdings of
directors:
Liontrust Investment
Partners LLP
7,023,616 (5.9%)
Estate of C M Brangwin
7,271,550 (6.1%)
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 where possible and, if
appropriate, by meeting with major
shareholders at other times during
the year. See Notice of Meeting –
AGM 2021.
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.
As the directors have no intention
of exercising these authorities, there
will be no resolution to grant these
powers 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 9 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
5 October 2021 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 2022. However,
in order to maintain the Board’s
flexibility of action it is envisaged
that it will be renewed at future
Annual General Meetings.
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Strategic ReportOur FinancialsStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Governance Directors’ Report continued
CORPORATE GOVERNANCE
The Company’s shares are traded on the Alternative Investment Market (AIM) of the London Stock Exchange Plc.
Previously the Company was not required to comply with the Principles of Good Governance and Code of Best Practice
(“The UK Corporate Governance Code”, or the “Code”).
Following a change to the AIM rules in 2018, from 28 September 2018, the Company has adopted the Quoted
Companies Alliance’s “Corporate Governance Guidelines for Smaller Quoted Companies” (the QCA Code) which the
Board believes is appropriate due to the size and complexity of the Company.
There are ten principles of the QCA code and the following table sets out in broad terms how we comply at this point in time.
Extent of
current
compliance
Compliant
Principle
1
Establish a strategy
and business model
which promote
long-term value for
shareholders
Compliant
2
Seek to
understand and
meet shareholders’
needs and
expectations
Commentary
Further disclosure
Find out more in the
Strategic Report
on pages 10 to 55
Read about our
Strategy on pages
20 and 21
Read about our
Business Model on
pages 18 and 19
Find out more in the
Directors’ Report
on page 60
The Group’s business strategy is detailed in
our Annual Report & Accounts and focuses
on delivering long-term growth and stability,
achieved through four key strategic priorities:
• Focus on high quality products and good
leadership in technology
• Continue to grow the customer base for
Group companies
• Focus on manufacturing excellence
• Continue to develop high quality people
Meetings are held with shareholders as required;
this includes visits to our various company
locations being organised and encouraged where
possible. In addition, all announcements include
contact details for shareholders to contact the
Company if they so choose.
The AGM is another forum for dialogue with our
shareholders. The Notice of Meeting is sent to
shareholders at least 21 days before the meeting.
Any feedback during these meetings is
encouraged and acted upon where appropriate.
3
Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
Compliant
Feedback from employees, customers, suppliers
and other stakeholders is actively encouraged.
Our employees are an important stakeholder
group and we actively encourage dialogue with
the Company via various employee committees
within our companies. Reports from these
meetings are distributed to the Board.
Find out more
in the Strategic
Report on pages
10 to 55 and in our
Sustainability
section on pages
48 and 55
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Annual Report and Accounts for the year ended 30 June 2021 Extent of
current
compliance
Compliant
Principle
4
Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
Compliant
6
Ensure that
between them the
directors have the
necessary up-to-date
experience, skills and
capabilities
Commentary
Further disclosure
The Board operates a continuous risk
identification and evaluation process. The
results are utilised by the Board to manage any
significant risks.
In addition, the executive directors regularly
visit all operating sites and review financial and
commercial issues with an executive director
responsible for each individual company.
The Board has overall responsibility for the
system of internal control and for reviewing its
effectiveness throughout the Group.
Internal financial control is driven by Group
finance who visit each company to assess
compliance against key controls. This includes
regular financial reporting that is compared
against plan and previous year’s performance.
The non-executives are not considered fully
independent. The Board considers that the non-
executive directors are appropriate as they bring
significant experience and expertise in the sector.
In addition, as the directors retire on a three-year
rotation, shareholders have a regular opportunity
to ensure that the composition of the Board is in
line with their interests.
There is a Remuneration Committee but no Audit
Committee, with matters that would normally
be tabled at an Audit Committee put to the full
Board.
The current composition of the Board provides
the necessary skills, experience and capabilities
for the size and context of the Group.
The composition and succession of the Board are
subject to review, considering the future needs of
the Group.
Find out more
about our
Principal Risk and
Uncertainties on
pages 42 to 44 and
in the Directors’
Report on page 60
Find out more in
Our Governance
on pages 58 to 77
Read about our
Board of Directors
on pages 58 and 59
Read our Directors’
Report on pages
60 to 65
Find out more in
Our Governance
on pages 58 to 77
Read about our
Board of Directors
on pages 58 and 59
Read our Directors’
Report on pages
60 to 65
Partially
Compliant
Total of eight directors, four executive directors
and four non-executive directors.
5
Maintain the Board
as a well-functioning,
balanced team led by
the Chair
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Extent of
current
compliance
Partially
Compliant
Commentary
Further disclosure
There is no formal evaluation process;
however, the Chairman is responsible for Board
performance and accordingly actively encourages
feedback on the content and function of board
meetings.
The composition and succession of the Board
are subject to constant review, considering the
ever-changing needs of the Group. In addition,
the directors retire by rotation every three years
giving shareholders the opportunity to ensure
that the Board is aligned with their interests.
Compliant
Our core aim is for long-term growth and stability.
Compliant
Compliant
The Group management team is passionate
about developing the business for the benefit of
the shareholders, employees and customers.
With our focus on excellence, we ensure our
Group’s culture is consistent with the aim of long
term growth and stability. In order to achieve and
maintain such a culture, we invest in training our
employees, as mentioned in the Annual Report
and Accounts.
The Board as a whole is responsible for
robust governance practices. The roles and
responsibilities of each director are clear and
responsibilities understood.
The Board meets at least eight times each year,
with additional meetings as required.
The Company communicates through the Annual
Report and Accounts, full-year and interim
announcements, the AGM and one-to-one
meetings with existing or potential shareholders.
A range of corporate information is also available
on the Company’s website.
Meetings with shareholders, employee groups,
management and other representative groups
provide a platform for raising any concerns
relating to corporate governance.
Find out more in the
Strategic Report
on pages 10 to 55
Read about our
Strategy on pages
20 and 21
Find out more in the
Directors’ Report
on pages 60 to 65
Read about our
Board of Directors
on pages 58 and 59
Find out more
online at:
www.fwthorpe.co.uk
Principle
7
Evaluate Board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
8
Promote a corporate
culture that is based
on ethical values and
behaviours
9
Maintain governance
structures and
processes that
are fit for purpose
and support good
decision making by
the Board
10
Communicate
how the Company
is governed and
is performing
by maintaining
a dialogue with
shareholders and
other relevant
stakeholders
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Annual Report and Accounts for the year ended 30 June 2021 They have also produced an analysis
that demonstrates that the Group
could cover its cash commitments
even if there was a significant
reduction in sales over the following
year from approving these accounts.
For this reason, they continue to
adopt the going concern basis in
preparing the accounts.
APPROVAL OF STRATEGIC AND
DIRECTORS’ REPORTS
The directors confirm that the
information contained within the
Strategic Report on pages 10 to 55
and the Directors’ Report on pages
60 to 65 is an accurate representation
of the Group’s strategy and
performance.
By order of the Board
Craig Muncaster
Joint Chief Executive, Group Financial
Director and Company Secretary
5 October 2021
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
Company Registration Number:
317886
The Board considers 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 Board does not have a
nominations committee.
• There is no formal evaluation
process of Board performance.
The Board believes 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.
STATEMENT ON THE
PROVISION OF INFORMATION
TO INDEPENDENT AUDITORS
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 reappointment will be proposed
at the next Annual General Meeting.
GOING CONCERN
The directors confirm they are
satisfied that the Group and
Company have adequate resources,
with £52.3m cash and £23.6m short
term deposits, to continue in business
for the foreseeable future factoring
in the expected impact of COVID-19.
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Strategic ReportOur FinancialsStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Governance Statement of Directors’ Responsibilities
in respect of the Financial Statements
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulation.
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements
DIRECTORS’ CONFIRMATIONS
In the case of each director in office
at the date the Directors’ Report is
approved:
•
•
so far as the director is aware,
there is no relevant audit
information of which the Group
and Company’s auditors are
unaware; and
they have taken all the steps
that they ought to have taken
as a director in order to make
themselves aware of any relevant
audit information and to establish
that the Group and Company’s
auditors are aware of that
information.
By order of the Board
Craig Muncaster
Joint Chief Executive, Group Financial
Director and Company Secretary
5 October 2021
on the going concern basis unless
it is inappropriate to presume
that the Group and Company will
continue in business.
The directors are responsible for
safeguarding the assets of the Group
and Company and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities.
The directors are also responsible for
keeping adequate accounting records
that are sufficient to show and
explain the Group and Company’s
transactions and disclose with
reasonable accuracy at any time the
financial position of the Group and
Company and enable them to ensure
that the financial statements comply
with the Companies Act 2006.
The directors are responsible for the
maintenance and integrity of the
Company’s website. Legislation in
the United Kingdom governing the
preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
Company law requires the directors
to prepare financial statements for
each financial year. Under that law the
directors have prepared the Group
financial statements in accordance
with International Accounting
Standards in conformity with the
requirements of the Companies
Act 2006 and Company financial
statements in accordance with
International Accounting Standards
in conformity with the requirements
of the Companies Act 2006 . Under
company law the directors must not
approve the financial statements
unless they are satisfied that they
give a true and fair view of the state
of affairs of the Group and Company
and of the profit or loss of the Group
and Company for that period. In
preparing the financial statements,
the directors are required to:
•
•
select suitable accounting policies
and then apply them consistently;
state whether applicable
International Accounting
Standards in conformity with the
requirements of the Companies
Act 2006 have been followed for
the Group financial statements
and International Accounting
Standards in conformity with the
requirements of the Companies
Act 2006 have been followed
for the Company financial
statements, subject to any
material departures disclosed
and explained in the financial
statements;
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Annual Report and Accounts for the year ended 30 June 2021 Directors’ Remuneration Report
The Board has prepared this report to
the shareholders, taking into account
sections 420 to 422 of the Companies
Act 2006.
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.
Total shareholder return
250
Total shareholder return
FW Thorpe
AIM All Share
FTSE Fledging
200
150
100
50
6
1
0
2
/
6
0
/
0
3
7
1
0
2
/
6
0
/
0
3
8
1
0
2
/
6
0
/
0
2
9
1
0
2
/
6
0
/
0
3
0
2
0
2
/
6
0
/
0
3
1
2
0
2
/
6
0
/
0
3
The remuneration package consists
of the following elements:
1. Basic salary, benefits in kind
and other benefits. The salary
is determined in July 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.
3. Long term incentive scheme. This
scheme consists of the “Executive
Share Ownership Plan” (ESOP)
details of which are shown on
page 70.
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
M Allcock has a service contract
terminable on two years’ notice.
C Muncaster, D Taylor and
J E Thorpe have service contracts
terminable on one year’s notice.
A B Thorpe, P D Mason, I A Thorpe
and A M Cooper do not have formal
service contracts with the Company.
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),
I A Thorpe, and A B 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.
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DIRECTORS’ EMOLUMENTS (AUDITED)
Executive
directors
M Allcock
D Taylor
C Muncaster
J E Thorpe
Non-executive
directors
A B Thorpe
I A Thorpe
P D Mason
A M Cooper
2021
Salary/
fees
£’000
213
113
240
140
34
34
34
34
842
2021
Bonus
£’000
167
74
179
113
2021
Benefits
£’000
19
14
18
20
–
–
–
–
533
15
16
5
2
109
2021
Total
£’000
399
201
437
273
49
50
39
36
1,484
2021
Share
options
gains
£’000
32
65
24
–
2020
Share
options
gains
£’000
27
54
20
–
–
–
–
231
352
–
–
–
7
108
2020
Total
£’000
372
197
407
228
48
49
39
159
1,499
2021
Total
£’000
431
266
461
273
49
50
39
267
1,836
2020
Total
£’000
399
251
427
228
48
49
39
166
1,607
The directors’ emoluments exclude contributions to the pension scheme.
DIRECTORS’ PENSION ARRANGEMENTS (AUDITED)
M Allcock is a deferred member and D Taylor a pensioner member of the defined contribution scheme of the
FW Thorpe Retirement Benefits Scheme and they have a final salary guarantee as they were previously members
of the defined benefit section. A M Cooper is a deferred member and J E Thorpe an active member of the defined
contribution section of the FW Thorpe Retirement Benefits Scheme.
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 17%.
M Allcock, D Taylor and A M Cooper have ceased being active members of the FW Thorpe Retirement Benefits
Scheme and C Muncaster has ceased being an active member of his personal pension scheme due to HMRC limits on
lifetime allowances and annual contributions. Subsequently the Company has entered into pension compensation
arrangements with these four directors and J E Thorpe to compensate them for the loss of these employer pension
contributions. During the financial year the Company paid pension compensation to M Allcock of £169,410 (2020:
£167,942), A M Cooper £nil (2020: £7,414), C Muncaster £40,790 (2020: £40,724), D Taylor £19,163 (2020: £19,132) and to
J E Thorpe £10,500 (2020: £9,290).
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.
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Annual Report and Accounts for the year ended 30 June 2021 There are no directors, excluding those classified as pensioners, having accrued entitlements under the defined benefit
section of the pension scheme.
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.
J E Thorpe
2021
£’000
13
2020
£’000
12
A M Cooper has a personal pension which is not part of the Company scheme, and the following contributions have
been made during the year.
A M Cooper
2021
£’000
–
2020
£’000
8
CEO PAY RATIO
FW Thorpe being a UK listed company with more than 250 employees is required to disclose annually the ratio of the
CEO’S pay to the lower quartile, median and upper quartile pay of their UK employees. These details are shown in the
table below.
Year
2020-21
2019-20
Method
Option A
Option A
25th percentile pay ratio
23:1
24:1
Median pay ratio
14:1
15:1
75th percentile pay ratio
8:1
8:1
Option A was chosen as it represents the most accurate means of identifying the percentiles. The comparison is based
on data for the year ended 30 June 2021. The table below sets out the salary and total pay and benefits for the three
quartiles.
Base salary
Total remuneration
25th percentile pay
21,172
28,431
Median pay
30,420
44,835
75th percentile pay
46,500
85,296
DIRECTORS’ SHAREHOLDINGS
The directors listed below were in office during the year. Directors’ interests in the share capital of the Company at
30 June 2021 and 1 July 2020 were as follows:
Executive directors
M Allcock
D Taylor
C Muncaster
J E Thorpe
Non-executive directors
A B Thorpe
I A Thorpe
P D Mason
A M Cooper
Ordinary shares of
1p Beneficial
2021
191,500
146,896
65,000
2,164,682
2020
175,500
132,896
50,000
1,371,450
25,812,700
25,047,120
626,370
178,707
27,682,700
25,840,352
1,626,370
112,224
The market price of the Company’s shares at the beginning and end of the financial year was 301p and 440p
respectively, and the range of market prices during the year was from 240p to 458p.
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EXECUTIVE SHARE OWNERSHIP PLAN (ESOP) (AUDITED)
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
Number at 1 July 2020
Awarded
Vested
Exercised
Forfeit
Lapsed
Number at 30 June 2021
A B Thorpe
80,000
–
–
–
–
–
80,000
M Allcock
80,000
–
–
(20,000)
–
–
60,000
D Taylor
40,000
–
–
(40,000)
–
–
–
A M Cooper
110,322
–
–
(110,322)
–
–
–
C Muncaster
110,000
–
–
(15,000)
–
–
95,000
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 2021 to 5 October 2021.
Approved by the Board and signed on its behalf by:
Craig Muncaster
Joint Chief Executive, Group Financial Director and Company Secretary
5 October 2021
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Annual Report and Accounts for the year ended 30 June 2021 Independent Auditors’ Report
to the Members of FW Thorpe Plc
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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 2021 and of the group’s
profit and the group’s and company’s cash flows for the year then ended;
• have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which
comprise: the Consolidated and Company Statements of Financial Position as at 30 June 2021; the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Cash
Flows, the Consolidated Statement of Changes in Equity and the Company Statement of Changes in Equity for the year
then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
• An audit was conducted of the complete financial information of the three financially significant reporting units:
Thorlux Lighting (the Company, located in the UK), Lightronics and Famostar (both located in the Netherlands).
• The audit work performed at these three reporting units (2020: three reporting units), together with additional
procedures performed on centralised functions at the Group level, including audit procedures over the
consolidation, gave us the audit evidence we needed for our opinion on the Group financial statements as a whole.
• This provided coverage of 89% (2020: 91%) of profit before tax.
Key audit matters
• Valuation of warranty provisions (group and parent)
• Capitalisation of internal development costs (group and parent)
•
Impairment considerations over intercompany receivables due to COVID-19 (parent)
Materiality
• Overall group materiality: £929,000 (2020: £860,000) based on 5% of profit before tax excluding the impact of
exceptional items.
• Overall company materiality: £760,000 (2020: £729,000) based on 5% of profit before tax excluding the impact of
exceptional items.
• Performance materiality: £697,000 (group) and £570,000 (company).
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to the Members of FW Thorpe Plc
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our audit.
Valuation of the share appreciation rights repurchase obligation , which was a key audit matter last year, is no longer
included because of the settlement position reached subsequent to the balance sheet date removing the estimation
uncertainty over this item. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation of warranty provisions
(group and parent)
Our audit procedures included:
• We have audited the specific provisions held at year-end by
Refer to critical accounting estimates and
judgements in note 1 to the financial
statements and note 22 provisions.
inspecting correspondence to confirm rectification is required and
recalculating the provision amount based on material cost and
estimated labour and installation expenditure;
• We have enquired with management and reviewed board minutes to
ensure that no specific rectification issues have been identified which
were not provided for at year-end;
• We have corroborated the actual failure rates against the expected
failure rate used to calculate the provision, where no known
rectification issues have been identified;
• We have reviewed and challenged the appropriateness of any other
judgement used in the estimation of the provision; and
• We have reviewed the accuracy of disclosures in relation to the
provision.
We found the valuation of the warranty provision was consistent with the
evidence obtained.
The Group and Company makes
provisions for warranties where it is
obliged to repair or replace faulty goods
under the terms and conditions of sale.
The typical warranty provision offered is
for a period of five years, although longer
periods are offered by Lightronics and
Famostar on certain product lines.
Amounts have been provided based on
known faults at the year-end date where
rectification will be due and also based
on expected failure rates as applied to
sales made which are within the warranty
period.
The valuation of the warranty provision
involves judgement with respect to the
expected failure rates especially when
applied to new products at the start of
their warranty period.
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Annual Report and Accounts for the year ended 30 June 2021 Key audit matter
How our audit addressed the key audit matter
Capitalisation of internal development
costs (group and parent)
Refer to critical accounting estimates and
judgements in note 1 to the financial
statements and note 9 intangibles.
The Group undertakes development
activities on new products and such
internal development costs are
capitalised where allowable under IAS 38
– “Intangible Assets”.
Judgement has been applied in
considering whether the requirements
for capitalising such internal
development costs under IAS 38 have
been met, the level and nature of costs
which should be capitalised and the
period over which the capitalised costs
should be amortised.
Impairment considerations over
intercompany receivables due to
COVID-19 (parent)
Refer to critical accounting estimates and
judgements in note 1 to the financial
statements, note 12 for Financial asset at
amortised cost and note 16 for Trade and
other receivables.
The ongoing economic uncertainty due
to COVID-19 requires the directors and
auditors to consider the valuation of
various assets on the balance sheet as
well as the going concern of the Group.
Based on the impact of COVID-19 on
the underlying trading in the group, the
risk is considered to be specific to the
recoverability of intercompany receivable
balances within the Company.
Our audit procedures included:
• We have assessed the development activities performed by the Group
against the criteria for capitalising internal development costs under
IAS 38;
• We have performed testing over the amounts capitalised in the year
by agreeing payroll amounts to payslips and assessing the percentage
of payroll costs capitalised with respect to the employee and their role
in the development of products;
• We have assessed the amortisation period of three years across the
Group with reference to the product launches and knowledge of the
industry; and
• We have reviewed the accuracy of the disclosures in relation to
capitalised development costs.
We found that the accuracy of the capitalised development costs was
consistent with the evidence obtained.
Our audit procedures included:
• We have audited the expected credit loss model prepared by
management and ensured that it has considered a range of potential
outcomes for each individual receivable balance and includes
a probability weighting depending on the future underlying
performance of the entities;
• When considering these models, we have applied sensitivity analysis
to the key inputs, which include the probability of default; and
• We have also considered management’s estimates through
comparison to historical and future business performance in line with
contractual terms and the financial position of each business at the
year end.
We found that the valuation of balances owed from Group undertakings
after making impairment provisions were consistent with the evidence
obtained and disclosed appropriately.
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to the Members of FW Thorpe Plc
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the group and the company, the accounting
processes and controls, and the industry in which they operate.
The group financial statements are a consolidation of multiple reporting units across the UK and the Netherlands,
comprising the group’s operating businesses and centralised functions. These reporting units maintain their own
accounting records and controls and report to the head office finance team for consolidation purposes.
In establishing the overall approach to the Group audit, we identified three reporting units, which, in our view,
required an audit of their complete financial information both due to their size and risk characteristics: Thorlux
Lighting (the Company, located in the UK), Lightronics and Famostar (both located in the Netherlands). The Group
engagement team audited Thorlux Lighting whilst Lightronics and Famostar were audited by a non-PwC component
audit team located in the Netherlands. Where balances in out of scope components are in excess of group performance
materiality and contribute a notable proportion of a certain financial statement line item, these balances have been
subject to audit procedures by the Group engagement team. The audit work performed at these three reporting units
(2020: three), together with additional procedures performed on centralised functions at the Group level, including
audit procedures over the consolidation, gave us the audit evidence we needed for our opinion on the Group financial
statements as a whole. This provided coverage of 89% (2020: 91%) of profit before tax.
The work performed by the component auditor was subject to review by the Group engagement team and the work
performed over areas considered to be of significant importance to the audit has fed into our key audit matters.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for
benchmark applied
Financial statements – group
Financial statements – company
£929,000 (2020: £860,000).
5% of profit before tax excluding the impact
of exceptional items
Based on the benchmarks used in the
annual report, profit before tax excluding
the impact of exceptional items is the
primary measure used by the shareholders
in assessing the performance of the Group.
Given the short term downturn due to
COVID-19 experienced in 2020 was not
repeated in 2021, we have not continued
to apply a three year average as COVID-19
did not result in a permanent rebasing of
profitability.
£760,000 (2020: £729,000).
5% of profit before tax excluding the impact
of exceptional items
Based on the benchmarks used in the annual
report, profit before tax excluding the impact
of exceptional items is the primary measure
used by the shareholders in assessing the
performance of the Company. Given the
short term downturn due to COVID-19
experienced in 2020 was not repeated in
2021, we have not continued to apply a three
year average as COVID-19 did not result in a
permanent rebasing of profitability.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was £400,000 to £760,000. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality,
amounting to £697,000 for the group financial statements and £570,000 for the company financial statements.
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Annual Report and Accounts for the year ended 30 June 2021 In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during
our audit above £46,000 (group audit) (2020: £43,000) and £38,000 (company audit) (2020: £36,000) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going
concern basis of accounting included:
• Testing the reasonableness of the model and assessing the assumptions used in management’s going concern
assessment which covers the period to December 2022;
• Management’s base case forecasts are based on its normal budget and forecasting process and have produced a
downside model. We understood and assessed this process, including the assumptions used, for 2021 and 2022 and
assessed whether there was adequate support for these assumptions; and
• We assessed the adequacy of disclosures in the Going Concern statement within the Directors’ report and the
statements in note 1 of the Annual Report and found these appropriately reflect downside risks.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s ability to
continue as a going concern for a period of at least twelve months from when the financial statements are authorised
for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
group’s and the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the
extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the financial statements or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
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to the Members of FW Thorpe Plc
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report
and Directors’ report for the year ended 30 June 2021 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course
of the audit, we did not identify any material misstatements in the Strategic report and Directors’ report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities in respect of the financial statements, the
directors are responsible for the preparation of the financial statements in accordance with the applicable framework
and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to applicable Generally Accepted Accounting Practices, tax compliance legislation and
the AIM Rules for Companies, and we considered the extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws and regulations that have a direct impact on the financial
statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to manipulate financial results and management bias in
accounting estimates. The group engagement team shared this risk assessment with the component auditors so that
they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by
the group engagement team and/or component auditors included:
• enquiry of management and those charged with governance around actual and potential litigation and claims;
• enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and
regulations;
reviewing minutes of meetings of those charged with governance;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with
applicable laws and regulations; and
•
•
• auditing the risk of management override of controls, including through testing journal entries and other
adjustments for appropriateness, testing accounting estimates (because of the risk of management bias), and
evaluating the business rationale of significant transactions outside the normal course of business.
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Annual Report and Accounts for the year ended 30 June 2021 There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
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.
OTHER REQUIRED REPORTING
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained 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
•
•
certain disclosures of directors’ remuneration specified by law are not made; 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.
Mark Foster (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Milton Keynes
5 October 2021
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Strategic ReportOur FinancialsStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Governance CONTENTS
81
82
80
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated and Company
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of Changes
in Equity
Consolidated and Company
Statements of Cash Flows
85
Notes to the Financial Statements 86
130
Notice of Meeting
132
Financial Calendar
84
83
78
78
Annual Report and Accounts for the year ended 30 June 2021
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Annual Report and Accounts for the year ended 30 June 2021 Financial
Statements
Stock Code: TFW www.fwthorpe.co.uk
Stock Code: TFW www.fwthorpe.co.uk
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Lumièrepark in Almere, the Netherlands
79
79
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06/10/2021 11:54:09
Strategic ReportOur GovernanceBusiness OverviewOur Financials Consolidated Income Statement
For the year ended 30 June 2021
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income
Operating profit (before exceptional item)
Exceptional item in respect of Lightronics fire
Operating profit
Finance income
Finance expense
Profit before income tax
Income tax expense
Profit for the year
Notes
2021
£’000
2020
£’000
2
3
3
5
5
6
117,875
(62,484)
55,391
(13,598)
(22,855)
289
19,227
1,566
20,793
615
(1,267)
20,141
(4,329)
15,812
113,342
(63,351)
49,991
(13,434)
(20,489)
264
16,332
–
16,332
708
(1,097)
15,943
(2,629)
13,314
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
Notes
7
7
2021
pence
13.57
13.52
2020
pence
11.45
11.40
The notes on pages 86 to 129 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.
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Annual Report and Accounts for the year ended 30 June 2021 Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Profit for the year:
Other comprehensive (expenses)/income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Items that will not be reclassified to profit or loss
Revaluation of financial assets at fair value through other comprehensive income
Actuarial gain/(loss) on pension scheme
Movement on unrecognised pension scheme surplus
Taxation
21
21
Notes
2021
£’000
15,812
2020
£’000
13,314
(688)
(688)
135
1,758
(1,940)
(236)
(283)
229
229
(834)
(2,039)
1,869
13
(991)
Other comprehensive expense for the year, net of tax
(971)
(762)
Total comprehensive income for the year attributable to equity shareholders
14,841
12,552
The notes on pages 86 to 129 form part of these financial statements.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials Consolidated and Company Statements of Financial Position
As at 30 June 2021
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiaries
Investment property
Financial assets at amortised cost
Equity accounted investments and joint arrangements
Financial assets at fair value through other
comprehensive income
Total non-current assets
Current assets
Inventories
Trade and other receivables
Financial assets at amortised cost
Short-term financial assets
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Current income tax liabilities
Total current liabilities
Net current assets
Non-current liabilities
Other payables
Lease liabilities
Provisions for liabilities and charges
Deferred income tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Foreign currency translation reserve
Retained earnings
At 1 July
Profit for the year attributable to the owners
Other changes in retained earnings
Total equity
Company
2021
£’000
2020
£’000
Group
2021
£’000
Notes
8
9
10
11
12
13
14
15
16
12
17
18
19
20
19
20
22
23
24
25
25
25
28,251
19,705
–
1,967
746
–
3,764
54,433
20,389
29,310
1,800
23,603
52,268
127,370
181,803
(39,198)
(226)
(1,040)
(40,464)
86,906
(78)
(435)
(2,242)
(1,591)
(4,346)
(44,810)
136,993
1,189
1,960
137
2,076
2020
£’000
30,574
21,032
–
1,987
1,800
–
3,772
59,165
25,296
21,256
625
18,580
44,422
110,179
169,344
(36,185)
(220)
(831)
(37,236)
72,943
(67)
(417)
(2,721)
(601)
(3,806)
(41,042)
128,302
1,189
1,526
137
2,764
11,018
3,798
14,581
10,184
9,027
–
3,764
52,372
11,528
29,024
1,800
23,603
47,064
113,019
165,391
(33,142)
–
–
(33,142)
79,877
–
–
(706)
(956)
(1,662)
(34,804)
130,587
1,189
1,960
137
–
122,686
15,812
(6,867)
131,631
136,993
117,036
13,314
(7,664)
122,686
128,302
120,336
13,781
(6,816)
127,301
130,587
11,980
4,074
14,581
10,130
12,338
–
3,772
56,875
16,914
22,133
625
18,580
37,218
95,470
152,345
(27,964)
–
–
(27,964)
67,506
–
–
(795)
(398)
(1,193)
(29,157)
123,188
1,189
1,526
137
–
114,398
13,326
(7,388)
120,336
123,188
The notes on pages 86 to 129 form part of these financial statements.
The financial statements on pages 80 to 85 were approved by the Board on 5 October 2021 and signed on its behalf by
Mike Allcock
Craig Muncaster
Company Registration Number: 317886
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Annual Report and Accounts for the year ended 30 June 2021 Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Share
capital
£’000
1,189
Share
premium
account
£’000
1,266
Capital
redemption
reserve
£’000
137
Notes
Foreign
currency
translation
reserve
£’000
2,535
Retained
earnings
£’000
Total
equity
£’000
117,036 122,163
–
–
–
–
(265)
(265)
1,189
1,266
137
2,535
116,771 121,898
21
21
14
23
23
26
27
21
21
14
23
23
26
27
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,314
(2,039)
13,314
(2,039)
1,869
1,869
(834)
(834)
81
(68)
81
(68)
229
–
229
–
–
–
229
12,323
12,552
–
–
–
–
1,189
260
–
–
260
1,526
–
–
–
–
137
–
–
–
–
2,764
–
(6,468)
60
(6,408)
260
(6,468)
60
(6,148)
122,686 128,302
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,189
434
–
–
434
1,960
–
–
–
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
(688)
15,812
1,758
15,812
1,758
(1,940)
(1,940)
135
135
(59)
(177)
–
(59)
(177)
(688)
(688)
15,529
14,841
–
–
–
–
2,076
–
(6,631)
47
(6,584)
434
(6,631)
47
(6,150)
131,631 136,993
Balance at 30 June 2019
Adjustments on first time adoption of
IFRS 16 (net of tax)
Restated balance at 1 July 2019
Comprehensive income
Profit for the year to 30 June 2020
Actuarial loss on pension scheme
Movement on unrecognised pension
scheme surplus
Revaluation of financial assets at fair
value through other comprehensive
income
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange differences on translation of
foreign operations
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2020
Comprehensive income
Profit for the year to 30 June 2021
Actuarial gain on pension scheme
Movement on unrecognised pension
scheme surplus
Revaluation of financial assets at fair
value through other comprehensive
income
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange differences on translation of
foreign operations
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2021
The notes on pages 86 to 129 form part of these financial statements.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials Company Statement of Changes in Equity
For the year ended 30 June 2021
Balance at 30 June 2019
Adjustment on first time adoption of
IFRS 16 (net of tax)
Restated balance at 1 July 2019
Comprehensive income
Profit for the year to 30 June 2020
Actuarial loss on pension scheme
Movement on unrecognised pension
scheme surplus
Revaluation of financial assets at fair value
through other comprehensive income
Movement on associated deferred tax
Impact of deferred tax rate change
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2020
Comprehensive income
Profit for the year to 30 June 2021
Actuarial gain on pension scheme
Movement on unrecognised pension
scheme surplus
Revaluation of financial assets at fair value
through other comprehensive income
Movement on associated deferred tax
Impact of deferred tax rate change
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Share based payment charge
Total transactions with owners
Balance at 30 June 2021
Notes
Share
capital
£’000
1,189
–
1,189
Share
premium
account
£’000
1,266
Capital
redemption
reserve
£’000
137
Retained
earnings
£’000
114,398
Total
equity
£’000
116,990
–
1,266
–
137
1
114,399
1
116,991
21
21
14
23
23
26
27
21
21
14
23
23
26
27
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
260
–
–
260
–
–
–
–
–
–
–
–
–
–
–
13,326
(2,039)
13,326
(2,039)
1,869
1,869
(834)
(834)
81
(58)
12,345
–
(6,468)
60
(6,408)
81
(58)
12,345
260
(6,468)
60
(6,148)
1,189
1,526
137
120,336
123,188
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,781
1,758
13,781
1,758
(1,940)
(1,940)
135
135
(59)
(126)
13,549
(59)
(126)
13,549
–
–
–
–
1,189
434
–
–
434
1,960
–
–
–
–
137
–
(6,631)
47
(6,584)
127,301
434
(6,631)
47
(6,150)
130,587
The notes on pages 86 to 129 form part of these financial statements.
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Annual Report and Accounts for the year ended 30 June 2021 Consolidated and Company Statements of Cash Flows
For the year ended 30 June 2021
Notes
28
26
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 investment property
Net sale/(purchase) of financial assets at fair value
through Other Comprehensive Income
Insurance proceeds re: property, plant and equipment
lost in fire
Proceeds from sale of other financial assets at fair value
through profit and loss account
Property rental and similar income
Dividend income
Net (deposit)/withdrawal of short-term financial assets
Interest received
Net receipt/(issue) of loan notes
Net cash (used in)/received from investing activities
Cash flows from financing activities
Net proceeds from the issuance of ordinary shares
Proceeds from loans
Repayment of borrowings
Settlement of lease liabilities
Payment of lease liabilities
Payment of lease interest
Dividends paid to Company’s shareholders
Net cash used in financing activities
Effects of exchange rate changes on cash
Net 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 86 to 129 form part of these financial statements.
Group
2021
£’000
25,726
(3,853)
21,873
(2,932)
290
(1,756)
–
205
3,057
–
41
186
(5,023)
105
59
(5,768)
434
365
(958)
–
(310)
(39)
(6,631)
(7,139)
(1,120)
7,846
44,422
52,268
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Company
2021
£’000
2020
£’000
18,453
(1,789)
16,664
12,958
(1,896)
11,062
2020
£’000
23,231
(3,848)
19,383
(6,988)
212
(1,719)
–
(1,045)
220
(1,323)
(305)
(61)
205
–
387
92
187
7,903
322
1,156
1,491
260
192
(203)
(1,011)
(265)
(36)
(6,468)
(7,531)
272
13,615
30,807
44,422
–
–
367
5,223
(5,023)
397
1,435
151
434
–
–
–
–
–
(6,631)
(6,197)
(772)
9,846
37,218
47,064
(2,641)
182
(1,472)
(1,237)
(61)
–
387
386
4,368
7,903
492
(837)
7,470
260
–
–
–
(3)
–
(6,468)
(6,211)
126
12,447
24,771
37,218
85
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials Notes to the Financial Statements
For the year ended 30 June 2021
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, limited by shares, which is listed on the Alternative Investment Market (AIM) of the London Stock
Exchange. The address of its registered office is Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH,
United Kingdom.
Basis of preparation
The consolidated and company financial statements of FW Thorpe Plc have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the Companies Act 2006. The financial
statements have been prepared on a going concern basis, under the historical cost convention except for the financial
instruments measured at fair value either through other comprehensive income or profit and loss per the provisions of
IFRS 9.
There are no other standards that are not yet effective that are expected to have a material impact on the group in the
current or future reporting periods and on foreseeable future transactions.
The consolidated financial statements are presented in Pounds Sterling, which is the Company’s functional and
presentation currency, rounded to the nearest thousand.
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.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the
Company income statement.
Going concern
The directors confirm they are satisfied that the Group and Company have adequate resources, with £52.3m cash and
£23.6m short term deposits, to continue in business for the foreseeable future factoring in the expected impact of
COVID-19. They have also produced an analysis that demonstrates that the Group could cover its cash commitments
even if there was a reduction of 33% in sales over the following year from approving these accounts. For this reason,
they continue to adopt the going concern basis in preparing the accounts.
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.
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Annual Report and Accounts for the year ended 30 June 2021 1 ACCOUNTING POLICIES CONTINUED
Equity accounted investments and joint arrangements
Under IFRS 11, ‘Joint Arrangements’, investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement. FW Thorpe Plc only has joint operations.
Joint operations
FW Thorpe Plc recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its
share of any jointly held or incurred assets, liabilities, revenues and expenses.
Equity accounted investments
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share
of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or
receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent
of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Revenue recognition
The Group recognises revenue earned from contracts based on individual performance obligations using the five-step
model. Revenue from contracts with customers is recognised when control of the goods or services are transferred
to the customer at an amount that reflects the consideration the Group is entitled to in exchange for those goods or
services, excluding VAT, trade discounts and rebates.
The Group has generally concluded that it is the principal in its revenue arrangements. The amount of revenue is not
considered to be reliably measurable until all contingencies relating to the sale have been resolved. 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. The normal credit terms are 30 to 90 days from delivery, or completion of the service provided.
Revenue from external customers is derived from the supply of light fittings and services to support the sale of these
light fittings. These services include surveying, project management, installation and commissioning. The transaction
price for both the light fittings and the service agreements are at fair value as if each of those services are provided
individually.
Revenue Stream
Light fittings
Services
Revenue Recognition
Revenue is recognised at the point in time when control of the asset is transferred to the
customer, generally on delivery of the goods
Revenue is recognised over time when the service is performed
The Group considers whether there are other promises in the contract that are separate performance obligations to
which a portion of the transaction price needs to be allocated (e.g. service agreements). In determining the transaction
price for the sale of goods, the Group considers the effects of variable consideration, the existence of significant
financing components, non-cash consideration, and consideration payable to the customer (if any).
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.
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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 ten 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. (which includes the business
of Famostar Emergency Lighting B.V.). The seven remaining operating segments have been aggregated into the “other
companies” reportable segment based upon their size, comprising the entities Philip Payne Limited, Solite Europe
Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux Lighting L.L.C., Thorlux Australasia Pty Limited and
Thorlux Lighting GmbH.
Pension costs
The Group operates a hybrid defined benefit and defined contribution pension scheme. 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 statement of financial position in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the statement of financial position 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.
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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.
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 statement of financial position date in accordance with
prevailing exchange rates and resulting gains or losses are recognised in the income statement.
Exceptional items
Exceptional items are separately presented from other items by virtue of their nature, size and/or incidence. They are
identified separately in order for the reader to obtain a clearer understanding of the underlying results of the ongoing
Group’s operations, by excluding the impact of items which, in management’s view, do not form part of the Group’s
underlying operating results.
Taxation
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
statement of financial position 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
statement of financial position 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.
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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. Right of use assets are depreciated at the rates
below according to their asset classification. The rates generally applicable are:
Freehold land
Buildings
Plant and equipment
Nil
2%–10%
10%–50%
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each statement of financial position
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
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-
of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the
leased assets are consumed.
Lease liability: The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the
Group uses an incremental borrowing rate which is the rate of interest that the lessee would have to pay to borrow over
a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment.
Right-of-use assets: The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period
of lease term and useful life of the underlying asset.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss in line with the Group’s existing impairment accounting policy.
Short term leases and low value assets
For these leases, payments made under them, are charged to the income statement on a straight-line basis over the
term of the lease.
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 at 33.33% per annum commencing when the asset is available for use
within the business. Development costs 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;
•
• Adequate technical, financial and other resources to complete the development and to use or sell the intangible
It can be demonstrated how the intangible asset will generate probable future economic benefits;
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.
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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 statement of
financial position 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 that 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. The rates generally applicable are:
Technology
Brand name
14%
14%–20%
Investment properties
Investment properties are recognised at cost, and then subsequently cost less accumulated depreciation and (if
applicable) any accumulated impairment losses. Assets are depreciated at the same rates as property, plant and
equipment assets according to their assets class, 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.
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Financial Assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI or the income statement); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in the income statement or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of
ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in the income statement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt
instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in the income statement together with foreign exchange gains and losses. Impairment losses
are included in either administrative expenses, or finance costs in the income statement dependent on the type of
asset impaired.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’
cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in the income statement. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in
finance income or costs. Interest income from these financial assets is included in finance income using the effective
interest rate method. Foreign exchange gains and losses are presented in administrative expenses and impairment
expenses are included in either administrative expenses, or finance costs in the income statement.
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a
debt investment that is subsequently measured at FVPL is recognised in the income statement in the period in
which it arises.
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Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to the income statement following the derecognition of the investment. Dividends from such
investments continue to be recognised in the income statement as finance income when the Group’s right to receive
payments is established.
Changes in the fair value of financial assets at FVPL are recognised in the income statement as applicable. Impairment
losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from
other changes in fair value.
(iv) Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried
at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables, see accounting policy for trade receivables for
further details.
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 the Group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract
assets.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics
and the days past due. The expected loss rates are based on the payment profiles of sales over a period 12 months
up to the end of the relevant financial year, and the corresponding historical credit losses experienced within this
period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables, as significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments.
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.
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.
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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.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
Provisions
Provisions are recognised in the statement of financial position 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
statement of financial position 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.
Warranty
The Group provides for expected warranty costs covering both specific known warranty claims and calculating
expected future warranty claims in order to estimate the expected costs that will arise in respect of products sold
within the remaining warranty periods. The expected future warranty claims provision is calculated by assessing
historical data, industry failure rates and the Group’s knowledge of products to determine the percentage of sales that
should be provided for to cover future associated warranty costs.
Critical accounting estimates and judgements
The presentation of the annual financial statements in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 requires the Directors to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and
expenses. The estimates and associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected. The key estimates and
judgements used in the financial statements are as follows:
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Estimates
Goodwill/Investment in subsidiaries
The Group and the Company undertake impairment reviews for cash generating units (CGU) at least
annually to assess the carrying value of goodwill/investment in subsidiaries and other intangible
assets. These reviews apply either discounted cash flows forecast, including terminal values and
growth factors if appropriate, or EBITDA multiples to the forecast financial performance of the CGU.
Note 9 contains details of reviews that have been carried out.
Warranty
The Group provides for expected warranty costs covering both specific known warranty claims and
calculating expected future warranty claims in order to estimate the expected costs that will arise in
respect of products sold within the remaining warranty periods. The usual warranty period provided
is between 5 and 10 years, dependant on market requirements. The expected future warranty
claims provision is calculated by assessing historical data, industry failure rates and the Group’s
knowledge of products to determine the percentage of sales that should be provided for to cover
future associated warranty costs. Note 22 contains details of the warranty provision. If the failure rate
assumption used in the provision calculation were to increase by 5%, then the resulting provision
would be higher by £92,000.
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. Note
21 contains details of the retirement benefit obligations.
Inter-company loan impairment
The Company provides for expected credit losses that may arise from under-performing loans to
subsidiary companies. The expected credit loss is calculated by looking at historical performance and
the Company’s knowledge of how the subsidiary is likely to perform in the future. Note 12 contains
details of inter-company loan impairments based on an expected credit loss assumption of 45%.
If the expected credit loss assumption was to increase to 55% there would be an extra charge of
£346,000 to the Company.
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Judgements
Development costs
The Group undertakes development activities and the commercial viability of these activities is
assessed on a continual basis; as such the Group assesses each new project to determine whether
development costs incurred should be capitalised within intangible assets or recognised as an
expense within administrative expenses. The Group determines this classification based on 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.
Retirement benefit obligations
The Group recognises its obligations to employee retirement benefits. Where the fair value of the
pension plan assets exceeds the present value of the defined benefit obligation the Group consider
the amount that can be recognised as an asset within the statement of financial position in line with
the requirements of IAS 19. 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. As these criteria are not met
the Group has decided not to recognise a net retirement benefit asset.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 1 ACCOUNTING POLICIES CONTINUED
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.
(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 and net investments in foreign operations. 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 statement of financial position either as financial assets at fair value through other comprehensive income
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.
The Group holds money market funds that are designated as short term investments and also a range of quoted
securities that are designated as financial assets at fair value through other comprehensive income. Management
has performed an analysis and do not believe there to be a material sensitivity to changes in underlying price indices
arising from these holdings.
(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. 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, see note 17, on the basis of expected cash flow.
All external current liabilities are expected to mature within four months.
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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.
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.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 1 ACCOUNTING POLICIES CONTINUED
Share based payments
Senior executives of the Group receive remuneration in the form of share based payments through the executive share
ownership plan and other employees through a “SAYE” scheme. 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 that are likely to vest.
Cash-settled share based payments
The Group has cash-settled share based payments for holders of share appreciation rights holders. A liability is
recognised equal to the calculated future fair value as at the date of the statement of financial position.
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 ten 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 businesses in the Netherlands, Lightronics and Famostar, are material
subsidiaries and disclosed separately as Netherlands companies.
The seven remaining operating segments have been aggregated into the “other companies” reportable segment based
upon their size, comprising the entities Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT
Lighting Limited, Thorlux Lighting L.L.C., Thorlux Australasia Pty Limited, Thorlux Lighting GmbH.
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
Netherlands
companies
£’000
Other
companies
£’000
Inter-
segment
adjustments
£’000
Total
continuing
operations
£’000
Year to 30 June 2021
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit (before exceptional item)
Exceptional item in respect of Lightronics fire
Operating profit
Net finance expense
Profit before income tax
Year to 30 June 2020
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit
Net finance expense
Profit before income tax
69,969
3,304
73,273
11,694
–
11,694
31,490
290
31,780
5,402
1,566
6,968
16,416
5,238
21,654
1,722
–
1,722
–
(8,832)
(8,832)
409
–
409
65,615
3,164
68,779
10,150
31,340
234
31,574
4,125
16,387
4,021
20,408
1,412
–
(7,419)
(7,419)
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117,875
–
117,875
19,227
1,566
20,793
(652)
20,141
113,342
–
113,342
16,332
(389)
15,943
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Inter segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc,
adjustments to profit related to stocks held within the Group that were supplied by another segment and elimination
of profit on transfer of assets between Group companies.
(b)i 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
Rest of Europe
Rest of the World
2021
£’000
74,363
28,879
12,499
2,134
117,875
2020
£’000
69,657
28,748
12,265
2,672
113,342
(b)ii Geographical analysis by product types
The Group’s main business segments primary revenue stream is the sale of light fittings, with some ancillary services
and commissioning supporting this revenue stream.
2021 (£’000)
UK
Netherlands
Rest of Europe
Rest of the World
2020 (£’000)
UK
Netherlands
Rest of Europe
Rest of the World
3 OPERATING PROFIT
Profit on sale of Property, Plant & Equipment
Depreciation of investment property
Depreciation of Property, Plant & Equipment
– owned property
– right-of-use assets
Amortisation of intangible assets
Share appreciation rights (with associated share based payment charges)
Cost of inventories recognised as an expense
Research and development expenditure credit
Government grants
Currency losses/(gains) in income statement
100
Light
fittings
69,992
28,879
12,499
2,134
113,504
Light
Fittings
66,733
28,748
12,231
2,671
110,383
Services
4,371
–
–
–
4,371
Services
2,924
–
34
1
2,959
2021
£’000
(115)
20
3,104
212
2,328
2,274
53,370
(289)
–
821
Total
74,363
28,879
12,499
2,134
117,875
Total
69,657
28,748
12,265
2,672
113,342
2020
£’000
(118)
19
2,993
228
2,577
1,978
45,110
(249)
(192)
(461)
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 3 OPERATING PROFIT CONTINUED
Services provided by the Company’s auditors
Fees payable to Company’s auditors for audit of financial statements
Fees payable to the Company’s auditors and its associates for other services
– Audit of Company’s subsidiaries
2021
£’000
247
20
267
2020
£’000
210
–
210
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.
Exceptional item in respect of Lightronics fire:
- Insurance proceeds
- Net book value of assets lost
- Other costs incurred
Building
2021
£’000
2,096
(1,062)
–
1,034
Other
assets
2021
£’000
961
(250)
(77)
634
Other
Costs
2021
£’000
318
–
(425)
(107)
Inventory
2021
£’000
5
–
–
5
Total
2021
£’000
3,380
(1,312)
(502)
1,566
An exceptional item has been recognised in the consolidated income statement of £1,566,000 as a result of the
Lightronics fire on 23 September 2020. All insurance claims have been settled and the building will be rebuilt during
2021/22.
The income above will be utilised for the rebuild. There is a deferred tax charge of £312,000 related to this recognised in
the income statement.
4 EMPLOYEE INFORMATION
The average monthly number of employees employed by the Group (including executive directors) during the year is
analysed below:
Average headcount
Production
Sales and distribution
Administration
Total average headcount
Employment costs of all employees
(including executive directors)
Wages and salaries
Social security costs
Other pension costs
Group
2021
Number
292
189
215
696
Group
2021
£’000
28,779
3,423
1,598
33,800
2020
Number
293
184
211
688
2020
£’000
27,957
3,262
1,504
32,723
Company
2021
Number
182
103
142
427
2020
Number
178
107
145
430
Company
2021
£’000
17,644
2,005
983
20,632
2020
£’000
17,803
1,965
969
20,737
Included in wages and salaries are £1,463,000 (2020: £1,821,000) of temporary employees costs.
Other pension costs include contributions to pension schemes and other employer’s pension related charges
comprising life assurance of £93,000 (2020: £80,000), pension administration and professional charges of £111,000
(2020: £119,000) and private pension schemes amounting to £5,000 (2020: £15,000).
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Contributions to the defined contribution section amounted to £243,000 (2020: £258,000) and contributions to other
schemes administered independently of the FW Thorpe pension schemes amounted to £963,000 (2020: £849,000).
Directors’ Emoluments
Aggregate emoluments
Contributions to money purchase schemes
Group
2021
£’000
1,836
13
1,849
2020
£’000
1,607
19
1,626
Company
2021
£’000
1,570
13
1,583
2020
£’000
1,356
19
1,375
For the year ended 30 June 2021 no retirement benefits were accruing to any director (2020: nil) under the
defined benefit scheme and to J E Thorpe (2020: J E Thorpe) under the defined contribution scheme. Additionally
compensation payments for the loss of pension contributions totalling £240,000 (2020: £245,000) were made to 4
(2020: 5) directors.
Highest paid director
Total of emoluments and amounts receivable
Group
2021
£’000
461
2020
£’000
427
Company
2021
£’000
461
2020
£’000
427
Compensation payments for the loss of pension contributions for the highest paid director were £41,000
(2020: £41,000).
The key management personnel are the Group Board directors.
Further details are provided in the directors’ remuneration report on pages 67 to 70.
5 NET FINANCE EXPENSE
Finance income
Current assets
Interest receivable
Non-current assets
Fair value adjustments on loans
Dividend income on financial assets at fair value through other comprehensive income
Net rental income
Loan interest
Gain on disposal of financial assets
Finance expense
Current liabilities
Interest payable
Lease liability interest expense
Share appreciation rights distribution
Non-current assets
Loan interest
Net finance expense
2021
£’000
2020
£’000
46
177
186
52
92
62
615
7
39
1,155
66
1,267
(652)
293
23
187
64
141
–
708
2
36
958
101
1,097
(389)
The share appreciation rights distribution are the dividends from Lightronics Participaties B.V. and Famostar Emergency
Lighting B.V. due to the former management of Lightronics Participaties B.V.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021
6 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
2021
£’000
4,128
(564)
3,564
765
765
4,329
2020
£’000
3,691
(981)
2,710
(81)
(81)
2,629
The tax assessed for the year is higher (2020: lower) than the standard rate of corporation tax in the UK of 19.00% (2020:
19.00%). The differences are explained below:
Profit before income tax
Profit on ordinary activities multiplied by the standard rate in the UK of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes
Accelerated tax allowances and other timing differences
Adjustments in respect of prior years
Patent box relief
Foreign profit taxed at higher rate
Tax charge
2021
£’000
20,141
3,827
1,077
238
(564)
(686)
437
4,329
2020
£’000
15,943
3,029
854
17
(981)
(643)
353
2,629
The effective tax rate was 21.49% (2020: 16.49%). Adjustments in respect of prior years relates to refunds received for
prudent assumptions on additional investment allowances and patent box relief in the tax calculations.
The UK corporation tax rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020. The UK
corporation tax rate increase from 19% to 25% from 1 April 2023, was substantively enacted in May 2021. This has led
to an increase in the deferred tax assets and liabilities at 30 June 2021 as these values have been calculated based on a
rate at which they are expected to crystalise.
7 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) total
2021
116,511,580
15,812
13.57
2020
116,272,709
13,314
11.45
Diluted 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, plus the number of shares earnt for share options where performance conditions
have been achieved.
Diluted
Weighted average number of ordinary shares in issue (diluted)
Profit attributable to equity holders of the Company (£’000)
Diluted earnings per share (pence per share) total
2021
116,938,189
15,812
13.52
2020
116,805,366
13,314
11.40
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 8 PROPERTY, PLANT AND EQUIPMENT
Group
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right-
of-use
assets
£’000
23,552
133
(1,181)
(410)
22,094
4,362
617
(283)
(58)
4,638
26,933
2,435
(1,548)
(158)
27,662
15,955
2,487
(1,013)
(84)
17,345
856
364
(276)
(49)
895
450
212
(221)
(24)
417
Total
£’000
51,341
2,932
(3,005)
(617)
50,651
20,767
3,316
(1,517)
(166)
22,400
Company
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right of
use
assets
£’000
6,484
45
–
–
6,529
2,245
154
–
–
2,399
20,356
1,000
(695)
–
20,661
12,615
1,731
(573)
–
13,773
Total
£’000
26,840
1,045
(695)
–
27,190
14,860
1,885
(573)
–
16,172
11,018
–
–
–
–
–
–
–
–
–
–
–
Cost
At 1 July 2020
Additions
Disposals*
Currency translation
At 30 June 2021
Accumulated
depreciation
At 1 July 2020
Charge for the year
Disposals*
Currency translation
At 30 June 2021
Net book amount
At 30 June 2021
17,456
10,317
478
28,251
4,130
6,888
* Disposals includes the write off of assets as a result of the Lightronics fire.
Group
Company
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right-
of-use
assets
£’000
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right of
use
assets
£’000
Total
£’000
Total
£’000
–
13
13
–
(13)
–
–
–
6,374
–
6,374
110
–
–
–
6,484
–
2,266
2,266
192
(1,628)
–
26
856
24,678
13
24,691
2,641
(492)
–
–
26,840
18,304
–
18,304
2,531
(479)
–
–
20,356
19,720
–
19,720
3,709
(31)
(17)
171
23,552
23,851
–
23,851
4,016
(1,005)
17
54
26,933
43,571
2,266
45,837
7,917
(2,664)
–
251
51,341
Cost
At 30 June 2019
Adoption of IFRS16
At 1 July 2019
Additions
Disposals
Transfers
Currency translation
At 30 June 2020
Accumulated
depreciation
At 30 June 2019
Adoption of IFRS16
At 1 July 2019
Charge for the year
Disposals
Transfers
Currency translation
At 30 June 2020
Net book amount
At 30 June 2020
Freehold land which was not depreciated at 30 June 2021 amounted to £758,000 (2020: £774,000) (Group) and £500,000
(2020: £500,000) (Company).
18,218
908
19,126
3,221
(1,641)
–
61
20,767
14,506
–
14,506
2,331
(911)
2
27
15,955
11,398
–
11,398
1,623
(406)
–
–
12,615
13,493
9
13,502
1,777
(419)
–
–
14,860
3,712
–
3,712
662
(31)
(2)
21
4,362
2,095
–
2,095
150
–
–
–
2,245
–
908
908
228
(699)
–
13
450
–
9
9
4
(13)
–
–
–
10,978
19,190
30,574
11,980
7,741
4,239
406
–
104
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 9 INTANGIBLE ASSETS
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Group 2021
Cost
At 1 July 2020
Additions
Write-offs and transfers
Currency translation
At 30 June 2021
Accumulated
amortisation
At 1 July 2020
Charge for the year
Write-offs and transfers
Currency translation
At 30 June 2021
Net book amount
At 30 June 2021
15,116
–
–
(685)
14,431
248
–
–
(7)
241
7,357
1,516
(964)
(38)
7,871
3,902
1,508
(964)
(31)
4,415
Brand
name
£’000
1,323
–
–
(66)
1,257
3,000
–
–
(154)
2,846
1,908
373
–
(102)
2,179
980
74
–
(48)
1,006
Software
£’000
Patents
£’000
Fishing
rights
£’000
Total
£’000
2,573
240
(5)
3
2,811
1,481
373
(5)
3
1,852
150
–
–
–
150
150
–
–
–
150
182 29,701
1,756
(969)
(940)
182 29,548
–
–
–
–
–
–
–
–
8,669
2,328
(969)
(185)
9,843
14,190
3,456
667
251
959
–
182 19,705
Write-offs relate to development assets where no further economic benefits will be obtained.
Group 2020
Cost
At 1 July 2019
Additions
Write-offs and transfers
Currency translation
At 30 June 2020
Accumulated
amortisation
At 1 July 2019
Charge for the year
Write-offs and transfers
Currency translation
At 30 June 2020
Net book amount
At 30 June 2020
Goodwill
£’000
Development
costs
£’000
Technology
£’000
14,921
–
–
195
15,116
246
–
–
2
248
7,292
1,322
(1,275)
18
7,357
3,441
1,715
(1,275)
21
3,902
2,956
–
–
44
3,000
1,504
371
–
33
1,908
Brand
name
£’000
1,304
–
–
19
1,323
801
162
–
17
980
Software
£’000
Patents
£’000
Fishing
rights
£’000
Total
£’000
2,202
397
(26)
–
2,573
1,178
329
(26)
–
1,481
150
–
–
–
150
150
–
–
–
150
182 29,007
1,719
(1,301)
276
29,701
–
–
–
182
–
–
–
–
–
7,320
2,577
(1,301)
73
8,669
14,868
3,455
1,092
343
1,092
–
182
21,032
Amortisation and impairment of £2,328,000 (2020: £2,577,000) is included in the administrative expenses. Included
in goodwill are amounts of £2,618,000 (2020: £2,618,000) arising from the acquisition of Portland Lighting Limited in
2011, €7,784,000 (£6,684,000) (2020: €7,784,000 (£7,091,000)) arising from the acquisition of Lightronics Participaties
B.V. in 2015 and €5,057,000 (£4,343,000) (2020: €5,057,000 (£4,607,000)) arising from the acquisition of Famostar
Emergency Lighting B.V. in December 2017. This goodwill is not amortised. The goodwill for Lightronics, Famostar
and Thorlux Australasia is revalued annually to the closing exchange rate, as it is denominated in euros and Australian
dollars respectively, with the movement recorded in exchange differences on translation of foreign operations in the
Statement of Changes in Equity.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 9 INTANGIBLE ASSETS CONTINUED
The Group tests intangible assets annually for impairment, or more frequently if there are indications of impairment, for
each relevant cash generating unit (CGU). CGUs in the Group comprise the entities FW Thorpe Plc, Lightronics Participaties
B.V., Lightronics B.V., Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux
Lighting L.L.C., Thorlux Australasia Pty Limited, Thorlux Lighting GmbH and Famostar Emergency Lighting B.V.
For Portland Lighting Limited the value in use has been determined using cashflow projections covering a five year
period with a terminal value all discounted at a rate of 7.6%. For prudence, no growth has been assumed from 2022.
For an impairment to be required, the discount rate would need to exceed 15.4% (Group) and 11.6% (Company:
investments in subsidiaries).
For the other CGUs an EBITDA analysis is computed to compare against the net carrying value of the goodwill and other
intangible assets for each CGU as appropriate. A multiple based on a six times EBITDA, that we consider a reasonable
multiple for the sector, is used in these computations, except for Famostar B.V. where an EBITDA multiple of five and a
half has been used.
Due to the timing of the acquisitions that gave rise to the majority of our goodwill held, our assessment also considers
business performance and likely net realisable value, which must be assessed as part of settlement of related share
appreciation rights. At expected levels of EBITDA we consider that our goodwill is fully recoverable with headroom
on the Lightronics and Famostar CGUs of £20m in the Group and £12m in the Company (investments in subsidiaries,
financial assets at amortised cost and amounts due from Group companies).
Company 2021
Cost
At 1 July 2020
Additions
Write-offs and transfers
At 30 June 2021
Accumulated amortisation
At 1 July 2020
Charge for the year
Write-offs and transfers
At 30 June 2021
Net book amount
At 30 June 2021
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
5,081
1,101
–
6,182
2,262
1,234
–
3,496
2,574
222
–
2,796
1,501
365
–
1,866
150
–
–
150
150
–
–
150
182
–
–
182
–
–
–
–
Total
£’000
7,987
1,323
–
9,310
3,913
1,599
–
5,512
2,686
930
–
182
3,798
Write-offs relate to development assets where no further economic benefits will be obtained.
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
5,275
1,081
(1,275)
5,081
2,258
1,279
(1,275)
2,262
2,183
391
–
2,574
1,190
311
–
1,501
150
–
–
150
150
–
–
150
182
–
–
182
–
–
–
–
Total
£’000
7,790
1,472
(1,275)
7,987
3,598
1,590
(1,275)
3,913
2,819
1,073
–
182
4,074
Company 2020
Cost
At 1 July 2019
Additions
Write-offs and transfers
At 30 June 2020
Accumulated amortisation
At 1 July 2019
Charge for the year
Write-offs and transfers
At 30 June 2020
Net book amount
At 30 June 2020
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 9 INTANGIBLE ASSETS CONTINUED
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.
10 INVESTMENTS IN SUBSIDIARIES
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 2020 and 30 June 2021
Company
2021
£’000
14,581
2020
£’000
14,581
Costs
£’000
Provision
£’000
14,581
–
Impairment for investments in subsidiaries has been considered within the headroom shown in note 9.
11 INVESTMENT PROPERTY
Cost
At 1 July
Additions
Disposals
At 30 June
Accumulated depreciation
At 1 July
Charge for the year
Disposals
At 30 June
Net book amount
At 30 June
Group
2021
£’000
2,259
–
(33)
2,226
272
20
(33)
259
2020
£’000
2,259
–
–
2,259
253
19
–
272
Company
2021
£’000
11,448
305
(44)
11,709
1,318
240
(33)
1,525
2020
£’000
10,211
1,237
–
11,448
1,080
238
–
1,318
1,967
1,987
10,184
10,130
The following amounts have been recognised in the income statement:
Rental income
Direct operating expenses arising from investment
properties that generate rental income
Group
2021
£’000
137
2020
£’000
142
Company
2021
£’000
463
2020
£’000
408
(105)
(98)
(325)
(316)
The investment property and land owned by 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. The associated
fishing rights for the property by the River Wye are included in intangible assets.
Investment property of £1,296,000 (2020: £1,296,000) is freehold land and therefore not depreciated; the property
element includes accumulated depreciation of £259,000 (2020: £272,000) which relates to the property occupied by
Mackwell Electronics Limited. This investment property has been independently valued and has a market value that is
not materially higher than its cost.
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An external fair value exercise of the land by the River Wye and the land in Monmouthshire was last undertaken in June
2019 resulting in a valuation of £1.57m, which is greater than the carrying value of those specific investment properties.
The directors’ valuation of this investment property for the year ended 30 June 2021 shows no material change.
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.
12 FINANCIAL ASSETS AT AMORTISED COST
The Group classifies its financial assets at amortised cost only if both of the following criteria are met:
•
•
the asset is held within a business model whose objective is to collect the contractual cash flows; and
the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets at amortised cost include the following debt investments. The Group applied the expected credit risk
model to calculate the impairment provision.
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. £377,000 was repaid during the year (2020: £nil), leaving a balance due at 1%
over the Bank of England base rate of £nil (2020: £377,000).
As the loan has been fully repaid the Group and Company have released the provision that was included in the
previous financial statements. As at the date of these financial statements, the provision is £nil (2020: £177,000) for
these loan notes.
During 2018, £1,500,000 in new loans were provided to Mr N Brangwin, a director and main shareholder in Mackwell
Electronics Limited, making a total of £1,800,000, with interest payable at 4% over the Bank of England base rate. This
loan is secured against Mr Brangwin’s shareholding in FW Thorpe Plc. No repayment was received during the year.
This debt investment is considered to have a minimal risk of default due to the collateral that is held as security, and
therefore the impairment provision is determined as 12 months expected credit losses. As at the date of these financial
statements, no provision was recorded.
Therefore the total balance due from Mackwell and its directors is £1,800,000 (2020: £2,000,000) after provisions.
Luxintec S.L.
During the year loan notes of €869,000 (£746,000) were provided to Luxintec S.L., an investment in the company is held
under financial assets at fair value through other comprehensive income, with ordinary interest payable at 1.5% fixed
rate payable quarterly. This loan is secured against the company assets.
This debt investment is considered to have a minimal risk of default due to the collateral that is held as security, and
therefore the impairment provision is determined as 12 months expected credit losses. As at the date of these financial
statements, no provision was recorded.
At the date of the financial statements, the loan notes balance was €869,000 (2020: €nil) equating to £746,000
(2020: £nil) at the end of year exchange rate.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 12 FINANCIAL ASSETS AT AMORTISED COST CONTINUED
Famostar Emergency Lighting B.V.
Part of the acquisition of Famostar Emergency Lighting B.V. included partial funding of the 35% share appreciation
rights held by the existing rights holders in Lightronics Participaties B.V. This was achieved by the issue of a loan of
€1,640,000. During the year €467,000 was repaid and at the date of the financial statements, the loan notes balance was
€nil (2020: €467,000) equating to £nil (2020: £425,000) at the end of year exchange rate.
We assess the credit risk of our loan note receivables, based on the creditworthiness of the counterparty, history of
repayment and security in place, and where required provisions are made.
At 1 July
Issued
Repaid
Fair value adjustment
Exchange rate movement
At 30 June
Analysis of total financial assets at amortised cost
Non-current
Current
Group
2021
£’000
2,425
746
(802)
177
–
2,546
Group
2021
£’000
746
1,800
2,546
2020
£’000
3,567
–
(1,136)
23
(29)
2,425
2020
£’000
1,800
625
2,425
Company
2021
£’000
12,963
1,151
(2,655)
(143)
(489)
10,827
Company
2021
£’000
9,027
1,800
10,827
2020
£’000
12,115
2,283
(1,484)
(114)
163
12,963
2020
£’000
12,338
625
12,963
The £1,151,000 loans issued by the Company are £746,000 issued to Luxintec S.L. as above and £405,000 to Thorlux
Lighting L.L.C.
The debt investment to Lightronics Participaties B.V. of €8,549,000 (£7,341,000) has shown no significant increase in
credit risk since the inception of the loan, and therefore the impairment provision is determined as 12 months expected
credit losses. As at the date of these financial statements, no provision was recorded.
The debt investment to Thorlux Lighting L.L.C. of £1,590,000 is considered to be underperforming and therefore
the impairment provision is determined as lifetime expected credit losses. As at the date of these financial statements,
the Company has made a provision of £650,000 (2020: £261,000) for these loan notes based on an expected credit loss
of 45%.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 13 EQUITY ACCOUNTED INVESTMENTS AND JOINT ARRANGEMENTS
The Group has a joint operation in the United Arab Emirates. Thorlux Lighting L.L.C. is registered in the 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, in 2016. In the
previous year, this was reclassified to financial assets at fair value through other comprehensive income as the Group is
not able to assert influence over the management of this investment.
The Group assesses on a forward looking basis the associated expected credit losses and the impairment methodology
applied depends on whether there has been a significant increase in credit risk, as allowed under IFRS 9. As at the date
of these financial statements, no provision was recorded for the Group.
At 1 July
Reclassification to financial assets at fair value through other
comprehensive income
At 30 June
Group
2021
£’000
–
–
–
2020
£’000
936
(936)
–
Company
2021
£’000
–
–
–
14 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Group and Company
Beginning of year
Net (disposals)/additions
Reclassification from equity accounted investments and joint arrangements
Reclassification to trade and other receivables
Revaluation
At 30 June
2021
£’000
3,772
(143)
–
–
135
3,764
2020
£’000
936
(936)
–
2020
£’000
3,683
61
936
(74)
(834)
3,772
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. Financial assets at fair value through other comprehensive income are
subsequently carried at fair value.
Financial assets at fair value through other comprehensive income comprise:
i) Listed equity in the UK, and are denominated in UK pounds. None of these assets is either past due or impaired; and
ii) The Group invested €1,200,000 for 40% of the share capital of Luxintec S.L., a company based in Spain, in 2016.
An impairment of £529,000 (2020: £407,000) is included in the revaluation amount of £135,000 for the investment in
Luxintec S.L. based on the fair value assessment of this investment.
Classified as financial assets at fair value through other comprehensive income as the Group is not able to assert
influence over the management of this investment.
The Group assesses at the end of each reporting year whether there is objective evidence that a financial asset or a
group of financial assets is impaired. For equity investments classified as financial assets at fair value through other
comprehensive income, 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 financial assets at fair value through other comprehensive
income, 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.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021
15 INVENTORIES
Raw materials
Work in progress
Finished goods
Group
2021
£’000
14,992
2,228
3,169
20,389
2020
£’000
16,257
2,964
6,075
25,296
Company
2021
£’000
6,853
1,687
2,988
11,528
2020
£’000
8,654
2,379
5,881
16,914
The value of the inventory provision is £2,928,000 (2020: £3,308,000) for the Group and £1,475,000 (2020: £1,702,000) for
the Company.
16 TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other receivables
Prepayments and accrued income
Amounts owed by subsidiaries
Total
Group
2021
£’000
25,599
1,982
1,729
–
29,310
2020
£’000
18,945
941
1,370
–
21,256
Company
2021
£’000
17,103
1,837
1,014
9,070
29,024
2020
£’000
12,064
833
986
8,250
22,133
Amounts owed by subsidiaries, except cash balances, are unsecured, interest free and have no fixed date for
repayment. Amounts owed in relation to cash balances generate interest in line with the Group’s deposit facilities.
Trade receivables past due date not provided
Group
2021
£’000
3,339
2020
£’000
1,734
Company
2021
£’000
2,476
2020
£’000
1,157
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.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets. A significant proportion of the trade receivables are
insured. The policy covers 90% of the debt in the event of a claim for default, where the customer is in severe financial
difficulty. No bad debt provision is made in respect of trade receivables from Government departments or agencies.
At 30 June 2021 the bad debt provision for the Group amounted to £180,000 (2020: £154,000) and for the Company
£23,000 (2020: £27,000).
No provision is held against trade receivables that are not yet due, due to the good credit history and expected
financial performance of customers and the overall exposure is considered low due to levels of credit insurance in
place. Credit limits are reviewed at least every 6 months to assess and amend, where appropriate, the credit limit
offered to customers.
Included in amounts owed by subsidiaries are provisions for expected credit losses for Thorlux Lighting L.L.C. of
£264,000 (2020: £442,000) and Thorlux Australasia PTY Limited of £643,000 (2020: £497,000), based on an expected
credit loss of 45%.
During the year the following amounts were written off (excluding amounts owed by subsidiaries):
Bad debts written off
Bad debts recovered
Net bad debt expense
Group
2021
£’000
26
(5)
21
2020
£’000
47
(41)
6
Company
2021
£’000
–
–
–
2020
£’000
41
(40)
1
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At 30 June 2021, 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 AUD Australian dollars
Due in $ United States dollars
Group
2021
£’000
18,217
7,166
82
134
–
25,599
2020
£’000
12,525
5,826
312
128
154
18,945
Company
2021
£’000
15,232
1,871
–
–
–
17,103
2020
£’000
11,192
718
–
–
154
12,064
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.
17 SHORT-TERM FINANCIAL ASSETS
Group and Company
Beginning of year
Net deposits/(withdrawals)
2021
£’000
18,580
5,023
23,603
2020
£’000
26,483
(7,903)
18,580
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 have a minimum rating of “A” by Fitch, with a specific rating of “F1” for short-
term funds.
18 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Group
2021
£’000
52,268
2020
£’000
44,422
Company
2021
£’000
47,064
2020
£’000
37,218
The banks where the funds are held have a minimum rating of “A” by Fitch, with a specific rating of “F1” for short-term
funds.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 19 TRADE AND OTHER PAYABLES
Current liabilities
Trade payables
Contract liabilities
Other payables
Social security and other taxes
Accruals and deferred income
Amounts owed to subsidiaries
Non-current liabilities
Other payables
Group
2021
£’000
10,600
1,360
17,048
2,289
7,901
–
39,198
78
78
2020
£’000
9,069
414
16,948
2,447
7,307
–
36,185
67
67
Company
2021
£’000
7,149
1,359
16,060
849
5,242
2,483
33,142
–
–
2020
£’000
6,018
414
12,826
1,236
5,085
2,385
27,964
–
–
Amounts owed to subsidiaries, except cash balances, are unsecured, interest free and have no fixed date of repayment.
Amounts owed in relation to cash balances generate interest in line with the Group’s deposit facilities.
Included within other payables in current liabilities is a commitment to purchase the outstanding share appreciation
rights (deferred consideration) in the subsidiaries Lightronics Participaties B.V. and Famostar Emergency Lighting
B.V. of £16,593,000 (2020: £15,550,000), including a loan of £899,000 (2020: £1,971,000) from Spuiweg Holding B.V.
For the Company, the commitment to purchase the outstanding share appreciation rights (deferred consideration) is
£15,694,000 (2020: £12,429,000).
Non-current liabilities relates to post employment benefits at Thorlux Australasia Pty Limited and Thorlux
Lighting L.L.C.
20 LEASE LIABILITIES
Right-of-use assets
At 1 July 2019
Additions*
Depreciation charge for the year
Lease termination
Currency translation
At 30 June 2020
Additions*
Depreciation charge for the year
Lease termination
Currency translation
At 30 June 2021
Property
£’000
929
–
–
(929)
–
–
–
–
–
–
–
Plant and
equipment
£’000
32
56
(23 (23)
–
2
67
5
(20)
(2)
(2)
48
Motor
vehicles
£’000
397
136
(205)
–
11
339
359
(192)
(53)
(23)
430
Total
£’000
1,358
192
(228)
(929)
13
406
364
(212)
(55)
(25)
478
* Additions comprise increases to right-of-use assets as a result of entering into new leases.
Lease liabilities
Lease liabilities recognised at 30 June 2021 total £661,000 (2020: £637,000) of which £226,000 (2020: £220,000) is due
within one year and £435,000 (2020: £417,000) due after more than one year. There are no contractual options to either
extend or terminate early lease agreements.
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20 LEASE LIABILITIES CONTINUED
Maturity analysis
The timing of the payments due over the remaining lease term for these liabilities is as follows:
2021
Within one year
More than one but less than five years
More than five years
Total due including interest
The total cash paid on these leases during the year was £349,000.
2021
Expense relating to short-term leases
Expense relating to low value leases
Total
£’000
226
434
1
661
£’000
146
12
21 PENSION SCHEME
The Group operates a funded hybrid pension scheme for employees in the UK. The scheme is approved by H.M.
Revenue and Customs 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 2021 amounted to £614,000 (2020: £616,000).
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 2018, and at that date the value of the fund was
£39,556,000. 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%
2.60%
2.60%
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 21 PENSION SCHEME CONTINUED
The figures at 30 June 2018 have been updated as at the Statement of Financial Position dates in order to assess the
additional disclosures required under IAS 19 as at 30 June 2021 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 2.5% 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
2021
3.50%
3.50%
1.80%
2.80%
3.30%
2.20%
22.1 years
23.4 years
24.3 years
25.4 years
2020
3.30%
3.30%
1.40%
2.30%
3.10%
2.10%
2019
3.50%
3.50%
2.10%
2.50%
3.30%
2.20%
2017
3.50%
3.50%
2.60%
2.50%
3.30%
2.20%
22.5 years 22.5 years 23.1 years 23.0 years
23.6 years 23.5 years 24.8 years 24.7 years
2018
3.40%
3.40%
2.70%
2.40%
3.20%
2.10%
24.7 years 24.7 years 25.4 years 25.3 years
25.9 years 25.9 years 27.2 years 27.1 years
The Statement of Financial Position figures required under IAS 19 are as follows:
30 June 2021
30 June 2020
30 June 2019
30 June 2018
30 June 2017
Expected
long-
term rate
of return
%
Value
£’000
1.8% 13,269
1.8% 26,458
1.8% 2,832
Expected
long-
term rate
of return
%
Value
£’000
1.4% 11,003
1.4% 29,549
2,300
1.4%
Expected
long-
term rate
of return
%
Value
£’000
2.70% 12,570
2.70% 26,618
2,387
2.70%
Expected
long-
term rate
of return
%
Value
£’000
2.70% 13,154
2.70% 24,769
1,665
2.70%
Expected
long-
term rate
of return
%
Value
£’000
2.60% 12,152
2.60% 25,859
413
2.60%
42,559
42,852
41,575
39,588
38,424
(40,350)
(42,583)
(39,437)
(37,259)
(37,710)
2,209
269
2,138
2,329
714
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
Asset recognised in the Statement of Financial Position
2021
£’000
(40,350)
42,559
2,209
(2,209)
–
2020
£’000
(42,583)
42,852
269
(269)
–
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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 loss
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
Amounts recognised in Income Statement
The amounts recognised in the Income Statement are as follows:
Current service cost
Actuarial loss recognised in Statement of Comprehensive Income for the year
Actual return less expected return on pension scheme assets
Experience losses arising on the scheme liabilities
Changes in assumptions underlying the present value on the scheme liabilities
Net interest income
Restriction of decrease in 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 gain/(loss) recognised in the Statement of Comprehensive Income for the year
Cumulative actuarial loss recognised in the Statement of Comprehensive Income at 30 June
2021
£’000
(42,583)
(432)
(583)
(272)
964
2,556
(40,350)
2021
£’000
42,852
588
789
614
272
(2,556)
42,559
2021
£’000
432
2021
£’000
789
(951)
1,915
5
(1,940)
(182)
2021
£’000
(6,486)
1,758
(4,728)
2020
£’000
(39,437)
(446)
(818)
(328)
(3,302)
1,748
(42,583)
2020
£’000
41,575
864
1,217
616
328
(1,748)
42,852
2020
£’000
446
2020
£’000
1,217
(171)
(3,131)
46
1,869
(170)
2020
£’000
(4,447)
(2,039)
(6,486)
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 21 PENSION SCHEME CONTINUED
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 (2020: £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 ended 30 June 2021 was £1,377,000 (2020: £2,081,000) or 3.2% (2020:
3.1%). The Group expects to pay £602,000 contributions (2020: £634,000) into the pension scheme during the
forthcoming year.
History of experience gains and losses recognised in the Statement of Comprehensive Income
2021
2020
2019
2018
2017
£’000
% £’000
% £’000
% £’000
% £’000
%
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
Amount which has been
recognised in the SOCI
Percentage of the present
value of scheme liabilities
789
1,217
1,755
592
2,121
2%
3%
(951)
(171)
(294)
2%
0%
4%
1%
1.5%
214
(1,129)
(0.6%)
1,915
(3,131)
(1,901)
632
(2,254)
–
5
(5%)
0%
0%
–
46
7%
0%
0%
–
66
5%
0%
0%
–
21
(1.7%)
0%
0%
–
51
1,758
(2,039)
(374)
1,459
(1,211)
4%
5%
1%
4%
6%
3%
6%
0%
0%
3%
Sensitivity analysis
The impact on the defined benefit obligation of changes in the significant assumptions is shown approximately below:
Assumption varied
As at 30 June 2021
Discount rate 0.5% p.a. higher
Increase in salaries 0.5% p.a. higher
Pension increase (in payment and in deferment) 0.5% p.a. higher
Life expectancy one year longer
Defined
benefit
obligation
£m
40.4
38.3
40.5
41.5
41.5
The figures assume that each assumption is changed independently of the others. Therefore, the disclosures are only a
guide because the effect of changing more than one assumption is not cumulative.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 22 PROVISIONS FOR LIABILITIES AND CHARGES
At 1 July 2019
Additions
Utilisation
Surplus
Currency translation
At 1 July 2020
Additions
Utilisation
Surplus
Currency translation
At 30 June 2021
Analysis of total provisions
Non-current
Total
WEEE
provision
£’000
102
–
–
–
–
102
–
–
(102)
–
–
Group
Warranty
provision
£’000
2,302
559
(200)
(65)
23
2,619
611
(478)
(428)
(82)
2,242
WEEE
provision
£’000
102
–
–
–
–
102
–
–
(102)
–
–
Company
Warranty
provision
£’000
364
368
(39)
–
–
693
432
(419)
–
–
706
Total
£’000
2,404
559
(200)
(65)
23
2,721
611
(478)
(530)
(82)
2,242
Total
£’000
466
368
(39)
–
–
795
432
(419)
(102)
–
706
Group
2021
£’000
2,242
2,242
2020
£’000
2,721
2,721
Company
2021
£’000
706
706
2020
£’000
795
795
WEEE provision
A potential liability was previously assessed 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. The assessment was updated
at the date of the financial statements where it was determined that no liability exists, consequently the provision was
released.
Warranty provision
The usual warranty period provided by Group companies is between 5 and 10 years ,dependant on market
requirements, and the provision for warranty is based on expected claims over the remaining warranty period. This is
calculated in accordance with the accounting policy estimates section included in note 1.
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:
Group
2021
£’000
–
(1,591)
(1,591)
2020
£’000
–
(601)
(601)
Company
2021
£’000
–
(956)
(956)
2020
£’000
–
(398)
(398)
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 23 DEFERRED INCOME TAX CONTINUED
The net movement on the deferred income tax account is as follows:
Beginning of year
Adoption of IFRS 16
Income statement (charged)/credited
Tax (charged)/credited directly to equity
Currency translation
End of year
Group
2021
£’000
(601)
–
(765)
(236)
11
(1,591)
2020
£’000
(699)
5
81
13
(1)
(601)
Company
2021
£’000
(398)
–
(373)
(185)
–
(956)
2020
£’000
(493)
1
71
23
–
(398)
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 asset
At 1 July 2019
Charged to the income statement
At 1 July 2020
Charged to the income statement
At 30 June 2021
Deferred tax liabilities
At 1 July 2019
Adoption of IFRS 16
Charged/(credited) to the income statement
(Charged)/credited directly to equity
Currency translation
At 1 July 2020
Charged/(credited) to the income statement
(Charged)/credited directly to equity
Currency translation
At 30 June 2021
Accelerated tax
depreciation
£’000
150
–
107
13
–
270
253
80
(10)
593
Research &
development
£’000
668
–
(100)
69
1
638
(13)
193
(2)
816
Accelerated tax
depreciation
£’000
–
–
–
–
–
Fair value &
other timing
differences
£’000
(119)
(5)
(88)
(95)
–
(307)
525
(37)
1
182
Total
£’000
–
–
–
–
–
Total
£’000
699
(5)
(81)
(13)
1
601
765
236
(11)
1,591
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 23 DEFERRED INCOME TAX CONTINUED
The movement in the Company deferred income tax liabilities during the year is as follows:
Deferred tax liabilities
At 1 July 2019
Adoption of IFRS 16
Charged/(credited) to the income statement
Charged/(credited) directly to equity
At 1 July 2020
Charged/(credited) to the income statement
Charged/(credited) directly to equity
At 30 June 2021
Accelerated tax
depreciation
£’000
112
–
58
13
183
204
57
444
Research &
development
£’000
501
–
(45)
59
515
(52)
163
626
Fair value &
other timing
differences
£’000
(120)
(1)
(84)
(95)
(300)
221
(35)
(114)
The deferred income tax (charged)/credited to equity during the year is as follows:
Total
£’000
493
(1)
(71)
(23)
398
373
185
956
Deferred tax (charged)/credited to equity
Tax on revaluation of financial assets at fair value through other
comprehensive income
24 SHARE CAPITAL
Authorised, allotted and fully paid
118,935,590 ordinary shares of 1p each
(2020: 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
At 1 July
Shares issued from treasury
At 30 June
Group
2021
£’000
(236)
(236)
2020
£’000
13
13
Company
2021
£’000
(185)
(185)
2020
£’000
23
23
Group
2021
£’000
2020
£’000
Company
2021
£’000
2020
£’000
1,189
1,189
1,189
1,189
Group and Company
Group and Company
2021
£’000
26
(3)
23
2021
No. of
shares
2,605,093
(331,524)
2,273,569
2020
No. of
shares
2,814,932
(209,839)
2,605,093
2020
£’000
28
(2)
26
There were no new shares issued during the year (2020: nil). 331,524 (2020: 209,839) shares were issued from treasury for
the exercise of share options, of which the Company repurchased none (2020: nil). There are 683,423 (2020: 1,044,482)
share options outstanding at the year end.
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 25 OTHER RESERVES
Share premium account
Capital redemption reserves
Foreign currency translation reserve
Group
2021
£’000
1,960
137
2,076
4,173
2020
£’000
1,526
137
2,764
4,427
Company
2021
£’000
1,960
137
–
2,097
26 DIVIDENDS
Dividends paid during the year are outlined in the tables below:
Dividends paid (pence per share)
Final dividend
Interim dividend
Total
2021
4.20
1.49
5.69
2020
£’000
1,526
137
–
1,663
2020
4.10
1.46
5.56
A final dividend in respect of the year ended 30 June 2021 of 4.31p per share, amounting to £5,028,000 (2020:
£4,886,000) and a special dividend of 2.20p, amounting to £2,567,000 (2020: £nil) are to be proposed at the Annual
General Meeting on 18 November 2021 and, if approved, will be paid on 25 November 2021 to shareholders on the
register on 29 October 2021. The ex-dividend date is 28 October 2021. These financial statements do not reflect this
dividend payable.
Dividends proposed (pence per share)
Final dividend
Special dividend
Dividends paid
Final dividend
Interim dividend
Total
Dividends proposed
Final dividend
Special dividend
2021
4.31
2.20
2021
£’000
4,895
1,736
6,631
2021
£’000
5,028
2,567
2020
4.20
–
2020
£’000
4,770
1,698
6,468
2020
£’000
4,886
–
27 SHARE BASED PAYMENT CHARGE
Equity settled scheme
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. The Group also operates a Save As You Earn (SAYE) scheme for UK based employees that matures in October
2021. 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 grant date. The application of IFRS 2 gave rise to a charge of £47,000 (2020: £60,000) for the year.
At 30 June 2021, there were 683,423 options exercisable (2020: 1,044,482) under the ESOP or SAYE schemes.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 27 SHARE BASED PAYMENT CHARGE CONTINUED
a) Details of changes in the number of awards outstanding during the year are set out below:
Outstanding at 1 July 2020
Exercised during the year
Forfeited during the year
Outstanding at 30 June 2021
ESOP Scheme
SAYE Scheme
Total
Exercise
price
(p/s)
124
124
–
124
Options
404,160
(26,202)
(9,535)
368,423
Exercise
price
(p/s)
209
209
–
209
Options
1,044,482
(331,524)
(29,535)
683,423
Options
640,322
(305,322)
(20,000)
315,000
The weighted average contractual life of the share based payments outstanding at the end of the year is 3.3 years for
the ESOP scheme and 0.8 years for the SAYE scheme.
b) Fair value calculations
The fair value of the share options granted during the year were calculated using the methods, principal 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)
ESOP Scheme
Black–Scholes
24 October 2014
124
124
3 – 7
3 – 7
23% – 28%
3.02%
1.06% – 1.90%
18.61 – 21.07
SAYE Scheme
Black–Scholes
15 July 2016
233
209
5
5
27%
1.90%
0.91%
54.84
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. and Famostar Emergency Lighting 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 settlement date. The application of IFRS 2 gave rise to a charge of £1,384,000 (2020: £1,151,000) for the year. The
total liability at 30 June 2021 was £4,135,000 (2020: £2,752,000).
The fair value of the share based payment (being calculated by estimating the additional payment due to the relevant
employees), was reviewed during the year based on current performance. This review resulted in an annual increase in
the share based payment charge of £501,000 (2020: £317,000).
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 28 CASH GENERATED FROM OPERATIONS
Cash generated from continuing operations
Profit before income tax
Depreciation charge
Depreciation of investment property
Amortisation of intangibles
(Profit)/loss on disposal of property, plant and equipment
Loss on disposal of investment property
Exceptional item in respect of Lightronics fire
Insurance proceeds re inventory lost in fire
Insurance proceeds re other costs
Net finance expense/(income)
Retirement benefit contributions in excess of current
and past service charge
Share based payment charge
Research and development expenditure credit
Effects of exchange rate movements
Changes in working capital
– Inventories
– Trade and other receivables
– Payables and provisions
Total cash generated from operations
29 CAPITAL COMMITMENTS
Property, plant and equipment
Group
2021
£’000
20,141
3,316
20
2,328
(115)
–
(1,566)
5
318
652
(182)
1,429
(289)
1,114
4,878
(7,287)
964
25,726
2020
£’000
15,943
3,221
19
2,577
(118)
–
–
–
–
389
(170)
1,211
(249)
(219)
238
571
(182)
23,231
Company
2021
£’000
15,298
1,885
240
1,599
(98)
11
–
–
–
(4,292)
(182)
1,429
(183)
1,245
5,386
(7,612)
3,727
18,453
2020
£’000
14,117
1,777
238
1,590
(109)
–
–
–
–
(4,961)
(170)
1,211
(174)
(81)
1,439
(1,358)
(561)
12,958
Group
2021
£’000
2,303
2020
£’000
46
Company
2021
£’000
169
2020
£’000
45
Capital expenditure contracted for at the statement of financial position date but not yet incurred includes £2,034,000
for the rebuild of the Lightronics building.
30 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 £3,764,000 (2020: £3,243,000) of fixed
rate listed investments included in financial assets at fair value through other comprehensive income 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. There have been no changes to valuation techniques or movements
between levels of the hierarchy in the year.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 30 FINANCIAL INSTRUMENTS BY CATEGORY CONTINUED
The accounting policies for financial instruments have been applied to the line items below:
Financial assets
at fair value
through other
comprehensive
income
£’000
Financial assets
at amortised cost
£’000
2,546
–
27,581
23,603
52,268
105,998
–
3,764
–
–
–
3,764
Financial assets at
amortised
cost
£’000
Financial assets
at fair value
through other
comprehensive
income
£’000
2,425
–
19,886
18,580
44,422
85,313
–
3,772
–
–
–
3,772
Financial assets
at fair value
through other
comprehensive
income
£’000
Financial assets
at amortised cost
£’000
10,827
–
28,010
23,603
47,064
109,504
–
3,764
–
–
–
3,764
Total
£’000
2,546
3,764
27,581
23,603
52,268
109,762
Total
£’000
2,425
3,772
19,886
18,580
44,422
89,085
Total
£’000
10,827
3,764
28,010
23,603
47,064
113,268
Group
30 June 2021
Financial assets at amortised cost
Financial assets at fair value through other
comprehensive income
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Group
30 June 2020
Financial assets at amortised cost
Financial assets at fair value through other
comprehensive income
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Company
30 June 2021
Financial assets at amortised cost
Financial assets at fair value through other
comprehensive income
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 30 FINANCIAL INSTRUMENTS BY CATEGORY CONTINUED
Company
30 June 2020
Assets as per statement of financial position
Financial assets at amortised cost
Financial assets at fair value through other
comprehensive income
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
The above analysis excludes prepayments.
Liabilities as per statement of financial position
Trade and other payables (excluding statutory liabilities)
Deferred consideration
Other payables
Financial lease liabilities
Financial assets at
amortised
cost
£’000
Financial assets
at fair value
through other
comprehensive
income
£’000
12,963
–
21,147
18,580
37,218
89,908
–
3,772
–
–
–
3,772
Total
£’000
12,963
3,772
21,147
18,580
37,218
93,680
Group
2021
£’000
20,316
16,593
78
661
2020
£’000
18,188
15,550
67
637
Company
2021
£’000
16,599
15,694
–
–
2020
£’000
14,299
12,429
–
–
Non current financial liabilities are lease liabilities (see note 20 for maturity analysis) and post employment benefits.
Financial liabilities are measured at amortised cost.
Contractual cash flows relating to current financial liabilities are all due within one year, and are equal to their carrying
value. Included in other payables (deferred consideration) is an interest bearing loan, of which the principal amount
of €1,047,000 (£899,000) is due for repayment within one year. Interest is contractually due to be paid annually until
maturity, and is estimated at current rates to be €52,000 (£45,000) per year. Furthermore liabilities arising to repurchase
share appreciation rights are non-interest bearing are all due within one year.
The Group and Company did not have derivative financial instruments at 30 June 2021 or 30 June 2020. All assets and
liabilities above are considered to be at fair value.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 31 RELATED PARTY TRANSACTIONS
The following amounts relate to transactions between the Company and its related undertakings:
2021
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting L.L.C.
Lightronics Participaties B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
2020
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting L.L.C.
Lightronics Participaties B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
Purchases
of goods
£’000
509
1,314
202
2,477
–
140
–
–
–
Purchases
of goods
£’000
648
537
–
2,028
–
125
–
–
–
Sales
of goods
£’000
82
386
7
1,246
312
652
614
–
6
Sales
of services
£’000
42
202
75
20
11
–
–
–
–
Purchase
of services
£’000
–
–
–
–
–
–
–
506
–
Sales
of goods
£’000
145
259
–
1,235
405
359
756
–
4
Sales
of services
£’000
86
178
67
223
–
–
–
–
–
Purchase
of services
£’000
–
–
–
–
–
–
–
471
–
Dividends
paid to
Company
£’000
300
250
200
–
–
2,512
–
–
–
Dividends
paid to
Company
£’000
600
600
650
–
–
1,776
–
–
–
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 31 RELATED PARTY TRANSACTIONS CONTINUED
Trading balances due to and from the Company by related entities were as follows:
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting L.L.C.
Lightronics Participaties B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
Total
Amounts due to
related party at 30 June
2020
£’000
(639)
(773)
(400)
(465)
–
(16)
–
(92)
–
(2,385)
2021
£’000
(628)
(793)
(578)
(310)
–
(31)
–
(143)
–
(2,483)
Amounts due from
related party at 30 June
2020
£’000
61
159
36
819
238
4,782
1,802
–
353
8,250
2021
£’000
12
35
9
297
381
5,905
1,645
–
786
9,070
Trading balances arise from transactions of goods and services carried out under normal commercial
terms. The Company has loan balances due from Lightronics Participaties B.V. of €8,549,000 (£7,341,000)
(2020: €10,626,000 (£9,680,000)) and Thorlux Lighting L.L.C. £1,590,000 (2020: £1,118,000). The Company has made
provisions for receivables due from Thorlux Australasia PTY Limited of £643,000 (2020: £497,000) and £914,000
(2020: £703,000) due from Thorlux Lighting L.L.C.
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 67 to 70. There are 2 employees who are related parties (2020: 2). Total remuneration for
the year was £94,000 (2020: £93,000).
The Company owns 40% of the share capital of Luxintec S.L., a company registered in Spain. During the year the
Company sold goods to Luxintec S.L. amounting to £367,000 (2020: £7,000), purchased goods and services amounting
to £31,000 (2020: £453,000). At the year end there were trade balances due to Luxintec S.L. of £21,000 (2020: £60,000)
and £341,000 due from Luxintec S.L. (2020: £nil). During the year a new loan of €869,000 was provided to Luxintec S.L.
with interest payable at 1.5% secured against the company’s assets. The loan balance including interest at the year end
was €873,000 (£750,000) (see note 12).
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials 32 GROUP COMPANIES
The parent Company has the following investments as at 30 June 2021 and 30 June 2020:
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.
Thorlux Lighting GmbH
Thorlux Australasia PTY Limited
Thorlux Lighting L.L.C.
Famostar Emergency Lighting B.V.
(investment held by Lightronics
Participaties B.V.)
Luxintec S.L.
Thorlux Lighting Limited
Country of
incorporation
England
England
England
England
England
Netherlands
Netherlands
Germany
Australia
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
Ordinary $1 shares
United Arab Emirates Ordinary AED 1,000 shares
Netherlands
Ordinary €100 shares
Spain
Ireland
Ordinary €1 shares
Ordinary €1 shares
The registered office addresses of these Group companies are:
Proportion of nominal value
of issued shares held by
Group and Company
30 June
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
40%
100%
30 June
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
40%
100%
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Lightronics Participaties B.V.
Lightronics B.V.
Thorlux Lighting GmbH
Thorlux Australasia PTY Limited
Thorlux Lighting L.L.C.
Famostar Emergency Lighting B.V.
Luxintec S.L.
Thorlux Lighting Limited
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Spuiweg 19, 5145 NE Waalwijk, Netherlands
Spuiweg 19, 5145 NE Waalwijk, Netherlands
Bahnhofstrasse 72, 27404 Zeven, Germany
31 Cross Street, Brookvale, NSW 2100, Australia
Office No. 2, Ghantoot International Building, Plot No: M.14-26, Musaffah
Industrial Area, PO Box 108168, Abu Dhabi, United Arab Emirates
Florijnweg 8 6883JP Velp, Netherlands
Polígono Industrial La Encomienda, C/ Atlas 12-14, 47195 Arroyo de la
Encomienda, Valladolid, Spain
Unit G6 Riverview Business Park, Nangor Road, Gallanstown, Dublin 12, Ireland
128
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Annual Report and Accounts for the year ended 30 June 2021Notes to the Financial Statements continuedFor the year ended 30 June 2021 32 GROUP COMPANIES CONTINUED
The principal activities of these Group companies are:
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Lightronics Participaties B.V.
Lightronics B.V.
Thorlux Lighting GmbH
Thorlux Australasia PTY Limited
Thorlux Lighting L.L.C.
Famostar Emergency Lighting B.V.
Luxintec S.L.
Thorlux Lighting Limited
– non-trading entity
– design and manufacture of illuminated signs
– design and manufacture of clean room 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
– sales support function
– sale of lighting equipment to industrial and commercial markets
– sale of lighting equipment to industrial and commercial markets
– design and manufacture of illuminated signs
– design and manufacture of LED luminaires and lenses
– sale of lighting equipment to industrial and commercial markets
For the year ended 30 June 2021, Compact Lighting Limited, Philip Payne Limited, Solite Europe Limited and Portland
Lighting Limited are exempt from the requirements of the Companies Act 2006 relating to the audit of individual
financial statements by virtue of section 479A. As a result, the Group guarantees all outstanding liabilities to which the
subsidiary company is subject. The Company registration number for Compact Lighting Limited is 02649528, for Philip
Payne Limited it is 01361523, for Solite Europe Limited it is 02295852 and for Portland Lighting Limited it is 02826511.
33 EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
On 21 September 2021 the Group completed its commitment to purchase the outstanding share appreciation rights in
the subsidiaries Lightronics Participaties B.V. and Famostar Emergency Lighting B.V. The settlement was executed by a
cash payment of the outstanding liability.
On the 4 October 2021, the Group acquired 63% of the share capital of Electrozemper S.A. (Zemper), an emergency
lighting specialist in Spain. The company was acquired by F W Thorpe Plc for initial consideration of €20.3m (£17.5m),
plus €4.2m (£3.6m) for cash, working capital and property adjustments, with an additional €1.1m (£1.0m) payable
subject to EBITDA performance 2021/22. The acquisition has been funded from the cash reserves of FW Thorpe Plc.
For the financial year to June 2021, Zemper achieved revenue of €20.3m (£17.4m) and operating profit of €3.8m (£3.3m).
A fair value exercise will be performed in the next 12 months to determine the value of goodwill and other intangible
assets that have arisen from this acquisition.
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials Notice of Meeting
Notice is hereby given that the Annual General Meeting of FW Thorpe Plc will be held at Merse Road, North Moons
Moat, Redditch, Worcestershire, B98 9HH on 18 November 2021 at 3:15 pm to transact the business set out below.
ORDINARY BUSINESS
To receive and adopt the Annual Report and Accounts for the year ended 30 June 2021.
1.
2. To declare a final dividend.
3. To declare a special dividend.
4. To re-elect Mr D Taylor as a director.
5. To re-elect Mr C Muncaster as a director.
6. To re-elect Mr P D Mason as a director.
7. 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 8 as an ordinary
resolution and in the case of 9 as a special resolution.
8. That the directors’ remuneration report (as set out on pages 67 to 70 of the Annual Report and Accounts) for the
year ended 30 June 2021 be approved.
9. 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 2022;
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. 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. If
you wish to inspect these documents, please contact the Company at shareholders@fwthorpe.co.uk.
2. 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
16 November 2021 (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.
3. 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.
4. 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.
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Annual Report and Accounts for the year ended 30 June 2021 5. 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 16 November 2021 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.
7.
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 16 November 2021 (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.
8. 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.
9. 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).
10. As at 5 October 2021 (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 2,273,569 shares held in
treasury, the total voting rights in the Company as at 5 October 2021 are 116,662,021.
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
Craig Muncaster
Joint Chief Executive, Group Financial Director and Company Secretary
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
5 October 2021
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Strategic ReportOur GovernanceStock Code: TFW www.fwthorpe.co.ukBusiness OverviewOur Financials Financial Calendar
2021
12 October
18 November
25 November
2022
March
March
September
Posting of the Annual Report and Accounts
Annual General Meeting
Payment of final dividend
Announcement of interim results
Payment of interim dividend
Announcement of results for the year
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1
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
England
Tel: + 44 (0)1527 583200
Fax: + 44 (0)1527 584177
www.fwthorpe.co.uk
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