Annual Report
and Accounts
2023
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WELCOME
2023 Annual Report.
Image: Demonstration vehicle fleet
Who we are.
We specialise in designing and
manufacturing professional lighting
systems. We currently employ over 900
people and although each company
works autonomously, our skills and
markets are complementary.
Our purpose.
Provide technically advanced lighting
solutions that deliver long-term lowest
cost of ownership.
Our vision.
Maintain a consistently respected
and profitable organisation with an
environmental conscience.
Revenue (£m)
+23%
2023
2022
2021
2020
2019
176.7
143.7
117.9
113.3
110.6
Operating profit (£m)
Dividend per share (pence)
+13%
2023
2022
2021
2020
2019
27.8
24.7
19.22
16.3
17.63
+5%
2023
2022
2021
2020
2019
6.46
6.151
5.801
5.66
5.53
Basic earnings per share (pence)
+9%
2023
2022
2021
2020
2019
18.72
17.16
13.57
11.45
13.91
CO2 emissions (tCO2) (Scopes 1,2 and 3)
-13%
2023
2022
2021
214,870
247,466
285,365
Operational highlights.
Strong revenue growth across
•
the Group with service levels
returning to normal
• Operating profit growth despite
•
inflationary cost pressures
Expanded our presence in Germany
with the addition of SchahlLED
• Net cash generated from operating
activities remained robust at
£31.9m
1 2022, 2021 dividends exclude special dividends
2
2021 excludes the exceptional item in respect of Lightronics fire £1.6m
3 2019 excludes the profit on disposal of property of £1.9m
Annual Report and Accounts for the year ended 30 June 2023 Contents.
Business Overview
WELCOME
2023 Annual Report
FW THORPE AT A GLANCE
Our investment case
Our culture
Our approach to sustainability
What we do
Our global footprint
Our timeline
Our business
Strategic Report
Chairman’s statement
Marketplace
Business model
Strategy
STRATEGY IN ACTION:
Thorlux illuminates London landmark.
Intelligent Lighting SchahlLED
Zemper injection moulding factory
New warehouse facility for Famostar
Key performance indicators
Operational performance
PRODUCT SPOTLIGHT:
Innovations from around the Group
SkyCore family
Making changes that matter
Financial performance
Section 172
02
04
05
06
07
08
10
16
20
24
26
28
32
34
35
36
38
48
50
51
52
54
SUSTAINABILITY
Our sustainability journey
Mapping sustainability
Sustainability in action
Products
Operations
People
Business model
TCFD
Principal risks and uncertainties
Our Governance
Board of Directors
Directors’ report
Statement of directors’ responsibilities
Directors’ remuneration report
Independent auditors’ report
to the members of FW Thorpe Plc
Our Financials
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
Notes to the financial statements
Notice of meeting
Financial calendar
Company information
Visit us online at:
www.fwthorpe.co.uk
56
58
59
60
62
63
64
66
80
86
88
94
95
99
108
109
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113
114
164
166
166
01
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
Our investment case.
01
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 £1.9m (2022: £2.1m).
Read more about Innovations
from around the Group on
pages 48 to 49
Image: Thorlux Lighting, Redditch
02
Image: Ratio io7 EV charger
527
tonnes of CO2e offset
from solar panels
(2022: 220 tonnes)
02
Our focus on
sustainability…
Environmental issues are a significant
focus for us:
• We carry the LSE Green Mark; we continue
to plant trees (179,412 trees planted
to date).
• We invest in installing solar panels across
•
the UK, Spain and the Netherlands
manufacturing facilities; and we monitor
CO2 emissions.
Energy saving products are a substantial
part of the business, as well as our carbon
offsetting programme; we continue to
invest in solar to reduce our emissions.
• We have family principles and a
supportive culture. Our employees are
fundamental to our success.
• We support local communities by giving
to charities – this year, we gave £16,880.
Read more about Sustainability on
pages 56 to 79
Annual Report and Accounts for the year ended 30 June 2023 Business Overview
Image: Nunnery Wood High School, Worcester
04
Means we are
positioned for
sustainable,
long-term growth.
Providing long-term value
for us and for our stakeholders.
A well-positioned portfolio of companies
across eight countries, serving many market
sectors, means that we have resilience in
the current economic climate and a strong
direction for the future.
Read more about Operational
performance on pages 38 to 46
£1.9m
Group spend on
R&D this year
(2022: £2.1m)
Image: Berrows House, University of Worcester
03
And financial
performance…
We achieved an improved financial
performance over this year despite
challenging economic conditions,
with revenue of £176.7m and operating
profit of £27.8m. In addition, we had net
cash generated from operating activities
of £31.9m.
• Majority of companies managed to grow
•
revenue and profitability this year.
The Group has had a strong order
performance, mainly attributed
to our largest division, Thorlux Lighting,
but supported by all Group companies.
• Positive contribution from our
new acquisition, SchahlLED.
• Consistent revenue growth – Compound
Annual Growth Rate (CAGR)
across the last five years of 10.0%,
ten years 12.3%, 15 years 8.5%.
Read more about Financial
performance on pages 52 to 53
03
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
Our culture.
Our values…
Integrity
Striving to make the right decisions for
all of our stakeholders and
our planet.
Honesty
We honour our commitments and aim
to deliver them in a dedicated and
respectful manner.
Longevity
We have a long history and we
genuinely care about our people,
their professional development and
work-life balance. Our employees are
our most important assets.
Our colleagues.
Across the Group we have employees
who have been with the business
for a few years to multiple decades,
our Chairman will celebrate 40 years
with the business in 2024. There
are numerous people with long
service tenures, demonstrating our
commitment to employee satisfaction
and development.
Image:
The Zemper team
with their six AENOR
(Spanish Association
for Standardisation and
Certification) certificates
04
Annual Report and Accounts for the year ended 30 June 2023 Business Overview
Our approach to sustainability.
FW Thorpe Plc has a longstanding
commitment to tackling global
environmental challenges,
principally through its core business
of manufacturing energy efficient
lighting equipment.
Over the last two decades, at FW
Thorpe we have sought to address
our carbon impact by working
towards carbon neutrality for our
manufacturing and distribution
operations. We are now independently
verified as carbon neutral, with
the same methodology adopted
since 2012.
Our goal is to reach net-zero before
the UK’s target for achieving net-zero
emissions, we will aim to achieve
this by 2040. We have made initial
assessments of our carbon impact right
across our manufacturing and value
chain, and this has enabled us to set
science-based targets in line with the
Paris Agreement on climate change.
Read more about Sustainability on
pages 56 to 79
NET ZERO
TARGET
1994
First energy saving products
introduced, controlling
lighting and reducing
energy consumption
2009
FW Thorpe begins
carbon offsetting with
tree planting project certified
by Woodland Carbon Code
2012
FW Thorpe becomes
carbon neutral as a Group
2016
Thorlux, the main revenue
driver for the Group,
introduces wireless controls
technology to monitor and
save energy usage called
SmartScan
2020
FW Thorpe receives the
Green Economy mark on
the London Stock Exchange
2022
FW Thorpe officially
recognised as being carbon
neutral since 2012 through
independent verification
2023
FW Thorpe announces
net-zero target and applies
to Science Based Target
initiative (SBTi) to validate
plans
1994
2009
2012
2016
2020
2022
2023
05
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
What we do.
The complete service
offering we provide…
Design & development
£1.9m
Group spend on capitalised R&D
(2022: £2.1m)
Manufacturing
£0.8m
Services
£8.6m
Investments in solar at Group
facilities (2022: £0.4m)
Revenue from services
(2022: £4.5m)
Our strategic pillars…
Focus on high-quality
products and good
leadership in technology
Focus on manufacturing
excellence
Continue to grow
the customer base for
Group companies
Continue to develop
high-quality people
06
Annual Report and Accounts for the year ended 30 June 2023 Business Overview
Our global footprint.
01
United Kingdom
Thorlux Lighting
Philip Payne
Solite Europe
Portland Lighting
TRT Lighting
Ratio EV Charging
02
Ireland
Thorlux Lighting
03
United Arab Emirates
Thorlux Lighting
04
Australia
Thorlux Lighting Australasia
05
Netherlands
Lightronics
Famostar
Ratio Electric
06
Germany
Thorlux Lighting
SchahlLED
07
France
Zemper
08
Spain
Zemper
Revenue by region
2023
UK
Netherlands
Germany
Rest of Europe
Rest of the World
2022
UK
Netherlands
Germany
Rest of Europe
Rest of the World
89.9
31.9
21.5
30.0
3.4
83.2
30.3
8.2
19.2
2.8
07
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
Our timeline.
1936
1940-
1960
1965
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
Floated on the London
Stock Exchange
Moved to our Redditch headquarters
First acquisition – Mackwell
Electronics
Start-up in retail and display lighting
Acquired Philip Payne
emergency exit signs
Transferred
to AIM
Minority investment in Spain
Target Spanish market
and acquire lens specialism
2016
Acquisition of Lightronics
– Netherlands
Develop European market
Sugg Lighting disposal
Creation of an in-house LED printed
circuit board production line
Start-up company TRT Lighting
Acquisition
of Portland Lighting
Entered the street lighting market
Mackwell Electronics disposal
Acquired Solite
Europe Lighting
for clean rooms
2015
2014
Acquired remaining share
capital in Thorlux Australasia
Target Australian market,
improve performance
2017
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
2018
2019
2020
08
Lightronics recovers from factory
fire with improved results
Sustainability focus
Acquired Electrozemper – Spain
Joint venture investment with
Ratio Electric – electric vehicle
charging products
Acquired SchahlLED – Germany
Global revenues exceed £176m
Annual Report and Accounts for the year ended 30 June 2023 Established by Frederick William
Moved to larger premises twice to
Floated on the London
Thorpe and his son Ernest Thorpe.
cope with the expansion into linear
Stock Exchange
Spinning circular reflectors
fluorescent luminaires, and to enter
the exterior and hazardous markets
Business Overview
1989
1990-
1996
Moved to our Redditch headquarters
First acquisition – Mackwell
Electronics
Start-up in retail and display lighting
Acquired Philip Payne
emergency exit signs
Minority investment in Spain
Target Spanish market
and acquire lens specialism
Acquisition of Lightronics
– Netherlands
Develop European market
Sugg Lighting disposal
Creation of an in-house LED printed
circuit board production line
Start-up company TRT Lighting
Entered the street lighting market
Acquisition
of Portland Lighting
Mackwell Electronics disposal
2013
2011
2005
Transferred
to AIM
Acquired Solite
Europe Lighting
for clean rooms
2009
Acquired Famostar
– Netherlands
Improved emergency
lighting product
Compact Lighting business
successfully merged
with Thorlux Lighting
offering
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
Acquired Electrozemper – Spain
Joint venture investment with
Ratio Electric – electric vehicle
charging products
Acquired SchahlLED – Germany
Global revenues exceed £176m
2021
2022
2023
09
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
Our business.
Description
Key products
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.
Market sectors
Commercial
Education
• Recessed, surface and suspended
luminaires
Emergency lighting systems
•
• Hazardous area lighting
• High and low bay luminaires
•
•
Lighting controls
Exterior lighting
Industrial
Healthcare
Manufacturing
Retail, display and hospitality
Description
Key products
• Recessed, surface and suspended
luminaires
• Hazardous area lighting
• High and low bay luminaires
•
•
Lighting controls
Exterior lighting
SchahlLED Lighting is a turnkey
provider of intelligent LED solutions for
the industrial and logistics sectors with
more than 50 years of lighting and 20
years of LED experience.
The company is based in
Unterschleißheim near Munich and
has sales offices in Cologne and Weyhe
close to Bremen. As both manufacturer
and full-service provider, SchahlLED
plans lighting concepts and supplies
intelligent LED lighting systems.
Market sectors
Industrial
Manufacturing
Logistics
10
Annual Report and Accounts for the year ended 30 June 2023 Business Overview
Products are environmentally friendly
in terms of energy use as well as in the
prevention of light pollution.
Key products
• Road lighting
• Amenity lighting
• Outdoor wall and ceiling luminaires
•
Lighting controls
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.
Market sectors
Infrastructure
Facilities - car parking
Housing
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.
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
Education
Industrial
Retail, display and hospitality
11
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview FW THORPE AT A GLANCE
Our business. continued
Description
Zemper was established in 1967 and
is a leading independent producer
of emergency lighting. It uses highly
automated manufacturing processes
and, through high levels of research
and development and extensive in-
house and third-party testing, supplies
market-leading products, including
wired and wireless self-testing systems.
Based in Ciudad Real, Spain, and with an
additional sales and distribution facility
Market sectors
Commercial
Education
in France, Zemper derives revenue from
Spain, France and Belgium as well as
other overseas territories.
Key products
•
•
•
Emergency general illumination
Emergency exit signage
Emergency lighting systems
Industrial
Healthcare
Infrastructure
Retail, display and hospitality
Key products
• Road and
tunnel lighting
• Amenity lighting
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 high quality, efficient, stylish,
high performance LED products, which
are manufactured in the UK.
Market sectors
Infrastructure
Facilities - car parking
12
Annual Report and Accounts for the year ended 30 June 2023 Business Overview
areas, hospitals, kitchens and food
preparation applications.
Key products
• Cleanroom luminaires
Description
Solite Europe is a leading manufacturer
and supplier of cleanroom lighting
equipment and luminaires within the
UK and Europe.
Solite provides luminaires for
laboratories, pharmaceutical and
semi-conductor manufacturing
Market sectors
Pharmaceutical
Healthcare
Education
Research & development
Description
Philip Payne recognises that most
trade emergency exit signage
products are designed with the
functional requirements 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.
Key products
•
•
Emergency exit signage
Emergency lighting systems
Market sectors
Commercial
Healthcare
Hospitality
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.
Key products
•
Lighting for signs
• Road safety lighting
Market sectors
Retail
Advertising
Hospitality
Infrastructure
13
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur GovernanceOur Financials Business Overview Image: Bremont, Henley-on-Thames
Strategic
Report.
Chairman’s statement
Marketplace
Business model
Strategy
STRATEGY IN ACTION:
Thorlux illuminates London landmark.
Intelligent Lighting SchahlLED
Zemper injection moulding factory
New warehouse facility for Famostar
Key performance indicators
Operational performance
PRODUCT SPOTLIGHT:
Innovations from around the Group
SkyCore family
Making changes that matter
Financial performance
Section 172
SUSTAINABILITY
Our sustainability journey
Mapping sustainability
Sustainability in action
Products
Operations
People
Business model
TCFD
Principal risks and uncertainties
14
16
20
24
26
28
32
34
35
36
38
48
50
51
52
54
56
58
59
60
62
63
64
66
80
Our Governance Strategic ReportBusiness OverviewOur Financials Chairman’s statement.
It is a pleasure to welcome the SchahlLED team, which
excels at rooting out discerning industrial customers willing
to pay for high quality luminaires with the latest Thorlux
energy saving and controls technology.
Mike Allcock
Chairman and Joint Chief Executive
Financial year 2022/23 was to a
large extent less turbulent than the
previous few years, notwithstanding
some special challenges to deal
with upon occasion. It has been
the intention of the Board to make
no further acquisitions whilst the
Group builds its cash reserves and
fully integrates recent acquisitions,
in order to formulate more efficient
Group activities whilst not losing
the ability for individual companies
to be autonomous and flourish.
Financial performance overall was
strong, with significant organic revenue
increases for most companies, primarily
due to much improved material
availability and the consequential
fulfilment of the previous year’s order
backlog. All companies wrestled with
inflationary effects on material and
labour costs, and some were better
able than others to adjust selling prices
to maintain margins.
Group companies’ service levels have
returned to being good, and the order
book and forecast situation is generally
fine. Whilst material inflation is showing
signs of slowing or even reversing,
wage and salary inflation remains high.
The Annual Report and Accounts
contains a more detailed appraisal
of each company’s individual
achievements and challenges.
Group results
Group revenue increased by 23% to
£176.7m (an organic 11% increase
excluding the SchahlLED and Zemper
acquisitions) whilst operating profit
increased by 13% to £27.8m. Operating
profit before acquisition adjustments,
removing the impact of amortisation
of intangible assets established at
purchase, grew 16% to £29.8m.
Revenue and operating profits were
supported by the recent acquisitions
of Zemper and SchahlLED. Last year’s
report included only nine months of
Zemper‘s figures, with nine months
of SchahlLED’s figures included this
year. Excluding Zemper and SchahlLED
acquisition effects, for comparison’s
sake, like-for-like revenue increased by
11% to £159.1m and operating profit
by 9% to £26.9m.
General overview
The Group’s stand-out performer
this year was Thorlux Lighting, which
benefitted from its ability to deliver its
order backlog, which had previously
been caused by component shortages,
especially microchips and electronic
components.
The Dutch operations made a
wonderful contribution overall,
although their recent growth trajectory
took a bit of a breather this year, with
the companies struggling to grow
revenue, whilst Lightronics also saw
its margins squeezed by inflationary
pressures.
Portland Lighting’s profit reduced
significantly because the company
lacked a typical large roll-out project
for outdoor retail sign lighting and
because business costs increased
as the company built its product
range and operations to diversify
into road sign lighting – namely with
the Portland Traffic division. This new
division has developed well, won some
successful small orders and will make
a more significant contribution to
2023/24 figures.
TRT Lighting increased its profit but,
at only a 3% profit-to-sales ratio, profit
remains significantly below Group
expectations and must improve. In
recent months the TRT Board structure
has been altered and strengthened,
with a new operations director and
new sales director, and the sales
16
Annual Report and Accounts for the year ended 30 June 2023 Image: Hoppern Skole, Norway
team has been refreshed. TRT is
also developing some interesting
technical innovations to enhance its
product portfolio. These changes have
started well and will result in further
improved performance in the current
financial year.
The Group welcomed Zemper for
its first full year – a year of getting to
know each other better and a year
for strategy and future planning.
Zemper’s facility in Spain is a credit to
its founding family’s professionalism.
The company is very self-sufficient,
with ownership of all its intellectual
property, and with its own laboratory
test facilities and state-of-the-art
manufacturing equipment. In the
year there were several exchange
visits between Group company
engineers and executives, and some
significant technological projects are
underway to harness Zemper’s design,
technical and manufacturing know-
how. These projects will support the
Group’s electronic operations and its
aspirations for premium connected
technology in the emergency
lighting sector.
Zemper’s profit contribution to the
Group in 2022/23 was marginally lower
than forecast, with orders down in the
first half year; however, various new
products and marketing supported
growth in the second half to recover
the full year’s numbers to be in line
with the prior year’s numbers. There
was notable growth in both the French
and Belgian markets – which, prior
to Zemper’s acquisition, were largely
untapped by the Group – whilst the
local Spanish market was tighter than
in the previous year.
SchahlLED, since joining the Group this
financial year, has continued to grow its
customer base, primarily in the German
market, for high technology SmartScan
industrial luminaires. It is a pleasure
to welcome the SchahlLED team,
which excels at rooting out discerning
industrial customers willing to pay for
high quality luminaires with the latest
Thorlux energy saving and controls
technology. In the year, SchahlLED
added nine months of revenue to
the consolidated figures of £16.9m
and operating profit of £2.3m before
acquisition adjustments.
The Group’s joint venture with Ratio
Electric BV commenced with the
opening of a UK operation close to
the Group HQ in Redditch, headed
by a young Thorlux design engineer.
Investments in the year have already
resulted in the UK operation’s own
sales and marketing team, a website,
preliminary manufacturing capabilities,
and a new pillar standalone-style twin
22kW electric vehicle (EV) charger –
the Ratio io7 – available for sale by
all Group companies. The charger,
developed with common components
from a Thorlux outdoor luminaire, is
widely recognised as an innovative and
stylish product; it is suitable for many
applications but is mainly targeted at
workplace charging, which matches
the Group’s core market of professional
users. Availability of the new EV
charging pillar has been limited due
to production capacity restraints, but
Ratio hopes to be able to better satisfy
the Group’s sales teams in coming
months, who are chomping at the
bit to get going. In the Netherlands,
at the Ratio HQ, operations have
been adjusting to the fast moving EV
marketplace, and investments in smart
charging technology and connectivity
have dented returns.
For many years some shareholders
have questioned the rationale behind
the Group holding large cash reserves.
The Board chooses to maintain a large
reserve as one never knows what is
around the corner, as proven recently
by the COVID lockdown. The Board
remains prudent, with no plans to
move away from this philosophy, and
will not fund further growth unless it
17
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Chairman’s statement. continued
can do so from cash reserves. Although
reserves have reduced with recent
acquisitions activity and with stock
control complexities, even with future
earn-out provisions and commitments
the Board remains confident that
the current £35.0m at the year end,
which remains well above its desirable
minimum target, will more than suffice.
There are targets around the Group
to reduce stock – of components, in
particular. The easing of the recent
supply shortage situation has now
inevitably created an overstock in
most Group companies and elsewhere
throughout the extensive supply
chain. Stock levels are being actively
managed, in particular to ensure agility
in Group businesses and to reduce
possible obsolescence. Whilst stock
increased last year from £32.8m to
£33.4m, the number reduced from
an interim high of £37.9m and will
fall further.
On the capital investment front, I am
pleased to report that investment
at Famostar has completed, with a
new substantial factory/warehouse
extension (£1.9m) setting up Famostar
for growth for some years to come. The
extension was almost entirely funded
by savings from closing external rented
accommodation that had been used
for storing stock. The new facility has
solar PV, in keeping with the Group’s
sustainability targets, the investment
having an excellent payback period
due to recent increases in energy costs.
At Zemper, the Group has invested
in a new and dedicated injection
moulding shop (£0.7m) next to the
current electronics factory in Ciudad
Real, moving plant from an older facility
some distance away. Opened in July
2023, this new factory has already
started to produce some critical parts
for the Thorlux SmartScan wireless
transmitter housing and has capacity to
take on more if this idea of insourcing
becomes attractive. The new plant
has the capacity to increase Zemper’s
18
productivity by 50%, and having
local production cuts costs and CO2
emissions. The factory also has its own
solar PV array, which is particularly
powerful, of course, in Spain. Finally,
Zemper has purchased a new
electronic production line to improve
its capacity.
Sustainability is one of the key pillars
for the Group, one that interests many
of its shareholders and will continue
to be a focus. All Group companies
are now certified independently to
ISO 14001, an international standard
for providing a systematic framework
for the continuous improvement of a
company’s environmental performance.
Due to the Group’s renowned carbon
offsetting programme on its own
land in Devauden, Wales, the Group
is now independently certified as
carbon neutral for Scope 1 and 2
emissions (those emissions produced
by companies’ own activities such as
use of electricity, gas and diesel). To
date, since the programme’s inception
in 2009, the Group has planted an
amazing 179,412 trees and has now run
out of land. Therefore, in July 2023, the
Group purchased a further 195 acres
of land, in Longtown, Hereford, which
should satisfy its carbon offsetting plans
for the next decade or more.
Beyond carbon offsetting, the Group
continually looks to lower its carbon
footprint; this is good news for the
environment but also, in most cases,
lowers Group operating costs. All
companies within the Group have
specific KPIs that focus on general
carbon reduction objectives and
increasingly move towards the
circularity of products, the impacts
of the materials selected, and
reducing waste.
Early in September 2023 the Group
showed its commitment to achieving
net-zero, by signing a Science
Based Targets initiative (SBTi) letter
of commitment and therefore
commencing the process.
The Group’s own emissions data
has been well accounted for many
years as part of its carbon offsetting
programme, but net-zero takes a large
step forward by also measuring the
impact of the Group’s international
supply chain and the impacts of the
Group’s products when installed and in
use at customers’ premises. The Group
has been supported throughout the
process by third party consultants, but
nevertheless, to calculate the required
emissions for all Group activities,
upstream and downstream, has been
an enormous task.
Now that emissions have been
calculated, the SBTi commitment
letter defines both the Group’s near
term (2030) targets and net-zero date.
By 2030 the Group has set a target,
relative to the baseline year 2020/21,
to reduce Scope 1 and 2 emissions by
42%, and Scope 3 emissions by 51.6%
per £m revenue. This will be done in
a variety of ways but, in particular, by
decarbonisation of Group resources
and energy supplies – for example
reducing gas use and switching to
greener sources such as solar PV
supplied electricity, using electric
vehicles and making Group products
even more efficient – together with
increasing the use of SmartScan
energy saving technology. The ultimate
objective is to achieve net-zero, and
the Group’s target date is 2040 (ten
years ahead of the UK Government’s
commitment); by this date the Group
needs to have reduced its emissions
by 90% (allowing for offsetting the
remaining 10%). Watch this space.
To finish on a high, Thorlux is very
proud to have successfully illuminated
the famous Big Ben – or, more
correctly, the Elizabeth Tower – in
the City of London. Big Ben is one of
the most photographed and most
iconic buildings in the world. Thorlux
developed special products between
2016 and 2022 which provide colour-
tuneable illumination of all four clock
Annual Report and Accounts for the year ended 30 June 2023 Image: The Croft, Stratford-upon-Avon
faces and the balconies above, a new
Ayrton Light (a special lighthouse
style lamp used to indicate when
Parliament is sitting), illumination of the
clock mechanism, the bells, including
floodlighting the Big Ben bell itself,
all internal rooms, and the 340 steps,
and all emergency lighting. SmartScan
features heavily in the controls for
ancillary areas. The project has been
kept secret until now, even during
the 2023 New Year celebrations. This
year’s Annual Report and Accounts is
therefore adorned with some iconic
Thorlux installation photographs.
Personnel
I would like to thank all Group
employees for their dedication and
commitment throughout the financial
year. I would also like to thank, again,
David Taylor and Tony Cooper, who, as
retiring directors, have spent a total of
over 65 years serving the Group; I wish
them a long and happy retirement.
Dividend
Performance as a whole for the year
to 30 June 2023 allows the Board to
recommend an increased final dividend
of 4.84p per share (2022: 4.61p), which
gives a total for the year of 6.46p (2022:
6.15p excluding special dividend).
Outlook
All Group companies are forecasting
some sales growth and all are charged
with keeping costs under control and
a close eye on sales margins. The Board
would like to see further improvements
in profitability – especially at the lower
performing companies in the Group,
which need to step up and do their bit.
As the Group becomes larger, costs of
managing non-value-added activities
become larger too; this means Group
companies need to work harder to
achieve a good return on sales.
The Group nowadays has excellent
resilience to changing conditions,
having a firm footprint in numerous
geographical territories and across
many market sectors.
As a whole, the outlook from the
sales teams is positive. At the start
of this new financial year, orders are
slightly lower than in the same time
period last year, and there is some
evidence of projects slowing. Costs
are under control and some margin
improvements have been made, which
will provide an improved return on
sales. Revenues, however, are expected
to see slower growth than in the recent
few years.
Mike Allcock
Chairman and Joint Chief Executive
12 October 2023
19
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Marketplace.
The Group services a diverse range of clients across a variety of different sectors. These sectors are targeted by
our sales teams, sector specialists and product experts as well as dedicated company specialisms in areas such
as lighting controls, emergency and outdoor lighting.
The product portfolio across the Group gives us the ability to deliver a complete project, from boiler room to
board room and beyond.
Market Overview
FW Thorpe commenced the year with
higher than usual order books and a
backdrop of component shortages that
had resulted in extended lead times for
customers.
Normal service levels have resumed
during the year with supply stabilising.
Increased costs had been common in
the prior year, these have now slowed,
and we are starting to see some
reversals in certain components and
commodities. This has also allowed the
Group to reduce stock holding in some
areas, with further reductions expected
in 2023/24.
There has been less focus on
redesign this year, allowing our
engineering teams to focus on
product development. We continue
to differentiate ourselves with product
and system innovation, combined
with our ability to service our markets
through the life cycle of a project.
Across our domestic and international
markets we face competition from
listed multinationals as well as solid
private businesses. Where information
is available, we have seen improved
financial performance of our main
competitors perhaps buoyed by the
ability to increase sales prices in the
current economic climate.
Our continued investment in business
development supports the ebbs and
flows of demand across various sectors.
We continually assess how to deploy
our selling resource in order to target
specific sectors and territories.
The product and technology portfolio
continues to evolve, enabling us to
compete across different sectors and
geographies. We continue to focus on
certain sectors, with renewed vigour
around those that may have reduced in
prior years.
Market sectors
Pharmaceutical
Hospitality
Display
Housing
Advertising
Facilities
Retail
Education
Industrial
Infrastructure
Research & development
Healthcare
Commercial
Manufacturing
UK +8%
•
•
•
Increased business from
target sectors
Services revenue with
improved gross contribution
Street lighting sector
improved, supplemented with
smaller tunnel projects
Netherlands +5%
• Growth in both the
Lightronics and Famostar
businesses
• Margin pressure at Lightronics
continued but improved
in the second half, similar
operating profit at Famostar
Germany +163%
(+34% ex SchahlLED acquisition)
• Continued growth in Germany
driven by SmartScan and the
addition of SchahlLED
• Margin pressure continued
at Zemper driven by material
and utility cost increases
Rest of Europe +57%
• Revenue in line with
expectations, improved levels
in France via Zemper
Scandinavian market
continued to be positive
•
Rest of World +21%
•
Improved demand in
Australia, difficulty with
logistics continued
• Dampened demand in UAE
20
Annual Report and Accounts for the year ended 30 June 2023 Drive for energy efficiency and carbon reduction
What this means
•
•
Global emissions targets
High energy costs in Europe
The opportunity
•
•
Increased demand for sustainable, energy efficient lighting solutions
Demand for retrofit lighting solutions driving energy savings using
both LED and wireless controls technology
Ability to harvest data to satisfy ongoing reporting requirements
How we are responding
•
Continue to offer energy saving technology and the ability to report
on energy usage with the SmartScan platform
Financing options with partners to make solutions more affordable
to customers to match the savings achieved
• Offering turnkey packages to customers to enable change
Investment in electric vehicle charging products with Ratio
•
Market-specific drivers…
Increase in demand for technology
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’s shift to LED sales now representing over 90% of
total revenue
The opportunity
•
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
How we are responding
•
SmartScan continues to evolve since launching in 2016, the latest
generation successfully launched
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
Macroeconomic drivers…
International economic conditions
What this means
•
Globalisation
What this means
•
Countries are now dealing with the impact of the conflict in Ukraine
and the global energy crisis
Pressure remains on global supply chains – raw material price
pressure, component shortages
Certain sectors could slow investment given recent interest rate
raises and concerns over future economic growth
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
Resilience in the supply chain is being tested post-pandemic and
with increased logistics costs
The opportunity
•
Higher energy costs are resulting in shorter payback periods for
energy saving lighting projects
Renewed focus on carbon saving investments with support
from governments
Potential to win market share or acquire competitors who struggle
in these economic conditions
How we are responding
•
•
Ensure our businesses are not reliant on any one sector in particular
Continue to develop innovative product solutions in al
our businesses
Target sectors where demand is stable or increasing
Redirect selling resource as appropriate
The opportunity
•
Chance to establish ourselves in new territories with established
customers in the countries we currently supply into
Sourcing opportunities – chance to review what is sourced from
where. Considering not only price, quality, carbon footprint but
the security of supply
Potential for customers to reconsider sourcing strategies and
buy “local”
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
21
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Marketplace. continued
36%
of sales from
safety products (emergency
lighting systems)
96%
of sales from
LED technology, energy
saving controls and
related services
22
Annual Report and Accounts for the year ended 30 June 2023 Market sectors
Pharmaceutical
Research & development
Industrial
Hospitality
Display
Housing
Advertising
Commercial
Facilities
Retail
Education
Infrastructure
Healthcare
Manufacturing
23
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials 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 . . .
Group
operations . . .
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
24
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”
Cross-selling opportunities
with other Group companies to offer a
complete solution to a wide variety
of sectors
Sustainability leadership
Group-wide initiatives and support in
achieving sustainability targets.
Design & development
Designing and developing products in
line with customer specifications and
sustainability requirements.
£1.9m (2022: £2.1m)
Group spend on capitalised R&D
Manufacturing
Manufacturing bespoke lighting
systems and components.
£0.8m (2022: £0.4m)
Investment in solar at Group facilities
Services
Supporting customers throughout the
products lifecycle.
£8.6m (2022: £4.5m)
Revenue from services
Annual Report and Accounts for the year ended 30 June 2023 Image: Berrows House, University of Worcester
Solutions provided
for our customers
Value
generated
We supply lighting systems,
including the controls, and install
them for our customers.
We then maintain the lighting
system for its lifecycle and provide
support.
Solutions provided
Energy efficiency
•
Low maintenance
•
• Rapid installation
•
•
Longevity of product
Low total cost of ownership
Read more about Our customers
on pages 28 to 31
Customers
Short term
Replacement of ageing
technology with improved
lighting systems
Shareholders Opportunity to invest in
Employees
Environment
a company that pays a
progressive dividend and
with a robust balance sheet
Opportunity to work with
an innovative market-leading
company within
the lighting industry
Build on the work of many
years, delivering energy saving
products and continuing our
carbon offset programme
Communities
Employment opportunities and
supporting local charities
Long term
Innovative lighting that delivers
cost savings and additional
benefits, such as data capture
and presentation
Sustainable profit growth drives
future shareholder returns
Continual development with a
variety of Group companies in a
number of different territories
Develop and implement our
sustainability strategy as we
drive towards net-zero
Providing sustainable
employment in the local
areas where our businesses
are located.
25
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials 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 and how we treat
our people is fundamental to our
success. The Group prides itself on
the development of people from
within the organisation, providing
training and experience as well as
maintaining our core values.
1 Focus on high quality products and
2 Continue to grow the customer base
3 Focus on manufacturing excellence
4 Continue to develop high quality people
good leadership in technology
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.
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
• Continued enhancement of features for the
•
•
SmartScan wireless system
Shared product development between certain
companies within the Group
Electric vehicle charging and road safety products
now to be marketed by a number of Group
companies
Future opportunities
Further development of SmartScan
•
• Continuous research and development
•
Targeted acquisition
Associated risks C
• Product acceptance
•
Initial product introduction
Progress to date
•
Targeted approach in the Netherlands and France
with Thorlux industrial product and controls portfolio
Introduce Famostar product portfolio to territories
where the Group has a presence
Introduce Zemper product portfolio to territories
where the Group has a presence
•
•
Future opportunities
• Consider further sales offices overseas
• Potential business development investment
•
•
Investment in sales personnel in the UK and Europe
Targeted acquisition
Associated risks A C D J
•
Short-term cost increase without immediate return
• Prolonged time required to establish FW Thorpe brands
Strategy in action
Strategy in action
Strategy in action
See more on pages 48 to 51
See more on pages 32 to 33
See more on pages 34 to 35
See more on page 63
26
Along with continued product development, the need
One of our main sources of competitive advantage,
to innovate the production process is essential.
it is imperative we continually develop and retain
•
Famostar facility extension project successfully
• Apprentice scheme continues
talent within the business.
Progress to date
•
•
Investment in management training
Training and development
Future opportunities
development
• Continued investment in training and personnel
•
Inter-company collaboration teams to develop a
broader understanding of the whole business
Associated risks C
I
• Ability to retain staff in competitive local job markets
• Potential loss of UK personnel from the EU
Progress to date
completed
• Completed solar investment at Thorlux
•
Expanded injection moulding facility at Zemper
Spain to support the manufacture of select
components for the Group
Future opportunities
• Continued development of manufacturing facilities
and processes for Ratio EV products in the UK at the
• Continual investment in facilities and processes
• Reduced productivity while changes are implemented
•
Learning curve on introduction of new products
Target Park facility
across the Group
Associated risks C E
and processes
Strategy in action
Annual Report and Accounts for the year ended 30 June 2023 Risk key
A Adverse economic conditions
G Movements in currency exchange
B Changes in government legislation or policy
H Cyber security
C Competitive environment
D Price changes
E Business continuity
F Credit risk
I
J
Exit from the European Union
Impact of Ukraine conflict on domestic and
global economies
K Sustainability & climate-related risk
1 Focus on high quality products and
2 Continue to grow the customer base
3 Focus on manufacturing excellence
4 Continue to develop high quality people
good leadership in technology
for Group companies
Customers continually require new and innovative ways
With the continued investment in the product portfolio
in which to reduce the operating costs of their lighting
and the broad range of sectors we can service, the focus
installations. There is also the requirement to reduce
will be on expanding our customer base in new markets
Along with continued product development, the need
to innovate the production process is essential.
One of our main sources of competitive advantage,
it is imperative we continually develop and retain
talent within the business.
their environmental impacts.
Progress to date
and territories.
Progress to date
• Continued enhancement of features for the
SmartScan wireless system
Targeted approach in the Netherlands and France
with Thorlux industrial product and controls portfolio
Shared product development between certain
Introduce Famostar product portfolio to territories
companies within the Group
where the Group has a presence
Electric vehicle charging and road safety products
Introduce Zemper product portfolio to territories
now to be marketed by a number of Group
where the Group has a presence
•
•
•
•
•
Future opportunities
• Consider further sales offices overseas
• Potential business development investment
Investment in sales personnel in the UK and Europe
Targeted acquisition
Associated risks A C D J
•
Short-term cost increase without immediate return
• Prolonged time required to establish FW Thorpe brands
•
•
•
•
companies
Future opportunities
Further development of SmartScan
• Continuous research and development
Targeted acquisition
Associated risks C
• Product acceptance
•
Initial product introduction
Progress to date
•
Famostar facility extension project successfully
completed
• Completed solar investment at Thorlux
•
Expanded injection moulding facility at Zemper
Spain to support the manufacture of select
components for the Group
Future opportunities
• Continued development of manufacturing facilities
and processes for Ratio EV products in the UK at the
Target Park facility
• Continual investment in facilities and processes
across the Group
Associated risks C E
• Reduced productivity while changes are implemented
Learning curve on introduction of new products
•
and processes
Progress to date
• Apprentice scheme continues
•
•
Investment in management training
Training and development
Future opportunities
• Continued investment in training and personnel
•
development
Inter-company collaboration teams to develop a
broader understanding of the whole business
Associated risks C
• Ability to retain staff in competitive local job markets
• Potential loss of UK personnel from the EU
I
Strategy in action
Strategy in action
Strategy in action
Strategy in action
See more on pages 48 to 51
See more on pages 32 to 33
See more on pages 34 to 35
See more on page 63
27
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials STRATEGY IN ACTION
Thorlux
illuminates
London
landmark.
The Elizabeth Tower, better known
as Big Ben, is one of the most
instantly recognisable landmarks
in the world. Standing at 96 metres
(316 feet) high, the famous clock
tower overlooks the River Thames
at the north of the Palace of
Westminster.
The tower is topped with the Ayrton
Light, which was installed in 1885
and is a lantern-like structure which
serves as an illuminating beacon. It is
thought that Queen Victoria requested
to see from Buckingham Palace when
members of either the Commons
or the Lords were sitting after dark.
Initially the Ayrton Light was powered
by gas jets and was then converted to
electricity in 1903.
28
Annual Report and Accounts for the year ended 30 June 2023
Thorlux is proud to have been involved
with the five-year programme of
essential renovations to conserve
the tower, supplying luminaires and
wireless lighting controls. In 2016,
building services consulting engineers
S I Sealy approached Thorlux to
support them with the engineering
and development of new lighting to
the rooms and service areas of the
tower, as well as bespoke fixtures for
the clock faces and Ayrton Light.
SmartScan wireless controls were
utilised in the rooms of
the tower: wall-mounted switches
provide wireless commands to the
luminaires, resulting in less cabling and
therefore less damage to the historic
building fabric.
228
Luminaires
Clock face
figures
55,000
Individual
LED chips
60%
Energy saving
Stock Code: TFW www.fwthorpe.co.uk
29
Our Governance Strategic ReportBusiness OverviewOur Financials Illuminating the Great Clock faces
Surveys were first carried out to validate the existing
lighting provision before Thorlux worked with S I Sealy
to develop a solution that met the specification.
Site trials were undertaken to prove the solution, which
involved replacing 12 of the existing luminaires in the
south clock face with prototypes of the new LED fixtures.
The trials were a huge success and proved that the LED
solution would make no difference to the appearance
of the clock faces, which are enjoyed by visitors from all
over the world.
The final design was developed and supplied, with the
four clock faces being illuminated by 228 luminaires and
over 55,000 individual LED chips. All this was achieved
whilst also providing a 60% energy saving.
I think it is fair to say that Thorlux has
provided a fantastic service, carrying
out various different iterations of
the clock face lighting and Ayrton
light designs until the aesthetics
were approved by the client. Their
contribution began at the outset of
the project, working directly with
the team to develop the light fitting
designs, and being involved in fine
tuning of the lighting controls of
the clock face to match the original
gaslight colour.”
Patrick Busby
Head of Building Services (South)
for Sir Robert McAlpine Ltd
30
Annual Report and Accounts for the year ended 30 June 2023
Upgrading the Ayrton Light
The challenge was to provide
a solution in keeping with the
history of the structure while
modernising the light and reducing
its environmental impact.
Thorlux developed a bespoke fixture
using energy-saving LED technology
with highly efficient lenses to control
and distribute the light, providing
an intense downward beam of light
through 360 degrees. The optics
are a modern-day equivalent of
the original Fresnel lenses used to
control and distribute the light. A
series of ‘light rings’ stacked on top of
each other provide the visual effect
required in a compact size to fit inside
the lantern structure. The modern
optics also significantly reduce the
amount of upward light. A prototype
was produced and a site trial was
conducted to validate the principle
and observe the effects. Different
locations throughout the city were
used as test sites for viewing and
evaluation purposes. The final solution
was then designed and engineered
with a bespoke mounting bracket to
utilise existing fixing points within
the structure.
31
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials STRATEGY IN ACTION
Company profile...
In September 2022, FW Thorpe
acquired 80% of the share capital of
SchahlLED Lighting, solidifying its
business in Germany and providing
further growth opportunities.
•
•
SchahlLED is a leading turnkey
provider of intelligent LED lighting
systems for industrial and logistics
applications in the DACH region
(Germany, Austria and Switzerland)
The company’s roots date back
to 2006, when it was established
through a spin-off from Richard
•
•
Schahl GmbH & Co KG, a German
distributor of speciality lamps.
In 2019, financial investor Active
Capital Company acquired a
majority stake in SchahlLED
to support the company in its
strategic growth plan.
SchahlLED has since successfully
enlarged its sales network through
organic growth and two add-on
acquisitions of betterLeds in North
Germany and LED Technics in
West Germany.
•
•
The company conceptualises
projects, delivers the lighting
systems, oversees installation and
assists in software integration and
data analysis.
SchahlLED and Thorlux have
worked together since 2019,
distributing SmartScan products
primarily into the German market.
50 yrs +
Lighting experience
700 +
Projects completed
80,000 +
Intelligent LED
luminaires installed
32
Annual Report and Accounts for the year ended 30 June 2023 •
Locations and
sales network...
SchahlLED is headquartered in
•
Unterschleißheim/Munich.
In addition to its headquarter, the
company has installed two sales
hubs in the North (Weyhe/Bremen)
and West (Cologne) of Germany.
SchahlLED has a sales network of six
internal salespeople and 19 external
sales partners.
It is active throughout the DACH
region, Poland and Czechia.
•
•
SchahlLED Lighting
North Hub
SchahlLED Lighting
West Hub
SchahlLED Lighting
Headquarters
GERMANY
POLAND
CZECHIA
SWITZERLAND
AUSTRIA
External sales partners
History...
Foundation of Richard Schahl
GmbH & Co. KG
Distribution of special lamps for
photography, film and television
Formation of LED segment with
acquisition of LED team of Elite Inc,
a LED distributor
First German distributor of
high-performance LED technology
Formation of SchahlLED
GmbH & Co. KG via a spin-off
of the LED components and
luminaires business
Start of intelligent LED
technology sales
FW Thorpe acquires 80% of the share
capital of SchahlLED Lighting
2022
1964
1964
2021
Acquisition of betterLeds
Acquisition of LED Technics
Addition of attractive lightline
product range
1999
2019-
2020
2006
2019
Launch of strategic road map
Addition of management and sales
capacities
Market launch of Thorlux technology
Key supplier relationship established
with Thorlux Lighting
2012
2013-
2017
Innovations: IPL-series corrosion
resistant luminaires, SLL-series IP65
linear luminaires, the
slimline-series, LED hall luminaires
(SLH-series)
33
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials 120.5kW
Photovoltaic
system
50%
Increased
production
capacity
830m2
Newly built
factory
Two
Additional
cutting-edge
machines
I
C
U
D
A
D
R
E
A
L
,
S
P
A
N
I
STRATEGY IN ACTION
Zemper injection
moulding factory.
To address the challenges faced
by several Group companies
in sourcing plastic moulded
components externally, a strategic
decision was taken to leverage the
expertise and production facilities
of Zemper. However, Zemper’s
plant in Almagro had insufficient
production capacity and space to
meet the increased demand.
The most viable solution was to
construct a new factory adjacent
to Zemper’s main facility in Ciudad
Real, to produce all Zemper’s plastic
components. As well as providing
the necessary space to manufacture
plastic components for other
Group companies, this approach
also eliminated the need for daily
transportation of components from
Almagro to Ciudad Real.
The newly built 830m2 factory
now accommodates six machines,
including two cutting-edge automated
production machines and CNC
machining capabilities for efficient
mould production. Plastic production
capacity has increased by 50%, which is
a significant improvement.
In line with a commitment to
sustainable practices, a noteworthy
addition to the new factory is the
installation of a 120.5kW photovoltaic
system on its roof. This renewable
energy infrastructure further reinforces
the company’s efforts to reduce its
carbon footprint and operate in an
environmentally responsible manner.
34
Annual Report and Accounts for the year ended 30 June 2023
STRATEGY IN ACTION
New warehouse
facility for Famostar.
Famostar recently unveiled its state-
of-the-art warehouse facility in the
Netherlands. With the previous
warehouse operating at maximum
capacity, the company had resorted
to utilising off-site storage facilities.
The newly constructed building
offers an additional 1,076m2 of
space, eliminating the need for
external storage and streamlining
the movement of goods within the
company’s operations.
The design of the new warehouse
prioritises energy efficiency. Natural
light floods the interior space through
large windows, reducing the reliance
on artificial lighting. In addition, on
the roof, 266 photovoltaic panels are
projected to generate approximately
110,000kWh of energy per year,
resulting in a significant reduction of 52
tonnes of CO2e emissions.
V
E
L
P
,
N
E
T
H
E
R
L
A
N
D
S
266
photovoltaic
panels to generate
110,000kWh
of energy
per year
38%
increase in space
1,076m2
additional
space
35
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials
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.
Financial…
Revenue (£m)
+23%
Operating profit (£m)
+13%
2023
2022
2021
2020
2019
176.7
143.7
117.9
113.3
110.6
2023
2022
2021
2020
2019
27.8
24.7
19.21
16.3
17.62
Performance in 2023
• Another year of growth, building on
2022 performance
Performance in 2023
• Solid improvement, positive addition
of SchahlLED
• Revenue growth across the Group, driven
• Increase suppressed by margin pressures
by Thorlux
• Addition of SchahlLED, nine months of
results included
from material costs and increased
operating cost pressure from wage
rate and general inflation
Basic earnings per share (pence)
+9%
Operating cash (£m)
+61%
2023
2022
2021
2020
2019
18.72
17.16
11.45
13.57
13.91
2023
2022
2021
2020
2019
31.9
19.7
21.9
19.4
21.6
Performance in 2023
• Driven by operating results
• Increased number of shares due to exercise of
executive share options
Performance in 2023
• Impacted by operating results
• Stock holding starting to reduce
following investment to protect
against supply chain disruption
36
Annual Report and Accounts for the year ended 30 June 2023 Sustainability…
CO2 emissions (tCO2) (Scopes 1,2 and 3)
-13%
Renewable energy usage (kWh)
+1%
2023
2022
2021
214,870
247,466
285,365
Performance in 2023
• Investment in solar energy generating
capacity at factories in the UK, Netherlands
and Spain
• All remaining electricity consumed across
the Group is from renewable sources
2023
2022
2021
2020
2019
0
790,030
321,236
2,774,463
2,743,373
Performance in 2023
• Solar generation, renewably sourced electricity
• Further solar investment to be completed
in 2023/24
1 2021 excludes the exceptional item in respect of Lightronics fire £1.6m
2 2019 excludes the profit on disposal of property of £1.9m
37
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Operational performance.
Group total revenue (£m)1
101.9
36.2
19.3
19.3
Thorlux UK
Netherlands companies
Zemper
Other companies
1 Excluding intercompany
Revenue by region (£m)
89.9
31.9
30.0
21.5
3.4
UK
Netherlands
Rest of Europe
Germany
Rest of the World
1 Excluding intercompany
Although the Group continues to
carry forward higher stocks of certain
electronic components, it has actively
reduced stocks in other areas. Group
procurement teams will switch their
attention from sourcing to value going
forwards.
Employee costs continued to increase,
driven by wage increases; this will
continue for the coming months until
headline inflation rates come under
control. Within the Group, companies
take pride in paying above minimum
wage levels. This year, an additional
special cost-of-living payment was also
made in December across the Group,
targeted at those suffering hardship
from increased domestic bills.
Selling prices have been increased
where possible, in a fair and responsible
manner, to combat inflationary
pressures, but negotiating these
increases through to the order book
has been more successful with some
companies than others. Electricity cost
increases have been somewhat offset
by successful investments in solar PV
on the roofs at the majority of Group
buildings.
In summary, there has been a solid
increase in revenue across most
Group companies, with operating
results improving in most companies
compared with last year. The addition
of SchahlLED and continued growth
in Thorlux’s export business continues
to match the Group’s ambition of
diversifying its revenues in terms of
territorial sales.
The Group continues to be
underpinned by the development of
market-leading lighting equipment
and by investment in manufacturing
and employee capabilities, as well as
continuing to strive to deliver excellent
customer service.
The following is an overview of
2022/23 for each company.
2023 Group company
overview
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 lighting and controls technology
allows Group companies to share the
benefits of their product and technical
expertise, differentiating themselves
from competitors.
The 2022/23 financial year was another
year of improved performance, driven
largely by improved operating results
at Thorlux Lighting and the addition
of SchahlLED in Germany, the Group’s
long-term distribution partner, for
which nine months of results are
included. This year was the first when
the operating results for the Group’s
Dutch companies, Famostar and
Lightronics, did not improve, due to
inflationary pressures on margins;
however, both companies produced
a creditable ratio of operating profit
to sales.
Zemper performed well in its first full
financial year as part of the Group; with
strong performance in France and an
improved second half performance in
Spain, the company delivered results in
line with expectations.
Within the Group’s ‘other companies’
segment, there were improved results
at TRT following a disappointing
2021/22, as well as, generally, progress
across the other UK companies.
The supply chain challenges suffered
last year have dissipated to a degree.
38
Annual Report and Accounts for the year ended 30 June 2023 Thorlux Lighting
This was another record year in
terms of revenue and operating
profit, with service levels returning
to normal. Orders, as expected,
were lower than last year, with less
activity in certain sectors; however,
this allowed manufacturing to
catch up, returning the outstanding
order book to more realistic and
manageable levels.
The operations team have certainly
delivered this year; with supply chain
challenges easing, the focus has
been on improving customer service
and reducing lead times to more
sensible levels. With the improvement
in component availability, Thorlux’s
engineering resource has been able
to move the focus away from sourcing
and redesigns, to more forward-
looking activities supporting product
innovation.
Continued investment in sales activities
has yielded dividends again this year.
Some investment in sales support
teams is required to underpin this
growth, as well as further investment
in direct selling presence in certain
sectors and territories continuing in
2023/24.
Large scale projects also had a positive
effect on results this year. Whilst these
have a dilutive impact on operating
results because of lower than normal
margins in the services element,
such as for surveying or subcontract
installation activities, the contribution
to operating profit improved again
this year.
Revenue
£92.7m
+10% (+15%), excluding
SchahlLED adding
£16.9m (9mths)
Thorlux’s capability to offer a turnkey
service enables it to secure significant
projects with solid product margins.
Revenue from outside the UK has
grown again, with strong contributions
from Germany and Scandinavia in
particular. Revenue from Australia was
good for the second half of the year,
with solid results for the whole year.
Results from the Republic of Ireland
were also strong.
SchahlLED is included in the Thorlux
segment this year. The Group is
pleased to welcome SchahlLED,
having worked together for many
years selling Thorlux energy saving
solutions into the German market,
targeting the industrial and logistics
sectors. Initial performance has been
as expected, adding £17m to revenues
and a solid operating profit return
before acquisition related accounting
adjustments.
See pages 32 to 33
Product innovation is a founding
principle of the Group, and Thorlux
continues to lead the way. The
SmartScan platform has delivered
strong revenue growth again this year,
with new features added as part of the
generation 2 launch. New products
include a commercial luminaire range
with reduced material usage and
energy consumption, underpinning
Thorlux’s sustainability credentials.
Adding to this, Thorlux will market and
distribute Ratio EV’s io7 charger before
the end of 2023, bringing lighting and
electric vehicle charging together as a
one-stop solution for customers.
Capital investment centred around the
completion of the solar PV project as
well as extending the electric vehicle
fleet, continuing Thorlux’s commitment
to sustainability and reducing its total
carbon emissions.
With Thorlux having delivered another
year of strong revenue growth, the
target will be to progress again
following investments in customer-
facing activities as well as targeted
investments in new territories. The
wider economic conditions of inflation
and higher interest rates may have
an impact on demand, as will a
potential change of government in
the UK. Whilst energy costs are slowly
reducing, there is still a push for both
carbon reduction and data reporting
– areas where the SmartScan system
excels and has a proven track record.
Along with the impending ban on
fluorescent lamps across the UK and
the EU, these factors should counteract
any slowdown in general capital
investment commitments.
Image: Fujifilm, Bedford
39
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Operational performance. continued
Philip Payne
Another respectable performance
this year built on the results of last
year. Operating profit has again
improved but was dampened by
investments in sales and marketing
resource, planning for the future
and working with both Famostar
and Zemper to develop the UK
market.
Products for the architecturally
discerning are at the core of the Philip
Payne business model. The ability
to offer something different to the
standard trade portfolio distinguishes
the company from its competitors.
The recent launch of the company’s
new iON exit sign is an example of a
new product targeted directly at the
specifier.
This year Philip Payne supplied
products for the following notable
projects including the London Stadium
and Birmingham Council house, to
name but two.
Specto-XT, a wireless emergency
lighting solution, offers customers
the ability to comply with safety
standards with minimal disruption.
This important compliance tool is sadly
overlooked in some organisations.
Philip Payne will continue to market
this essential safety system to targeted
market sectors.
Philip Payne continues to target growth
from other segments of the emergency
lighting market whilst supporting the
development of the Group as a whole,
aiming to promote both the Zemper
and Famostar brands in the UK,
targeting different parts of the market,
utilising diverse sales channels. The
investment in sales and marketing in
these areas will hopefully come to the
fore during the next few years.
New Philip Payne managing director
Nick Revell is welcomed to the Group.
Nick is charged with continuing
the many years of stability and
profitable growth delivered under
the stewardship of David Taylor, who
retired at the end of the 2022/23
financial year. The Group looks forward
to Nick moving the business forward
from solid foundations built by David
and the team over many years.
Whilst this year has seen some
improvement in performance at
Philip Payne, the Group expects the
combination of investment in the
selling function, expansion of the
product range and new management
to deliver progressive results over the
next few years and beyond.
Revenue
£3.9m
+20% (+16%)
Image: Birmingham Council House, Birmingham
40
Annual Report and Accounts for the year ended 30 June 2023 As Solite starts the new financial year,
the order book is good; the business
has secured a large project for a UK
battery plant for electric vehicles and
has a number of prospects in more
traditional business areas as well as in
some new sectors targeted in recent
years. Solite is in a good position to
build on the success of this year.
Revenue
£4.4m
+12% (+21%)
Solite
Another year of growth for Solite
was delivered by a combination of
clean-room and bespoke projects.
Operating profits also rose as sales
price increases and material cost
management yielded some benefits.
This operating profit performance,
returning the business closer to
pre-pandemic levels, is especially
pleasing.
Solite continues to focus on
operational performance and
managed to return lead times to more
acceptable and competitive levels.
There will be further investment in this
area during 2023/24, as Solite looks to
build for the future by improving key
manufacturing processes.
The product portfolio continues to
be refreshed: the ability of Solite to
offer engineered solutions specific to
customer needs is an important facet
of the business. As well as supplying
the traditional customer base this
year, Solite has also supplied projects
in both the retail and transportation
sectors, demonstrating its capability to
deliver a bespoke solution for a variety
of sectors.
Image: WuXi Biologics, Dundalk, Ireland
41
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Operational performance. continued
Image: The Sir Robert Peel pub, Walsall
Portland Lighting
Fortunes for Portland were mixed
this year. Traditional outdoor sign
lighting sales were down, and the
development of a new selection
of products to target the road and
traffic sign market has yet to deliver
the growth planned. However,
with a new dedicated person now
leading the road safety division,
there were some promising signs as
the Group closed the financial year
and started 2023/24.
Results for the year were mainly
impacted by a reduction in spending
in the traditional retail and hospitality
sectors. This was further compounded
by investment in personnel to support
Portland’s endeavours in the road
safety market.
Portland continues to develop
products for the road safety market as
well as investing in sales and marketing
resource. The business has developed
some excellent innovations, including a
retrofit solution to road crossing safety
lights (‘Belisha beacons’).
This retrofit option provides local
authorities with an opportunity to
reutilise existing groundworks and
mounting posts, saving the time and
expense of road closures. Another road
safety product is well advanced and
will be launched early next year.
Sustainability remains a focus.
Following a reduction in plastic
packaging last year, the business has
managed to reduce its gas usage
considerably – saving both carbon
emissions and cost.
Whilst the traditional markets of sign
lighting have been quiet recently,
Portland continues to be optimistic
about growth from sales into the road
safety market.
Revenue
£3.2m
–17% (+35%)
42
Annual Report and Accounts for the year ended 30 June 2023 Revenue
£10.1m
+16% (–18%)
TRT Lighting
TRT’s revenue bounced back this
year. Selling prices started to
improve in the second half of the
year and, whilst the operating profit
performance continues to be below
the standards set by the Group, it is
a solid improvement on last year’s
results.
Street lighting projects contributed
most of the revenues for this year.
Tunnel projects were at lower levels,
with only some smaller scale projects
in the UK and Australia. Some larger
projects have been secured and
ordered for delivery in 2023/24; these
higher margin projects will make
a strong contribution to results for
2023/24.
The new operational leader at TRT has
made a positive impact. Service levels
are good, and the business continues
to improve its ability to respond to
peaks in customer demand. Some
improvement is required in stock
management following investment
in certain stock lines to protect against
supply challenges; this now needs to
be managed to more sustainable and
lower levels.
Significant effort is being focused on
product development; for example,
an exciting new product will be
launched into the street and amenity
lighting market towards the end of
2023 which further underpins the
Group’s reputation for innovation and
sustainability, and other new ideas
are progressing. The business will
continue to build its amenity range,
collaborating with other businesses
within the Group. Expect to see the
results of these innovations in next
year’s annual report.
TRT starts the new financial year with
a solid order book and a few decent
sized tunnel projects on the books and
in progress. The Group expects a strong
operating profit performance for the
coming financial year, building on the
improved performance for this year.
Image: Hereford Cathedral Close, Hereford
43
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Operational performance. continued
Revenue
£24.8m
+13% (–2%) (constant
currency +10% (+2%))
(exc. Thorlux)
Image: Hoge rij, Deventer, Netherlands
Lightronics
Whilst revenue has grown this year,
operating results for Lightronics are
a little disappointing. Margins were
squeezed in the first half of the year;
however, the business continues to
deliver a very respectable ratio of
operating profit to sales.
The main challenge during the year
has been managing increases to supply
chain costs. Some progress was made
both in improving selling prices and
reducing costs, but there is work to do.
The commercial organisation continues
to develop under the leadership of
Lightronics’ new commercial director.
Product innovation is fundamental for
Lightronics, as it is across the Group.
The company is working on a number
of shared developments with both TRT
and Thorlux.
These businesses share certain product
lines and customer types, so the
company will continue to find ways to
exploit these synergies to the Group’s
benefit.
Following the completion of building
works last June, the Group has invested
in further solar PV, which supports
operations at Lightronics today as well
as into the future. The business will look
to invest further in the new financial
year to support sales and marketing
activities.
Margins improved in the second half
of the year; Lightronics expects this
to continue into the new financial
year, following some positive results
on purchase price negotiations in the
supply chain. The business starts the
new year with a solid order book, with
a clear target of improving operating
returns in 2023/24.
44
Annual Report and Accounts for the year ended 30 June 2023 Revenue
£11.5m
+4% (+20%) (constant
currency +3% (+25%))
Famostar
Having delivered many years of
double digit and profitable growth,
the business has taken a “pause for
breath”. The business continues to
target certain customer activity,
embed SmartScan technology into
its product offering, and develop
Thorlux product sales into the
Dutch market.
Famostar has a solid position in the
Dutch market, producing high quality
sustainable emergency lighting
solutions; however, Famostar continues
to look for ways to expand into new
territories. The project with Philip Payne
to expand sales into the UK market
continues, although progress has been
limited to date.
The sale and distribution of Thorlux
products into the Dutch market
continues to make steady progress.
Famostar continues to invest in sales
and marketing resources and hopes
to see improved results. Finding
additional good quality people is the
main challenge in a tight local labour
market.
Sustainability is a key focus for all Group
businesses, and Famostar continues
to review ways of reducing the
impact on the environment in terms
of the composition and manufacture
of its products. This year Famostar
committed to introducing solar PV
panels on the roof of its new facility,
which will generate enough electricity
to power the building each year.
The new warehouse and manufacturing
facility was completed before the
close of the financial year. The Group
expects to see operational efficiencies
this coming financial year now that all
operations are on one site.
See page 35
Famostar will continue to strive for
growth domestically through existing
channels, offering SmartScan and
delivering projects with the Thorlux
product portfolio. Export markets will
continue to be explored in conjunction
with other Group companies.
Image: The Streetfood Club, Breda, Netherlands
45
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Operational performance. continued
Image: ExitAlya Surface (surface wall mounted exit sign) and the Spazio Nano (recessed emergency luminaire)
the UAE, and drive the improvement of
margins so the business can deliver on
its medium-term growth projections.
Revenue
£19.3m
+37% (last year 9mths
included)
Zemper
Zemper joined FW Thorpe in
September 2021. Since becoming
part of the Group, Zemper
has delivered a solid financial
performance. Revenues are derived
primarily from the local Spanish
market, France and Belgium. The
business also supplies a wide variety
of export markets.
The business is deeper into the value
chain than most Group companies:
with its ability to injection mould its
own plastic components and populate
finished printed circuit boards; it also
has its own robotic final assembly and
testing process. There has been further
investment in these facilities during
the year, with the addition of injection
moulding capacity that will support the
Group as well as additional investment
in surface mount machinery that will
also facilitate synergy projects for the
wider group.
Supply cost increases hampered
operating results; however, this was
partially offset by increased revenues
in the targeted growth territories of
France and Belgium and several new
successful product launches which
stimulated order intake in the second
half year.
Synergy projects continue, and
the Zemper team has added some
significant emergency lighting
knowledge and technical expertise to
the Group. Projects include in-sourcing
of troublesome plastic components,
standardisation of product offerings
across multiple territories, and
continual development of shared
product ideas. These synergies take
time to implement, but the Group
expects to see some benefit later in the
new financial year.
This year there is the benefit of a full
financial year’s results for the Group.
Zemper will target continued growth,
supported by projects in the UK and
See page 34
46
Annual Report and Accounts for the year ended 30 June 2023 Stock Code: TFW www.fwthorpe.co.uk
47
Our Governance Strategic ReportBusiness OverviewOur Financials Image: Shrewsbury Cricket School, Shrewsbury PRODUCT SPOTLIGHT
Innovations from
around the Group.
Ratio io7
The io7 pillar integrates high-performance area
illumination and electric vehicle (EV) charging into a
single stylish and robust unit. As well as incorporating
up to 2 x 22kW fast charging capabilities, the io7 also
provides essential illumination for users to safely
connect to the charger whilst identifying potential trip
hazards such as trailing cables.
The sophisticated optics of the io7 deliver exceptional
area illumination with high uniformity, minimal glare and
less than 2% upward light emission, effectively mitigating
light pollution concerns. This design ensures a well-lit
environment whilst minimising any adverse effects on
the surrounding areas.
48
Furthermore, the io7 can be customised to meet specific
requirements, including power availability, charging
demands, internet connectivity, lighting preferences
and budget considerations. Compatibility with the
Thorlux Lighting SmartScan platform guarantees
optimal functionality.
By combining efficient lighting and EV charging
capabilities, the io7 provides a versatile solution for modern
infrastructure. Its contemporary design, durable construction
and user-focused features make it an ideal choice for those
seeking a comprehensive and sustainable solution to meet
their EV charging and area illumination needs.
Annual Report and Accounts for the year ended 30 June 2023 TRT I-Range
The robust I-Range has been
designed and tested for tunnel and
urban passageway applications.
Features include a tough extruded
aluminium body, narrow projection,
toughened safety glass cover, and IP66
and IK08 ratings (for water and impact-
resistance, respectively). This compact,
lightweight luminaire has a smooth flat
finish to reduce dirt build-up.
A choice of three lengths, four
wattages and eight optical
distributions ensures that the I-Range
can be integrated into most exterior
lighting projects. An angled bracket
allows optimal positioning, and
a bespoke lensing arrangement
maximises efficiency. The I-Range is
supplied with a pre-wired mains cable,
making this out-of-the-box solution
easy to install.
Additionally, the product is delivered in
a highly sustainable packaging solution
that utilises non-virgin cardboard
throughout and avoids the use of
plastic. This eco-friendly packaging has
the optimal dimensions to protect the
product during transportation.
Lightronics CEDER
The CEDER luminaire, with its conical shape, is used in a wide
range of applications in public areas.
The luminaire has been designed for maximum circularity,
minimising the use of raw materials, maximising the reuse of parts
and facilitating efficient recycling. The collar can be recycled at the
end of the luminaire’s service life and used as a base material for
a new light post or similar, and the aluminium parts are anodised
to allow future recycling without additional treatment to remove
a coating.
The luminaire is also designed to accommodate the rapid
integration of the latest lighting technology. The LED board and
driver unit can be effortlessly replaced without the need for
specialised tools, ensuring that future upgrades can be easily
incorporated and extending the lifespan of the luminaire.
49
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials PRODUCT SPOTLIGHT
SkyCore family.
The new SkyCore family is the
next generation of luminaires for
commercial environments. SkyCore
luminaires are designed with
the principles of circularity and
sustainability in mind. Modularity,
maintainability and reduced waste
are key considerations, as well as
high performance for a variety of
lighting solutions.
The SkyCore family includes the
SkyGlo, SkyPro and SkyDome. All three
luminaire types share a common
luminaire body, but each has a diffuser
option for a different application.
SkyGlo has a homogeneously lit flat
opal diffuser, ideal for areas where
diffuse lighting is required. SkyPro
uses a low-glare micro-prism diffuser,
making it ideal for office applications
or areas with computer screens,
and SkyDome, which uses an iconic
domed diffuser providing excellent
wall and ceiling illumination, is perfect
for creating well-lit and stimulating
classrooms.
All versions are available recessed,
surface mounted or suspended,
making the SkyCore family a versatile
range of luminaires for a wide variety
of applications.
A solution
for every
space.
SkyPro
SkyGlo
SkyDome
50
Lighting for your comfort.The power is in your hands.Annual Report and Accounts for the year ended 30 June 2023 Highly
efficient
Long life and
maintainable
Energy
saving
Modular
and flexible
Reuse and
repurpose
Recycle
with ease
PRODUCT SPOTLIGHT
Making changes
that matter.
Thorlux is passionate about minimising its environmental impact.
The SkyCore family was therefore designed as follows:
Using modular
components; giving
flexible options
The principles of circularity aim to
eliminate waste by keeping as much
of the original product material in
use for as long as possible, which
is why the SkyCore family has been
designed to provide a long and
reliable life of at least 100,000 hours.
The luminaires are fully serviceable
and have a modular design. Each
luminaire comprises a luminaire head
and gearbox which can easily be
separated for servicing or repurposing
in the future, helping to reduce
maintenance time, waste, and the
costs associated with replacement.
The modular serviceable design allows
the luminaire to be fully maintainable
throughout its life, keeping it in service
longer. Individual components can
be removed for ease of servicing or
replaced for upgrading should the
need arise.
Once the product reaches its end
of life, it can easily be disassembled
and recycled.
Each SkyCore luminaire can be
adjusted on site to one of four
predetermined wattages, through
the wattage selector mounted on
the gearbox.
This clever feature means room light
levels can be increased or decreased if
there is a change in use or occupier.
Reducing material waste
During development of the SkyCore
family, manufacturing efficiency
and reduced waste were key
considerations; this led to a change
in the design process.
The development team carefully
considered material types and how
they could be used to improve the
design and minimise waste during
the manufacturing process. Through
careful selection of steel sheet size
and optimising the component layout,
two luminaires can be manufactured
from each sheet, with a utilisation of
over 80%. The waste material from the
centre of the luminaire frame is used
to manufacture the accompanying
gearbox. The steel comprises at least
27% recycled content.
Minimising energy
consumption
The greatest environmental impact
of a luminaire is during its operating
phase – more specifically, due to the
energy it consumes.
The SkyCore family has been designed
to be highly efficient, with versions
producing 146.9 lumens per circuit
watt (LL/cW), minimising a building’s
lighting load. This can be reduced
further with SmartScan, the award-
winning wireless lighting management
system, which ensures that luminaires
consume only the energy required to
light the space.
51
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Financial performance.
The increase in Group profitability has been driven
by another positive year from Thorlux and a positive
contribution by recent acquisitions.”
Craig Muncaster
Joint Chief Executive, Group Financial Director
and Company Secretary
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 2023.
Results and dividends
Revenue increased by 23.0% to
£176.7m with operating profit
increasing by 12.6% to £27.8m,
supplemented by the addition of
SchahlLED acquired in September
2022 and an additional three month’s
contribution from Zemper, acquired
October 2021. Excluding both
additional elements, revenue increased
10.7%, with operating profit up 8.8%.
The increase in Group profitability
has been driven by another positive
year from Thorlux and a positive
contribution by recent acquisitions
(although dampened by acquisition
related fair value adjustments). There
was a solid performance by the
Netherlands companies, with the other
UK companies improving performance
in the main. Operating profit before
acquisition adjustments reached
£29.8m (2022: £25.8m), up 15.6%.
Both acquisitions, Zemper and
SchahlLED, made positive contributions
of £4.1m (2022: £2.2m) before
amortisation costs of acquisition
related intangible assets. Given the
52
Group has committed to acquiring
the remaining shares over the next
few years, we account for 100% of the
revenue derived by these companies
but adjust the operating profit for
intangibles valued at acquisition and
profit before tax to reflect the minority
shareholding. For added complexity,
SchahlLED predominantly distribute
Thorlux products, so there are
further adjustments at a revenue and
operating profit level.
The remaining UK companies all
posted positive contributions with
improvements in all except for Portland;
however, the overall results for the other
companies continues to be dampened
by the results from our overseas sales
offices in the UAE and Australia.
Net finance expense is impacted by
both the Zemper and SchahlLED
acquisitions; however, the recent
upturn in interest rates have seen
returns on our significant cash holding
improve in the last quarter of the year.
The taxation charge represents an
effective rate of 18.6% (2022: 16.7%).
The rate is higher than the previous
year driven by the addition of profits
from Germany and Spain 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.
Cash balance remained strong
following significant investments
during the year.
In April 2023, the Company paid an
interim dividend of 1.62p per share
(2022: 1.54p) amounting to £1,898,000
(2022: £1,803,000). There were no
special dividends during the year (2022:
2.27p, £2,659,000). A final dividend of
4.84p (2022: 4.61p) per ordinary share
is proposed, amounting to £5,674,000
(2022: £5,403,000). If approved, the
dividends will be paid on 24 November
2023. Total dividends paid during
the year amounted to £7,301,000 in
aggregate (2022: £12,079,000). The
final dividend for 2022 was paid on 25
November 2022.
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 is a series of time deposits that
are maturing on a rolling cycle in order
Annual Report and Accounts for the year ended 30 June 2023 to meet regular business payments,
with a margin for larger regular and
one-off payments as well as seasonal
variation in cash requirements.
The Group primarily trades in sterling.
There is an exposure to foreign
currency as the Group buys and sells
in foreign currencies and maintains
currency bank accounts in US dollars,
Australian dollars, UAE dirhams and
euros. The activities of buying and
selling in foreign currency are broadly
matched with currencies bought and
sold as required in order to minimise
currency exposures. Larger exposures
would be hedged in order to reduce
the risk of adverse exchange rate
movement. There were no currency
hedging derivatives in place as at 30
June 2023 or 30 June 2022.
Pension scheme position
and funding
The latest triennial actuarial valuation
was completed as at 30 June 2021. 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 £1,874,000 (2022: £2,096,000) on
capitalised development costs, which
includes internal labour.
Property, plant
and equipment
The directors are of the opinion that
the market value of the freehold land
and buildings is in excess of their net
book value. Whilst it is considered that
the market value is significantly greater
than the net book value for many of
the Group’s properties as a result of
being acquired between one and over
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 continued at a
higher level compared with previous
years. The main capital expenditure
focused on the extension of the
Famostar building, a new injection
moulding facility for Zemper to support
an insourcing project for the Group
and an increased investment in solar PV
panels for the Thorlux and Lightronics
factories, further underpinning of our
sustainability credentials.
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 45 (2022: 42). The Group continues
to report on payment practices and
performance as per UK legislation.
of key control procedures and any
non-compliance reported to the
Group Board. If there any areas of
non-compliance noted as part of this
process they are 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
12 October 2023
Group total revenue (£m)
+23% (2022: +22%)
£176.7m
Group operating profit (£m)
+13% (2022: +29%)
£27.8m
Net cash generated from
operations (£m)
+61% (2022: -10%)
£31.9m
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
Net assets (£m)
+10% (2022: +6%)
£160.3m
53
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Section 172.
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.
Key stakeholders and how we engage with them:
Employees
Customers
Shareholders
Suppliers
Communities & environment
Why we engage
Why we engage
Why we engage
Why we engage
Why we engage
The right people, capabilities and
engagement across the Group
is the platform to drive our
long-term success.
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.
How we engage
How we engage
Employee committees
•
• Health & safety committees
•
Employee appraisals, training
and 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
Trust from our shareholders is key to
We need to maintain reliable
The Group is committed to be
delivering our strategy and long-term
relationships with suppliers for mutual
a responsible member of the
success. We endeavour to provide fair,
benefit and ensure they are meeting
community and considers the
balanced and meaningful information
our standards, from value for money,
environmental impacts of the
to shareholders and potential
quality, through to business ethics.
customer’s use of our products
as well as our own operations.
investors to ensure they understand
our performance and strategy.
How we engage
•
Trading updates at
appropriate times
How we engage
How we engage
• Meetings and negotiations with
Support local and national
key suppliers
charities
• Regulatory News Service
•
Site visits
•
Investor meetings and
presentations, including
company visits
• Dedicated Group website
• Annual and Interim reports
• Annual General Meetings
• Quality management reviews and
audits
trade shows
• Attending supplier forums and
industry bodies
•
•
Engagement with local MPs and
Chambers of Commerce
• Members of appropriate trade and
• 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
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.
54
Annual Report and Accounts for the year ended 30 June 2023 Employees
Customers
Shareholders
Suppliers
Communities & environment
Why we engage
Why we engage
Why we engage
Why we engage
Why we engage
The right people, capabilities and
Understanding the needs of our
engagement across the Group
is the platform to drive our
long-term success.
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.
How we engage
How we engage
Employee committees
• Meetings/maintaining close
•
•
• Health & safety committees
Employee appraisals, training
and development
• Communication via web portal,
notices and company newsletter
• Group board meetings held
periodically at different
company sites
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
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.
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.
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.
How we engage
•
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
How we engage
How we engage
• Meetings and negotiations with
key suppliers
Site visits
•
• Quality management reviews and
audits
•
•
Support local and national
charities
Engagement with local MPs and
Chambers of Commerce
• Members of appropriate trade and
• Attending supplier forums and
industry bodies
trade shows
• 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
55
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials SUSTAINABILITY
Our sustainability journey.
The journey so far: the
Group’s progress and
plans for the future
Over the last two decades, FW Thorpe
has sought to address the carbon
impact of its manufacturing and
distribution operations. This has led
to a major employee engagement
programme on energy efficiency of
Group 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.
Since 2009, FW Thorpe has been
planting trees on its own land in Wales
to offset Group emissions each year. To
date, the Group has planted 179,412
trees, offsetting more than 44,385
tonnes CO₂e over the next 100 years.
FW Thorpe has completed its
woodland creation project in
Devauden, Wales and has purchased
195 acres of land in Herefordshire.
The land has significant potential
for connecting existing woodlands
for biodiversity and landscape
enhancement and the transition from
grazing sheep to woodland creation
will have little to no impact on food
security.
FW Thorpe has been officially
recognised as being carbon
neutral, with systems of reduction,
measurement and certified offsetting
in place, since 2012. This status has
been independently assessed by a
third party in accordance with ISO
14064-1, an international standard
for the quantification and reporting
of greenhouse gas emissions and
removals. Meeting this standard
provides independent assurance of the
Group’s longstanding commitment to
sustainability across all its operations
worldwide.
The Group is committed to
addressing today’s sustainability
challenges and opportunities,
adjusting its business strategy
accordingly. Understanding the
needs of customers and 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. Thorlux Smart
technology has been saving energy
for customers as well as reducing their
carbon impact since 2003.
FW Thorpe 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.
56
Annual Report and Accounts for the year ended 30 June 2023
25
year projection of 12,500
tonnes CO₂e avoided by
the use of solar panels
(Based on 2022
conversion factors.)
25
year projection of
50,000,000 kWh of
electricity produced
from solar panels
500
tonnes CO₂e avoided
per annum by the use
of solar panels
(estimated average)
2 m
kWh electricity
production capability
per annum from
solar panels
57
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials SUSTAINABILITY
Mapping sustainability.
Alignment with the Sustainable Development Goals
The 17 Sustainable Development
Goals (SDGs) were launched in 2015
by the United Nations (UN). The SDGs
aim to end poverty and create a life of
dignity and opportunity for all, within
the boundaries of the planet. Global
sustainable development priorities and
aspirations for 2030 are defined which
seek to mobilise global efforts among
governments, business and civil society
around a common set of targets.
FW Thorpe’s activities align most
closely with six UN SDGs covering the
themes of good health and well-being,
affordable clean energy, decent work
and economic growth, sustainable
human settlements, responsible
consumption and production and
climate action.
3
7
8
Ensure healthy lives and
promote well-being for
all at all ages.
Ensure access to
affordable, reliable,
sustainable and modern
energy for all.
Promote sustained,
inclusive and sustainable
economic growth.
11
12
13
Sustainable cities and
communities.
Ensure sustainable
consumption
and production
patterns.
Take urgent action
to combat climate
change and its
impacts.
58
Annual Report and Accounts for the year ended 30 June 2023 Sustainability in action.
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.
Products (design and innovation)
New products:
• New product design follows the Group’s Circular Design
Strategy including the development of retrofit solutions
for new and existing customers.
•
•
The Group continues to offer increasingly energy efficient
products and lighting management systems that further
reduce energy and prolong lifetimes.
The Group focuses on smart technology including
enhancements to the SmartScan lighting management
system.
Read more about Sustainability in Action on pages 60 to 62
Operations (manufacturing excellence)
“responsible production”
Energy usage
•
The majority of the Group’s electricity usage is from
renewable sources.
•
The Group’s solar installations have the capability to
produce 2m kWh of electricity per annum.
• Continued investment in carbon offsetting programmes.
Read more on pages 56 to 57
Waste
• All Group companies have been tasked to reduce waste
to landfill.
Sourcing:
•
The Group is working to increase the use of sustainable
materials in products.
Distribution
•
Systems are being introduced to enable returnable and
reusable packaging.
•
Initiatives are in place to reduce supplier packaging waste.
• A policy is in place to increase the use of electric and
Supply chain:
•
The Group is committed to its Supplier Code of Conduct.
• Group companies are working with key suppliers to
embed sustainable practices and remove single-use plastic
from the supply chain.
hybrid vehicles.
External activities
•
The majority of Group companies have electric vehicle (EV)
charging stations at the workplace.
•
Sales engineers fleet switching to EV.
Read more on pages 61 to 62
Business model
People
• New product developments support the green economy
e.g. electric vehicle chargers
•
•
•
Several Group companies offer financing models for
customer projects.
The Group promotes the refurbishment or reuse of
existing luminaires – e.g. replacement light engines
Existing products support the green economy –
SmartScan.
Read more about Our Business Model on page 64
• All Group companies are certified to the international
standard ISO 45001 (Occupational Health and Safety
Management) or equivalent.
•
The Group offers a fully funded employee assistance
programme (EAP) and 24/7 GP video helpline.
• All employees are paid above the minimum wage rates and
the majority are enrolled in some form of bonus scheme.
•
The Group supports equal opportunity, regardless of
gender, age, religion, ethnic origin or sexual orientation.
Read more about Our People on page 63
59
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials
SUSTAINABILITY
Products.
From an environmental point of
view, the greatest impact of a
luminaire is during the operating
phase and, more specifically, in the
amount of energy it consumes.
The Group continues to invest in
the development of energy-efficient
luminaires and control systems,
utilising LED technology, including
circuit board design, software
development, thermal modelling
and optical lens design, ensuring
its luminaires provide the optimum
lighting performance with the best use
of energy and minimal stray emissions.
Using the most up-to-date and
high-quality LEDs, based on criteria
such as colour rendering, luminous
flux and thermal stability, guarantees
that Group luminaires offer exceptional
luminous efficacy and long lifetimes.
New products
The Group endeavours to limit the
environmental impact of its products
throughout their lifetime, and new
product design follows an FW Thorpe
agreed circular design strategy.
Offering increasingly energy-efficient
luminaires and lighting solutions
reduces energy consumption and
prolongs the lifetime of all products.
Group products have always been
engineered to last and extending the
life of a product allows it to remain in
use for as long as possible; this may be
by designing products to be physically
durable or to allow the product to be
adapted to a user’s changing needs
through easy upgrade.
The Group actively promotes retrofit
solutions for existing and new
customers, utilising the bodies of
existing luminaires. Designing custom-
made gear trays to replace traditional
light sources with LEDs realises
significant benefits in terms of energy
efficiency, maintenance costs and
luminaire lifetime.
Sustainability in action - Philip Payne
Philip Payne supplied the original emergency luminaires for the London Stadium
and was approached by the appointed engineering services provider to retrofit
the luminaires to be LED. Philip Payne designed custom-made gear trays, utilising
the existing luminaire bodies and eliminating the expense and inconvenience of
replacing the entire luminaire.
Image: Philip Payne
secures the retro fit exit
signs for London Stadium
Image: Emergency luminaires from the Philip Payne architectural range
60
Annual Report and Accounts for the year ended 30 June 2023
Sustainability in action
Famostar
Famostar has joined the Circular
Circuits consortium, a five-year research
programme focused on the design
of next generation electronics for a
circular economy. The project involves
11 universities and research institutes
and 17 industrial partners.
Solite
Solite is supplying retrofit gear trays
to sites with old Solite fluorescent
luminaires. Reusing approximately 70%
of the original product significantly
reduces the quantity of new materials
required and the CO2 associated with
their production and transportation.
Thorlux
Thorlux continues to collaborate with
WMG Business through a Knowledge
Transfer Partnership. The focus for
the project is to assess and improve
product development processes to
ensure new products become more
circular in their design.
The aim is to embed circular principles
and concepts into the new product
development team through workshops
and design-related activities.
Portland
Portland Lighting has developed the
Crossafe Converter, a variant of its
Crossafe illuminated post oversleeve,
providing the potential to upgrade
thousands of older illuminated
pedestrian crossing posts installed
throughout the country.
The heavy gauge base of the existing
steel post is still serviceable after many
years. By cutting and removing the top
of the old post, the existing old base
housing is left in situ to be repurposed.
The new Crossafe Converter is installed
in just 20 minutes, fitted, and secured
to the old base with a built-in clamp
system without the need to close
the crossing.
Sourcing
Sustainable sourcing, which includes
considering social, ethical and
environmental performance factors, is
integrated into the Group’s practices
and procurement decisions. All
materials used in manufacture comply
with the Restriction of Hazardous
Substances (RoHS) directive, which
applies to electrical and electronic
equipment. The choice of material
in a luminaire has a significant
environmental impact throughout
the product’s lifetime, so the Group
is working to increase the use of
sustainable materials to reduce this
impact. The recycled content of all
raw materials is being established and
increased wherever possible.
As the Group begins to embed the
principles of the circular economy, one
of the first initiatives is to reduce the
amount of packaging waste generated
by the business. Improved planning
will allow Group companies to
successfully manage inventory, reduce
excess, consolidate deliveries and
eliminate the purchase of unnecessary
items, all of which will reduce the
amount of supplier-delivered waste.
Supply chain
The Group is committed to its Supplier
Code of Conduct to ensure an ethical
and sustainable supply chain and
is working with suppliers to embed
sustainable practices.
The Group’s mainline suppliers are
based throughout the world and vary
considerably, both in terms of size and
amount spent with them. All product
suppliers are subject to an approvals
process before they are permitted
to supply products. Many hold
international quality standards and
accreditations and are regularly audited
to ensure ongoing compliance with
quality standards and other regulatory
requirements.
In addition, the Group has a large
number of non-product suppliers,
who are predominantly based in
Europe. These suppliers are subject to
the same due diligence processes as
the product suppliers.
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Operations.
Energy usage
The Group has installed solar PV
units on the roofs of most of its UK
manufacturing facilities, as well as
at Lightronics and Famostar in the
Netherlands and Zemper in Spain. The
units have the capability to deliver over
2 million kWh per annum, reducing the
Group’s consumption from traditional
electricity sources. All remaining
significant electricity consumption is
now derived from renewable sources.
All Group companies are certified to
the international standards ISO 14001
(Environmental Management) and ISO
9001 (Quality Management).
Distribution
Systems are being successfully
introduced which lend themselves
to the implementation of returnable
and reusable packaging, including a
customer packaging recycling scheme.
All finished goods packaging will be
supplied from Forest Stewardship
Council (FSC) or equivalent sources.
External activities
A proactive policy is in place to
increase the use of either hybrid or full
electric vehicles (EVs). To date, over 50%
of company vehicles are either electric
or hybrid.
Sustainability
in action
Portland Lighting now uses
paper bubble wrap (globular
embossed paper) which is 100%
recycled and 100% recyclable. This
replaces plastic bubble wrap and
significantly reduces plastic waste.
Thorlux Carbon Offsetting Project
Devauden, Monmouthshire, Wales
Waste
All Group companies are required
to meet ambitious targets to
reduce waste to landfill through the
economical use of resources and
recycling of materials. With improved
planning, the Group has been able
to manage inventory, reduce excess,
consolidate deliveries, and eliminate
the purchase of unnecessary items –
all of which will reduce the amount
of supplier delivered waste.
Sustainability
in action
Lightronics has replaced plastic
wrap with lashing straps to
secure boxes on pallets; these
are reusable and returned with
every recurring shipment.
179,412
trees planted
44,385
tonnes CO2e offset over
the next 100 years
Image: The final tree was planted at the Group Carbon Offsetting
Project in Monmouthshire, Wales by retiring FW Thorpe Group Director
David Taylor, pictured with Chairman Michael Allcock
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Annual Report and Accounts for the year ended 30 June 2023 People.
Safety
All Group companies are certified to
the international standard ISO 45001
(Occupational Health and Safety
Management) or equivalent. 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.
Training and
development
The Group offers skill and personal
development to all employees and
continues to support its apprenticeship
scheme. A number of senior managers
and directors within the Group are
former apprentices.
The Group continues to work with
Warwick Business School to develop its
leaders of the future.
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.
Employee engagement
and diversity
Employees are kept informed of
matters of concern to them by
publication and distribution of a
company newsletter and other notices,
or by specially convened meetings.
Committees representing different
groups of employees meet regularly
to ensure the views of employees are
considered when making decisions
that are likely to affect their interests.
The Group aims to improve employees’
work–life balance by continuing to
offer flexible working time models.
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.
The Group is committed to the highest
standards of openness, probity and
accountability. The Whistleblowing
Policy is intended to assist individuals
who believe they have discovered
malpractice or impropriety and to offer
protection to any employees of the
Group who disclose such concerns.
Employees are encouraged to share
ideas and solutions through Group
suggestion schemes, to encourage
sustainable development. Additionally,
the FW Thorpe Sustainability Working
Group has been set up to share,
discuss, learn about and circulate ideas
on sustainability topics. A biannual
Group sustainability newsletter is
distributed to all employees with
updates of company environmental
initiatives.
The Group pays employees above
minimum wage rates as well as an
additional annual profit share bonus for
all those who meet eligibility criteria, as
well as providing access to a pension
scheme with a contribution from the
respective Group company.
The Group supports equal opportunity,
regardless of gender, age, religion,
ethnic origin or sexual orientation.
The Group’s Modern Slavery Act
disclosure is published on the corporate
website (www.fwthorpe.co.uk) in the
company documents section.
During the year the Group gave
£16,880
(2022: £23,153) for charitable
purposes. This is made up of
donations to charities of £7,116,
and to local causes of £9,764.
Number of charities supported
30 (2022: 27)
Number of apprentices
16 (2022: 17)
Image: The Ratio team
playing in a five-a-side football
tournament to raise money for
Birmingham Women’s and
Children’s NHS Foundation Trust
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Business model.
Governance
Sustainable management and social
responsibility are at the core of Group
governance. The Board and Group
management are responsible for
determining the strategic direction
of sustainability initiatives and for
governance and monitoring of
sustainable working methods.
The Company’s shares are traded on
the Alternative Investment Market
(AIM) of the London Stock Exchange.
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
adopted the Quoted Companies
Alliance Corporate Governance
Guidelines for Smaller Quoted
Companies (the ‘QCA Code’), which the
Board believes appropriate due to the
size and complexity of the Company.
It is Group policy to conduct all
business in an honest and ethical
manner. The Group takes a zero-
tolerance approach to bribery and
corruption and is committed to
acting professionally, fairly and with
integrity in all business dealings and
relationships, wherever it operates.
Several small-scale projects have
been funded directly or indirectly by
FW Thorpe, enabling the customer
to benefit from energy savings
immediately as well as lowering their
carbon emissions.
Image: Day of Technology at Lightronics
Image: Local mayor visits Thorlux Lighting
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Annual Report and Accounts for the year ended 30 June 2023
Sustainability in action:
TRT Lighting has achieved International Dark-Sky Association
(IDA) approval for eight of its product ranges. The IDA is the
recognised authority on light pollution and is the leading
organisation combating light pollution worldwide.
Sustainability in action:
Zemper has been awarded an EcoVadis Silver Medal in recognition of its
continued commitment to improving sustainability across its business
operations. EcoVadis operates an evidence-based online platform
providing supplier sustainability ratings and allows companies to assess the
environmental, social and governance performance of its global suppliers.
Sustainability in action:
Lightronics has been selected for ‘De Groene Pluim’ (The Green Plume).
This mark is granted to organisations that excel in the following SDGs:
decent work and economic growth (SDG 8), responsible consumption and
production (SDG 12), climate action (SDG 13), and partnership (SDG 17).
Image: World Clean Up Day at Famostar
Image: Bicycle to Work Day at Lightronics
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TCFD.
Reporting for Task Force on Climate-Related Financial Disclosures
Overview
Executive statement
“An important challenge facing
FW Thorpe is the global issue of
sustainability. The Group commenced
its sustainability programme in
2009 and recognises the need to
continually invest in greener solutions
for its factories, enhance component
sourcing and management, foster
circular design practices, and develop
energy-efficient product offerings
to maintain a leading position in the
market.
Beyond the well-publicised ongoing
tree planting projects, FW Thorpe
has continued to roll out solar
solutions across its multiple factory
roofs. Displaying proactive planning
and favourable timing in 2021/22
prior to the energy crisis and supply
constraints, the Company acquired
an additional 3,000 large PV panels
(amounting to £0.8 million) which have
been installed on the main Thorlux
facility’s roof in Redditch.
The Group is making substantial strides
in bolstering its sustainability profile.
Collaborating with a third-party entity,
FW Thorpe has comprehensively
collected and collated emissions
data from all its operational activities,
spanning Scope 1, 2, and 3 emissions.
Internally, the Group is driving various
sustainability initiatives. Noteworthy
examples include material selection,
reduction strategies, fostering
reusability, and promoting recycling
practices. All Company personnel
receive sustainability training and a
biannual sustainability newsletter
featuring contributions from across
the Group. Many of the efficiency
enhancements achieved at both the
factory and product levels not only
reduce costs but also contribute to the
company’s ability to secure orders and
enhance its overall reputation.”
Mike Allcock
Chairman and Joint Chief Executive
Structure of the TCFD recommendations
Governance
Strategy
Risk
Management
Metrics
& Targets
Image: Tree planting at the Group Carbon
Offsetting Project, Devauden, Wales
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Annual Report and Accounts for the year ended 30 June 2023
This is the Group’s first TCFD aligned
report, to commence the journey on
understanding its current position on
climate-related risks and opportunities.
The TCFD is a framework for overseeing
and analysing the Group’s climate-related
risks and opportunities. The framework
has four thematic areas (Governance,
Strategy, Risks and Metrics and Targets)
that are core elements and eleven
disclosure recommendations, defining
the scope of information that should
be reported, to provide transparency in
relation to climate change. FW Thorpe
recognises that climate change presents
both physical and transitional risks, as
well as opportunities, for the business.
FW Thorpe has developed net-zero
targets and strategy and incorporated
multiple decarbonisation projects. It has
procured an external consultant, to help
it understand climate-related risks and
opportunities this financial year. During
the next financial year (2023/24), they
will help the Group to conduct climate
scenario analysis and provide it with a
comprehensive, long-term picture of
the potential impacts.
Three time horizons will be used to
provide the analysis with a suitable
level of granularity and coverage. Best,
worst and moderate case scenarios will
be used to consider a broad range of
eventualities.
The Group will be modelling the
likelihood and severity of potential
impacts on its operations from
flooding, storm patterns, precipitation,
mean temperatures and sea level
rise, to fully understand the threats
and establish a mitigation strategy to
safeguard the future of the business
against climate change. The Group
plans to utilise climate scenario
analyses to facilitate climate-related
decision-making in an organised,
systematic, and analytical manner.
The findings will be discussed during
the 2023/24 Board level workshop
and integrated into the general risk
management process.
Following the risk management
workshop, the Group will identify
material climate related risks and
opportunities. Consequently, it will be
Image: Ratio io5 EV charger
able to describe the potential impacts
of climate-related issues on the Group’s
financial performance and use in its
financial planning process.
During the next financial year, the
Group will consider producing a
standalone TCFD report, to widen its
understanding of the potential impacts
of climate change and incorporate
mitigation approaches into overall
business strategy.
The TCFD disclosures for the Group
will continue to evolve. Climate
analysis was not performed this year
as the Group continued to expand
with acquisitions in recent years,
resulting in revenue and operations
in additional territories such as Spain,
France, Belgium, and Germany, that
extends the assessment scope. We will
develop this analysis during 2023/24
and look to report progress in next
year’s annual report.
Stock Code: TFW www.fwthorpe.co.uk
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TCFD. continued
Reporting for Task Force on Climate-Related Financial Disclosures
Governance
Summary of disclosure
Disclosure of the Group’s governance
around climate-related risk and
opportunities.
Sustainable management and social
responsibility are at the core of the
Group’s Governance. The Board and
Group management are responsible
for determining the strategic
direction of sustainability initiatives,
the governance and monitoring of
sustainable working methods.
Board-level oversight
The Joint Chief Executive, Group
Financial Director and Company
Secretary in collaboration with
the Chairman of the Board are
responsible at Board level for the
overall Environmental, Social and
Governance (ESG) agenda, including
the management of climate-related
risks and opportunities. Sustainability
is a standing agenda item at Board
level and is discussed in every Board
meeting. From the next reporting
year, climate change will become a
separate additional agenda item at
the quarterly board meetings at each
Group company.
Corporate governance structure
Board members received a capacity-
building training session in April 2023,
as a part of developing FW Thorpe’s
net-zero strategy. In the next reporting
year, separate climate-risk workshops
will be held for Board members and
managing directors. This will include
a general overview of climate change,
climate scenario analysis for the Group
level and a detailed review of climate-
related risks and opportunities that are
specific to the business.
The Board considers climate-related
issues in relation to its business in the
form of research and development
(R&D) of its products, decarbonisation
of its operations, resource
management and its carbon offsetting
program. From the next reporting
year, the aim is to incorporate, where
possible, climate-related issues when
reviewing the Group’s business
strategy, targets and major plans of
actions and investments.
The Group’s Board remuneration is
currently not directly linked to climate/
sustainability, but any future share
options granted will contain a specific
performance condition around carbon
reduction.
FW Thorpe is currently reviewing
incentives across the Group to consider
a potential link to sustainability targets
in 2023/24.
Management-level oversight
At the Group level, we have established
a sustainability working group in
2022/23 that includes representatives
from the Board and other key
stakeholders. The Sustainability
Working Group also participated in
April’s 2023 net-zero workshop.
At subsidiary level, responsibility for
the sustainability agenda and climate-
related issues lies with each individual
business managing director who
reports back to the Board, which has
overall responsibility.
Currently, FW Thorpe does not
have a formal ESG committee. The
sustainability agenda is discussed at
general meetings across the Group,
where subsidiary directors and key
management are expected to report
back to the Board on sustainability
KPIs. Next financial year the Group
will consider establishing a formal
ESG committee that will include
representatives from the Board and key
roles relevant to the topic.
Sustainability
working group
The Board
Sustainability
champions
Managing directors
68
Annual Report and Accounts for the year ended 30 June 2023 Across the Group, meetings with
subsidiary directors are hosted every
two months. Within each subsidiary,
the managing directors are responsible
for sustainability and climate change,
which are guided by the board. Each
managing director has assigned
a sustainability champion to their
individual business.
Key management personnel have
participated in April’s 2023 net-zero
workshop and will also be joining next
Strategy
Summary of disclosure
Disclosure of the actual and potential
impacts of climate-related risks and
opportunities on the business where
such information is material.
FW Thorpe Plc has a long-standing
commitment to tackling global
environmental challenges, principally
through its core business of
manufacturing energy efficient lighting
equipment. Over the last two decades,
the Group has sought to address its
operational carbon impact, by working
year’s climate risk workshop. FW Thorpe
provides training for all employees on
a range of environmental initiatives
and an employee suggestion box
scheme, with rewards for adopted
ideas. The aim is to educate all existing
employees, and new starters on
sustainability topics.
A sustainability newsletter is circulated
every six months with sustainability
achievements, relevant articles and
communication of future targets
and initiatives.
FW Thorpe’s Sustainability Committee
has purchased Group licenses for
software (One-Click LCA), which will
enable all the Group’s companies to
review and assess its products, and
fine tune their design, material use /
optimisation and efficiency, to reduce
the impact on the environment of
making and selling the product.
towards carbon neutrality for its
manufacturing, sales and distribution
operations. FW Thorpe is certified as
carbon neutral for its Scope 1 and 2
emissions which relates to the sales,
manufacturing and distribution
phases of making our products. The
goal is ultimately to reach net-zero
in 2040, before the UK’s target for
achieving net-zero carbon emissions
by 2050. The Group has made initial
assessments of its GHG emissions,
which will help it to set validated
science-based targets in 2023/24,
in line with the Paris Agreement on
climate change.
FW Thorpe Plc has been officially
recognised as being carbon
neutral since 2012, environmental
management systems ISO 14001
accredited and follows principles of
circular economy under the FW Thorpe
Circular Design Strategy. More details
can be found in the Sustainability
section on page 60.
Our time horizons
Time horizon
Years
Description
Short term
0-5
From 2023 to 2027. Short-term climate risks are most likely to result from legislation
changes, shifts in market preference and pressures, increased costs and external
investment conditions. If the Group does not respond to these pressures, reputational and
financial damage is likely. In the short term, the business strategy will be aligned, to prepare
for medium- and long-term change.
Medium term
5-15
From 2027 to 2035. Effective management of medium-term climate risk, both transitional
and physical, is expected, to require a broader shift in business strategy and challenging
targets for deep de-carbonisation.
Long term
15-30
From 2036 to 2050. Long-term risk assessment reviews the likely outcome of transitional
risk over time. Also, the more prevalent physical risks, including more frequent and extreme
weather events.
The long-term horizon was decided to align with the UK net-zero by 2050 target. Medium term is catered to match with SBTi
interim targets. Finally, the short-term time horizon is based on known and upcoming policies.
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Reporting for Task Force on Climate-Related Financial Disclosures
Risk
Summary of disclosure
Disclosure of how FW Thorpe
identifies, assesses, and manages
climate-related risks.
Risk management
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 annually
reviews the likelihood of risks occurring
and the potential impact they could
have on the business. The Group as a
manufacturer of energy consuming
products has an impact on the
environment in terms of its operations
and its products in use.
Types of climate-related risks
The TCFD provides a framework of two
main categories of climate-related risks.
The main types of risks are physical
(outcomes of changing climate
impacts) and transition (outcomes of
necessary responses to the challenges
presented by climate change and
the need for a transition to the low
carbon economy).
Physical risks are divided into acute
(single events, e.g., wildfires) and
chronic (continuous, e.g., sea level
rise). In the next financial year, the
Group will be modelling the likelihood
and severity of potential impacts
on its operations from flooding,
storm patterns, precipitation, mean
temperatures and sea level rise,
to fully understand the threats and
establish mitigation strategy to
safeguard the future of the business
against climate change.
70
Further development of the Group’s
approach to climate change risk
management is building on the
Group’s evolving understanding of
materiality, time horizons and approach
to risk.
For a wider assessment of climate-
related risks, FW Thorpe has procured
an external consultant, to help it
understand the risks and opportunities.
The consultant will conduct a climate
scenario analysis in the next reporting
year, and provide the Group with a
comprehensive, long-term picture of
the potential impacts. The findings
will be discussed at the Board-level
workshop and integrated into the
Company’s risk management process.
The completed climate risk register will
be presented to the Board in the next
reporting period for approval.
Climate-related transition risks
specifically refer to the risks associated
with the transition to a low-carbon
economy. These risks can have a
substantial impact on businesses and
associated stakeholders. The severity
of transition risks is projected to
grow in the future. Transition risks are
subdivided into market, reputation,
technology, policy and legal risks.
Market risks analysis reviews changing
customer behaviour, market changes
and the increasing cost of raw
materials. Reputational risks will occur
as consumer preferences change and
stakeholder concerns on climate-
related issues grow, demanding a
more rapid change from the sector.
Technology risks cover the transition
to a lower carbon technology and
include the risks around adopting
existing products and services, the
likelihood of failed investment in new
technologies and the overall costs of
adjusting to low carbon operations.
Policy and legal risks develop from the
emerging regulations, which are likely
FW Thorpe has an existing risk
management process in order to assess
and manage the Group’s principal
risks. The Group’s current overall risk
management programme focuses
on the unpredictability of financial
markets and seeks to minimise
potential adverse effects on the Group’s
financial performance. However, FW
Thorpe recognises that climate change
may present risks to the business. As
a responsible business, the Group
acknowledges that it has a duty to
effectively manage and mitigate these
risks. Moving forward, it plans to work
closely with the ESG consultancy to
identify, assess, appraise and address
any risks and, where possible, capitalise
on any opportunities identified.
to be enrolled to lessen climate change
impacts and accelerate the transition
to net-zero. For example, regulations
aligned with a price on greenhouse gas
(GHG) emissions, increasing reporting
requirements (e.g. TCFD reporting)
and mandates on current products
and services, to align them with a low
carbon economy.
Climate scenario analysis
In the next financial year, the Group will
conduct a climate scenario analysis.
Three-time horizons will be used to
provide the analysis with a suitable
level of granularity and coverage. Best,
worst and moderate case scenarios will
be used to consider a broad range of
eventualities.
Climate change cannot be perfectly
predicted. Future outcomes depend on
the level of action taken in the coming
decades. Climate scenario analysis uses
possible global warming pathways, to
envisage potential futures. This allows
a better understanding of the potential
risks and opportunities.
Annual Report and Accounts for the year ended 30 June 2023 Climate-related Risks
Transition Risks
Policy and Legal
Mandates on and
regulation of existing
products and services
FW Thorpe is already subject to mandatory Streamlined Energy and Carbon Reporting (SECR), Energy Savings
Opportunity Scheme (ESOS) and climate-related financial disclosures. The Group is aware that additional
climate-related regulations could be released soon. Moreover, it is paying attention to the international
regulations, due to the international locations of individual businesses. Changes in government legislation
or policy can result in reduction in public sector expenditure. Changing policy increases the risk to the order
book and increases the complexity of access to EU markets.
Markets
Increased cost of energy
and materials
In the next two years the Group is aiming to use expanded climate scenario analysis to understand possible
risks to the supply chain.
The UK’s exit from the European Union has increased the complexity of access to EU markets. Climate
change can have potential impact on supply chains, including an increase in certain raw material prices
and disruption to some shipping routes. We are already experiencing market disruptions that are impacting
the energy supply price, which is likely to continue in the near future.
Technology
Costs to transition
to lower emissions
technology
FW Thorpe is actively reducing its overall carbon footprint and has installed solar panels on the majority of
its manufacturing facilities. Several sites within the Group have no reliance on gas, and the Company intends
to continue reducing its gas consumption in the upcoming years. In the Netherlands, the solar installations
generate enough energy to offset their usage. In the UK and Spain, solar energy will contribute a portion of the
overall energy consumption. No solar power installations have been established at overseas Group sales offices.
The Group has a packaging reduction programme, manages its waste, is transitioning to electric vehicles
where practical and expanding the number of chargers throughout the individual businesses. It has been
working on a net-zero strategy throughout this reporting year and finalised this in April 2023 to incentivise
further long-term decarbonisation.
Existing competitors, powerful new entrants and the continued evolution of technologies in the lighting
industry pose the greatest risk of eroding the Group’s revenue and profitability. The aim is to become market
leaders and reduce GHG emissions and, through research and development (R&D), the Group will continue
to make products and services more efficient, greener and sustainable.
Reputation
Increased stakeholder
concern
Stakeholders’ concern over the Group’s sustainability credentials will continue growing as the world moves
to a decarbonised economy. Many of its competitors are actively incorporating sustainability agenda into
their operations. As an enabler of global decarbonisation, FW Thorpe’s reputation risk is relatively low. The
Group is mitigating it by transparent and detailed communication of its current stands and future objectives.
In the next reporting period we will update our website with the net-zero SBTi validated goals and carbon
reduction achievements.
Physical Risks
FW Thorpe has not yet made a full climate scenario analysis to assess climate-related physical risks to its sites.
A high-level assessment of the primary site in Redditch indicates that the likelihood of extreme weather
events at the Redditch site is low. Climate risk assessment of all locations across the globe will be carried
out in 2023/24 to understand possible impacts and prepare a mitigation strategy.
An acute event is a sudden change in climate conditions leading to extreme weather e.g. heatwave,
cyclones, floods. Whereas chronic is a long-term shift in climate patterns e.g. less rain, warming summers,
sea level rise, and much more gradual. Extreme weather can damage property and assets, which could
cause significant operational impacts. Suppliers may be subject to events of flooding and wildfires, which
may impact operations through shipping delays and increased costs. Acute physical risk will be fully
accessed in the next reporting year.
As a result of rising mean temperatures, the Group has experienced an increase in business disruptions.
Rising mean temperatures will increase energy usage, leading to increased operating costs for the business
and associated operational emissions. Chronic physical risk will be fully assessed in the next reporting year.
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Reporting for Task Force on Climate-Related Financial Disclosures
Climate-related opportunities
The Group will assess the range of
climate-related opportunities in the
next reporting period, through climate
scenario analyses. FW Thorpe is an
enabler of global transition to the low
carbon economy through the types
of products it manufactures and sells.
Global efforts to decarbonise have
become a climate-related opportunity
for the Group to grow its business and
increase profitability. To maintain the
leadership position on the market,
FW Thorpe is constantly investing in
the R&D of new products and services.
Lighting accounts for 5% (2.5 billion
tonnes) of global CO₂ emissions.
A global switch to energy efficient
light emitting diode (LED) technology
could save over 1,400 million tonnes
of CO₂ and avoid the construction
of 1,250 power stations. Most of the
environmental impact is from the
products that the Group manufactures
and sells, especially from the power
they use throughout their lifetime.
The Group believes that its efforts will
appeal to all stakeholders, especially
customers, and improve its business
performance overall.
Image: Real-time solar photovoltaic data from the Thorlux solar installation
Image: Solar photovoltaic (PV) units on the roof of Thorlux’s manufacturing facility
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Annual Report and Accounts for the year ended 30 June 2023 Carbon neutral
to net-zero.
A
Scope 3
Purchased
goods and
services
Capital
goods
Transportation
& distribuition
Business
travel
Leased
assets
Scope 2
Purchased electricity, steam,
heating & cooling
for own use
Scope 1
Company
facilities
Company
vehicles
B
Scope 3
Transportation
& distribution
Processing
of sold
products
Use of sold
products
End-of-life
treatment of
sold products
Leased
assets
U
p
s
t
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e
a
m
a
c
t
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v
i
t
i
e
s
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e
p
o
r
t
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n
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c
o
m
p
a
n
y
D
o
w
n
s
t
r
e
a
m
a
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t
i
v
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e
s
Stock Code: TFW www.fwthorpe.co.uk
73
Our Governance Strategic ReportBusiness OverviewOur FinancialsEmissions from purchased goods and services Emissions from purchased energyEmissions from FW Thorpe manufacturing & operationsEmissions from our goods and services in use
SUSTAINABILITY
TCFD. continued
Reporting for Task Force on Climate-Related Financial Disclosures
Metrics and targets
Summary of disclosure
Disclosure of the metrics and targets
used to assess and manage relevant
climate-related risks and opportunities
where such information is material.
Measuring our
climate impact
FW Thorpe is committed to operating
sustainably and doing what it can
to protect the environment. A range
of metrics are used to measure the
Group’s impact, and it has established
emission reduction targets to
manage the climate-related risks and
opportunities. The Group is working to
minimise its GHG emissions and has
been working to reforest an area in
Monmouthshire in Wales since 2009,
with almost 180,000 trees planted.
FW Thorpe Plc’s environmental
performance will be reported annually
in the future.
To reduce the Group’s impact on
the environment, it must first be
understood and measured. Reducing
GHG emissions is a material topic
for stakeholders. Therefore, in 2022,
FW Thorpe initiated a robust data
collection process to calculate its full
carbon footprint. The Group’s carbon
emission reduction plan is aligned with
the Paris Agreement 1.5°C scenario
(reactive) and full Scope 1, 2 and 3
emissions for the 2021 base year, 2022,
and the current financial year 2023
have been calculated.
Greenhouse gas emissions
In 2022, the Group conducted a
thorough data collection process,
working with a specialist ESG
consultancy, to calculate its full carbon
footprint comprising of Scope 1, 2
and 3 GHG emissions. The Group
followed the Greenhouse Gas Protocol
Corporate Value Chain (Scope 3)
Accounting and Reporting Standards
and the guidelines of ISO14064-1.
An initial assessment of the 15
categories of Scope 3 was conducted
to determine the categories that
are applicable to the business.
Subsequently, the relevant spending
and activity data was collected,
to support the analysis. Emissions
are reported on a consolidation,
operational control approach, as
defined by the GHG Protocol, and all
applicable Scope 3 categories have
been quantified. As this process is
complex, the 2021 data was used to
calculate a baseline year. The Group’s
total GHG emissions (Scopes 1, 2 and
3) were 285,365 tCO2e for 2021, with
Scopes 1 and 2 representing 0.9% and
Scope 3 99.1%.
Group Scope 1, 2 and 3 emissions
Emission Scope
Scope 1
Scope 2 (market-based)
Scope 3
Total
2023
2022
2021
(Restated)*
(Restated)*
% Change
2021 to 2023
1,586
213
213,071
214,870
1,635
596
245,235
247,466
1,493
1,024
282,848
285,365
+6.2%
-79.2%
-24.6%
-24.7%
* Figures restated due to recalibration of Scope 1 data and market-based data is now being used for Scope 2.
74
Annual Report and Accounts for the year ended 30 June 2023 Image: Lightronics receive “De Groene Pluim” award. See page 65.
Emission reduction targets
FW Thorpe has set and will seek
validation by the Science Based
Targets initiative on the following
science-aligned targets:
• Reduce absolute Scope 1 and 2
emissions by 42% by 2030, from
a 2021 base year on a market-
based approach.
• Reduce Scope 3 emissions per
£m revenue 51.6% by 2030,
from a 2021 base year.
• Reduce Scope 1, 2 and 3
emissions by 90% by 2040
from a 2021 base year, in line
with reaching net-zero with a
maximum of 10% of emissions
being offset by this date.
Progress against targets
Scope 1 and 2
Progress against the Group’s near-term Scope 1 and 2 absolute target
3,000
2,500
2,000
1,500
e
2
O
C
t
1,000
500
0
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Actual Scope 1
Actual Scope 2 - Market-based
Near-Term Target
75
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Reporting for Task Force on Climate-Related Financial Disclosures
The Group’s operational emissions
(Scope 1 and 2) represent 0.8% of its
baseline emissions and result from
energy consumption (transport fuels,
gas, and electricity) in controlled assets.
Between 2021 and 2022, the Group
experienced an increase in Scope 1
emissions due to a rebound in driving
after COVID, coupled with a decrease
in market-based Scope 2 emissions,
as subsidiaries began purchasing
renewable electricity. Although
transport emissions continued to
increase in 2023, the switch to electric
vehicles should start to influence these
emissions.
The Group has set a near-term target
to reduce these industrial Scopes 1 and
2 emissions by 42% by 2030, from a
Scope 3
Progress against the Group’s near-term Scope 3 intensity target
2021 base year. This requires an annual
reduction of 4.2%, whilst a total of
28.5% decrease was identified between
2021 and 2023. The Group is currently
ahead of schedule. Going forward, a
mix of energy efficiency measures, fuel
switching, and on-site generation will
help to reduce these emissions.
e
u
n
e
v
e
r
m
£
/
e
2
O
C
t
2,500
2,000
1,500
1,000
500
0
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Actual Scope 3 Intensity
Scope 3 Intensity Target
Calculating the Group’s indirect Scope
3 emissions enables it to identify the
main sources of GHGs outside of its
operations. This process provides a
baseline for making decisions regarding
net-zero. Twelve of the 15 Greenhouse
Gas Protocol Scope 3 categories are
applicable to the business and have
been calculated. The non-applicable
categories are further processing of sold
products (Category 10), downstream
leased assets (Category 13) and
franchises (Category 14). Within Scope
3, the largest component comes from
the use of sold products (Category
11), accounting for 77.6% of baseline
emissions. As the Group sells more
products, this category should increase
in emissions. However, as electricity
grids decarbonise, the emissions per
product will decrease. The Group’s near-
term Scope 3 target requires a 51.6%
decrease in the emissions intensity
per £m revenue, equivalent to 5.7%
annually. Between 2021 and 2023, a
24.6% decrease was achieved, which
is ahead of the interim target. This
was mainly achieved by an increase in
the efficiency of the Group’s products
coupled with the rapid decarbonisation
of electricity grids globally.
Whilst most of our Scope 3 emissions
are outside of the Group’s direct
control, it acknowledges that it
has direct control over business
travel and influence on employee
commuting emissions. Therefore, it will
identify opportunities and prioritise
implementation to reduce these
emissions over the next few years.
76
Annual Report and Accounts for the year ended 30 June 2023
Net-zero
Progress against the Group’s net-zero by 2040 target
300,000
250,000
200,000
e
2
O
C
t
150,000
100,000
50,000
0
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
2
0
2
9
2
0
2
0
3
0
2
1
3
0
2
2
3
0
2
3
3
0
2
4
3
0
2
5
3
0
2
6
3
0
2
7
3
0
2
8
3
0
2
9
3
0
2
0
4
0
2
Scope 1
Scope 2 - Market-Based
Actual Scope 3
Net-zero Target
The Group has set an ambitious net-zero target of 2040, showing its commitment to action on climate change. This net-zero
target requires an annual emissions reduction of 4.7%. Between 2021 and 2023, there has been a 24.7% decrease in total
emissions. The Group is more than three years ahead of schedule. To continue making progress, the Group will continue to
develop highly efficient products and work with suppliers to procure lower-emission materials.
The Group’s Carbon Balance Sheet for 2021, 2022, and 2023
2023
2022
2021
Scope 1
Natural Gas
Transport
Scope 2 – market-based
Scope 3
1: Purchased Goods and Services
2: Capital Goods
3: Fuel-related Emissions
4: Upstream Transport and Distribution
5: Waste Generated in Operations
6: Business Travel
7: Employee Commuting
8: Upstream Leased Assets
9: Downstream Transport and Distribution
10: Further Processing of Sold Products
11: Use of Sold Products
12: End-of-life Treatment of Sold Products
13: Downstream Leased Assets
14: Franchises
15: Investments
Total (market-based)
tCO2e/£m Revenue
1,586
754
832
213
213,071
34,474
2,222
571
2,780
100
379
1,063
278
12
-
166,714
29
-
-
4,449
214,870
1,216
(Restated)*
1,635
960
675
596
245,235
35,404
1,636
594
2,497
178
265
1,104
190
184
-
196,902
36
-
-
6,245
247,466
1,722
(Restated)*
1,493
979
514
1,024
282,848
31,235
1,791
538
1,737
127
435
727
150
285
-
239,087
61
-
-
6,675
285,365
2,420
* Figures restated due to recalibration of Scope 1 data and market-based data is now being used for Scope 2.
Emissions from the use of sold
products have been calculated
using assumptions based on
the following factors:
The power consumed by
the luminaire
The typical hours operated
per annum
The typical dim level which
reduces the power consumed
Emergency light power
10 year life expectancy
77
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials SUSTAINABILITY
TCFD. continued
Reporting for Task Force on Climate-Related Financial Disclosures
Since 2018, the Group’s energy
usage has been monitored, and
the associated emissions have
been calculated in line with the UK
Government’s policy on Streamlined
Energy and Carbon Reporting (SECR).
The Group’s Scope 1 emissions are from
the combustion of natural gas for heat
and processes and the combustion
of transport fuels in Company-owned
assets. Scope 2 emissions are from the
purchase of electricity. The calculation
of these emissions will aid in reducing
the Group’s energy usage, where
possible.
The Group’s Scope 1 and 2 emissions (SECR)
Scope 1
Natural gas
Transport fuels
Scope 2 – Location-based
Scope 2 – Market-based
Total (Market-based)
tCO2e / £m revenue (Market-based)
The Group’s energy consumption
Scope 1
Natural gas
Transport fuels
Scope 2
Total
2023
tCO₂e
2022
tCO2e
(Restated)*
1,585.58
1,635.02
753.38
832.20
747.09
959.83
675.49
821.51
213.33
595.51
1,798.91
2,230.53
10.18
15.52
%
Change
-3.0%
-21.5%
+23.2%
-9.1%
-64.2%
-19.4%
-34.4%
2023
kWh
2022
kWh
(Restated)*
7,514,098
7,912,788
4,118,406
3,395,692
5,258,199
2,654,589
3,512,063
3,941,777
11,026,161
11,854,565
* Figures restated due to recalibration of Scope 1 data and market-based data is now being used for Scope 2.
Energy efficiency
improvements
• All Group companies have now
•
been certified to the international
standards ISO 14001 (Environmental
Management Systems), ISO 45001
(Occupational Health and Safety
Management Systems) and ISO 9001
(Quality Management Systems).
The Group has installed solar
PV units on the roofs of most of
its UK manufacturing facilities,
as well as at Lightronics in the
Netherlands and Zemper in Spain.
The remaining electrical energy
from the grid is now 79% from
renewable electricity.
• All Group companies will be
required to meet ambitious targets
to reduce waste to landfill.
• New product design is to follow
an FW Thorpe Plc agreed Circular
Design Strategy, ensuring products
last even longer, use sustainable
materials in their construction and
are easier to reuse, refurbish or
recycle at the end of their lifetime.
• All Group companies to produce
Environmental Product Declarations
(EPDs) for their best-selling
product ranges and to evaluate
the Life Cycle Assessments (LCAs)
generated to assess and improve
product performance.
• All Group delivery vehicles are to be
a minimum of Euro 6 compliant.
• All Group companies to review
their manufacturing processes
and develop plans to reduce
energy usage.
The majority of Group companies
have electric vehicle (EV) charging
stations at the workplace.
•
• All Group companies to evaluate
emissions from business travel
and actively find ways to reduce
it, without impacting business
performance.
• All Group companies will target
zero plastic bags and zero bubble
wrap usage in its factories and aim
to reach zero single-use plastic from
the supply chain.
• All finished goods packaging is
to be supplied from the Forest
Stewardship Council (FSC)
or equivalent sources. Group
companies will offer a return and
reuse service for product packaging.
• All Group employees are to be
trained in environmental initiatives.
• All Group companies have
appointed a Sustainability
Champion and have a written
sustainability plan.
78
Annual Report and Accounts for the year ended 30 June 2023 Compliance Responsibility
FW Thorpe’s registered Joint CEOs are
responsible for complying with the
Regulations. They must be satisfied
that, to the best of their knowledge,
all relevant information concerning
FW Thorpe’s organisation structure,
properties, activities and energy
supplies has been provided
for calculation.
This report (including the Scope 1 and
2 consumption and CO2e emissions
data) has been developed and
calculated using the GHG Protocol –
A Corporate Accounting and Reporting
Standard (World Business Council for
Sustainable Development and World
Resources Institute, 2004); Greenhouse
Gas Protocol – Scope 2 Guidance
(World Resources Institute, 2015); ISO
14064-1 and ISO 14064-2 (ISO, 2018;
ISO, 2019a); Environmental Reporting
Guidelines: Including Streamlined
Energy and Carbon Reporting
Guidance (HM Government, 2019).
Government Emissions Factor Database
2023 version 1 has been used, utilising
the published kWh gross calorific value
(CV) and kgCO2e emissions factors
relevant for the reporting period
1 July 2022 to 30 June 2023.
Image: Ekeberg School, Oslo, Norway
79
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials 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
Strategic priorities key
Type of risks key
Change in period key
1
2
Focus on high-quality products and good
leadership in technology
Continue to grow the customer base for
Group companies
Strategic
Increase in risk
Operational
Decrease in risk
3 Focus on manufacturing excellence
Financial
No change in risk
4 Continue to develop high-quality people
80
Annual Report and Accounts for the year ended 30 June 2023 Area of risk
Type
of risk
Description
of risk
Mitigation of risk
Possible
impact on
performance
Strategic
priorities
impacted
upon
Change
in period
High
1, 2, 4
•
•
•
•
•
•
•
A
Adverse
economic
conditions
B
Changes in
government
legislation
or policy
C
Competitive
environment
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 Ukraine
conflict 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
Existing
competitors,
powerful new
entrants and
continued
evolution of
technologies
in the lighting
industry eroding
our revenue and
profitability
D
Price changes
Erosion of revenue
and profitability
Broad range of customers in differing
sectors
High quality, technically advanced
products to differentiate the Group from
competitors
Energy efficient products with shorter
payback periods
Actively seek to identify new opportunities
to ensure we maximise our potential of
winning new business
Medium
2, 4
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
Leveraging increasing footprint in Europe
• Offering innovative products and
Medium
1, 2, 3, 4
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 regularly 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
1, 2
81
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Principal risks and uncertainties. continued
Possible
impact on
performance
Strategic
priorities
impacted
upon
Change
in period
High
2, 3
Low
Low
2
2
Medium
1, 3, 4
Area of risk
Type
of risk
Description
of risk
Mitigation of risk
A significant
proportion of the
Group’s revenues
are from products
manufactured
in the Redditch
facility
The Group offers
credit terms which
carry risk of slow
payment and
default
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
A breach of IT
security could
result in the
inability to
operate systems
effectively and
efficiently or
the release of
inappropriate
information
•
•
•
•
•
•
•
•
•
•
•
High level of importance attached to
environmental management systems,
health and safety and preventative
maintenance
Insurance cover is maintained to provide
financial protection where appropriate
Increased production flexibility with the
ability to build products in more than
one manufacturing facility
Credit policy includes an assessment of
the bad debt risk and management of
higher risk customers
The Group maintains a credit insurance
policy for a significant proportion of its
debtors
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
Continual review and monitoring of
potential risks
Computers encrypted where necessary to
protect data
Cyber security awareness training
continues to be delivered to employees
Third party specialists engaged to provide
enhanced support and advice
Critical applications protected by
multi-factor authentication and all
connectivity is through the Virtual Private
Network (VPN)
E
Business
continuity
F
Credit risk
G
Movements
in currency
exchange
H
Cyber security
82
Annual Report and Accounts for the year ended 30 June 2023 Area of risk
I
Exit from the
European
Union
J
Impact of
Ukraine
conflict on
domestic
and global
economies
K
Sustainability
& climate
-related risk
Possible
impact on
performance
Strategic
priorities
impacted
upon
Change
in period
Medium
2, 4
Type
of risk
Description
of risk
Mitigation of risk
Increased
complexity
of access to
EU markets,
customers
in certain EU
territories
actively moving
business from UK
companies.
•
• With the Group having a 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
•
Potential impact
on supply chains
including increase
in certain raw
material prices
and disruption to
some shipping
routes. Impact
of energy supply
price increases.
The Group has
potential exposure
to climate-related
risk that could
impact both its
operations and
the products it
promotes.
•
•
•
•
•
Medium
2, 3
Alternative sources for certain materials
and alternative shipping routes, albeit
with higher costs in some circumstances
Electricity usage has been reduced with
implementation of solar panels at the
majority of manufacturing sites across
the Group
Medium
2, 4
New
Sustainability targets are set each year for
Group companies.
Education of employees to further
develop sustainability and climate-related
understanding, evolving knowledge of the
related risks.
Targeted reduction of total GHG emissions,
reducing the impact of its operations.
Strategic priorities key
Type of risks key
Change in period key
1
2
Focus on high-quality products and good
leadership in technology
Continue to grow the customer base for
Group companies
Strategic
Increase in risk
Operational
Decrease in risk
3 Focus on manufacturing excellence
Financial
No change in risk
4 Continue to develop high-quality people
83
Stock Code: TFW www.fwthorpe.co.ukOur Governance Strategic ReportBusiness OverviewOur Financials Image: Fujifilm, Bedford
Our
Governance.
86
Board of Directors
Directors’ report
Statement of directors’ responsibilities
Directors’ remuneration report
Independent auditors’ report
to the members of FW Thorpe Plc
86
88
94
95
99
84
Business Overview
Strategic Report
Our Governance
Our Financials
Board of Directors.
The Board in
numbers
4
2
1
Mike Allcock
Craig Muncaster
James Thorpe
Andrew Thorpe
Peter Mason
Ian Thorpe
Frans Haafkens
20+ years
1-20 years
Less than one year
Chairman, Joint Group
Chief Executive
Joint Group Chief
Executive, Group Financial
Director and Company
Secretary
Business Development
Director, Thorlux
Lighting
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Appointment/background:
Appointment/background:
Appointment/background:
Appointment/background:
Appointment/background:
Appointment/background:
Appointment/background:
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.
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.
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.
Andrew is the grandson of the
After studying Electrical
Ian, grandson of the Company
Frans holds a Master’s degree in
Company founder, Frederick
Engineering at Aberdeen University,
founder, was Manufacturing
Mechanical & Control Engineering
William Thorpe. After serving an
Peter qualified as a Chartered
Director of Thorlux Lighting from
and an MBA. He is Managing
apprenticeship with the Company,
Accountant with Price Waterhouse
1978 until 1993 when he became
Partner at Dutch investment firm
he has worked in various parts
of the business, leading to the
in 1976. He spent time with Planet
Personnel Director. He became a
i4hi, a company having direct
Group and TI Group before joining
non-executive director on
investments in manufacturing and
positions of Export Sales Director,
FW Thorpe in 1987 as Finance
1 October 1997 and is a member of
technology businesses. He spent his
Manufacturing Director and then
Director. He became Joint Chief
the remuneration committee.
Managing Director of Thorlux
Executive in July 2000. In June
Lighting. In 2000, he became Joint
2010 he became a non-executive
Group Chief Executive and in 2003
director and Chairman of the
Group Chairman, positions he held
remuneration committee following
until July 2017. In July 2019 Andrew
the appointment of his successor.
became a non-executive director
and member of the remuneration
committee.
formative years with McKinsey & Co.
as well as working for a short period
in the UK lighting industry.
Frans is a Dutch national who has
worked with the Group in recent
years supporting the continued
success of its Dutch entities,
Lightronics and Famostar, both as
a consultant and an investor.
Key areas of expertise/
responsibility:
Key areas of expertise/
responsibility:
Key areas of expertise/
responsibility:
Key areas of expertise/
Key areas of expertise/
Key areas of expertise/
Key areas of expertise/
responsibility:
responsibility:
responsibility:
responsibility:
R
R
R
Lighting & Controls Technology,
Product Design/Management,
Industry Knowledge,
Marketing, Strategy
Financial Management,
Commercial/Legal Risk, Investor
Relations, Mergers & Acquisitions,
Company Secretarial
Sales & Marketing, Business
Development, Digital Marketing
Manufacturing, Product Design/
Financial Management,
Manufacturing, Human Resources,
Mergers & Acquisitions, Business
Management, Sales & Marketing,
Governance, Company Secretarial,
Governance, Industry Knowledge
Management, Industry Knowledge,
Industry Knowledge, Strategy,
Industry Knowledge
Strategy
Governance
86
Annual Report and Accounts for the year ended 30 June 2023 Mike Allcock
Craig Muncaster
James Thorpe
Andrew Thorpe
Peter Mason
Ian Thorpe
Frans Haafkens
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Appointment/background:
Appointment/background:
Appointment/background:
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.
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.
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.
Frans holds a Master’s degree in
Mechanical & Control Engineering
and an MBA. He is Managing
Partner at Dutch investment firm
i4hi, a company having direct
investments in manufacturing and
technology businesses. He spent his
formative years with McKinsey & Co.
as well as working for a short period
in the UK lighting industry.
Frans is a Dutch national who has
worked with the Group in recent
years supporting the continued
success of its Dutch entities,
Lightronics and Famostar, both as
a consultant and an investor.
Chairman, Joint Group
Joint Group Chief
Business Development
Chief Executive
Executive, Group Financial
Director, Thorlux
Director and Company
Lighting
Secretary
Mike joined FW Thorpe Plc in
After graduating in Business
1984 as an apprentice working
Administration, Craig qualified
his way to Technical Director for
as a Chartered Management
James graduated from Swansea
University with a BSc in 2000. He
spent 13 years in the IT industry,
Thorlux Lighting in 1998, taking
Accountant in 2000. He has spent
involved in a variety of public and
responsibility for the Company’s
time in the manufacturing and
private sector contracts before
design programme. He was
engineering sectors, previously as
joining FW Thorpe in 2013. During
appointed Group Technical Director
UK Financial Director for Durr, which
his time as Business Development
in 2001 and became Managing
included a number of overseas
Manager at Thorlux, he has been
Director of Thorlux Lighting in
ventures and projects for the wider
responsible for securing a number
2003. Mike is a Chartered Electrical
Group. He joined FW Thorpe in 2010
of high profile projects which
and was appointed Joint Group
have contributed to the growth
Chief Executive in July 2017.
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.
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/
Key areas of expertise/
Key areas of expertise/
responsibility:
responsibility:
responsibility:
Key areas of expertise/
responsibility:
Key areas of expertise/
responsibility:
Key areas of expertise/
responsibility:
Key areas of expertise/
responsibility:
R
R
R
Lighting & Controls Technology,
Financial Management,
Sales & Marketing, Business
Product Design/Management,
Commercial/Legal Risk, Investor
Development, Digital Marketing
Industry Knowledge,
Marketing, Strategy
Relations, Mergers & Acquisitions,
Company Secretarial
Manufacturing, Product Design/
Management, Sales & Marketing,
Industry Knowledge, Strategy,
Governance
Financial Management,
Governance, Company Secretarial,
Industry Knowledge
Manufacturing, Human Resources,
Governance, Industry Knowledge
Mergers & Acquisitions, Business
Management, Industry Knowledge,
Strategy
Committee key
R
Remuneration
Committee
87
Stock Code: TFW www.fwthorpe.co.ukOur FinancialsStrategic Report Our GovernanceBusiness Overview 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 2023.
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 108 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 110. 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 pages
36 and 37 (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
88
regularly at local and Group Board level.
During the year a number of objectives
were achieved.
Principal risks
and uncertainties
The table on pages 81 to 83 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 pages 52 and 53.
Directors
The directors of the Company during
the year and at the date of this report
are set out on pages 86 and 87.
F Haafkens was appointed to the board
on 17 November 2022. In accordance
with the Articles of Association he will
retire from office at the Annual General
Meeting, but offers himself for election
at that meeting.
The directors retiring by rotation are
M Allcock and C Muncaster who,
being eligible, offer themselves for
re-election. M Allcock has a service
contract terminable on two years’
notice. C Muncaster has a service
contract terminable on 12 months’
notice.
Annual Report and Accounts for the year ended 30 June 2023 Directors’ share interests
The details of the directors’ share
interests are set out in the directors’
remuneration report on page 97.
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
financial year and also at the date of
approval of the financial statements.
The Company also purchased and
maintained throughout the financial
year directors’ and officers’ liability
insurance in respect of itself and its
directors.
Board constitution
The Company continues to be
proprietorial in nature and the
directors act as a unitary Board and
as a consequence are unable to see
the benefits of splitting the Board into
sub-committees and in particular of
constituting audit and nomination
committees as matters that would
normally be considered by an audit or
nomination committee are addressed
by the full Board with the non-
executive directors present and the
auditors attending as appropriate.
A remuneration committee has been
established with the following people
serving on it:
P D Mason
Non-executive director and
Chairman of the committee.
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 95 to 98.
offering the shares in question to
existing shareholders.
Where there is a requirement for a
senior personnel or subsidiary board
appointment a sub-committee is
formed. Any appointment to the
Group Board would involve all Board
members in the selection process.
The Board meets regularly during the
year and has a schedule of matters
reserved for its approval, which only
the Board may change.
Substantial
shareholdings
At 12 October 2023, 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
6,839,667 (6.0%)
Estate of C M Brangwin
7,271,550 (6.2%)
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 2023.
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
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 8 set out in the
notice of the Annual General Meeting
will, if it is approved, allow the Company
to exercise the authority contained in
the Articles of Association to purchase
its own shares. The Board has no firm
intention that the Company should
make purchases of its own shares if the
proposed authority becomes effective,
but would like to be able to act quickly
if circumstances arise in which such a
purchase would be desirable.
Purchases will only be made on the
Alternative Investment Market and only
in circumstances where the directors
believe that they are in the best
interests of the shareholders generally.
Furthermore, purchases will only be
made if the directors believe that they
would result in an increase in earnings
per share.
The proposed authority will be limited
by the terms of the special resolution
to the purchase of 11,893,559 ordinary
shares representing 10% of the
Company’s issued ordinary share
capital at 12 October 2023 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
89
Stock Code: TFW www.fwthorpe.co.ukOur FinancialsStrategic Report Our GovernanceBusiness Overview Directors’ report. continued
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 2024. However, in order to maintain
the Board’s flexibility of action it is envisaged that it will be renewed at future Annual General Meetings.
Corporate governance
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
Further disclosure
Find out more in the
Strategic Report on
pages 16 to 83
Read about our
Strategy on
pages 26 and 27
Read about our
Business model on
pages 24 and 25
Find out more in the
Directors’ report on
pages 88 to 93
Commentary
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.
90
Annual Report and Accounts for the year ended 30 June 2023 Extent of
current
compliance
Compliant
Principle
3
Take into account
wider stakeholder
and social
responsibilities and
their implications for
long-term success
4
Compliant
Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
Commentary
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.
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.
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
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.
6
Compliant
Ensure that
between them the
directors have the
necessary up-to-date
experience, skills
and capabilities
Further disclosure
Find out more in the
Strategic Report on
pages 16 to 83 and in
our Sustainability
section on pages 56
to 79
Find out more about
our Principal risk
and uncertainties on
pages 80 to 83 and in
the Directors’ report
on page 88
Find out more in
Our governance
on pages 86 to 105
Read about our Board
of Directors on pages
86 and 87
Read our Directors’
report on pages 88
to 93
Find out more in
Our governance
on pages 86 to 105
Read about our Board
of directors on pages
86 and 87
Read our Directors’
report on pages 88
to 93
91
Stock Code: TFW www.fwthorpe.co.ukOur FinancialsStrategic Report Our GovernanceBusiness Overview Directors’ report. continued
Extent of
current
compliance
Partially
Compliant
Principle
7
Evaluate Board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
8
Compliant
Promote a corporate
culture that is based
on ethical values and
behaviours
9
Compliant
Maintain governance
structures and
processes that are
fit for purpose and
support good decision
making by the Board
10
Compliant
Communicate how the
Company is governed
and is performing
by maintaining
a dialogue with
shareholders and
other relevant
stakeholders
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.
Our core aim is for long-term growth and stability.
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.
Find out more in the
Strategic Report on
pages 16 to 83
Read about our
Strategy on pages
26 and 27
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.
Find out more in the
Directors’ report on
pages 86 to 93
Read about our Board
of directors on pages
86 and 87
Find out more
online at:
www.fwthorpe.co.uk
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.
92
Annual Report and Accounts for the year ended 30 June 2023 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 £35.0m
cash to continue in business for the
foreseeable future, including the
affect of increased costs caused by
the on-going Ukraine and Russia
conflict, where the Group has no
sales, and other global events. 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 16 to 83 and
the Directors’ Report on pages 88 to
93 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
12 October 2023
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
Company Registration Number: 317886
93
Stock Code: TFW www.fwthorpe.co.ukOur FinancialsStrategic Report Our GovernanceBusiness Overview 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
12 October 2023
Statement of directors’
responsibilities.
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’s 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.
The directors are responsible for
preparing the Annual Report and
Accounts and the financial statements
in accordance with applicable law and
regulation.
Company law requires the directors
to prepare financial statements for
each financial year. Under that law the
directors have prepared the group
and the company financial statements
in accordance with UK-adopted
international accounting standards.
Under company law, 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
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 UK-
adopted international accounting
standards have been followed,
subject to any material departures
disclosed and explained in the
financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and Company will continue
in business.
94
Annual Report and Accounts for the year ended 30 June 2023 Directors’ remuneration report.
The Board has prepared this report to
the shareholders, taking into account
sections 420 to 422 of the Companies
Act 2006.
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.
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
200
150
100
50
FW Thorpe
AIM All Share
FTSE Fledging
8
1
0
2
/
6
0
/
0
3
9
1
0
2
/
6
0
/
0
3
0
2
0
2
/
6
0
/
0
2
1
2
0
2
/
6
0
/
0
3
2
2
0
2
/
6
0
/
0
3
3
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 98.
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
and J E Thorpe have service contracts terminable on one year’s notice.
A B Thorpe, P D Mason, I A Thorpe and F Haafkens do not have formal service
contracts with the Company.
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Directors’ emoluments (audited)
Executive directors
2023
Salary/fees
£’000
M Allcock
D Taylor
C Muncaster
J E Thorpe
Non-executive
directors
A B Thorpe
I A Thorpe
P D Mason
A M Cooper
F Haafkens
274
117
305
187
36
36
36
48
63
2023
Bonus
£’000
322
143
322
292
–
–
–
–
–
1,102
1,079
2023
Benefits
£’000
3
14
2
3
15
15
6
2
–
60
2023
Total
£’000
599
274
629
482
51
51
42
50
63
2,241
2023
Share
options
gains
£’000
2022
Share
options
gains
£’000
45
–
45
–
205
–
–
–
–
295
59
–
44
–
–
–
–
–
–
103
2022
Total
£’000
488
207
542
403
49
49
39
40
–
1,817
2023
Total
£’000
644
274
674
482
256
51
42
50
63
2022
Total
£’000
547
207
586
403
49
49
39
40
40
2,536
1,920
The directors’ emoluments exclude contributions to the pension scheme. D Taylor and A M Cooper resigned from the board
on 3 July 2023.
Directors’ pension arrangements (audited)
M Allcock and D Taylor are pensioner members 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
and J E Thorpe are deferred members 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 J E Thorpe 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 to compensate them for the loss of these employer pension contributions. During the financial year the
Company paid pension compensation to M Allcock of £180,953 (2022: £170,358), C Muncaster £51,770 (2022: £44,439), D
Taylor £17,266 (2022: £19,546) and to J E Thorpe £23,150 (2022: £12,016).
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.
96
Annual Report and Accounts for the year ended 30 June 2023 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
2023
£’000
9
2022
£’000
15
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
2022–23
2021–22
Method
Option A
Option A
25th percentile pay ratio
27:1
26:1
Median pay ratio
19:1
18:1
75th percentile pay ratio
9:1
9:1
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 2023. The table below sets out the salary and total pay and benefits for the three quartiles.
Base salary
Total remuneration
25th percentile pay
£23,361
£31,469
Median pay
£32,936
£46,227
75th percentile pay
£52,000
£93,223
Directors’ shareholdings
The directors listed below were in office during the year. Directors’ interests in the share capital of the Company at 30 June
2023 and 30 June 2022 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
F Haafkens
Ordinary shares of
1p Beneficial
2023
221,350
140,137
100,000
2,164,682
25,892,700
25,047,120
626,370
152,597
–
2022
207,500
146,896
80,000
2,164,682
25,812,700
25,047,120
626,370
166,107
–
The market price of the Company’s shares at the beginning and end of the financial year was 380p and 374p respectively, and
the range of market prices during the year was from 335p to 437p.
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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)
A B Thorpe
24 October 2014
200,000
124
M Allcock
24 October 2014
200,000
124
D Taylor
24 October 2014
200,000
124
A M Cooper
24 October 2014
200,000
124
C Muncaster
24 October 2014
200,000
124
Number at 1 July 2022
Awarded
Vested
Exercised
Forfeit
Lapsed
Number at 30 June 2023
A B Thorpe
80,000
–
–
(80,000)
–
–
–
M Allcock
40,000
–
–
(20,000)
–
–
20,000
D Taylor
–
–
–
–
–
–
–
A M Cooper
–
–
–
–
–
–
–
C Muncaster
80,000
–
–
(20,000)
–
–
60,000
There have been no changes in the interests of the directors in the share capital of any Company in the Group during the
period 1 July 2023 to 12 October 2023.
Approved by the Board and signed on its behalf by:
Craig Muncaster
Joint Chief Executive, Group Financial Director and Company Secretary
12 October 2023
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Annual Report and Accounts for the year ended 30 June 2023 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 2023 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 UK-adopted international accounting standards as applied in
accordance with the provisions 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 2023; the Consolidated income
statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, Company
statement of changes in equity and Consolidated and company statements of cash flows 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 other listed entities of public
interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
We have provided no non-audit services to the company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• An audit was conducted of the complete financial information of the three reporting units: Thorlux Lighting (the
Company, located in the UK), Lightronics Participaties B.V. (located in the Netherlands), and TRT Lighting Limited (located
in the UK).
The audit work performed at these three reporting units (2022: four reporting units), together with specified procedures
performed on Electrozemper S.A. (located in Spain), Famostar BV (located in Netherlands) and SchahlLED Lighting
GmbH (located in Germany) and 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 70% (2022: 91%) of profit before tax from the full scope audits.
•
•
Key audit matters
• Defined Benefit Pension Obligation valuation - Liability assumptions (group and parent)
• Valuation of intangible assets acquired in the acquisition of Lumen Intelligence Holding GmbH (group)
• Valuation of the future consideration payable for Electrozemper S.A. and Lumen Intelligence Holding GmbH (group and parent)
Materiality
• Overall group materiality: £1,375,000 (2022: £1,200,000) based on 5% of profit before tax.
• Overall company materiality: £977,000 (2022: £788,000) based on 5% of profit before tax.
• Performance materiality: £1,031,000 (2022: £900,000) (group) and £733,000 (2022: £591,000) (company).
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to the members of FW Thorpe Plc continued
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.
Defined Benefit Pension Obligation valuation - Liability assumptions, Valuation of the future consideration payable for
Electrozemper S.A. and Lumen Intelligence Holding GmbH and the valuation of intangible assets acquired in the acquisition
of Lumen Intelligence Holding GmbH. are new key audit matters this year. Valuation of warranty provisions, Capitalisation
of internal development costs, Impairment considerations over intercompany receivables and the accounting related to
acquisitions of a subsidiary and a joint venture, which were key audit matters last year, are no longer included because of
no issues being identified in prior years and the risk of material misstatement in these balances are low. As such, they are
not considered to be of most significance in the current year. Otherwise, the key audit matters below are consistent with
last year.
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Annual Report and Accounts for the year ended 30 June 2023 Key audit matter
How our audit addressed the key audit matter
Defined Benefit Pension Obligation valuation - Liability
assumptions (group and parent)
Refer to critical accounting estimates and judgements in note 1
to the financial statements and note 22 relating to the pension
scheme. The Group and company operates a hybrid defined
benefit and defined contribution pension scheme and 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, resulting in liabilities
of £28.0m. In making these assumptions the Group and company
takes advice from an independent qualified actuary about which
assumptions best reflect the nature of the obligations to employee
retirement benefits.
Valuation of intangible assets acquired in the acquisition of Lumen
Intelligence Holding GmbH (group)
Refer to critical accounting estimates and judgements in note 1
to the financial statements, note 9 Intangible assets and note 34
Business combination. In September 2022, the Group acquired
80% of the share capital of Lumen Intelligence Holding GmbH
(Lumen). The acquisition has resulted in the creation of £7.1m
of intangible assets, related to the brand name and customer
relationships, based upon total purchase consideration of £19.5m.
We consider the risk to be in relation to the valuation of intangible
assets due to the significance of the acquisition, the value
attributed to intangible assets, and the accounting estimates
and judgements involved in the valuation these assets.
Valuation of the future consideration payable for
Electrozemper S.A. and Lumen Intelligence Holding GmbH
(group and parent)
Refer to critical accounting estimates and judgements in note 1
to the financial statements, note 9 Intangible assets, note 19 Trade
and other payables and note 34 Business combination. In the
prior year (October 2021), the Group acquired 63% of the share
capital of Electrozemper S.A. (Zemper), with a commitment to
purchase the remaining 37% of the share capital, calculated by a
pre-determined earnings multiple used to value the investment.
Further, in the current year (September 2022), the Group acquired
80% of the share capital of Lumen Intelligence Holding GmbH
(Lumen) as detailed above. There is also a commitment to acquire
the remaining shares in Lumen, which is also subject to future
performance conditions. The future consideration payable in both
instance is predominantly driven by future financial performance,
and hence requires estimation.
In undertaking our audit procedures: we obtained and reviewed
the actuary’s report on assumptions and methodology used to
value the scheme liability; compared the assumptions with PwC’s
expected range taking into account the attributes of the scheme
and challenged the actuaries on any unexpected differences;
tested the accuracy of the data used by the actuary to underlying
payroll records and assessed the appropriateness of the related
disclosures. We consider that the valuation of the defined benefit
pension obligation to be appropriate.
In undertaking our audit procedures: we obtained and reviewed
relevant contracts related to the acquisition and management’s
fair value exercise in accordance with the requirements of IFRS
3; assessed the competence, capabilities and objectivity of
management’s external valuers; obtained the valuation reports
and discussed with the external valuers on the methodologies and
key assumptions used; involved our internal valuation experts to
evaluate the methodologies used to determine the fair values of
the intangible assets recognised, and benchmarked the discount
rates applied; compared the assumptions with PwC’s expected
range and challenge management on any unexpected differences;
tested the accuracy of the data used by management to underlying
records; and we reviewed the appropriateness of the accounting
treatment and the related financial statement disclosures. We
consider that the accounting treatment in relation to the valuation
of the intangible assets to be appropriate.
In undertaking our audit procedures: we obtained the sale and
purchase agreements and understood the terms of the future
consideration; obtained management calculations of the future
consideration and understood the key variables and estimates
applied in the calculation; confirmed the viability of the forecasts by
compared forecasted data used for calculations against the actual
achieved results; reviewed the actual performance achieved to
forecast performance from prior years; obtained and understood
variances from forecast and validated explanations; obtained
support for actual stage payments made during the year and how
these compare to accrued amounts; obtained support in relation to
future projections and estimates; we assessed the appropriateness
of the related disclosures. We consider that the accounting
treatment in relation to the future consideration payable to
be appropriate.
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Independent auditors’ report.
to the members of FW Thorpe Plc continued
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, the Netherlands, Spain and
Germany, 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 two reporting units, which, in our view, required
an audit of their complete financial information both due to their size and risk characteristics. These are Thorlux Lighting
(the Company, located in the UK), and Lightronics (located in the Netherlands). We have also performed a full scope audit
on TRT Lighting Limited (located in the UK) due to performing statutory accounts for this entity. This provided coverage of
70% (2022: 91%) of profit before tax for all three full scope entities. The Group engagement team audited Thorlux Lighting
and TRT Lighting Limited whilst Lightronics was audited by PwC 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 both PwC and the non-PwC component audit teams. The audit
work performed at these three reporting units (2022: four), together with specified procedures performed on Electrozemper,
Famostar and SchahlLED and 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.
The work performed by the component auditors 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.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process adopted to assess the extent of the
potential impact of climate risk on the Group and company’s financial statements and support the disclosures made within
the sustainability section of the Strategic report. Given the principal activities of the Group, it is likely that climate risk will
have an impact on the Group’s business but this is not expected until the medium or long term. As part of our audit, we
evaluated management’s climate change risk assessment including the identified physical and transitional risks and the
assessment of the impact of those risks on the Group financial statements. Our procedures did not identify any material
impact as a result of climate risk on the group’s and company’s financial statements.
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:
Financial statements – group
Financial statements – company
Overall materiality
£1,375,000 (2022: £1,200,000).
£977,000 (2022: £788,000).
How we determined it
5% of profit before tax
5% of profit before tax
Rationale for benchmark
applied
Based on the benchmarks used in the annual
report, profit before tax is the primary measure
used by the shareholders in assessing the
performance of the Group.
Based on the benchmarks used in the annual
report, profit before tax is the primary measure
used by the shareholders in assessing the
performance of the Company.
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Annual Report and Accounts for the year ended 30 June 2023
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 £301,000 to £977,000. 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% (2022: 75%) of overall materiality, amounting
to £1,031,000 (2022: £900,000) for the group financial statements and £733,000 (2022: £591,000) for the company financial
statements.
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 £69,000 (group audit) (2022: £60,000) and £49,000 (company audit) (2022: £39,000) 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 going concern model and assessing the assumptions used in management’s
assessment which covers the period to 31 December 2024;
• 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 2023 and 2024 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 in note 1 of
the Annual Report and Accounts 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, which includes reporting based on the
Task Force on Climate-related Financial Disclosures (TCFD) recommendations. 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.
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to the members of FW Thorpe Plc continued
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.
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 2023 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.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
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, 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 employment laws and health and safety regulations, 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 Companies Act 2006, AIM Rules for Companies and taxation
legislation. 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 finance and compliance functions to identify any instances of non-compliance with laws
and regulations;
reviewing minutes of meetings of those charged with governance;
•
104
Annual Report and Accounts for the year ended 30 June 2023 •
•
•
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable
laws and regulations;
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;
reviewing component teams’ key working papers for all in-scope components with a particular focus on the areas
involving judgement and estimates; and
incorporating elements of unpredictability into our audit procedures.
•
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 and the part of the Directors’ remuneration report to be audited 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
12 October 2023
105
Stock Code: TFW www.fwthorpe.co.ukOur FinancialsStrategic Report Our GovernanceBusiness Overview Image: Lahinch Leisure Centre, Ireland
Financial
Report.
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
Notes to the financial statements
Notice of meeting
Financial calendar
108
109
110
111
112
113
114
164
166
106
Strategic ReportOur Governance Our FinancialsBusiness Overview 2023
£’000
2022
£’000
176,749
(98,891)
77,858
(19,214)
( 31,292)
480
27,832
716
(1,094)
(520)
26,934
(5,000)
21,934
143,715
(80,440)
63,275
(15,501)
(23,482)
423
24,715
527
(1,367)
228
24,103
(4,030)
20,073
2022
pence
17.16
17.13
Consolidated income statement.
For the year ended 30 June 2023
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income
Operating profit
Finance income
Finance expense
Share of (loss)/profit of joint ventures
Profit before income tax
Income tax expense
Profit for the year
Notes
2
3
5
5
13
6
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
2023
pence
18.72
18.70
The notes on pages 114 to 163 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.
108
Annual Report and Accounts for the year ended 30 June 2023 Consolidated statement of comprehensive income.
For the year ended 30 June 2023
Profit for the year:
Other comprehensive income/(expenses)
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
Movement on associated deferred tax
Actuarial (loss)/gain on pension scheme
Movement on unrecognised pension scheme surplus
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive income for the year
The notes on pages 114 to 163 form part of these financial statements.
Notes
14
24
22
22
2023
£’000
21,934
231
231
(105)
26
(123)
177
(25)
206
22,140
2022
£’000
20,073
(268)
(268)
(57)
14
953
(1,143)
(233)
(501)
19,572
109
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Consolidated and company statements
of financial position.
As at 30 June 2023
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
Deferred income tax assets
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
Financial liabilities
Lease liabilities
Current income tax liabilities
Total current liabilities
Net current assets
Non-current liabilities
Other payables
Financial liabilities
Lease liabilities
Provisions for liabilities and charges
Deferred income tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued 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
Notes
8
9
10
11
12
13
14
24
15
16
12
17
18
19
20
21
19
20
21
23
24
25
26
26
26
Group
Company
2023
£’000
38,763
70,891
–
1,986
1,587
5,592
3,364
382
122,565
33,437
35,733
1,266
4
35,013
105,453
228,018
(37,457)
(1,435)
(812)
(1,143)
(40,847)
64,606
(11,987)
(1,461)
(3,822)
(3,299)
(6,261)
(26,830)
(67,677)
160,341
1,189
2,976
137
2,039
139,392
21,934
(7,326)
154,000
160,341
2022
£’000
33,818
51,865
–
1,984
1,124
6,112
3,470
120
98,493
32,758
33,018
1,800
5,079
35,505
108,160
206,653
(35,801)
(332)
(506)
(641)
(37,280)
70,880
(12,880)
(1,830)
(2,510)
(2,536)
(4,264)
(24,020)
(61,300)
145,353
1,189
2,827
137
1,808
131,631
20,073
(12,312)
139,392
145,353
2023
£’000
11,745
3,060
20,486
9,736
240
–
3,334
–
48,601
15,425
26,610
51,886
–
25,527
119,448
168,049
(23,102)
–
(7)
–
(23,109)
96,339
–
–
(19)
(1,133)
(1,259)
(2,411)
(25,520)
142,529
1,189
2,976
137
–
128,587
16,966
(7,326)
138,227
142,529
2022
£’000
11,070
3,531
20,486
9,967
31,882
–
3,439
–
80,375
16,976
24,480
1,800
5,075
28,221
76,552
156,927
(22,425)
–
–
–
(22,425)
54,127
–
–
–
(879)
(883)
(1,762)
(24,187)
132,740
1,189
2,827
137
–
127,301
13,598
(12,312)
128,587
132,740
The notes on pages 114 to 163 form part of these financial statements.
The financial statements on pages 108 to 113 were approved by the Board on 12 October 2023 and signed on its behalf by
Mike Allcock
Craig Muncaster
Company Registration Number: 317886
110
Annual Report and Accounts for the year ended 30 June 2023 Consolidated statement of changes in equity.
For the year ended 30 June 2023
Balance at 1 July 2021
Comprehensive income
Profit for the year to 30 June 2022
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
Exchange differences on translation of
foreign operations
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Total transactions with owners
Balance at 30 June 2022
Comprehensive income
Profit for the year to 30 June 2023
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
Exchange differences on translation of
foreign operations
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Total transactions with owners
Balance at 30 June 2023
Issued
share
capital
£’000
1,189
Share
premium
account
£’000
1,960
Notes
Capital
redemption
reserve
£’000
Foreign
currency
translation
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
137
2,076
131,631
136,993
22
22
14
24
27
22
22
14
24
27
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
867
–
867
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,073
20,073
953
953
(1,143)
(1,143)
(57)
14
(57)
14
(268)
(268)
–
(268)
19,840
19,572
–
–
–
–
867
(12,079)
(12,079)
(12,079)
(11,212)
1,189
2,827
137
1,808
139,392
145,353
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
149
–
149
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
21,934
(123)
21,934
(123)
177
177
(105)
26
(105)
26
231
231
–
231
21,909
22,140
–
–
–
–
(7,301)
(7,301)
149
(7,301)
(7,152)
1,189
2,976
137
2,039
154,000
160,341
The notes on pages 114 to 163 form part of these financial statements.
111
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Company statement of changes in equity.
For the year ended 30 June 2023
Balance at 1 July 2021
Comprehensive income
Profit for the year to 30 June 2022
Actuarial gain on pension scheme
Movement on unrecognised pension scheme
surplus
Revaluation of financial assets at fair value
through other comprehensive income
Movement on deferred tax associated to financial
assets at fair value through other comprehensive
income
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Total transactions with owners
Balance at 30 June 2022
Comprehensive income
Profit for the year to 30 June 2023
Actuarial loss on pension scheme
Movement on unrecognised pension scheme
surplus
Revaluation of financial assets at fair value
through other comprehensive income
Movement on deferred tax associated to financial
assets at fair value through other comprehensive
income
Total comprehensive income
Transactions with owners
Shares issued from exercised options
Dividends paid to shareholders
Total transactions with owners
Balance at 30 June 2023
Notes
Issued
share
capital
£’000
1,189
Share
premium
account
£’000
1,960
Capital
redemption
reserve
£’000
137
22
22
14
24
27
22
22
14
24
27
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
867
–
867
2,827
–
–
–
–
–
–
149
–
149
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
–
–
–
Retained
earnings
£’000
127,301
13,598
953
Total
equity
£’000
130,587
13,598
953
(1,143)
(1,143)
(57)
(57)
14
13,365
14
13,365
–
(12,079)
(12,079)
128,587
867
(12,079)
(11,212)
132,740
16,966
(123)
177
(105)
26
16,941
–
(7,301)
(7,301)
16,966
(123)
177
(105)
26
16,941
149
(7,301)
(7,152)
1,189
2,976
137
138,227
142,529
The notes on pages 114 to 163 form part of these financial statements.
112
Annual Report and Accounts for the year ended 30 June 2023 Consolidated and company statements of cash flows.
For the year ended 30 June 2023
Notes
29
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
Purchases of intangible assets
Purchases of subsidiaries (net of cash acquired)
Purchase of shares in subsidiaries
Purchase of investment property
Net sale of financial assets at fair value through
other Comprehensive Income
Investment in joint venture
Property rental and similar income
Dividend income
Net withdrawal of short-term financial assets
Interest received
Receipts from loans receivable
Issue of loans receivables
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from the issuance of ordinary shares
Addition of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Principal element of lease payments
Payment of interest
Dividends paid to Company’s shareholders
27
Net cash used in financing activities
Effects of exchange rate changes on cash
Net decrease 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 114 to 163 form part of these financial statements.
Group
2023
£’000
36,216
(4,341)
31,875
(7,739)
535
(2,255)
(12,602)
(6,445)
(22)
1
–
93
209
5,075
434
1,813
(1,748)
(22,651)
149
203
1,039
(2,532)
(789)
(339)
(7,301)
(9,570)
(146)
(492)
35,505
35,013
2022
£’000
24,789
(5,049)
19,740
(5,510)
423
(2,366)
(14,625)
(15,219)
(36)
268
(4,958)
113
246
18,524
218
–
(806)
(23,728)
867
236
–
(1,271)
(535)
(139)
(12,079)
(12,921)
146
(16,763)
52,268
35,505
Company
2023
£’000
22,506
(1,294)
21,212
(2,699)
369
(993)
–
–
(22)
–
–
431
1,059
5,075
483
2,524
(22,885)
(16,658)
149
–
–
–
(5)
(25)
(7,301)
(7,182)
(66)
(2,694)
28,221
25,527
2022
£’000
14,982
(1,568)
13,414
(2,024)
301
(1,234)
(3)
(15,219)
(36)
268
–
451
946
18,528
277
–
(23,387)
(21,132)
867
–
–
–
–
–
(12,079)
(11,212)
87
(18,843)
47,064
28,221
113
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements.
For the year ended 30 June 2023
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 UK adopted
International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting
under those standards, with future changes being subject to endorsement by the UK Endorsement Board.
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 and contingent consideration that are measured at fair value.
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 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 £35.0m cash to
continue in business for the foreseeable future, including the affect of increased costs caused by the on-going Ukraine
and Russia conflict, where the Group has no sales, and other global events. The directors have also produced a severe, but
plausible downside scenario that demonstrates that the Group could cover its cash commitments over the following year
from approving these accounts. For this reason, the directors 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.
Non-controlling interests
The group do not recognise non-controlling interests in an acquired entity when there is a commitment and obligation to
acquire the non-controlling interests of the acquired entity. The acquired entity is consolidated as if it is wholly owned by
the Group since acquisition. Any profits attributable to non-controlling interests, if any, are treated as finance expense of the
Group.
114
Annual Report and Accounts for the year ended 30 June 2023 1 Accounting policies continued
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration agreement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed on a business combination are measured initially at their fair values at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
Equity accounted investments 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.
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 are transferred to the customer, or
the service is performed, 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).
115
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
1 Accounting policies continued
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.
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 twelve operating segments based on the products and customer base in the lighting market.
The largest businesses, on an ongoing basis, are Thorlux (which includes the businesses of Thorlux Lighting Limited and
SchahlLED Lighting GmbH), FW Thorpe Nederland B.V. (formerly Lightronics Participaties B.V.) (which includes the businesses
of Lightronics B.V. and Famostar Emergency Lighting B.V.) and Zemper Group. 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.
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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 the income statement, unless the changes to the pension plan are
conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-
service costs are amortised on a straight-line basis over the vesting period.
For defined contribution plans and pure defined contribution elements, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis.
The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as
employee benefit expense in the income statement as they fall due, or as an accrued or prepaid expense. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. A defined benefit
surplus is only recognised if it meets the following criteria: if the Group has an unconditional right to a refund; or if the Group
can realise it at some point during the life of the plan or when the plan liabilities are settled. If the criteria are not met then a
defined benefit surplus is not recognised.
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. The translation of financial statements from foreign
currencies is recognised in the foreign currency translation reserve and in the consolidated statement of comprehensive
income at the prevailing exchange rates.
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.
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Dividend distribution
Final dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the
period in which the dividends are approved by the Company’s shareholders.
Interim dividends are recognised as a liability in the Group’s financial statements when approved by the directors.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses where applicable.
Cost includes the original purchase price together with the costs attributable to bringing the asset to its working condition
for its intended use.
Depreciation is calculated on a straight-line basis to write down the cost less estimated residual value of all plant and
equipment assets by equal instalments over their expected useful life. 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.
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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;
•
•
• Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset
There is an ability to use or sell the intangible asset;
It can be demonstrated how the intangible asset will generate probable future economic benefits;
•
are available; and
The expenditure attributable to the intangible asset during its development can be reliably measured. Other
development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
The economic success for development activities is uncertain and carrying amounts are reviewed at each 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%.
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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
Customer Relationships
12%-14%
10%–20%
7%-17%
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.
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.
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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.
Financial assets at fair value through other comprehensive income (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.
Financial assets at fair value through profit and loss (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.
•
•
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. Raw materials include items that are both used in the
production of finished goods and items used in the production of other raw material items..
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling
expenses. A provision is made against the cost of slow-moving, obsolete and other stock lines based on the net realisable
value.
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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, such 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.
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 cash and cash equivalents and certain other receivables which generate interest income, and
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.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and
equipment are included in non-current liabilities as deferred income, and they are credited to profit or loss
on a straight-line basis over the expected lives of the related assets.
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Financial liabilities
Financial liabilities are initially recognised at fair value, net of transaction costs incurred and subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the financial liability using the effective interest rate method. Fees paid on the establishment
of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent that there is no evidence that
it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.
Financial liabilities are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss as other income or finance costs.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
Costs for financial liabilities are expensed in the period in which they occur.
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.
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Critical accounting estimates and judgements
The presentation of the annual financial statements in accordance with UK adopted International Accounting Standards and
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:
Impairment of 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 earnings before interest, tax, depreciation and
amortisation (EBITDA) (which equates to operating profit adjusted for effect of depreciation and amortisation) 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, dependent 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 23 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 £160,000.
Zemper non-controlling interests
The Group has the obligation to purchase the remaining shares of the Zemper business in tranches over the next 2 years. To calculate
the expected repurchase value the Group has considered the recent and budgeted future performance of the Zemper business
analysing forecasted EBITDA, revenue and costs upon which the obligation is based. This analysis is reviewed and updated each year and,
if necessary, adjustments are made to ensure that the provision value reflects the best current estimate of settlement with movements
recognised as a share-based payment charge. If the forecast EBITDA assumption were to increase by 5%, the resulting deferred
consideration would increase by £473,000. Notes 19 contain details of the outstanding obligations.
Lumen (SchahlLED) non-controlling interests
The Group has the obligation to purchase the remaining shares of the Lumen business in tranches over the next 2 years. To calculate the
expected repurchase value the Group has considered the recent and budgeted future performance of the Lumen business analysing
forecasted EBITDA, revenue and costs upon which the obligation is based. This analysis is reviewed and updated each year and, if
necessary, adjustments are made to ensure that the provision value reflects the best current estimate of settlement with movements
recognised as a share-based payment charge. If the forecast EBITDA assumption were to increase by 5%, the resulting contingent
consideration would increase by £330,000. Notes 19 and 34 contain details of the outstanding obligations.
Allocation of intangible assets at acquisitions
On acquisition of new businesses, the Group undertakes valuation exercise to ascertain the fair values of various intangible assets. The
valuation of these intangible assets involves identifying the types of intangible assets, estimation on inputs such as future EBITDA of the
acquired business to be generated by these intangible assets, the periods for which these intangible assets would benefit the acquired
business and discount rates used.
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 Limited to ensure their appropriateness. Note 22 contains
details of the retirement benefit obligations.
Inter-company receivables/loans impairment
The Company provides for expected credit losses that may arise from under-performing loans to and receivables from 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 100% and 45%. If the expected credit loss assumption were to increase to 55% there would be an extra charge of
£206,000 to the Company.
Estimates
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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.
Zemper non-controlling interests
The Group has the obligation to purchase the remaining shares of the Zemper business in tranches over the next 2 years. In
determining the expected purchase price the Group has assumed the repurchase will be made in the 2 tranches commencing
in September 2023 and ending in September 2024 thereby assessing the expected purchase price at each of these dates.
Lumen non-controlling interests
The Group has the obligation to purchase the remaining shares of the Lumen business from September 2025. In determining
the expected purchase price the Group has assumed the repurchase will be made commencing in September 2025 thereby
assessing the expected purchase price at the date.
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.
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 an
decrease by 1% in exchange rates on each currency other than sterling, the cash and cash equivalents would decrease by
£70,000. The risk is managed by maintaining relatively low foreign currency balances and selling or buying foreign 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.
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(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.
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.
126
Annual Report and Accounts for the year ended 30 June 2023 1 Accounting policies continued
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.
When ordinary shares are issued to shareholders by the Company, the face value of the ordinary shares issued is credited to
Issued share capital where the excess of the consideration paid by shareholders over the face value of the ordinary shares
issued is credited to share premium account.
Where any Group company purchases the Company’s issued 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.
When shares are cancelled, the related face value of the cancelled shares are deducted from the Company’s issued share
capital and credited to the Company’s capital redemption reserve.
Share-based payments
Senior executives of the Group receive remuneration in the form of share-based payments through the executive share
ownership plan. 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.
Firm commitment
Where the Group has an obligation to pay outstanding consideration in a business combination, a liability is recognised
equal to the calculated future fair value as at the date of the statement of financial position.
127
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
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 twelve 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 business acquired through acquisition of Lumen Intelligence Holding GmbH in September 2022 is included in this
segment in accordance with the Group’s internal reporting. The businesses in the Netherlands, Lightronics B.V. and Famostar
Emergency Lighting B.V., are material subsidiaries and disclosed separately as Netherlands companies. The businesses in the
Zemper Group are also material and disclosed separately as the Zemper Group.
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.
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.
Year to 30 June 2023
Revenue to external customers
Revenue to other group companies
Total revenue
EBITDA
Depreciation and amortisation
Operating profit before acquisition
adjustments
Operating profit
Net finance expense
Share of loss of joint ventures
Profit before income tax
Thorlux
£’000
101,859
3,601
105,460
21,458
4,212
18,062
17,246
Netherlands
companies
£’000
Zemper Group
£’000
Other
companies
£’000
Inter-
segment
adjustments
£’000
Total
continuing
operations
£’000
36,226
417
36,643
7,952
983
7,187
6,969
19,328
–
19,328
4,205
2,307
2,801
1,898
19,336
4,667
24,003
2,392
1,261
1,131
1,131
–
(8,685)
(8,685)
588
–
588
588
176,749
–
176,749
36,595
8,763
29,769
27,832
(378)
(520)
26,934
Included in the Thorlux segment are additional revenues from Lumen (SchahlLED) of £16.9m and operating profits of £1.4m. Acquisition adjustments
includes amortisation of intangible assets.
Year to 30 June 2022
Revenue to external customers
Revenue to other group companies
Total revenue
EBITDA
Depreciation and amortisation
Operating profit before acquisition
adjustments
Operating profit
Net finance expense
Share of profit of joint ventures
Profit before income tax
128
78,912
5,171
84,083
16,887
3,378
13,509
13,509
34,676
377
35,053
8,514
1,043
7,846
7,471
14,152
–
14,152
3,107
1,525
2,242
1,582
15,975
5,794
21,769
2,692
1,045
1,647
1,647
–
(11,342)
(11,342)
506
–
506
506
143,715
–
143,715
31,706
6,991
25,750
24,715
(840)
228
24,103
Annual Report and Accounts for the year ended 30 June 2023 2 Segmental analysis continued
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 five main areas, the UK, the Netherlands, Germany, 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
Germany
Rest of Europe
Rest of the World
2023
£’000
89,917
31,845
21,548
30,039
3,400
2022
£’000
(Restated)*
83,242
30,323
8,205
19,139
2,806
176,749
143,715
* Figures are restated as a result of inclusion of Germany as separate geographical segment in the current year.
(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.
2023 (£’000)
UK
Netherlands
Germany
Rest of Europe
Rest of the World
2022 (£’000) (Restated)*
UK
Netherlands
Germany
Rest of Europe
Rest of the World
* Figures are restated as a result of inclusion of Germany as separate geographical segment in the current year.
Light fittings
Services
85,193
31,845
18,034
29,668
3,400
4,724
–
3,514
371
–
Total
89,917
31,845
21,548
30,039
3,400
168,140
8,609
176,749
Light
Fittings
78,713
30,323
8,205
19,139
2,806
Services
4,529
–
–
–
–
Total
83,242
30,323
8,205
19,139
2,806
139,186
4,529
143,715
129
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
3 Operating profit
Profit on disposals of property, plant and equipment
Depreciation of investment property (note 11)
Depreciation of property, plant and equipment
– owned assets
– right-of-use assets (notes 8 and 21)
Amortisation of intangible assets (note 9)
Share appreciation rights (with associated share-based payment charges)
Cost of inventories recognised as an expense
Research and development expenditure credit
Government grants
Currency gains in income statement
Services provided by the Company’s auditors
Fees payable to the Company’s auditors for audit of financial statements
Fees payable to the Company’s auditors and its associates for other services
– Audit of the Company’s subsidiaries
2023
£’000
(192)
20
3,675
614
4,454
–
72,956
(382)
(122)
(539)
2023
£’000
276
98
374
2022
£’000
(197)
19
3,303
456
3,213
(348)
55,608
(306)
(117)
(479)
2022
£’000
241
48
289
During the year there were no non-audit services provided by PricewaterhouseCoopers LLP.
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
Company
2023
Number
2022
Number
2023
Number
2022
Number
432
257
255
944
408
229
232
869
260
121
129
510
Group
Company
2023
£’000
40,511
5,222
2,174
47,907
2022
£’000
34,968
4,497
1,650
41,115
2023
£’000
22,783
2,203
1,434
26,420
227
111
130
468
2022
£’000
20,869
2,349
1,008
24,226
Included in wages and salaries are £2,319,000 (2022: £2,365,000) of temporary employees costs.
Other pension costs include contributions to pension schemes and other employer’s pension related charges comprising
life assurance of £99,000 (2022: £80,000), pension administration and professional charges of £116,000 (2022: £113,000) and
private pension schemes amounting to £5,000 (2022: £5,000).
130
Annual Report and Accounts for the year ended 30 June 2023 4 Employee information continued
Contributions to the defined contribution section amounted to £229,000 (2022: £236,000) and contributions to other
schemes administered independently of the FW Thorpe pension schemes amounted to £1,262,000 (2022: £1,067,000).
Directors’ emoluments
Aggregate emoluments
Contributions to money purchase schemes
Group
Company
2023
£’000
2,536
9
2,545
2022
£’000
1,920
15
1,935
2023
£’000
2,340
9
2,349
2022
£’000
1,713
15
1,728
For the year ended 30 June 2023 no retirement benefits were accruing to any director (2022: nil) under the defined benefit
scheme and to J E Thorpe (2022: J E Thorpe) under the defined contribution scheme. Additionally, compensation payments
for the loss of pension contributions totalling £273,000 (2022: £246,000) were made to 4 (2022: 4) directors.
Highest paid director
Total of emoluments and amounts receivable
Group
Company
2023
£’000
674
2022
£’000
586
2023
£’000
674
2022
£’000
586
Compensation payments for the loss of pension contributions for the highest paid director were £52,000 (2022: £44,000).
The key management personnel are the Group Board directors.
Further details are provided in the directors’ remuneration report on pages 95 to 98.
5 Net finance expense
Finance income
Current assets
Interest receivable
Non-current assets
Dividend income on financial assets at fair value through other comprehensive income
Net rental income
Loan interest income
Gain on disposal of financial assets
Finance expense
Current liabilities
Interest payable
Lease liability interest expense
Non-controlling interest
Non-current liabilities
Loan interest expense
Fair value adjustment on loans
Net finance expense
2023
£’000
2022
£’000
236
209
103
168
–
716
94
236
755
9
–
49
247
113
114
4
527
53
139
613
55
507
1,094
(378)
1,367
(840)
131
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview
Notes to the financial statements. continued
For the year ended 30 June 2023
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
2023
£’000
5,515
(313)
5,202
(202)
(202)
5,000
The tax assessed for the year is lower (2022: lower) than the standard rate of corporation tax in the UK of 20.50%
(2022: 19.00%). The differences are explained below:
Profit before income tax
Profit on ordinary activities multiplied by the standard rate in the UK of 20.5% (2022: 19.0%)
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
2023
£’000
26,934
5,521
1,150
(145)
(313)
(1,718)
505
5,000
2022
£’000
4,717
(279)
4,438
(408)
(408)
4,030
2022
£’000
24,103
4,580
329
(348)
(279)
(812)
560
4,030
The effective tax rate was 18.56% (2022: 16.72%). Adjustments in respect of prior years relate to refunds received for prudent
assumptions on additional investment allowances and patent box relief in the tax calculations.
The UK corporation tax rate increased from 19% to 25% from 1 April 2023, which was substantively enacted in May 2021 and
an average standard rate of 20.50% is applicable to the Company during the current year. Deferred tax assets and liabilities have
been calculated based on a rate at which they are expected to crystallise.
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
2023
117,199,805
21,934
18.72
2022
116,953,866
20,073
17.16
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
2023
117,294,937
21,934
18.70
2022
117,209,308
20,073
17.13
132
Annual Report and Accounts for the year ended 30 June 2023 8 Property, plant and equipment
Group
* Acquisition of subsidiaries are the assets acquired from the purchase of the Lumen companies with a fair value of £146,000.
22,008
12,931
3,824
38,763
4,590
7,128
27
11,745
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
25,354
–
2,892
–
(27)
28,219
5,477
–
738
–
(4)
6,211
33,795
50
4,847
(970)
(33)
37,689
22,518
–
2,937
(685)
(12)
24,758
Right-
of-use
assets
£’000
4,356
134
1,751
(278)
(21)
5,942
1,692
38
614
(220)
(6)
2,118
Total
£’000
63,505
184
9,490
(1,248)
(81)
71,850
29,687
38
4,289
(905)
(22)
33,087
Company
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right-of -use
assets
£’000
6,592
–
734
–
–
7,326
2,559
–
177
–
–
2,736
21,965
–
1,965
(662)
–
23,268
14,928
–
1,660
(448)
–
16,140
–
–
31
–
–
31
–
–
4
–
–
4
Total
£’000
28,557
–
2,730
(662)
–
30,625
17,487
–
1,841
(448)
–
18,880
Company
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
Right-of -use
assets
£’000
Group
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
22,094
975
2,241
(1)
45
25,354
4,638
234
600
–
5
5,477
27,662
3,965
3,037
(884)
15
33,795
17,345
3,175
2,703
(714)
9
22,518
Right-
of-use
assets
£’000
895
3,534
232
(303)
(2)
4,356
417
1,062
456
(248)
5
1,692
Total
£’000
50,651
8,474
5,510
(1,188)
58
63,505
22,400
4,471
3,759
(962)
19
29,687
6,529
–
63
–
–
6,592
2,399
–
160
–
–
2,559
20,661
–
1,961
(657)
–
21,965
13,773
–
1,686
(531)
–
14,928
Total
£’000
27,190
–
2,024
(657)
–
28,557
16,172
–
1,846
(531)
–
17,487
11,070
–
–
–
–
–
–
–
–
–
–
–
–
–
Cost
At 1 July 2022
Acquisition of subsidiaries*
Additions
Disposals
Currency translation
At 30 June 2023
Accumulated depreciation
At 1 July 2022
Acquisition of subsidiaries*
Charge for the year
Disposals
Currency translation
At 30 June 2023
Net book amount
At 30 June 2023
Cost
At 1 July 2021
Acquisition of subsidiaries*
Additions
Disposals
Currency translation
At 30 June 2022
Accumulated depreciation
At 1 July 2021
Acquisition of subsidiaries*
Charge for the year
Disposals
Currency translation
At 30 June 2022
Net book amount
At 30 June 2022
19,877
11,277
2,664
33,818
4,033
7,037
* Acquisition of subsidiaries are the assets acquired from the purchase of the Zemper companies with a fair value of £4,003,000.
Freehold land which was not depreciated at 30 June 2023 amounted to £758,000 (2022: £758,000) (Group) and £500,000
(2022: £500,000) (Company).
133
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
9 Intangible assets
Group 2023
Cost
At 1 July 2022
Acquisition of subsidiaries*
Additions
Disposals
Write-offs
Currency translation
At 30 June 2023
Accumulated amortisation
At 1 July 2022
Charge for the year
Disposals
Write-offs
Currency translation
At 30 June 2023
Net book amount
At 30 June 2023
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand
name
£’000
Customer
relationship
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
Total
£’000
32,778
14,624
–
–
–
(399)
47,003
252
–
–
–
(19)
233
16,320
–
1,874
–
(4,228)
(10)
13,956
10,009
2,152
–
(4,228)
(8)
7,925
2,895
–
–
–
–
(2)
2,893
2,495
151
–
–
(3)
2,643
3,845
1,354
–
–
–
(35)
5,164
1,273
434
–
–
(5)
1,702
9,460
5,759
–
–
–
(141)
15,078
473
1,350
–
–
(17)
1,806
3,344
38
381
(12)
–
(4)
3,747
2,460
367
(1)
–
–
2,826
159
–
–
–
–
–
159
156
–
–
–
–
156
182
–
–
–
–
–
182
–
–
–
–
–
–
68,983
21,775
2,255
(12)
(4,228)
(591)
88,182
17,118
4,454
(1)
(4,228)
(52)
17,291
46,770
6,031
250
3,462
13,272
921
3
182
70,891
* Acquisition of subsidiaries are the assets acquired from the purchase of the Lumen companies with a fair value of £7,151,000, excluding goodwill.
Write-offs relate to development assets where no further economic benefits will be obtained.
Group 2022
Cost
At 1 July 2021
Acquisition of subsidiaries*
Additions
Currency translation
At 30 June 2022
Accumulated
amortisation
At 1 July 2021
Acquisition of subsidiaries*
Charge for the year
Currency translation
At 30 June 2022
Net book amount
At 30 June 2022
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand
name
£’000
Customer
relationship
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
Total
£’000
14,431
18,320
–
27
32,778
241
–
–
11
252
7,871
6,346
2,096
7
16,320
4,415
3,770
1,820
4
10,009
2,846
45
–
4
2,895
2,179
–
308
8
2,495
1,257
2,588
–
–
3,845
1,006
–
262
5
1,273
–
9,468
–
(8)
9,460
–
–
465
8
473
2,811
266
267
–
3,344
1,852
250
358
–
2,460
150
6
3
–
159
150
6
–
–
156
182
–
–
–
182
–
–
–
–
–
29,548
37,039
2,366
30
68,983
9,843
4,026
3,213
36
17,118
32,526
6,311
400
2,572
8,987
884
3
182
51,865
* Acquisition of subsidiaries are the assets acquired from the purchase of the Zemper companies with a fair value of £14,693,000, excluding goodwill.
Amortisation of £4,454,000 (2022: £3,213,000) is included in the administrative expenses. Included in goodwill are amounts
of £285,000 (2022: £285,000) arising from the acquisition of Solite Europe Limited in 2009, £2,618,000 (2022: £2,618,000)
arising from the acquisition of Portland Lighting Limited in 2011, €7,784,000 (£6,692,000) (2022: €7,784,000 (£6,698,000))
arising from the acquisition of FW Thorpe Nederland B.V. (formerly Lightronics Participaties B.V.) in 2015, AU$478,000
(£252,000) (2022: AU$478,000 (£262,000)) arising from the acquisition of Thorlux Australasia Pty Ltd in 2016, €5,057,000
(£4,348,000) (2022: €5,057,000 (£4,351,000)) arising from the acquisition of Famostar Emergency Lighting B.V. in December
2017, €21,273,000 (£18,289,000) (2022: €21,273,000 (£18,304,000)) arising from the acquisition of Electrozemper S.A. in
October 2021 and €16,616,000 (£14,286,000) (2022: €nil (£nil) arising from the acquisition of Lumen Intelligence Holding
GmbH in September 2022. This goodwill is not amortised.
134
Annual Report and Accounts for the year ended 30 June 2023 9 Intangible assets continued
The goodwill for Lightronics B.V., Famostar Emergency Lighting B.V., Electrozemper S.A., Lumen Intelligence Holding GmbH
and Thorlux Australasia Pty Ltd 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.
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, FW Thorpe Nederland B.V.
(formerly 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, Famostar Emergency
Lighting B.V., Electrozemper S.L, Zemper France S.A.R.L. S.A, RGB S.L., Thorlux Lighting Limited, Lumen Intelligence Holding
GmbH and SchahlLED Lighting GmbH.
For Portland Lighting Limited the value in use has been determined using cash flow projections covering a five year
period with a terminal value all discounted at a rate of 10.94%. For prudence, no growth has been assumed from 2023.
For an impairment to be required, the discount rate would need to exceed 17.5% (Group) and 11.2% (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 Zemper CGUs and Lumen CGUs where an EBITDA multiple
of ten and eight, respectively, have been used in accordance with the agreement upon which the contingent consideration
is based.
At expected levels of EBITDA we consider that our goodwill is fully recoverable with headroom on the Lightronics and
Famostar CGUs of £36.9m in the Group and £22.2m in the Company (investments in subsidiaries, financial assets at
amortised cost and amounts due from Group companies).
For Zemper CGUs, our assessment considers business performance and likely net realisable value, which must be assessed
as part of settlement of non-controlling interest rights. At expected levels of EBITDA we consider that our goodwill is fully
recoverable with headroom on the Zemper CGUs of £25.46m in the Group and £13.8m in the Company (financial assets at
amortised cost).
For Lumen CGUs, our assessment considers business performance and likely net realisable value, which must be assessed
as part of settlement of non-controlling interest rights. At expected levels of EBITDA we consider that our goodwill is fully
recoverable with headroom on the Lumen CGUs of £12.9m in the Group and £16.0m in the Company (financial assets at
amortised cost)
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
Company 2023
Cost
At 1 July 2022
Additions
Disposals
Write-offs
At 30 June 2023
Accumulated amortisation
At 1 July 2022
Charge for the year
Disposals
Write-offs
At 30 June 2023
Net book amount
At 30 June 2023
7,198
839
–
(4,075)
3,962
4,656
1,117
–
(4,075)
1,698
3,014
154
(12)
–
3,156
2,207
336
(1)
–
2,542
2,264
614
150
–
–
–
150
150
–
–
–
150
–
Total
£’000
10,544
993
(12)
(4,075)
7,450
7,013
1,453
(1)
(4,075)
4,390
182
–
–
–
182
–
–
–
–
–
182
3,060
135
Write-offs relate to development assets where no further economic benefits will be obtained.
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
9 Intangible assets continued
Company 2022
Cost
At 1 July 2021
Additions
Write-offs
At 30 June 2022
Accumulated amortisation
At 1 July 2021
Charge for the year
Write-offs
At 30 June 2022
Net book amount
At 30 June 2022
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
rights
£’000
6,182
1,016
–
7,198
3,496
1,160
–
4,656
2,542
2,796
218
–
3,014
1,866
341
–
2,207
807
150
–
–
150
150
–
–
150
–
Total
£’000
9,310
1,234
–
10,544
5,512
1,501
–
7,013
182
–
–
182
–
–
–
–
182
3,531
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 investments in subsidiaries is as follows:
Investments in subsidiaries – cost
The movement in the investment and provisions is as follows:
At 1 July
Addition during the year
At 30 June
Company
2023
£’000
20,486
2022
£’000
20,486
Costs
Provision
2023
£’000
20,486
–
20,486
2022
£’000
14,581
5,905
20,486
2023
£’000
–
–
–
2022
£’000
–
–
–
Impairment for investments in subsidiaries has been considered within the headroom shown in note 9.
Details of the Company’s subsidiaries are included in note 33.
136
Annual Report and Accounts for the year ended 30 June 2023 11 Investment property
Cost
At 1 July
Additions
At 30 June
Accumulated depreciation
At 1 July
Charge for the year
At 30 June
Net book amount
At 30 June
The following amounts have been recognised in the income statement:
Rental income
Direct operating expenses arising from investment
properties that generate rental income
Group
Company
2023
£’000
2,262
22
2,284
278
20
298
2022
£’000
2,226
36
2,262
259
19
278
2023
£’000
11,745
22
11,767
1,778
253
2,031
1,986
1,984
9,736
Group
Company
2023
£’000
141
2022
£’000
175
2023
£’000
479
2022
£’000
11,709
36
11,745
1,525
253
1,778
9,967
2022
£’000
513
(57)
(81)
(290)
(314)
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 (2022: £1,296,000) is freehold land and therefore not depreciated; the property element
includes accumulated depreciation of £298,000 (2022: £278,000) 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.
An external fair value exercise of the land by the River Wye and the land in Monmouthshire was last undertaken in June 2023
resulting in a valuation of £2.3m, which is greater than the carrying value of those specific investment properties.
The Company’s investment properties consist of land and buildings used by subsidiaries in their normal course of business.
The Company receives rental income from the subsidiaries for the use of these premises and incurs amortisation costs.
Each investment property generates rental income.
137
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
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.
Ratio Holding B.V.
Pursuant to the investment in Ratio Holding B.V., the Group has issued loan notes of €1,500,000 (£1,290,000) (2022:
€1,000,000 (£860,000)) to help fund the development of this business. With accrued interest, the balance at 30 June 2023 is
€1,566,000 (£1,347,000) (2022: €1,012,000 (£872,000)).
During the current year, the Group has issued loan notes of £1,250,000 to Ratio EV Limited, a wholly-owned subsidiary
of Ratio Holding B.V., to help fund the development of its business. With accrued interest, the balance at 30 June 2023 is
£1,266,000.
The debt investments have shown no significant increase in credit risk since the inception of the loans, 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.
Mackwell Electronics Limited
Mr N Brangwin, a director and main shareholder in Mackwell Electronics Limited, has loans outstanding of £nil (2022:
£1,800,000), with interest payable at 4% over the Bank of England base rate. This loan was secured against Mr Brangwin’s
shareholding in FW Thorpe Plc and was fully repaid during the year.
Luxintec S.L.
In the year ended 30 June 2021 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 risk of default despite 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,
a provision of €589,000 (£506,000) (2022: €589,000 (£507,000)) was recorded.
At the date of the financial statements, the loan notes balance was €281,000 (2022: €281,000) equating to £240,000
(2022: £242,000) 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
Acquisition of subsidiaries*
Issued
Repaid
Fair value adjustment
Exchange rate movement
At 30 June
Group
Company
2023
£’000
2,924
–
1,748
(1,813)
–
(6)
2,853
2022
£’000
2,546
77
872
(66)
(507)
2
2,924
2023
£’000
33,682
–
22,885
(2,624)
(1,404)
(413)
52,126
2022
£’000
10,827
–
23,467
(80)
(629)
97
33,682
* Acquisition of subsidiaries are the assets acquired from the purchase of the Zemper companies in 2022.
138
Annual Report and Accounts for the year ended 30 June 2023 12 Financial assets at amortised cost continued
Analysis of total financial assets at amortised cost
Non-current
Current
Group
Company
2023
£’000
1,587
1,266
2,853
2022
£’000
1,124
1,800
2,924
2023
£’000
240
51,886
52,126
2022
£’000
31,882
1,800
33,682
The £22,885,000 loans issued by the Company are £7,172,000 to FW Thorpe Espana S.L.U., £14,123,000 issued to F.W. Thorpe
Nederland B.V. (formerly Lightronics Participaties B.V.), £311,000 to Thorlux Lighting L.L.C., £13,000 issued to Thorlux Lighting
Limited and £1,266,000 issued to Ratio EV Limited.
The debt investments to FW Thorpe Espana S.L.U. of €31,278,000 (£26,892,000), FW Thorpe Nederland B.V. (formerly
Lightronics Participaties B.V.) of €27,272,000 (£23,447,000), Thorlux Lighting Limited of €325,000 (£280,000) and Ratio EV of
£1,266,000 have 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 £2,175,000 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 £2,175,000 (2022: £771,000) for these loan notes based on an expected credit loss of 100%.
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 €6,762,000 (£5,814,000) (2022: €6,762,000 (£5,818,000)) for 50% of the share capital of Ratio Holding B.V., a
company based in the Netherlands in December 2021. The amount consists of an initial investment of €5,750,000 (£4,948,000),
costs of €12,000 (£10,000) (2022: €12,000 (£10,000)) and a further €1,000,000 (£860,000) for payment in December 2023. The
Group has applied the equity accounting method to recognise this interest.
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
Additions
Share of joint venture (loss)/profit
Currency translation
At 30 June
Group
2023
£’000
6,112
–
(520)
–
5,592
2022
£’000
–
5,818
290
4
6,112
Company
2023
£’000
2022
£’000
–
–
–
–
–
–
–
–
–
–
In the year to 30 June 2023, the joint venture, Ratio Holdings B.V. generated a loss after tax of €1,199,000 (£1,041,000) (2022:
profit after tax of €683,000 (£588,000)).
The Group has recognised its 50% share of loss of €599,000 (£520,000) (2022: profit of €342,000 (£290,000)) in the Income
Statement, less costs in the parent company of £nil (2022: £62,000).
No further analysis of the joint ventures has been provided as the activities are not considered material to the Group.
139
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
14 Financial assets at fair value through other comprehensive income
Beginning of year
Acquisition of subsidiaries*
Net disposals
Revaluation
At 30 June
Group
Company
2023
£’000
3,470
–
(1)
(105)
3,364
2022
£’000
3,764
31
(268)
(57)
3,470
2023
£’000
3,439
–
–
(105)
3,334
2022
£’000
3,764
–
(268)
(57)
3,439
* Acquisition of subsidiaries are the assets acquired from the purchase of the Zemper companies in 2022.
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;
ii. Unlisted equity in Spain held by Electrozemper S.A., denominated in euros. None of these assets is either past due or
impaired; and
iii. The Group invested €1,200,000 for 40% of the share capital of Luxintec S.L., a company based in Spain, in 2016. This is
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. At the date of the financial statements, the balance for this investment is £nil
(2022: £nil).
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.
15 Inventories
Raw materials
Work in progress
Finished goods
Group
Company
2023
£’000
21,223
3,900
8,314
33,437
2022
£’000
23,555
3,735
5,468
32,758
2023
£’000
8,333
2,469
4,623
15,425
2022
£’000
10,343
2,742
3,891
16,976
The value of the inventory provision is £5,122,000 (2022: £4,449,000) for the Group and £2,785,000 (2022: £2,477,000) for the
Company.
The cost of inventories sold recognised as an expense is disclosed in note 3.
140
Annual Report and Accounts for the year ended 30 June 2023 16 Trade and other receivables
Current
Trade receivables
Other receivables
Prepayments and accrued income
Amounts owed by subsidiaries
Total
Group
Company
2023
£’000
30,581
2,451
2,701
–
35,733
2022
£’000
29,015
2,723
1,280
–
33,018
2023
£’000
11,878
1,541
1,917
11,274
26,610
2022
£’000
15,834
2,516
623
5,507
24,480
Amounts owed by subsidiaries, except cash balances, are unsecured, interest free and have no fixed date for repayment.
Trade receivables past due date not provided
Group
Company
2023
£’000
2,316
2022
£’000
2,705
2023
£’000
1,229
2022
£’000
741
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 carrying amounts of the trade receivables for the Group company Zemper France S.A.R.L. include receivables which
are subject to a factoring arrangement. Under this arrangement, the company has transferred the relevant receivables to
the factor in exchange for cash and is prevented from selling or pledging the receivables. However, Zemper France S.A.R.L.
retains the late payment and credit risk. The Group therefore continues to recognise the transferred assets in their entirety
in its balance sheet. Zemper France S.A.R.L. only receives money from the factor when needed and the amount repayable
under the factoring agreement is presented as secured borrowing. The Group considers that the ‘held to collect’ business
model remains appropriate for these receivables, and hence it continues measuring them at amortised cost. The relevant
carrying amounts for transferred receivables are €1,670,000 (£1,436,000) (2022: €1,161,000 (£999,000)) and the amount
received from the factor as secured borrowing is €1,197,000 (£1,030,000) (2022: €nil (£nil)).
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
2023 the bad debt provision for the Group amounted to £728,000 (2022: £704,000) and for the Company £343,000 (2022:
£503,000).
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 the Company’s amounts owed by subsidiaries are provisions for expected credit losses for Thorlux Lighting L.L.C.
of £515,000 (2022: £303,000) and Thorlux Australasia PTY Limited of £930,000 (2022: £806,000), based on an expected credit
loss of 100%. and 45%, respectively.
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/ (income)
Group
Company
2023
£’000
214
(139)
75
2022
£’000
469
(409)
60
2023
£’000
105
(130)
(25)
2022
£’000
463
(407)
56
141
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
16 Trade and other receivables continued
At 30 June 2023, 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
Group
Company
2023
£’000
13,645
16,659
24
253
2022
£’000
16,965
11,809
17
224
2023
£’000
11,524
354
–
–
2022
£’000
13,875
1,959
–
–
30,581
29,015
11,878
15,834
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
At 1 July
Net withdrawals
At 30 June
Group
Company
2023
£’000
5,079
(5,075)
4
2022
£’000
23,603
(18,524)
5,079
2023
£’000
5,075
(5,075)
–
2022
£’000
23,603
(18,528)
5,075
The short-term financial assets consist of term cash deposits 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
Company
2023
£’000
35,013
2022
£’000
35,505
2023
£’000
25,527
2022
£’000
28,221
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.
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
Total
Non-current liabilities
Other payables
Total
142
Group
Company
2023
£’000
14,908
73
8,671
3,475
10,330
–
37,457
Group
2023
£’000
11,987
11,987
2022
£’000
15,772
1,375
6,547
2,935
9,172
–
35,801
2022
£’000
12,880
12,880
2023
£’000
7,920
73
317
1,439
7,390
5,963
23,102
Company
2023
£’000
–
–
2022
£’000
9,216
1,375
311
1,353
6,479
3,691
22,425
2022
£’000
–
–
Annual Report and Accounts for the year ended 30 June 2023 19 Trade and other payables continued
Amounts owed to subsidiaries, except for subsidiaries’ cash balances managed by the Company, are unsecured, interest free
and have no fixed date of repayment. Amounts owed in relation to subsidiaries’ cash balances generate interest in line with
the Group’s deposit facilities.
Included within other payables are commitment to purchase the remaining outstanding shares (redemption liability and
contingent consideration) in Electrozemper S.A. of €12,623,000 (£10,853,000) and Lumen Intelligence Holding GmbH
of €7,508,000 (£6,455,000). Of these amounts €6,248,000 (£5,372,000) is included in current liabilities and €13,883,000
(£11,936,000) in non-current liabilities. Other payables also includes €1,000,000 (£860,000) deferred consideration for the
investment in Ratio Holding B.V. which is within current liabilities.
Non-Current liabilities also includes £51,000 (2022: £40,000) post employment benefits at Thorlux Australasia Pty Limited and
Thorlux Lighting L.L.C.
20 Financial liabilities
Financial liabilities
At 1 July
Acquisitions of subsidiaries*
Additions in year
Repayment in year
Currency translation
At 30 June
Group
Company
2023
£’000
2022
£’000
2023
£’000
2,162
2,256
1,039
(2,532)
(29)
2,896
2022
£’000
–
2,546
7
(392)
1
2,162
–
–
–
–
–
–
–
–
–
–
–
–
2022
£’000
–
–
–
* Acquisitions of subsidiaries are the liabilities acquired with the purchase of the Lumen companies (2022: Zemper companies).
Analysis of financial liabilities
Current financial liabilities (values due < 12 months)
Non-current financial liabilities (values due > 12 months)
Total
Group
Company
2023
£’000
1,435
1,461
2,896
2022
£’000
332
1,830
2,162
2023
£’000
–
–
–
Included in non-current financial liabilities were amounts of £1,201,000 (2022: £1,459,000) due more than one year but less
than five years and £260,000 (2022: £371,000) due more than five years.
Financial liabilities by category
Bank overdrafts
Bank loans
Factoring liabilities
Other loans
Government loans
Total
Group
Company
2023
£’000
55
902
1,030
93
816
2,896
2022
£’000
63
1,073
–
–
1,026
2,162
2023
£’000
–
–
–
–
–
–
2022
£’000
–
–
–
–
–
–
During the year ended 30 June 2023, pursuant to the acquisition of Lumen Intelligence Holding GmbH, the Group acquired
financial liabilities totalling €2,563,000 (£2,256,000), included loans from the original shareholders of Lumen Intelligence
Holding GmbH, totalling €1,652,000 (£1,454,000). As at date of these financial statements, an amount of €108,000 (£93,000)
remained outstanding.
During the year ended 30 June 2022, pursuant to the acquisition of Electrozemper S.A., the Group acquired financial liabilities
totalling €2,957,000 (£2,546,000). As at the date of these financial statements, the bank loans included €583,000 (£502,000)
(2022: €783,000 (£674,000)) issued to support Zemper France S.A.R.L. through the COVID pandemic, and are guaranteed by
the Government in France. There is also a bank loan for the property occupied by Zemper France S.A.R.L., the outstanding
amount was £369,000 (£317,000) (2022: €437,000 (£376,000)). The Government loans were issued to facilitate investment,
including research and development projects.
143
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
21 Lease liabilities
Right-of-use assets
At 1 July 2021
Acquisition of subsidiaries*
Additions
Depreciation charge for the year
Lease termination
Currency translation
At 30 June 2022
Acquisition of subsidiaries*
Additions
Depreciation charge for the year
Lease termination
Currency translation
At 30 June 2023
Group
Company
Property
£’000
–
2,286
–
(208)
–
(5)
2,073
–
1,400
(385)
–
(11)
3,077
Plant and
equipment
£’000
48
–
5
(20)
–
–
33
–
–
(10)
(1)
–
22
Motor vehicles
£’000
430
186
227
(228)
(57)
–
558
96
351
(219)
(57)
(4)
725
Total
£’000
478
2,472
232
(456)
(57)
(5)
2,664
96
1,751
(614)
(58)
(15)
3,824
Motor vehicles
£’000
–
–
–
–
–
–
–
–
31
(4)
–
–
27
Total
£’000
–
–
–
–
–
–
–
–
31
(4)
–
–
27
* Acquisition of subsidiaries are leases acquired with the investment in Lumen group of companies (2022: Zemper group of companies).
Additions comprise increases to right-of-use assets as a result of entering into new leases.
Lease liabilities
Lease liabilities recognised at 30 June 2023 total £4,634,000 (2022: £3,016,000) of which £812,000 (2022: £506,000) is
due within one year and £3,822,000 (2022: £2,510,000) due after more than one year. There are no contractual options
to either extend or terminate early lease agreements.
Maturity analysis
The timing of the payments due over the remaining lease term for these liabilities is as follows:
Within one year
More than one but less than five years
More than five years
Total due including interest
Group
Company
2023
£’000
948
2,867
1,540
5,355
2022
£’000
726
2,355
927
4,008
2023
£’000
8
21
–
29
2022
£’000
–
–
–
–
The total cash paid on these leases during the year was £1,026,000 (2022: £674,000) for the Group and £5,000 (2022: £nil) for
the Company.
Expense relating to short-term leases
Expense relating to low-value leases
Group
2023
£’000
162
113
2022
£’000
136
22
Company
2023
£’000
83
–
2022
£’000
92
–
144
Annual Report and Accounts for the year ended 30 June 2023 22 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 2023 amounted to £537,000 (2022: £580,000). 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 2021, and at that date the value of the fund was £42,600,000.
This was sufficient to cover 103% 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
3.60%
5.25%
2.10%
2.10%
The figures at 30 June 2021 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 2023 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% p.a. or RPI if less
Pension increases in payment of 2.5% p.a. 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
2023
3.40%
3.40%
5.20%
2.80%
3.20%
2.20%
2022
2021
2020
2019
3.50%
3.50%
3.80%
2.80%
3.30%
2.20%
3.50%
3.50%
1.80%
2.80%
3.30%
2.20%
3.30%
3.30%
1.40%
2.30%
3.10%
2.10%
3.50%
3.50%
2.10%
2.50%
3.30%
2.20%
22.9 years
24.1 years
24.4 years
25.5 years
23.4 years
24.6 years
24.8 years
25.9 years
22.1 years
23.4 years
24.3 years
25.4 years
22.5 years
23.6 years
24.7 years
25.9 years
22.5 years
23.5 years
24.7 years
25.9 years
145
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
22 Pension scheme continued
The Statement of Financial Position figures required under IAS 19 are as follows:
30 June 2023
30 June 2022
30 June 2021
30 June 2020
30 June 2019
Expected
long-term
rate of
return
%
5.20%
5.20%
5.20%
Expected
long-term
rate of
return
%
3.80%
3.80%
3.80%
Expected
long-term
rate of
return
%
1.8%
1.8%
1.8%
Expected
long-term
rate of
return
%
1.4%
1.4%
1.4%
Expected
long-term
rate of
return
%
2.70%
2.70%
2.70%
Value
£’000
11,003
29,549
2,300
42,852
Value
£’000
12,570
26,618
2,387
41,575
Value
£’000
13,269
26,458
2,832
42,559
Value
£’000
12,150
21,643
2,659
36,452
Value
£’000
11,270
18,389
1,542
31,201
(28,026)
(33,100)
(40,350)
(42,583)
(39,437)
3,175
3,352
2,209
269
2,138
Equities
Bonds
Other
Total market value
of assets
Present value of
scheme liabilities
Surplus in the
scheme
All assets are held in pooled investment vehicles with the exception of the cash balance of £772,000 (2022: £130,000) in the
trustees bank account. The pooled investment vehicles are unquoted with the underlying assets being quoted.
Amounts recognised in the statement of financial position
The amounts recognised in the Statement of Financial Position are determined as follows:
2023
£’000
(28,026)
31,201
3,175
(3,175)
–
2022
£’000
(33,100)
36,452
3,352
(3,352)
–
2023
£’000
2022
£’000
(33,100)
(40,350)
(303)
(420)
(1,202)
(276)
3,767
3,508
(390)
–
(711)
(259)
6,303
2,307
(28,026)
(33,100)
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
Movement in defined benefit obligation
The movement in the defined benefit obligation over the year is as follows:
At 1 July
Current service cost
Past service cost
Interest cost
Contributions by plan participants
Actuarial gain
Benefits paid
At 30 June
146
Annual Report and Accounts for the year ended 30 June 2023 22 Pension scheme continued
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 loss
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
Past service cost
Net interest income
Total expense
2023
£’000
36,452
1,334
(3,890)
537
276
(3,508)
31,201
2023
£’000
303
420
(132)
591
Actuarial gain/(loss) recognised in statement of comprehensive income for the year
Actual return less expected return on pension scheme assets
Experience gains arising on the scheme liabilities
Changes in assumptions underlying the present value of the scheme liabilities
Net interest income
Restriction of increase/(decrease) in pension scheme surplus
Actuarial gain/(loss) recognised in the Statement of Comprehensive Income
Cumulative actuarial loss recognised in the Statement of Comprehensive Income at 1 July
Actuarial (loss)/gain recognised in the Statement of Comprehensive Income for the year
Cumulative actuarial loss recognised in the Statement of Comprehensive Income at 30 June
2023
£’000
(3,890)
293
3,474
–
177
54
2023
£’000
(3,775)
(123)
(3,898)
2022
£’000
42,559
753
(5,392)
580
259
(2,307)
36,452
2022
£’000
390
–
–
390
2022
£’000
(5,392)
348
5,955
42
(1,143)
(190)
2022
£’000
(4,728)
953
(3,775)
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 (2022: £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 2023 was £2,556,000 (2022: (£4,639,000)) or 7.0% (2022:
(10.9%)). The Group expects to pay £364,000 contributions (2022: £361,000) into the pension scheme during the
forthcoming year.
147
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
22 Pension scheme continued
History of experience gains and losses recognised in the statement of comprehensive income
2023
2022
2021
2020
2019
£’000
%
£’000
%
£’000
%
£’000
%
£’000
%
Difference between the expected and
actual return on scheme assets
Percentage of scheme assets
Experience gain/(loss)
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
Sensitivity analysis
(3,890)
(5,392)
789
1,217
1,755
(11%)
(13%)
2%
3%
293
348
(951)
(171)
(294)
0%
0%
2%
0%
3,474
5,955
1,915
(3,131)
(1,901)
(10%)
(15%)
(5%)
–
132
–
42
0%
0%
0%
0%
–
46
–
5
0%
0%
7%
0%
0%
–
66
(123)
953
1,758
(2,039)
(374)
(0%)
2%
4%
5%
4%
1%
5%
0%
0%
1%
The impact on the defined benefit obligation of changes in the significant assumptions is shown approximately below:
Assumption varied
As at 30 June 2023
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
28.0
27.0
28.1
28.6
28.7
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.
148
Annual Report and Accounts for the year ended 30 June 2023 23 Provisions for liabilities and charges
At 1 July 2021
Acquisition of subsidiaries*
Additions
Utilisation
Surplus released
At 30 June 2022
Acquisition of subsidiaries*
Additions
Utilisation
Surplus released
Currency translation
At 30 June 2023
Analysis of total provisions
Non-current
Total
Group
Company
Warranty
provision
£’000
2,242
136
496
(202)
(136)
2,536
704
517
(148)
(295)
(15)
Total
£’000
2,242
136
496
(202)
(136)
2,536
704
517
(148)
(295)
(15)
Warranty
provision
£’000
706
–
289
(116)
–
879
–
–
254
–
–
Total
£’000
706
–
289
(116)
–
879
–
–
254
–
–
3,299
3,299
1,133
1,133
Group
Company
2023
£’000
3,299
3,299
2022
£’000
2,536
2,536
2023
£’000
1,133
1,133
2022
£’000
879
879
* Acquisitions of subsidiaries are leases acquired with the investment in Lumen group of companies (2022: Zemper group of companies).
Warranty provision
The usual warranty period provided by Group companies is between 5 and 10 years, dependent 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.
24 Deferred income tax
Deferred income tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are
as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
Group
Company
2023
£’000
382
(6,261)
(5,879)
2022
£’000
120
(4,264)
(4,144)
2023
£’000
–
(1,259)
(1,259)
2022
£’000
–
(883)
(883)
149
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
24 Deferred income tax continued
The net movement on the deferred income tax is as follows:
At 1 July
Acquisitions of subsidiaries*
Income statement credited /(charged)
Tax credited directly to equity
Currency translation
At 30 June
Of which:
Deferred tax assets
Deferred tax liabilities
Group
Company
2023
£’000
(4,144)
(2,005)
202
26
42
2022
£’000
(1,591)
(2,984)
408
14
9
2023
£’000
(883)
–
(402)
26
–
2022
£’000
(956)
–
59
14
–
(5,879)
(4,144)
(1,259)
(883)
382
(6,261)
120
(4,264)
–
(1,259)
–
(883)
* Acquisitions of subsidiaries are the deferred assets and liabilities acquired with the investment in the Lumen group of companies (2022: Zemper group of companies).
The movement in Group deferred income tax assets and liabilities during the year, without taking into consideration the
offsetting of balances within the same tax jurisdiction, is as follows:
Deferred tax assets
At 1 July 2021
Acquisition of subsidiaries*
Credited to the income statement
At 30 June 2022
Acquisition of subsidiaries*
Credited to the income statement
Currency translation
At 30 June 2023
Deferred tax liabilities
At 1 July 2021
Acquisition of subsidiaries*
Charged/(credited) to the income statement
(Charged) directly to equity
Currency translation
At 30 June 2022
Acquisition of subsidiaries*
Charged/(credited) to the income statement
Credited directly to equity
Currency translation
At 30 June 2023
Fair value & other
timing differences
£’000
–
114
6
120
132
134
(4)
382
Accelerated tax
depreciation £’000
Research &
development £’000
Fair value & other
timing differences
£’000
593
169
29
–
–
791
–
111
–
–
902
816
–
4
–
2
822
–
(40)
–
–
782
182
2,929
(435)
(14)
(11)
2,651
2,137
(139)
(26)
(46)
4,577
Total
£’000
–
114
6
120
132
134
(4)
382
Total
£’000
1,591
3,098
(402)
(14)
(9)
4,264
2,137
(68)
(26)
(46)
6,261
* Acquisitions of subsidiaries are the deferred assets and liabilities acquired with the investment in the Lumen group of companies (2022: Zemper group of companies).
150
Annual Report and Accounts for the year ended 30 June 2023
Total
£’000
956
(59)
(14)
883
402
(26)
1,259
2022
£’000
14
14
24 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 2021
Charged/(credited) to the income statement
Credited directly to equity
At 30 June 2022
Charged/(credited) to the income statement
Credited directly to equity
At 30 June 2023
Accelerated tax
depreciation £’000
Research &
development £’000
Fair value & other
timing differences
£’000
444
18
–
462
120
–
582
626
(34)
–
592
(49)
–
543
(114)
(43)
(14)
(171)
331
(26)
134
The deferred income tax credited to equity during the year is as follows:
Deferred tax credited to equity
Tax on revaluation of financial assets at fair value through other
comprehensive income
25 Share capital
Authorised, allotted and fully paid
118,935,590 ordinary shares of 1p each
(2022: 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
Company
2023
£’000
26
26
2022
£’000
14
14
2023
£’000
26
26
Group
2023
£’000
2022
£’000
Company
2023
£’000
2022
£’000
1,189
1,189
1,189
1,189
Group and Company
Group and Company
2023
£’000
18
(1)
17
2022
£’000
2023
No. of shares
2022
No. of shares
23
(5)
18
1,824,004
2,273,569
(120,000)
(449,565)
1,704,004
1,824,004
There were no new shares issued during the year (2022: nil). 120,000 (2022: 449,565) shares were issued from treasury for the
exercise of share options, of which the Company repurchased nil (2022: nil). There are 110,322 (2022: 230,322) share options
outstanding at the year end.
At 30 June 2023, there were 110,322 options exercisable (2022: 230,322) under the ESOP scheme.
151
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
26 Other reserves
Share premium account
Capital redemption reserve
Foreign currency translation reserve
27 Dividends
Dividends paid during the year are outlined in the tables below:
Dividends paid (pence per share)
Final dividend
Special dividend (final)
Interim dividend
Special dividend (interim)
Total
Group
Company
2023
£’000
2,976
137
2,039
5,152
2022
£’000
2,827
137
1,808
4,772
2023
£’000
2,976
137
–
3,113
2023
4.61
–
1.62
–
6.23
2022
£’000
2,827
137
–
2,964
2022
4.31
2.20
1.54
2.27
10.32
A final dividend in respect of the year ended 30 June 2023 of 4.84p per share, amounting to £5,674,000 (2022: £5,403,000) is
to be proposed at the Annual General Meeting on 16 November 2023 and, if approved, will be paid on 24 November 2023 to
shareholders on the register on 27 October 2023. The ex-dividend date is 26 October 2023. These financial statements do not
reflect this dividend payable.
2023
4.84
2023
£’000
5,403
–
1,898
–
7,301
2023
£’000
5,674
2022
4.61
2022
£’000
5,043
2,574
1,803
2,659
12,079
2022
£’000
5,403
Dividends proposed (pence per share)
Final dividend
Dividends paid
Final dividend
Special dividend (final)
Interim dividend
Special dividend (interim)
Total
Dividends proposed
Final dividend
152
Annual Report and Accounts for the year ended 30 June 2023 28 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.
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 £nil (2022: £nil) for the year.
a) Details of changes in the number of awards outstanding during the year are set out below:
Outstanding at 1 July 2022
Exercised during the year
Outstanding at 30 June 2023
ESOP Scheme
Total
Options
230,322
(120,000)
110,322
Exercise price
(p/s)
124
124
124
Options
230,322
(120,000)
110,322
The weighted average contractual life of the share-based payments outstanding at the end of the year is 1.3 years for the
ESOP scheme. The weighted average share price for shares exercised during the year was £3.70.
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
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.
153
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
29 Cash generated from operations
Group
Company
2023
£’000
26,934
4,289
20
4,454
(192)
378
54
520
(382)
952
3,117
(98)
(3,830)
36,216
2022
£’000
24,103
3,759
19
3,213
(197)
855
(190)
(228)
(306)
(520)
(8,986)
(603)
3,870
24,789
2023
£’000
19,499
1,841
253
1,453
(155)
2022
£’000
15,242
1,846
253
1,501
(175)
(3,385)
(1,480)
54
–
(256)
579
1,551
141
931
22,506
(190)
62
(193)
(154)
(5,449)
5,041
(1,322)
14,982
2022
£’000
–
–
516
Group
Company
2023
£’000
2,000
298
229
2022
£’000
–
–
602
2023
£’000
2,000
–
–
Cash generated from continuing operations
Profit before tax
Depreciation of property, plant and equipment
Depreciation of investment property
Amortisation of intangible assets
Profit on disposal of property, plant and equipment
Net finance expense/(income)
Retirement benefit contributions less the current
and past service charge
Share of joint venture loss/(profit)
Research and development expenditure credit
Effects of exchange rate movements
Changes in working capital
– Decrease/(increase) in inventories
– (Increase)/decrease in trade and other receivables
– (Decrease)/increase in payables and provisions
Cash generated from operations
30 Capital commitments
Land
Buildings
Property, plant and equipment
154
Annual Report and Accounts for the year ended 30 June 2023 31 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 £3,334,000 (2022: £3,439,000), for the Group and the
Company, 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.
The accounting policies for financial instruments have been applied to the line items below:
Group
30 June 2023
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 2022
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 2023
Financial assets at amortised cost
Financial assets at fair value through other comprehensive
income
Trade and other receivables
Cash and cash equivalents
Total
Financial assets at
amortised cost
£’000
Financial assets at fair
value through other
comprehensive income
£’000
2,853
–
33,032
4
35,013
70,902
–
3,364
–
–
–
3,364
Financial assets
at amortised cost
£’000
Financial assets at fair
value through other
comprehensive income
£’000
2,924
–
31,738
5,079
35,505
75,246
–
3,470
–
–
–
3,470
Financial assets at
amortised cost
£’000
Financial assets at fair
value through other
comprehensive income
£’000
52,126
–
24,693
25,527
102,346
–
3,334
–
–
3,334
Total
£’000
2,853
3,364
33,032
4
35,013
74,266
Total
£’000
2,924
3,470
31,738
5,079
35,505
78,716
Total
£’000
52,126
3,334
24,693
25,527
105,680
155
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
31 Financial instruments by category continued
Company
30 June 2022
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)
Redemption liability
Deferred and contingent consideration
Other payables
Financial liabilities
Lease liabilities
Financial assets at
amortised
cost
£’000
Financial assets at fair
value through other
comprehensive income
£’000
33,682
–
23,857
5,075
28,221
90,835
–
3,439
–
–
–
3,439
Group
Company
2023
£’000
17,420
15,311
2,857
51
2,896
4,634
2022
£’000
18,426
11,918
6,190
40
2,162
3,016
2023
£’000
14,273
–
–
–
–
26
Total
£’000
33,682
3,439
23,857
5,075
28,221
94,274
2022
£’000
14,593
–
–
–
–
–
Financial liabilities are measured at amortised cost. The maturity analysis for lease liabilities is shown in note 21.
Contractual cash flows relating to current financial liabilities are all due within one year, and are equal to their carrying value.
The Group and Company did not have derivative financial instruments at 30 June 2023 or 30 June 2022. All assets
and liabilities above are considered to be at fair value.
156
Annual Report and Accounts for the year ended 30 June 2023 32 Related party transactions
The following amounts relate to transactions between the Company and its related undertakings:
2023
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting L.L.C.
FW Thorpe Nederland B.V. (formerly Lightronics
Participaties B.V.)
Lightronics B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
Thorlux Lighting Limited
FW Thorpe Espana S.L.U.
Electrozemper S.A.
Zemper France S.A.R.L.
R.G.B. S.L.
Lumen Intelligence Holding GmbH
SchahlLED Lighting GmbH
2022
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Thorlux Lighting L.L.C.
FW Thorpe Nederland B.V. (formerly Lightronics
Participaties B.V.)
Lightronics B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
Thorlux Lighting Limited
FW Thorpe Espana S.L.U.
Electrozemper S.A.
Zemper France S.A.R.L.
R.G.B. S.L.
Purchases
of goods
£’000
Sales
of goods
£’000
Sales
of services
£’000
Purchase
of services
£’000
720
1,058
3
1,859
–
–
251
–
–
33
–
–
18
–
–
–
–
231
364
4
1,034
202
–
618
744
–
391
5,818
–
–
10
–
–
4,054
42
202
78
162
–
–
–
–
–
–
–
–
4
–
–
–
–
–
–
–
–
–
–
–
–
520
–
–
–
14
–
–
–
–
Purchases
of goods
£’000
Sales
of goods
£’000
Sales
of services
£’000
Purchase
of services
£’000
581
1,477
19
2,874
–
–
229
–
–
–
–
–
–
–
–
166
512
5
1,090
176
–
2,269
558
–
395
295
–
–
–
–
42
144
75
–
19
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
539
–
–
–
–
–
–
Dividends
paid to
Company
£’000
150
300
400
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Dividends
paid to
Company
£’000
250
100
350
–
–
–
–
–
–
–
–
–
–
–
–
157
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
32 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.
FW Thorpe Nederland B.V. (formerly Lightronics Participaties B.V.)
Lightronics B.V.
Thorlux Australasia PTY Limited
Thorlux Lighting GmbH
Famostar Emergency Lighting B.V.
Thorlux Lighting Limited
FW Thorpe Espana S.L.U.
Electrozemper S.A.
Zemper France S.A.R.L
R.G.B. S.L.
Lumen Intelligence Holding GmbH
SchahlLED Lighting GmbH
Total
Amounts due to
related party at 30 June
Amounts due from
related party at 30 June
2023
£’000
(868)
(1,291)
(465)
(1,490)
–
–
(192)
–
(147)
(3)
(1,391)
–
(30)
(86)
–
–
–
(5,963)
2022
£’000
(552)
(803)
(677)
(973)
–
–
(144)
–
(178)
–
(364)
–
–
–
–
2023
£’000
61
88
40
250
316
2,224
7
1,987
–
20
1,492
1,716
–
10
–
–
–
(3,691)
–
3,063
11,274
2022
£’000
57
262
32
978
300
1,276
551
1,736
–
1
314
–
–
–
–
–
–
5,507
Trading balances arise from transactions of goods and services carried out under normal commercial terms. The Company has
made provisions for trade receivables of £930,000 (2022: £806,000) due from Thorlux Australasia PTY Limited and £515,000
(2022: £303,000) due from Thorlux Lighting L.L.C. The amounts due from subsidiaries are net of provisions.
The Company has loan balances due from FW Thorpe Espana of €31,278,000 (£26,892,000) (2022: €23,125,000 (£19,914,000)),
FW Thorpe Nederland B.V. (formerly Lightronics Participaties B.V.) of €27,272,000 (£23,447,000) (2022: €12,049,000
(£10,367,000)), Thorlux Lighting L.L.C. £2,175,000 (2022: £1,864,000) and Thorlux Lighting Limited €325,000 (£280,000) (2022:
€310,000 (£267,000)). The Company has made provisions for loan receivable from Thorlux Lighting L.L.C. of £2,175,000 (2022:
£771,000).
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 95 to 98. There are 2 employees who are related parties (2022: 2). Total remuneration for the year was
£104,000 (2022: £94,000).
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 £nil (2022: £328,000) and purchased goods and services amounting to £nil (2022: £47,000).
At the year end there were trade balances due to Luxintec S.L. of £31,000 (2022: £31,000) and £338,000 due from Luxintec S.L.
(2022: £338,000). The Company has made a provision of £338,000 (2022: £338,000) against the receivables due from Luxintec S.L.
In 2021 a loan of €869,000 was provided to Luxintec S.L. with interest payable at 1.5% secured against the company’s assets.
At the date of the financial statements, the loan notes balance including interest was €281,000 (2022: €281,000) equating
to £240,000 (2022: £242,000) at the end of year exchange rate, including a provision of €589,000 (£506,000) (2022: €589,000
(£507,000)) (see note 12).
During the year, the non-controlling interests of ElectroZemper S.A. provided services to the Group of €750,000 (£651,000)
(2022: €558,000 (£472,000)) and received services from the Group of €9,000 (£8,000) (2022: €6,000 (£5,000). The balances
due from and due to these non-controlling interests were €11,000 (£9,000) (2022: €11,000 (£10,000)) and €nil (£nil) (2022:
€141,000 (£122,000)), respectively.
158
Annual Report and Accounts for the year ended 30 June 2023 Proportion of nominal value
of issued shares held by
Group and Company
30 June
2023
30 June
2022
33 Group companies
The parent Company has the following investments as at 30 June 2023 and 30 June 2022:
Name of undertaking
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
FW Thorpe Nederland B.V. (formerly
Lightronics Participaties B.V.)
Lightronics B.V. (investment held by F.W.
Thorpe Nederland B.V.)
Thorlux Lighting GmbH
Thorlux Australasia PTY Limited
Thorlux Lighting L.L.C.
Famostar Emergency Lighting B.V.
(investment held by FW Thorpe
Nederland B.V.)
Luxintec S.L.
Thorlux Lighting Limited
FW Thorpe Espana S.L.U.
Electrozemper S.A. (investment held by
FW Thorpe Espana S.L.U.)
Zemper France S.A.R.L (investment held
by Electrozemper S.A.)
R.G.B. S.L (investment held by
Electrozemper S.A.)
Ratio Holding B.V. (Investment held by
FW Thorpe Nederland B.V.)
Ratio Electric B.V. (investment held by
Ratio Holding B.V.)
Ratio EV Limited (investment held by
Ratio Holding B.V.)
Lumen Intelligence Holding GmbH
(investment held by FW Thorpe
Nederland B.V.)
SchahlLED Lighting GmbH (investment
held by Lumen Intelligence Holding
GmbH)
Country of
incorporation
England
England
England
England
England
Description of
shares held
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Netherlands
Ordinary €0.01 shares
Netherlands
Ordinary €454 shares
Germany
Australia
Ordinary €1 shares
Ordinary $1 shares
United Arab Emirates
Ordinary AED 1,000 shares
Netherlands
Spain
Ireland
Spain
Spain
France
Spain
Netherlands
Netherlands
England
Germany
Ordinary €100 shares
Ordinary €1 shares
Ordinary €1 shares
Ordinary €1 shares
Ordinary €1,250 shares
Ordinary €1,000 shares
Ordinary €60 shares
Ordinary €1 shares
Ordinary €1 shares
Ordinary £1 shares
Ordinary €1 shares
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
40%
100%
100%
76.5%
76.5%
76.5%
50%
50%
50%
80%
Germany
Ordinary €1 shares
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
40%
100%
100%
63%
63%
63%
50%
50%
50%
–
–
159
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
33 Group companies continued
The registered office addresses of these Group companies are:
Compact Lighting Limited
Philip Payne Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
FW Thorpe Nederland B.V. (formerly
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
FW Thorpe Espana S.L.U.
Electrozemper S.A.
Zemper France S.A.R.L.
R.G.B. S.L.
Ratio Holding B.V.
Ratio Electric B.V.
Ratio EV Limited
Lumen Intelligence Holding GmbH
SchahlLED Lighting GmbH
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
Calle Conde de Aranda, 1, 2º izq., 28002 Madrid, Spain
C/ Juan de Mariana, 16 Local 2 Drcha, 28045 Madrid, Spain
189 Chemin des Frozières ZA des Berthilliers, 71850 Charnay-Les-Macon, France
C/ Flauta Magica 19, 29006 Malaga, Spain
Ambachtsstraat 12, 3861 RH Nijkerk, Netherlands
Ambachtsstraat 12, 3861 RH Nijkerk, Netherlands
Merse Road, North Moons Moat, Redditch, Worcestershire, B98 9HH, England
Max-Planck-Straße 9, 85716 Unterschleißheim, Germany
Max-Planck-Straße 9, 85716 Unterschleißheim, Germany
160
Annual Report and Accounts for the year ended 30 June 2023 33 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
FW Thorpe Nederland B.V. (formerly
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
FW Thorpe Espana S.L.U.
Electrozemper S.A.
Zemper France S.A.R.L.
R.G.B. S.L.
Ratio Holding B.V.
Ratio Electric B.V.
Ratio EV Limited
Lumen Intelligence Holding GmbH
SchahlLED Lighting GmbH
– 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
– holding company
– design and manufacture of illuminated signs
– sale of lighting equipment to industrial and commercial markets
– sale of lighting equipment to industrial and commercial markets
– holding company
– sale of lighting equipment to industrial and commercial markets
– sale of lighting equipment to industrial and commercial markets
– holding company
– sale of lighting equipment to industrial and commercial markets
For the year ended 30 June 2023, 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.
161
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Notes to the financial statements. continued
For the year ended 30 June 2023
34 Business combination
On 23 September 2022, the Group acquired 80% of the share capital and hence control of Lumen Intelligence Holding
GmbH, a company that holds 100% equity interest in SchahlLED Lighting GmbH, a turnkey provider of intelligent energy
saving lighting products for the industrial and logistics sectors. The company was acquired for an initial consideration of
€14.6m (£12.9m). There is a fixed commitment to acquire the remaining shares, based on current best estimates, a further
€7.5m (£6.6m) could be payable, which is subject to future performance conditions. Amounts recognised in respect of this
acquisition are shown below:
€’000
8,124
57
109
150
4,450
3,856
324
(4,466)
(2,563)
(549)
(729)
(800)
(2,428)
5,535
16,616
22,151
14,643
5,185
2,323
22,151
14,643
(324)
14,319
£’000
7,151
50
96
132
3,917
3,394
286
(3,931)
(2,256)
(483)
(642)
(704)
(2,137)
4,873
14,624
19,497
12,888
4,563
2,046
19,497
12,888
(286)
12,602
Intangible assets
Property, plant & equipment
Right of use assets
Deferred tax assets
Inventories
Trade and other receivables
Cash
Trade and other payables
Financial liabilities
Lease liabilities
Current income tax liabilities
Provisions for liabilities and charges
Deferred tax Liabilities
Total identifiable assets
Goodwill
Total purchase consideration
Total purchase consideration satisfied by:
Cash
Redemption liability
Contingent consideration
Total consideration
Net cash flow arising acquisition of subsidiaries
Cash consideration
Less cash in subsidiaries acquired
Cash outflow on acquisition of subsidiaries
162
Annual Report and Accounts for the year ended 30 June 2023 34 Business combination continued
On acquisition, a valuation exercise on the assets and liabilities of Lumen Intelligence Holding GmbH has been performed;
the book value of all assets and liabilities except for warranties are considered to represent fair value. For provision for
warranties, additional provision of €500,000 (£440,000) was applied to reflect the longer term nature of these commitments.
Fair value of intangible assets was assessed and determined on the basis of brand name and customer relationships acquired.
Brand name elements was determined using an industry typical royalty rate over a ten years period and customer relationships
was determined using an industry typical royalty rate over a six years period, all discounted to the present day.
The goodwill relates to the on going level of profitability of the business model, opportunity to sell existing Group and third
party products into the German market and potential sourcing benefits for Group companies.
The acquisition of Lumen Intelligence Holding GmbH has been accounted for as if the Group acquired 100% of its share
capital as the Group has a commitment and obligation to acquire the remaining outstanding shares in Lumen Intelligence
Holding GmbH. Therefore, any post-acquisition profits attributable to non-controlling interests are treated as finance
expense of the Group.
For the nine months to 30 June 2023 the Lumen companies contributed €19.3m (£16.9m) to Group revenue and €1.2m (£1.0m)
to Group profit before tax for the current financial year.
If the acquisition had occurred on 1 July 2022 the consolidated proforma revenue and profit before tax for the year ended
30 June 2023 would have been €23.9m (£20.8m) and €1.3m (£1.1m) respectively. These amounts have been calculated using
the subsidiary’s results and adjusting them for:
• differences in accounting policies between the Group and the subsidiary; and
•
the additional depreciation and amortisation that would have been charged, assuming that the fair value adjustments
to property, plant and equipment and intangible assets had applied from 1 July 2022, together with the consequential
tax benefits.
35 Events after the statement of financial position date
On 17 July 2023, the Group completed its commitment to purchase a piece of land in Wales for a consideration of £2.0m.
The land will be used to plant trees as part of the Group’s effort to reduce its carbon emission footprint.
On 3 October 2023, the Group paid the third tranche of payments for the acquisition of Electrozemper S.A. totalling
€5.0m (£4.3m).
163
Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview 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 16 November 2023 at 3.15 pm to transact the business set out below.
To receive and adopt the Annual Report and Accounts for the year ended 30 June 2023.
Ordinary business
1.
2. To declare a final dividend.
3. To re-elect Mr M Allcock as a director.
4. To re-elect Mr C Muncaster as a director.
5. To elect Mr F Haafkens as a director.
6. To re-appoint PricewaterhouseCoopers LLP as auditors of the Company, to hold office until the conclusion of the next
General Meeting at which accounts are laid before the Company and to authorise the directors to fix the auditors’
remuneration.
Special business
To consider and, if thought fit, to pass the following resolutions which will be proposed in the case of 7 as an ordinary
resolution and in the case of 8 as a special resolution.
7. That the directors’ remuneration report (as set out on pages 95 to 98 of the Annual Report and Accounts) for the year
ended 30 June 2023 be approved.
8. 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 2024; 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
14 November 2023 (or, in the event of any adjournment, 6:30pm 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.
164
Annual Report and Accounts for the year ended 30 June 2023 Notes continued
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 14 November 2023 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 14 November 2023 (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 12 October 2023 (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 1,704,004 shares held in treasury, the
total voting rights in the Company as at 12 October 2023 are 117,231,586.
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
12 October 2023
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Stock Code: TFW www.fwthorpe.co.ukStrategic ReportOur Governance Our FinancialsBusiness Overview Financial calendar.
2023
16 October
16 November
24 November
2024
March
April
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
Company Information.
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
Singer Capital Markets
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
166
Annual Report and Accounts for the year ended 30 June 2023 The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
The production of this report supports the work of the Woodland Trust,
charity. Each tree planted will grow into a vital carbon store,
the UK’s leading woodland conservation charity. Each tree planted will
helping to reduce environmental impact as well as creating
grow into a vital carbon store, helping to reduce environmental impact
as well as creating natural havens for wildlife and people.
natural havens for wildlife and people.
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Merse Road | North Moons Moat | Redditch | Worcestershire | B98 9HH | England
Tel: + 44 (0)1527 583200 | Fax: + 44 (0)1527 584177 | www.fwthorpe.co.uk