Acquisitions underpin first-half growth for FW Thorpe

12th Oct 2023 12:51

(Sharecast News) - Professional lighting specialist FW Thorpe reported a 23% rise in revenue in its final results on Thursday, amounting to £176.7m, or a 10.7% increase when excluding the impact from the acquisition of SchalLED and Zemper.

The AIM-traded firm said the solid revenue performance came from both organic means, attributed to service levels reverting to their typical state, and the added contributions derived from recent acquisitions.

Operating profit was ahead 15.6% at £29.8m before acquisition adjustments and 7.9% after excluding the acquisitions.

Furthermore, the firm reported an operating profit of £17.8m, marking a 12.6% rise, or 8.8%, when disregarding acquisitions.

Profit before tax demonstrated a notable surge, positioned at £26.9m, reflecting an 11.7% growth or 10.2% sans the SchalLED and Zemper acquisition impacts.

Basic earnings per share escalated to 18.72p, portraying a 9.1% increment, as the board announced a total interim and final dividend of 6.46p, up 5% from 2022's 6.15p.

The final dividend was set at 4.84p, marking a 5% boost from the prior year's 4.61p.

Net cash generated from operating activities came in at £31.9m, up from £19.7m a year earlier.

Moving forward, FW Thorpe said it kicked off the 2024 financial year on a sturdy note, with operating performance aligning with the onset of the prior year, hinting at a continuation of its upward financial trend.

"All group companies are forecasting some sales growth and all are charged with keeping costs under control and a close eye on sales margins," said chairman and joint chief executive officer Mike Allcock.

"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."

Mike Allcock said FW Thorpe had "excellent resilience" to changing conditions, with a firm footprint in numerous geographical territories and 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."

At 1100 BST, shares in FW Thorpe were down 2.93% at 376.62p.

Reporting by Josh White for Sharecast.com.