FW Thorpe declares special dividend after first half growth

10th Mar 2022 12:29

(Sharecast News) - FW Thorpe declared an interim dividend of 1.54p in its first-half results on Thursday - a 3.4% increase - after a decent jump in both profit and earnings per share despite recent headwinds.

The AIM-traded firm also declared a special dividend of 2.27p per share.

It reported revenue of £63.5m for the six months ended 31 December, up 13% year-on-year, or 4% excluding the recently-acquired Zemper in Spain.

Its operating profit and profit before tax both jumped 15% to £8.8m and £8.5m, respectively, while basic earnings per share came in at 5.91p, 17% higher than a year ago.

Operationally, Thorpe reported a strong order performance at Thorlux, but said revenue and operating results there were suppressed by supply chain challenges and material cost inflation.

In the Netherlands it recorded a "positive performance", with improved profitability as a result of it being the first year without earn-out provisions.

The firm's other UK companies struggled, but the board said an order backlog supported a second-half improvement.

Net cash generated from operating activities improved to £8.9m from £8.0m at the same point last year.

The initial acquisition of Electrozemper, or Zemper, was completed in October, with the company's investment in Ratio Electric in the Netherlands following that in December.

"Most group companies are looking forward to an improved second-half performance with supply chain issues easing, to some extent, especially for commodity items like steel and cardboard," said chairman Mike Allcock.

"Within the group we are, however, mindful of significant cost inflation for purchased items as well as increases for labour and utilities."

Allcock said the company had increased its prices in the market to compensate, but was only now starting to see positive effects.

"Supported by the group's healthy order book, I foresee a good second-half revenue performance, provided the component shortages continue to improve.

"Operating results remain the focus and will improve once the recent headwinds experienced for most businesses subside."

At 1024 GMT, shares in FW Thorpe were down 1.65% at 418p.