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FW Thorpe steady through the first half

The lighting specialist has managed to match some impressive comparators from the previous half year
March 19, 2018

The relative performance of FW Thorpe (TFW) was always likely to pale at the half-year mark due to strong comparators in the previous year. In the event, though, the lighting specialist broadly matched profits while building the top line, with the resultant 45 basis point reduction in the operating margin attributable to pricing pressures at TRT Lighting.

IC TIP: Hold at 313p

Measures are being taken to improve matters at TRT over the second half, but group performance for FY2018 may fall short of the previous year as order income hasn’t reached the record highs of 2016-17.

In December, Famostar BV, an emergency lighting specialist in the Netherlands, was acquired by the group as a complementary addition to the Lightronics operation, for an initial consideration of €7.6m (£6.7m). A further €2.7m could be payable subject to future performance hurdles.

Group revenue hgas all but doubled since 2013, and following on from the completion of the new TRT factory and surface mount technology (SMT) electronics assembly line, the group acquired the Lightronics factory and neighbouring property for €3.4m, providing another potential growth opportunity. Growth can also be stimulated by new and improved product lines, so additional SmartScan wireless lighting system features have been launched at Thorlux. In addition, several new and improved lighting products will appear on individual business websites before the end of the current financial year.

FW THORPE (TFW)   
ORD PRICE:313pMARKET VALUE:£362m
TOUCH:305-320p12-MONTH HIGH:405pLOW: 302p
DIVIDEND YIELD:1.6%PE RATIO:25
NET ASSET VALUE:90p*NET CASH:£28.4m
Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201651.27.805.381.35
201753.27.885.431.40
% change+4+1+1+4
Ex-div:22 Mar   
Payment:12 Apr   
*Includes intangible assets of £22.9m, or 20p a share