25th Mar 2020 18:23
(Alliance News) - FW Thorpe PLC on Wednesday declared an increased dividend despite posting a drop in profit due to higher overheads.
The stock closed 4.3% lower a 244.00 pence each on Wednesday in London.
For the six-month period to the end of December, the lighting systems firm posted revenue of GBP57.4 million, up from GBP52.7 million year-on-year, with revenue from the UK making up around 40% of the total amount.
Pretax profit fell 16% to GBP7.4 million from GBP8.8 million.
FW Thorpe said group operating profit was 6.7% higher at GBP7.5 million from GBP7.0 million, however larger scale orders and services carried out by its largest division Thorlux led to increased overheads, and subsequently hurt operating margin. The company added that it is taking action to improve margins in the second half of its financial year ending June 30.
The company raised its interim dividend by 2.1% to 1.46p from 1.43p.
Looking ahead, FW Thorpe said it expects government and customer response to the Covid-19 outbreak to disrupt delivery schedules. However, it added that it believes its "strong" balance sheet comprising "sufficient" cash and other liquid assets will protect the business from being hurt by "sudden economic impacts and unforeseen risks".
"Having a strong order book provides an excellent reservoir to smooth current turbulence. Recent investments give a significant capacity boost ready for us to satisfy those customers who can accept deliveries and for us to fulfil any pent-up future demand. Our local manufacturing capabilities, stock situation and customer portfolio give us a solid platform to perform to the extent we are able during the current turbulence and then build swiftly on when a level of trading normality returns," said Chair Mike Allcock.
By Ife Taiwo; [email protected]
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