Dewhurst PLC – Preliminary Results

Results

I am delighted to be able to report record sales and adjusted operating profit for the Group in this, our centenary year. Group sales for the year to 30 September 2019 increased 23.4% to £56.4 million on a continuing basis (2018: £45.7 million), with the benefit of a full year of sales from A&A Electrical Distributors (A&A). Adjusted operating profit before amortisation of acquired intangibles and exceptional pension costs was £7.7 million (2018: £6.0 million).  These adjustments totalled £2.3 million (2018: £0.6 million).  Reported profit before tax (after the adjusting items) was £5.2 million (2018: £5.3 million).  These results, as required under IFRS, are presented on the basis of our continuing business only, with comparatives also adjusted to exclude the contribution from Thames Valley Controls Limited (“TVC”) which was sold on 30 September 2019.  Further details regarding the contribution TVC made in our last year of ownership is provided in the Financial Review below. 

 

In addition to the above results we are reporting a profit on the sale of TVC of £6.0 million this year.  £1.1 million of the proceeds has been transferred to the pension fund towards liabilities for TVC pension scheme members, with the balance being retained for future investment.

 

In local currencies the lift business in the UK was up significantly helped by a full years’ contribution from A&A; North America was broadly flat overall with the US up but Canada down slightly after strong growth last year; and there was good growth across all our Australian businesses. Transportation business fell again during the year, but Keypads generated modest growth with a major customer increasing stock in preparation for a model changeover. Overall, currency movements have not had a material impact on reported sales this year.

 

With the continuing strength of the Group’s performance we are proposing a 0.25 pence increase in the final dividend to provide a 0.5 pence increase for the year as a whole.

Operations and People

The biggest impact on people this year has been the sale of TVC.  This required a considerable amount of work to get over the line and I would particularly like to thank Jared Sinclair and members of his team, Richard Young and David Dewhurst for their significant contributions and hard work on the project. Richard Young resigned as a Group Director on the completion of the sale.  I have enjoyed working with Richard for more than 20 years and I would like to thank him for his leadership at TVC and contribution to the Group overall.  I wish him and the team at TVC continuing success in the future.

 

We have also expended considerable resources and time on integrating A&A into our Group-wide processes and IT systems.  We have made good progress on that integration, but further work remains to be done.

 

Overall however, these record results would not have been possible without the efforts of our staff, and I would like to both recognise and thank all the staff working for the Group during the year, including those at TVC, for their contribution to this year’s success.

Centenary

We completed our 100 years in business in November and are very proud of achieving that milestone.  We marked the centenary with two events at the Science Museum in London for customers, staff and other stakeholders and by compiling a history of the business.  The events were a fantastic celebration and a great opportunity for me to thank our staff and various stakeholders for their loyalty and support over the years.  Reviewing the history was a fascinating journey through our archives and a lesson on the importance of being able to adapt to changes in the market.  Clearly with digital disruption and climate change we are facing two very significant challenges that are not just going to change our market but the whole economic and physical environment.  If we are to last another hundred years, our business, in common with others, is going to have to adapt its strategy to use the world’s resources more sustainably.  Change also brings opportunity and we will be looking to use our strengths and financial resources to capitalise on opportunities that we identify.

Outlook

Clearly it is challenging to look forward 100 years, but particularly at the moment where it is difficult to look forward just one year.  We anticipate performance in the UK will be highly dependent on the result of the General Election and particularly on whether it produces a clear result that creates some certainty about our direction of travel or just prolongs the last three years’ uncertainty.  Overseas, in the USA the market still seems strong, but the Canadian market, particularly for lift modernisation, appears to be softening; in Australia the market seems steady, at least for the first half of the year.  Regarding keypads, having gained this year from sales build up on a new model, we now envisage a reduction from the rundown in stock of the outgoing product line.