FW Thorpe lifts profit and dividend despite softer lighting markets

A resilient result in difficult markets

FW Thorpe has delivered a steady set of full-year results despite slow general lighting markets in the UK and Europe.

Revenue from continuing operations fell by 1.3% to £172.9 million in the year ended 30 June 2026. However, profit before tax increased by 2.5% to £32.4 million, while basic earnings per share rose by a more substantial 9.4% to 23.72p.

The board also raised the ordinary dividend for the year by 3.1% to 7.34p per share. This excludes the 2.60p special dividend already paid during the year.

These are not transformational numbers, but they demonstrate resilience. FW Thorpe maintained profitability during weak market conditions, supported by good performances from several subsidiaries, lower material costs and tight expense control.

The less comfortable part is the outlook. Orders are ahead of the comparable point last year, but general performance is marginally lower, costs are expected to rise and two underperforming businesses still require improvement.

FW Thorpe's key financial figures

Metric	2026	2025	Change
Revenue	£172.9 million	£175.2 million	-1.3%
Operating profit before acquisition adjustments	£33.0 million	£32.9 million	+0.4%
Operating profit	£31.8 million	£32.1 million	-0.8%
Profit before tax	£32.4 million	£31.6 million	+2.5%
Profit for the year	£27.1 million	£25.4 million	+6.5%
Basic earnings per share	23.72p	21.69p	+9.4%
Total ordinary dividend	7.34p	7.12p	+3.1%
Operating cash inflow	£30.8 million	£33.2 million	-7.2%

Operating profit was broadly flat before acquisition adjustments, which include the amortisation of acquisition-related intangible assets and changes in the value of a redemption liability.

The increase in profit before tax was helped by lower finance expenses and a reduction in FW Thorpe's share of joint-venture losses. The effective tax rate also declined to 16.50% from 19.64%, supported by patent box and other innovation tax reliefs.

Mixed performances across the group

The group's diversified collection of lighting businesses proved valuable, with stronger subsidiaries offsetting weaker areas.

Zemper, the Spanish emergency lighting business, increased profit by more than 40%. Dutch emergency lighting company Famostar delivered further profitable growth, while specialist cleanroom lighting business Solite exceeded £1 million of operating profit for the first time.

TRT, which manufactures street and tunnel lighting, returned to profitability. It also entered the new financial year with the largest order in FW Thorpe's history, which is due to be shipped over two years.

There was also progress at the Ratio EV joint venture. Its main Netherlands division and UK start-up were profitable during the final six months of the year, although the group still reported a £608,000 overall share of joint-venture losses.

Performance was weaker at Lightronics in the Netherlands and SchahlLED in Germany. The latter has been affected by costs associated with its recovery plan and efforts to diversify away from recession-hit industrial markets.

Philip Payne also suffered from lower order intake, particularly from one large customer. Portland Lighting continued to grow revenue but reported lower profit as it invested to support expansion into road-sign lighting.

Management has introduced improvement plans, including appointing a new commercial leader at Lightronics in September 2026. Investors should be aware that the company believes sales initiatives may take 12 months or longer to produce meaningful results.

Cash generation remains strong, but working capital weakened

Net cash generated from operating activities fell to £30.8 million from £33.2 million. Cash generated before tax was £37.4 million, compared with £40.1 million previously.

The main working-capital pressure came from a £3.6 million reduction in payables and provisions. FW Thorpe also deliberately strengthened stock availability to protect service levels amid uncertain supply conditions, although year-end inventory was broadly stable at £29.5 million.

The balance sheet remains strong. Cash and cash equivalents increased to £47.2 million, while short-term financial assets stood at £8.3 million. Together, these amounted to £55.4 million at the year end.

Management tested a severe but plausible scenario involving a 10% reduction in sales and concluded that the group could still meet its cash commitments over the following year.

That financial strength provides flexibility for investment, shareholder returns and acquisitions, although no suitable acquisition target has yet been identified.

Buybacks boosted shareholder returns and earnings per share

FW Thorpe spent £11.8 million buying back shares during the year, up from £3.1 million in 2025. The board said this was a measured use of cash following weaker valuations for the company and the wider AIM market.

Buybacks reduce the number of shares across which profits are divided. The weighted average share count fell from 117.1 million to 114.1 million, helping earnings per share grow faster than total profit.

The company also paid £11.1 million in dividends during the year, including the special dividend. Cash outflow from financing activities reached £30.8 million after including buybacks, dividends, lease payments and other obligations.

Although cash resources remain substantial, investors should monitor the balance between buybacks, dividends, capital investment and possible acquisitions if trading conditions stay subdued.

Ordinary dividend increases by 3.1%

The proposed final dividend is 5.53p per share, up from 5.36p. This takes the ordinary dividend for the year to 7.34p, compared with 7.12p in 2025.

If approved at the annual general meeting on 26 November 2026, the final dividend will be paid on 4 December to shareholders on the register on 6 November. The shares will trade ex-dividend from 5 November.

The 2.60p special dividend paid earlier in the financial year is separate from the 7.34p ordinary total. Including it would bring distributions relating to the year to 9.94p per share, although special dividends should not be assumed to recur.

Product investment could support longer-term growth

FW Thorpe continues to invest in manufacturing efficiency and product development.

Thorlux's SmartScan lighting control system is due to receive a major update in autumn 2026. The third generation will include a faster wireless network, AES-256 encryption and remote software updating.

Zemper's ALIOTH emergency lighting system can alter evacuation instructions when conditions change. Its first large-scale order was installed as part of an EU airport refurbishment, with further projects being progressed.

The group is also preparing to launch emergency lighting products using cork bodies. FW Thorpe says cork components cost less than comparable wooden parts, while tooling costs are modest relative to plastic manufacturing.

These initiatives are promising, but the financial contribution from future orders was not disclosed.

What investors should watch in 2026/27

The original company announcement presents a business that is financially robust but still searching for renewed growth.

The positives are higher profit, improved margins, strong cash resources, a rising dividend and encouraging performances from Zemper, Famostar, Solite and TRT. The record TRT order and progress at Ratio EV provide additional reasons for interest.

The risks are equally clear. Revenue declined, operating cash generation weakened and the recovery of Lightronics and SchahlLED remains unfinished. Electronic component, sourcing and employment costs are expected to increase, while management sees less scope for easy efficiency gains.

Orders being ahead is encouraging, but the statement that general performance is marginally lower prevents this from being an upbeat outlook. For investors, the key test is whether FW Thorpe can convert its healthy order position and product pipeline into renewed revenue growth without sacrificing margins.