Family firm giving savers a f lick of light in dark times
FREDERICK William Thorpe founded Thorlux Lighting in 1936. Today FW Thorpe still specialises in lighting products. It is based in Redditch, Worcestershire, just 15 miles from the original headquarters, and the family remains deeply involved with the business.
Frederick’s descendants own more than 40 per cent of the shares, three Thorpes sit on the board and there is a strong feeling of community across its 650 staff.
Like many family businesses, the company is deeply conservative. It has no debt, about £50million in cash, and property valued at almost £20million. This conservatism has attracted criticism in the past. Today, it is highly reassuring, particularly for investors in search of reliable dividends.
Interim results for the second half of 2019, posted last month, showed growth in turnover and profit, alongside a 2.1 per cent increase in the interim dividend to 1.46p.
Chairman Mike Allcock admitted the outlook was uncertain given Brexit and the coronavirus outbreak, but also expressed confidence in Thorpe’s ability to ride out the storm.
The company has a strong order book, is well stocked with component parts and demand has held up well. Recent investment here and overseas means that Thorpe is also well placed to satisfy customer needs now and in the future.
The company specialises in sophisticated LED lighting that uses the latest technology to save energy, cut costs and comply with regulatory requirements.
Customers come from a range of industries, but the public sector accounts for around 50 per cent of group sales. Thorpe’s lights can be seen in hospitals across the country, including operating theatres and testing laboratories, where fittings and fixtures have to comply with strict rules and regulations.
The company also makes sensordriven products that only light up when workers enter the room. Widely used in warehouses, offices and factories, they help cut electricity bills and carbon emissions.
Thorpe makes emergency exit signs too, fitted with wireless gadgetry so they can be tested remotely. These are used in a variety of sectors, particularly in big buildings, where manual tests would be costly and time consuming.
The company tends to become involved in projects from the start, and often works with architects when they are designing sites and buildings. This early involvement means Thorpe develops close relationships with its customers, who see the business as a trusted provider of premium kit.
Allcock has been with Thorpe man and boy, starting out as an apprentice in 1984. Having risen steadily up the ranks, he became joint chief executive in 2010 and chairman seven years later.
Given his long association with the business, Allcock is particularly assiduous about staff training. The group has a tradition of developing people from within, which tends to make them stay longer, know more about their trade and feel a commitment to the company.
Over the past two decades, Thorpe has made a number of smart acquisitions, which have bolstered sales and profits, and expanded the group’s customer base across the world. Analysts at the stockbroker Liberum say that sales have grown by an average of almost 8 per cent over the past 19 years, while operating profits have grown by 10.5 per cent a year, from £2.75million to £17.67 million.
In the past five years alone, the dividend has increased by 52 per cent to 5.53p and further gains are expected in 2020 and beyond. The group could even pick up some well-priced acquisitions, once conditions begin to improve.