Final Results - Part 2
Trifast PLC
20 June 2000
PART 2
Trifast plc
Preliminary Results
for the year ended 31 March 2000
Notes
1 Accounting policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Group's financial
statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules modified
to include the revaluation of certain land and buildings.
Basis of consolidation
The consolidated financial statements include the financial statements of the
company and its subsidiary undertakings all of which have been made up to 31
March 2000.
Where the acquisition method of accounting is required to be adopted the
results of subsidiary undertakings acquired or disposed of in the year are
included in the consolidated profit and loss account from the date of
acquisition or up to the date of disposal.
In the Company's accounts, investments in subsidiary undertakings are stated
at cost less amounts written off for any impairment in value.
Under section 230(4) of the Companies Act 1985, Trifast plc is exempt from
the requirement to present its own profit and loss account.
The amount of profit for the year dealt with in the financial statements of
Trifast plc is disclosed in the notes to the financial statements.
Goodwill
Purchased goodwill (both positive and negative) arising on consolidation in
respect of acquisitions before 1 April 1998, when FRS 10 Goodwill and
intangible assets was adopted, was written off to reserves in the year of
acquisition. When a subsequent disposal occurs any related goodwill
previously written off to reserves is written back through the profit and
loss account as part of the profit or loss on disposal.
Purchased goodwill (representing the excess of the fair value of the
consideration given plus any related costs over the fair value of the
separable net assets acquired) arising on consolidation in respect of
acquisitions since 1 April 1998 is capitalised. Positive goodwill is
amortised to nil by equal annual instalments over its estimated useful life.
On the subsequent disposal or termination of a business acquired since 1
April 1998, the profit or loss on disposal or termination is calculated after
charging/(crediting) the unamortised amount of any related goodwill.
Employee share schemes
No cost is recognised in respect of SAYE schemes that are offered on similar
terms to all eligible employees.
Fixed assets and depreciation
During the year the Group adopted FRS 15. Details regarding the revaluation
are set out in the notes to the financial statements.
Depreciation is provided by the Group to write off the cost or valuation less
the estimated residual value of tangible fixed assets over their estimated
useful economic lives. The rates in use are as follows:
Freehold and long leasehold buildings - 2% per annum straight line or
the period of the lease
Short leasehold properties - period of lease
Motor vehicles - 25% on straight line basis
Plant, machinery and fixtures - 10-20% per annum on straight line
basis
Fixtures, fittings and office equipment - 10-25% per annum on reducing balance
basis
No depreciation is provided on freehold land.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange
ruling at the balance sheet date and the gains or losses on translation are
included in the profit and loss account.
For consolidation purposes, the assets and liabilities of overseas subsidiary
undertakings are translated at the closing exchange rates. Profit and loss
accounts of such undertakings are consolidated at the average rates of
exchange during the year. Exchange differences arising on these translations
are taken to reserves, net of exchange differences arising on related foreign
currency borrowings.
Leases
Where the company enters into a lease which entails taking substantially all
the risks and rewards of ownership of an asset, the lease is treated as a
'finance lease'. The asset is recorded in the balance sheet as a tangible
fixed asset and is depreciated over its estimated useful life or the term of
the lease, whichever is shorter. Future instalments under such leases, net of
finance charges, are included with creditors. Rentals payable are apportioned
between the finance element, which is charged to the profit and loss account,
and the capital element which reduces the outstanding obligation for future
instalments.
All other leases are accounted for as 'operating leases' and the rental
charges are charged to the profit and loss account on a straight line basis
over the life of the lease.
Pensions
The Group operates defined contribution pension schemes. The assets of the
schemes are held separately from those of the Group in independently
administered funds. The amount charged against profits represents the
contributions payable to the schemes in respect of the accounting period.
Stocks
Stocks are stated at the lower of cost and net realisable value with
provision being made for obsolete and slow moving items. In determining the
cost of raw materials, consumables and goods purchased for resale, the
weighted average purchase price is used. For work in progress and finished
goods manufactured by the Group, cost is taken as production cost, which
includes an appropriate proportion of attributable overheads.
Taxation
Provision is made for deferred tax only to the extent that it is probable
that a liability will crystallise.
Turnover
Turnover represents the amounts (excluding value added tax) receivable by the
Group in the ordinary course of business from sales to outside customers for
goods supplied.
Cash
Cash, for the purpose of the cash flow statement, comprises cash in hand and
deposits repayable on demand, less overdrafts repayable on demand.
2 Geographical segments
The Group's turnover, analysed by geographical market of destination, is
as follows:
2000 1999
£000 £000
United Kingdom 82,547 77,055
European Union (excluding UK) 15,963 6,594
Europe - other 4,878 5,759
North and South America 5,240 2,817
Far East 4,509 3,060
Other 176 144
113,313 95,429
The Group's turnover, profit before tax and net assets, analysed by
geographical market of origin, are as follows:
UK Asia Rest of World Group
2000 1999 2000 1999 2000 1999 2000 1999
£000 £000 £000 £000 £000 £000 £000 £000
Turnover
Total 92,895 85,749 7,653 5,457 20,309 10,155 120,857 101,361
sales
Inter (3,769) (3,665) (2,293) (1,437) (1,482) (830) (7,544) (5,932)
segment
sales
Sales to 89,126 82,084 5,360 4,020 18,827 9,325 113,313 95,429
third
parties
Profit
before
taxation
Segment 9,040 8,194 1,647 1,026 774 675 11,461 9,895
profit
before
goodwill
Goodwill (88) (66) - - (229) (82) (317) (148)
amortisation
Profit 8,952 8,128 1,647 1,026 545 593 11,144 9,747
before
interest
Net (343) (263)
interest
Profit on ordinary activities 10,801 9,484
before taxation
Segment 28,499 22,196 3,918 1,869 803 2,323 33,220 26,388
net assets
Turnover is predominantly derived from the manufacture and logistical supply
of industrial fasteners.
3 Operating profit
Operating profit is analysed as follows:
Existing Acquisitions Continuing
operations operations
2000 1999 2000 1999 2000 1999
£000 £000 £000 £000 £000
£000
Turnover 105,998 95,429 7,315 - 113,313 95,429
Cost of (75,272) (68,676) (5,502) - (80,774) (68,676)
sales
Gross 30,726 26,753 1,813 - 32,539 26,753
profit
Distribution (2,266) (1,812) (358) - (2,624) (1,812)
costs
Administrative
expenses (before
goodwill) (17,469) (15,030) (965) - (18,434) (15,030)
Goodwill (208) (148) (109) - (317) (148)
amortisation
Other (77) (16) 57 - (20) (16)
operating
expenses
Operating 10,706 9,747 438 - 11,144 9,747
profit
4 Profit on ordinary activities before taxation
2000 1999
£000 £000
Profit on ordinary activities before taxation is stated
after charging and (crediting):
Auditors' remuneration:
Audit 106 96
Other fees paid to the auditors and their associates 186 166
Depreciation and other amounts written off tangible fixed
assets:
Owned 1,439 1,146
Leased 35 34
Hire of plant and machinery - operating leases 47 9
Hire of other assets - operating leases 1,061 1,017
Loss on disposal of fixed assets 192 117
Rents receivable from property (44) (2)
Net exchange gains (67) (172)
Goodwill amortisation (317) (148)
The total amount charged for the hire of plant and machinery amounted to
£51,000 (1999: £11,000). This comprises rentals payable under operating
leases as well as depreciation on plant and machinery held under finance
leases together with the related finance charges.
The audit fee included for the company was £30,000 (1999: £29,000). The
auditors also received £14,000 (1999: £112,000) which has been capitalised as
part of the cost of the acquisitions.
5 Interest payable and similar charges
2000 1999
£000 £000
On bank overdraft 46 40
Finance charges payable in respect of finance leases and
hire purchase 10 15
contracts
Loans and mortgages 476 346
Other 2 8
534 409
6 Taxation
2000 1999
£000 £000
UK corporation tax at 30% (1999: 31%) 2,793 2,652
Overseas taxes 608 261
Deferred taxation (55) 59
Adjustment relating to an earlier year (29) 121
3,317 3,093
7 Dividends
2000 1999
Ordinary shares: £000 £000
Interim - 2000: 4.57p per share (1999: 4.17p) 810 739
Final proposed - 2000: 9.14p per share (1999: 8.33p) 1,641 1,467
Total dividend 2,451 2,206
8 Earnings per share
2000 1999
Earnings per share £000 £000
Post tax profit for the financial year 7,484 6,391
Goodwill amortisation charge 317 148
Post tax profit for the year before goodwill 7,801 6,539
amortisation
2000 1999
Weighted average number of ordinary shares in 17,727,819 17,475,875
issue - basic
Adjustment in respect of share options 186,881 220,855
_________ _________
Weighted average number of ordinary shares in 17,914,700 17,696,730
issue - diluted
_________ _________
Basic (after goodwill amortisation) 42.21p 36.58p
Diluted (after goodwill amortisation) 41.77p 36.12p
Adjusted diluted (before goodwill amortisation) 43.54p 36.96p
The 'Adjusted diluted' earnings per share is calculated after adding back the
goodwill amortisation of £317,000 (1999: £148,000). In the directors' opinion
this best reflects the underlying performance of the Group and assists in the
comparison with the results of earlier years.
9. The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 March 1999 or 2000 but is
derived from those accounts. Statutory accounts for 1999 have been delivered
to the Registrar of Companies, and those for 2000 will be delivered following
the company's Annual General Meeting. The auditors have reported on those
accounts; their reports were unqualified and did not contain statements under
Section 237(2) or (3) of the Companies Act 1985.
10. This statement is not being posted to shareholders. The Report &
Accounts for the year to 31 March 2000 will be posted to shareholders on 7
July 2000. Further copies will be available from the Company's Registered
Office: Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW.
The Annual General Meeting will be held on Thursday, 24 August 2000,
12.00noon, at the Company's Registered Office as above.
TRIFAST GROUP OF COMPANIES
TRIFAST plc
Uckfield
East Sussex
* * * * * *
TR FASTENINGS Ltd
Uckfield
East Sussex
* * * * * *
Birmingham Division Leeds Division South-West Division
West Bromwich Riverside Place Taunton
West Midlands Leeds Somerset
Bracknell Division Manchester Division Telford Division
Bracknell Broadway Telford
Berkshire Manchester Shropshire
East Anglia Division Northampton Division Wales Division
Sawston Brackmills Cwmbran
Cambridge Northampton Gwent
Edenbridge Division North East Division
Edenbridge Newton Aycliffe
Kent County Durham
Hank & Products Scotland Division
Division East Kilbride
Uckfield Scotland
East Sussex
Ireland Division Stringers Division
Mallusk Coventry
Northern Ireland West Midlands
OTHER UK SUBSIDIARIES
Ivor Green (Exports) Ltd Lancaster Fastener Company Limited
Arundel Morecambe
West Sussex Lancashire
INTERNATIONAL
TR Southern Fasteners Ltd TR Miller Holding BV Samson Industries Inc.
Mallow, Galway & Dublin Oldenzaal Los Angeles & Phoenix
Divisions Holland Divisions
Eire USA
Ferreus Precision Ltd TR Norge AS FCF International AB
Mallow Oslo Stockholm
Eire Norway Sweden
TR Formac Pte. Ltd TR Formac (Malaysia) SDN BHD Joint Venture
Singapore Pulau Pinang Shanghai
Malaysia China
INFORMATION TECHNOLOGY
Trifast Systems Ltd
Brighton
East Sussex