Interim Results
Trifast PLC
21 November 2000
Trifast plc
'Global Assembly Partners'
Interim Results
for the six months ended 30 September 2000
'Growth Momentum Continues'
Turnover £60.83m +13%
Operating profit before goodwill amortisation £6.04m +11%
Operating profit £5.88m +12%
Profit before taxation £5.69m +11%
Earnings per shareAdjusted fully diluted 5.70p +10%
Interim dividend per share 1.26p +10%
Manufacturing supplier agreements in Asia to provide competitive edge
sourcing being finalised
Pursuing acquisition targets within our International triangle
Progressing supplier alliances to enable the Group to become the 'Single
Global Supplier' to its multi-national OEM's
'We are pleased to report a good first half performance, which has met our
expectations.
'The Directors are very positive about the future prospects and the many
opportunities that lie ahead.'
FULL STATEMENT ATTACHED
Enquiries:
Malcolm Diamond, Chief Executive Today: 020 7282 8000 (8.15am -
12.00 noon)
John Wilson, Group Finance Director Today: 020 7678 8000 (12.30pm -
2.30pm)
Trifast plc Mobile: 07979 518493 (MMD)/0411 103915 (JW)
Thereafter: 01825 747487
Web-site: www.trifast.com
Email: ceooffice@trifast.com
Fiona Tooley Today: 020 7282 8000 (8.15am - 2.30pm)
Citigate Dewe Rogerson Mobile: 07785 703523
Thereafter: 0121 631 2299
-2-
Trifast plc
Interim Results
for the six months ended 30 September 2000
JOINT STATEMENT BY THE CHAIRMAN, DAVID DUGDALE AND CHIEF EXECUTIVE, MALCOLM
DIAMOND
Results
We are pleased to report a good first half performance, which has met our
expectations. In a year where we have significant planned investment and
re-alignment programmes that will enable us to maintain our leading market
position, the focus of the business teams is to be commended.
Turnover for the six months ended 30 September 2000 increased 13% to £60.83
million (1999: £54.0 million). Our International operations performed well
contributing 24% of sales and 30% to operating profits. Gross margins have
been maintained.
The Group's pre-tax profits for the period were £5.69 million (1999: £5.11
million). Operating profits before goodwill amortisation amounted to £6.04
million (1999: £5.43 million) - both up by 11% on the comparable half.
Adjusted fully diluted Earnings per Share increased 10% to 5.70 pence (1999:
5.18 pence).
Group overheads remained in line with budget at 18.8% of sales. Capital
expenditure continues to be material with £1.6 million expended in the first
half and a further planned £1.9 million during the remainder of the year.
Depreciation stood at £800,000.
Since the end of the last financial year, stocks have increased by £2.4
million to £22 million principally to service the requirements of some new
major logistics contracts which although previously highlighted are beginning
to come on stream. However, debtor management remains a priority and although
debtor days marginally increased this has been offset by control of creditor
payments. No significant bad debts were incurred in the period.
Shareholders' funds were £36.4 million compared to £33.2 million in March
2000. Gearing rose from 7% to 15% in the comparable period. The Balance Sheet
remains strong, which will allow us comfortably to finance some of our future
plans in the short-term.
Taking into account the 3 for 1 share bonus issue in August, a 10% increase
in the interim dividend to 1.26 pence (1999: 1.14 pence) will be paid on 11
January 2001 to shareholders on the Register as at 1 December 2000.
Review
After considerable organic and acquisitive growth over the last five years,
we have developed from being solely a manufacturer and distributor of
industrial fastenings into a leading provider of multi-product inventory
management solutions for our ever increasing global customer base. To reflect
the enhanced supply chain role TR Europe has been established and will
embrace the UK's principal trading subsidiary, TR Fastenings as well as other
UK companies and our operations in Scandinavia, Ireland, Hungary and Holland.
TR Europe will focus its sales activities into four clearly defined sectors -
Information Technology, Home Appliances, 1st Tier Automotive and Industrial.
continued...
-3-
This major restructuring now mirrors the successful operational format
already adopted in the Americas and Asia, so harmonising our strategy of
focusing on customers' needs through our international triangle network
whilst also meeting the demand for supply chain logistics in other emerging
industrial hot spots around the world.
The UK Hub & Satellite operation, which will provide operational efficiencies
going forward, is due for completion in early 2001. The Southern Hub will
gain additional capacity following the relocation of the Group's central
support services to modest refurbished offices near the Uckfield operation in
the New Year. The Central England Hub, now under construction in Wednesbury
will allow us to consolidate and enhance our Midland's presence. The freehold
property occupied by Stringers in Coventry has already been sold slightly
above book value.
Competitive advantages have been achieved through our own designed dedicated
software programme 'New Horizons' which links all our TR business groups
providing them with up-to date vital information on our key customers and
also tracking all the components used within our and their organisations.
More recently the program has been extended to allow sales of branded
proprietary products via the 'web' when customers are ready to e-trade.
Our International businesses have once again performed strongly, in
particular Scandinavia and the Americas where growth was 10% ahead of budget.
In October, we sold our non -core power transmission business in Norway to
the management for net asset value.
Our Shanghai facility which became fully operational at the end of the last
financial year showed rapid growth whilst our Malaysian and Singapore
operations benefited from the improvement in their respective economies.
With the ever-increasing opportunities in Mainland Europe and across the
Atlantic we have decided to establish a taxable presence in both Mexico and
Hungary both of which will be operational by the year-end, with the benefits
beginning to come through in the latter part of 2001. A feasibility study has
been commissioned to examine the practicalities and benefits of establishing
a Central European manufacturing capability and we expect to report on its
findings at our next Preliminary Results.
Our people and their training are key to the success of this business and we
continue to invest heavily in this area. We have formulated a 'Fastrack'
development programme which identifies outstanding front line personnel who
can undergo 2 years of intensive management training grooming them to take up
key roles around the Group and become the 'drivers' in the future success of
Trifast.
In August, we announced the appointment of Ben Stevens to the Trifast Board
as a non-executive director. He is responsible for acquisitions within BAT
plc, having previously headed up a succession of BAT operations, mainly in
third world economies so he brings to the Group considerable operational and
international expertise, which will be invaluable to us, as we roll out our
exciting plans of overseas expansion.
In the New Year, we are bringing in a TR Europe Purchasing Director and a
Logistics Consultant to spearhead our campaign to leverage our strong
purchasing power position. By focusing on achieving leaner supply chain
solutions on an on-going basis, we will improve our revenue and margin, which
can only impact positively on the Group's earnings ability in the future.
continued...
-4-
Prospects
The Directors are very positive about the future prospects and the many
opportunities that lie ahead.
Whilst we are investing in the UK, it is vital to concentrate our efforts on
building further our international manufacturing and supplier capabilities
through alliances, partnerships as well as acquisitions, which will drive our
ambition to become the 'Single Global Supplier' to a high proportion of our
40 multi-national strategic customers.
We are actively co-ordinating a 'harmonised group' of major suppliers, which
will give us world-wide capability for category 'C' products. In addition, we
are currently negotiating two new manufacturing alliances within Asia. We
also continue to actively pursue acquisition opportunities within the area of
our International triangle.
-5-
Trifast plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Interim Results for the six months ended 30 September 2000
Note Six months Six months Year
Ended Ended Ended
30 September 30 September 31 March 2000
2000 1999 £'000
£'000 £'000
Turnover 2 60,826 53,994 113,313
Cost of sales (43,372) (38,208) (80,774)
__________ __________ __________
Gross profit
17,454 15,786 32,539
Net operating (11,410) (10,359) (21,078)
expenses
__________ __________ __________
Operating profit 6,044 5,427 11,461
before goodwill
amortisation
Goodwill (164) (152) (317)
amortisation
__________ __________ __________
Profit on 5,880 5,275 11,144
ordinary
activities
before interest
Net interest (194) (164) (343)
__________ __________ __________
Profit on 5,686 5,111 10,801
ordinary
activities
before taxation
Taxation on 3 (1,706) (1,533) (3,317)
profit on
ordinary
activities
__________ __________ __________
Profit on 3,980 3,578 7,484
ordinary
activities after
taxation
Dividends 4 (898) (810) (2,451)
__________ __________ __________
Retained profit 8 3,082 2,768 5,033
========= ========= =========
6
Earnings per
share1
Basic 5.58p 5.06p 10.55p
Diluted 5.47p 4.97p 10.44p
Adjusted diluted 5.70p 5.18p 10.89p
========= ========= =========
The results for the period were derived wholly from continuing operations.
1 restated see note 5
-6-
Trifast plc
SUMMARISED CONSOLIDATED BALANCE SHEET
Unaudited Interim Results as at 30 September 2000
Note 30 September 30 September 31 March 2000
2000 1999 £'000
£'000 £'000
Goodwill 5,904 6,181 6,068
Tangible fixed 14,177 12,475 13,621
assets
__________ __________ __________
Current assets
7 52,579 47,010 51,009
Creditors: (28,510) (27,297) (29,566)
amounts falling
due within one
year
__________ __________ __________
Net current 24,069 19,713 21,443
assets
__________ __________ __________
Total assets 44,150 38,369 41,132
less current
liabilities
Creditors:
amounts falling (6,934) (7,776) (7,038)
due after more
than
one year
Provisions for (825) (736) (874)
liabilities and
charges
__________ __________ __________
Net assets
36,391 29,857 33,220
========= ========= =========
Capital and
reserves
Called up share 3,564 886 891
capital
Share premium 3,229 5,668 5,872
Revaluation 1,017 - 1,017
reserves
Merger reserve 783 1,111 947
Profit and loss 8 27,798 22,192 24,493
account
__________ __________ __________
Equity 9 36,391 29,857 33,220
shareholders'
funds
========= ========= =========
-7-
Trifast plc
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Interim Results for the six months ended 30 September 2000
Note Six months Six months Year ended
ended ended 31 March
30 September 30 September 2000
2000 1999 £'000
£'000 £'000
Net cash inflow from 10 3,606 7,305 11,071
operating activities
Returns on investment (206) (157) (338)
and servicing of
finance
Taxation paid (1,349) (421) (3,553)
Net cash outflow from 11 (1,276) (3,871) (4,776)
investing activities
Equity dividends paid (1,628) (1,476) (2,290)
__________ __________ __________
Cash (outflow)/inflow
before use of liquid (853) 1,380 114
resources and
financing
Net cash 12 (49) 2,549 2,066
(outflow)/inflow from
financing
__________ __________ __________
(Decrease)/increase (902) 3,929 2,180
in cash in the period
========= ========= =========
-8-
Trifast plc
NOTES TO THE INTERIM STATEMENT
Unaudited Interim Results for the six months ended 30 September 2000
1. Basis of preparation
This interim statement has been prepared on the basis of accounting
policies set out in the Group financial statements for the year ended 31
March 2000.
This statement does not comprise full financial statements within the
meaning of Section 240 of the Companies Act 1985. The statement is unaudited
but has been reviewed by KPMG Audit Plc and their report is set out below.
The figures for the year ended 31 March 2000 have been extracted from
the full Annual Report and Accounts filed with the Registrar of Companies on
which the Auditors gave an unqualified report.
2. Turnover
Six months ended Six months ended Year ended
30 September 2000 30 September 1999 31 March 2000
£'000 £'000 £'000
Analysis by
activity
Industrial 60,536 53,959 113,237
fastenings
Other activities 290 35 76
__________ __________ __________
60,826 53,994 113,313
========= ========= =========
3. Taxation
The charge for tax is an estimate based on the anticipated effective
rate of tax for the year ending 31 March 2001.
4. Dividends
The Directors have declared an interim dividend of 1.26p per ordinary
share to be paid on 11 January 2001 to shareholders on the register on 1
December 2000.
5. Bonus Issue
The prior period number of shares in issue have been restated to reflect
the 3 for 1 bonus issue effected 25 August 2000.
6. Earnings per Share
The calculation of earnings per 5p ordinary share is based on profit on
ordinary activities after goodwill amortisation and after taxation and the
weighted average number of shares in the period of 71,267,901 (September
1999: 17,672,658 restated 70,690,632; March 2000: 17,727,819 restated
70,911,276).
The calculation of the fully diluted earnings per 5p ordinary share is
based on profit on ordinary activities after goodwill amortisation and after
taxation. In accordance with FRS 14 the weighted average number of shares in
the period has been adjusted to take account of the effects of all dilutive
potential ordinary shares. The number of shares used in the calculation
amount to 72,699,343 (September 1999: 17,995,693 restated 71,982,772; March
2000: 17,914,700, restated 71,658,800).
continued...
-9-
The adjusted fully diluted earnings per share is presented so as to show
more clearly the underlying performance of the Group and is calculated as
above using the profit on ordinary activities before goodwill amortisation
but after tax.
7. Current Assets
Six months ended Six months ended Year ended
30 September 2000 30 September 1999 31 March 2000
£'000 £'000 £'000
Stocks 22,083 16,768 19,627
Debtors 26,422 23,625 26,331
Cash at bank and 4,074 6,617 5,051
in hand
__________ __________ __________
52,579 47,010 51,009
========= ========= =========
8. Profit and Loss Account
Six months ended Six months ended Year ended
30 September 30 September 31 March 2000
2000 1999 £'000
£'000 £'000
Opening balance 24,493 19,783 19,783
Retained profit for 3,082 2,768 5,033
period
Exchange differences 59 (63) (192)
Transfer from merger 164 152 317
reserve
Capitalisation of
reserves on
issue of shares to
qualifying - (448) (448)
employees share
ownership
trust
__________ __________ __________
27,798 22,192 24,493
========= ========= =========
9. Reconciliation of Movements in Shareholders' Funds
Six months ended Six months ended Year ended
30 September 30 September 31 March 2000
2000 1999 £'000
£'000 £'000
Profit for the 3,980 3,578 7,484
financial period
Dividends (898) (810) (2,451)
__________ __________ __________
Retained profit for 3,082 2,768 5,033
the period
Issue of ordinary 30 1,212 1,422
shares
Capitalisation of
reserves on issue of
shares to qualifying - (448) (448)
employees
share ownership
trust
Exchange 59 (63) (192)
gains/(losses)
Revaluation - - 1,017
__________ __________ __________
Net addition to 3,171 3,469 6,832
shareholders' funds
Opening 33,220 26,388 26,388
shareholders' funds
__________ __________ __________
Closing 36,391 29,857 33,220
shareholders' funds
========= ========= =========
continued...
-10-
10. Net Cash Flow from Operating Activities
Six months Six months Year ended
ended ended 31 March 2000
30 September 30 September £'000
2000 1999
£'000 £'000
Operating profit after
goodwill 5,880 5,275 11,144
amortisation
Depreciation charge 800 682 1,474
Loss on sale of 47 189 192
tangible fixed assets
Goodwill amortisation 164 152 317
(Increase)/decrease in
working (3,285) 1,007 (2,056)
capital
__________ __________ __________
3,606 7,305 11,071
========= ========= =========
11. Net Cash Outflow from Investing Activities
Six months ended Six months ended Year ended
30 September 2000 30 September 1999 31 March 2000
£'000 £'000 £'000
Capital
expenditure and 1,276 2,009 2,913
financial
investment
Acquisitions and - 1,862 1,863
disposals
__________ __________ __________
1,276 3,871 4,776
========= ========= =========
12. Net Cash (Outflow)/Inflow from Financing
Six months Six months Year ended
ended ended 31 March 2000
30 September 30 September £'000
2000 1999
£'000 £'000
Issue of ordinary share 30 216 425
capital
(Decrease)/increase in (79) 2,333 1,641
debt
__________ __________ __________
(49) 2,549 2,066
========= ========= =========
13. Reconciliation of Net Cash Flow to Movement in Debt
Six months Six months Year ended
ended ended 31 March 2000
30 September 30 September £'000
2000 1999
£'000 £'000
(Decrease)/increase in
cash in the (902) 3,929 2,180
period
Cash outflow/(inflow)
from
decrease/(increase) in 79 (2,333) (1,641)
debt and
lease financing
__________ __________ __________
Change in net debt
resulting from (823) 1,596 539
cash flows
Loans and finance
leases acquired - (365) (365)
with subsidiaries
Translation difference (26) 10 (2)
__________ __________ __________
Movement in net debt in
the (849) 1,241 172
Period
Net debt at beginning (3,678) (3,850) (3,850)
of period
__________ __________ __________
Net debt at end of the (4,527) (2,609) (3,678)
period
========= ========= =========
-11-
Independent Review Report by KPMG Audit Plc to Trifast plc
Introduction
We have been instructed by the company to review the financial information
set out on pages 5 to 10 and we have read the other information contained in
the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Listing
Rules of the Financial Services Authority require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where
they are to be changed in the next annual accounts in which case any changes,
and the reason for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4: Review of interim financial information issued by the Auditing
Practices Board. A review consists principally of making enquiries of Group
management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a
lower level of assurance than an audit. Accordingly we do not express an
audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 September 2000.
KPMG Audit Plc
Chartered Accountants
Crawley