Trifast PLC Half-yearly Financial Report-period to 30.9.17 (3840W)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Trifast Plc	LSE:TRI	London	Ordinary Share	GB0008883927	ORD 5P

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	1.80	2.30%	80.00	78.20	81.00	80.00	78.80	78.80	91,187	08:45:21

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
Manufacturing Industries,nec	244.39M	-2.87M	-0.0213	-37.56	107.72M

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TIDMTRI

RNS Number : 3840W

Trifast PLC

14 November 2017

The information contained within this announcement

is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.

Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

TRIFAST PLC

HALF-YEARLY FINANCIAL REPORT

FOR THE SIX MONTHSED 30 SEPTEMBER 2017

"Another six months of strong growth, with increased trading driving up our underlying PBT"

 
KEY FINANCIALS 
---------------------------------------  --------  --------  --------  --------- 
                                           Change 
                                           HY2018 
Continuing operations (Actual Exchange          v 
 Rate, AER)                                HY2017    HY2018    HY2017     FY2017 
---------------------------------------  --------  --------  --------  --------- 
Group revenue                               +9.0%  GBP97.8m  GBP89.7m  GBP186.5m 
Gross profit %                            -140bps     30.2%     31.6%      31.1% 
Underlying operating profit*                +8.5%  GBP11.1m  GBP10.3m   GBP21.0m 
Operating profit                            +6.4%   GBP9.3m   GBP8.8m   GBP17.9m 
Underlying profit before tax*               +9.7%  GBP10.9m   GBP9.9m   GBP20.5m 
Profit before tax                           +7.7%   GBP9.1m   GBP8.5m   GBP17.3m 
Underlying diluted earnings per 
 share*                                     +8.1%     6.78p     6.27p     12.82p 
Diluted earnings per share                 +23.1%     6.56p     5.33p     10.40p 
Basic earnings per share                   +22.2%     6.72p     5.50p     10.72p 
Interim/total dividend^                    +10.0%     1.10p     1.00p      3.50p 
---------------------------------------  --------  --------  --------  --------- 
Net debt                                 -GBP6.3m   GBP7.9m  GBP14.2m    GBP6.4m 
Return on capital employed (ROCE)*        +150bps     20.1%     18.6%      19.9% 
---------------------------------------  --------  --------  --------  ---------

* Before separately disclosed items (see notes 2, 6 and 9).

^ Change is in interim dividend only.

OPERATIONAL HIGHLIGHTS

   --      Revenue up by 4.8% at Constant Exchange Rate (CER), 9.0% at AER, all organic growth 
   --      Underlying diluted earnings per share up by 8.1% at AER

-- Confidence for the future and continued profitable growth in a period of investment, drives an interim dividend increase of 10.0% to 1.10p

   --      Ongoing investment for growth in our sales teams and operations around the world

-- Capital investment of GBP1.3m increases our manufacturing capacity and capability, with more to follow

-- Expanded distribution facilities in Shanghai, with plans in place for Holland and Northern Ireland

-- New TR Innovation and Technical Centre to be set up in Gothenburg, Sweden's electric vehicle development area

   --      TR Fastenings Espana up and running, with a strong pipeline in place

"HY2018 delivered another six months of strong growth, with ongoing investment across all of our regions.

As an international business with over 70% of our revenue being generated outside of the UK, and a very well-balanced geographical and sector spread, the Board remains confident we have the flexibility and foresight to continue to grow, while facing any challenges head on as and when they arise."

Malcolm Diamond MBE, Non-Executive Chairman

To listen to the CEO, Mark Belton talking about trading and the business follow this link:

https://www.brrmedia.co.uk/broadcasts-embed/5a057df02acfc74f9342e193/event

Presentation of Results:

This will be held at 8.45am (UK) today at, The Lounge - 1 Cornhill, London, EC3V 3ND.

Conference dial-in facility: on request, please contact Fiona Tooley on +44 (0)7785 703523

or email fiona@tooleystreet.com.

 
 Enquiries please contact: 
 
  Trifast plc 
  Malcolm Diamond MBE, 
  Non-Executive Chairman 
  Mark Belton, Chief Executive 
  Officer 
  Clare Foster, Chief Financial 
  Officer 
  Today: Mobile: +44 (0) 
  7979 518493 (MMD) 
  Office: +44 (0) 1825 
  747630 
  Email: corporate.enquiries@trifast.com 
 
   Peel Hunt LLP 
   Stockbroker & financial 
   adviser 
   Justin Jones 
   Mike Bell 
   Matthew Brooke-Hitching 
   Tel: +44 (0)20 7418 8900 
 TooleyStreet Communications 
  IR & media relations 
  Fiona Tooley 
  Tel : +44 (0)7785 703523 
  Email : fiona@tooleystreet.com

Editors' note:

LSE Premium Listing: Ticker: TRI

LEI number: 213800WFIVE6RUK3CR22

Group website: www.trifast.com

About us: Trifast, leading international specialists in the engineering, manufacturing and distribution of high quality industrial fastenings to major global assembly industries. Key sectors are automotive, domestic appliances, electronics and distributors.

The Group employs c.1,200 staff across 28 global locations across the UK, Europe, Asia and the USA.

For more information, visit

Commercial website: www.trfastenings.com

LinkedIn: www.linkedin.com/company/tr-fastenings

Twitter: www.twitter.com/trfastenings

Facebook: www.facebook.com/trfastenings

 
 
   Electronic Communications 
 The Company is not proposing to bulk print and distribute 
  hard copies of this half-yearly financial report for 
  the six months ended 30 September 2017 unless specifically 
  requested by individual shareholders. News updates, 
  Regulatory News, and Financial statements, can be viewed 
  and downloaded from the Group's website, www.trifast.com. 
  Copies can also be requested via corporate.enquiries@trifast.com 
  or, in writing to, The Company Secretary, Trifast plc, 
  Trifast House, Bellbrook Park, Uckfield, East Sussex, 
  TN22 1QW.

Forward-looking statements

This announcement contains certain forward-looking statements. These reflect the knowledge and information available to the Company during the preparation and up to the publication of this document. By their very nature, these statements depend upon circumstances and relate to events that may occur in the future thereby involving a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company.

TRIFAST PLC

HALF-YEARLY FINANCIAL REPORT

FOR THE SIX MONTHSED 30 SEPTEMBER 2017

"WE ARE FOCUSSED ON LEVERAGING OUR COMBINED STRENGTHS AS AN INTEGRATED AND INTERACTIVE GROUP"

INTRODUCTION

We continue to develop the depth and scope of our business from a position of financial strength and stability that derives from continuing organic growth, supported by effective cash management and overhead controls.

Global market overview

We imagine that there are very few of us in commerce that have failed to be influenced by the recent geopolitical uncertainty that has abounded, and which shows every sign of continuing.

The Trifast Board and management team have concluded, that in our view, global market demand will remain dynamic, and so we have increased our focus on our customers and our supply chain, including our pricing negotiations with key suppliers. This is coupled with our ongoing forward investment in plant and machinery, automation and people skills.

TR strategy update

Our commitment to continuous operational improvement over the past five years has been rewarded with positive KPI performance against targets on a consistent annual basis, together with financial reward for our investors and staff.

Building on this success, the Board, led by Mark Belton, has initiated a major long-term project to provide the Group with improved real-time management information (including an innovative customer relationship management (CRM) and global enquiry system), paralleled with regular senior team training and operational meetings. This is aimed at significantly developing and integrating our existing IT infrastructure around the world so as to support our ongoing growth plans and meet our multinational OEM customers' evolving demands. One early benefit of this improved approach is that our six Asian factories are now sharing factory capacity data to enable work to be shared at times of feast and famine production issues - previously these were managed on a local basis, thus restricting revenue and cost recovery opportunities.

Furthermore, this enhanced use of collective resources is supported by major capital investments in Italy, Singapore and Taiwan, plus distribution and engineering capacity investment in the UK, Sweden, Spain and China.

Our search for suitable acquisitions continues to be a major strategic aim. Since we last reported in June 2017, two larger international targets were thoroughly investigated over several months by our newly formed global acquisitions team, but regrettably, both were finally rejected - more due to future revenue growth risk than to high valuations. Our team brings together the skills and experience needed to conduct initial due diligence without the need to appoint costly external financial advisers. These advisers will only be appointed in the future following the successful agreement of non-binding heads of terms.

Succession and people

It has been a real pleasure to sign an increasing number of long service award certificates for our burgeoning loyal members of staff - some of whom have now reached forty-years service, along with many overseas employees being recognised for service of ten years and more.

Across the Group, skills and personal development training are high on the list for resource funding and management focus, especially as our ever-improving operational efficiencies are creating the need for heightened individual capabilities as opposed to the need for always increasing head count to accommodate business growth.

I am personally proud and delighted to oversee the further capability development of our business whilst the core Trifast caring and informal interpersonal culture is jealously guarded by our management.

Malcolm Diamond MBE, Non-Executive Chairman

13 November 2017

BUSINESS REVIEW

Unless stated otherwise, comparisons with prior year are calculated at constant currency (CER) and where we refer to 'underlying', this is defined as being before separately disclosed items (see note 2). CER calculations have been calculated by translating the HY2018 figures by the average HY2017 exchange rate.

The above reflects a change in calculation from the HY2017 statement where the average FY2016 rate was used. Given the marked movement in the rates following the Brexit vote in June 2016, management consider using the average HY2017 rate presents a more accurate reflection of our CER growth in HY2018 than an average FY2017 rate would allow.

The impact of foreign exchange movements has increased our revenue by an additional 4.2%, GBP3.8m (HY2017: 6.8%, GBP5.3m), our underlying profit before tax by a further 5.2%, GBP0.5m (HY2017: 12.3%, GBP1.0m) and our underlying diluted EPS by 5.2%, 0.33p (HY2017: 13.9%, 0.70p).

Our Group performance

 
                           HY2018     HY2018     HY2017    Change    Change 
                              CER        AER               at CER    at AER 
----------------------  ---------  ---------  ---------  --------  -------- 
 Revenue                 GBP94.0m   GBP97.8m   GBP89.7m      4.8%      9.0% 
----------------------  ---------  ---------  ---------  --------  -------- 
 Gross profit (GP)       GBP28.4m   GBP29.5m   GBP28.4m      0.0%      3.9% 
----------------------  ---------  ---------  ---------  --------  -------- 
 GP%                        30.2%      30.2%      31.6%   -140bps   -140bps 
----------------------  ---------  ---------  ---------  --------  -------- 
 Underlying EBITDA       GBP11.5m   GBP12.1m   GBP11.2m      2.4%      7.4% 
----------------------  ---------  ---------  ---------  --------  -------- 
 Underlying operating 
  profit (UOP)*          GBP10.6m   GBP11.1m   GBP10.3m      3.4%      8.5% 
----------------------  ---------  ---------  ---------  --------  -------- 
 UOP%                       11.3%      11.4%      11.4%    -10bps      0bps 
----------------------  ---------  ---------  ---------  --------  -------- 
 Underlying profit 
  before tax*            GBP10.4m   GBP10.9m    GBP9.9m      4.5%      9.7% 
----------------------  ---------  ---------  ---------  --------  -------- 
 Underlying diluted 
  EPS*                      6.45p      6.78p      6.27p      2.9%      8.1% 
----------------------  ---------  ---------  ---------  --------  --------

*The non-underlying measures are included in the Key Financials table at the start of this report. Reconciliation to equivalent IFRS measures are in notes 2, 6 & 9.

In HY2018 we have seen another six months of good revenue growth, up 4.8% to GBP94.0m (AER: up 9.0% to GBP97.8m; HY2017: GBP89.7m).

This growth has come from our successful ongoing organic growth strategy. Sales to our top 100 multinational OEMs have grown by 4.4% in the period, reflecting the ever-increasing share of wallet we are securing with these key customers. Complementing this, we have also continued to see very strong growth, up 19.0%, across our master distributor network, predominantly into Europe.

Gross margins have been maintained slightly ahead of our 30.0% target at 30.2% (AER: 30.2%), although as expected these have reduced from the HY2017 high of 31.6%. This reduction is the result of known inflationary purchase pricing pressures which to date have been most keenly felt in Europe, arising in the main from the protracted weakness of the EUR against the US$. Despite this decrease in gross margins, underlying operating margins have remained steady at 11.3% (AER: 11.4%; HY2017: 11.4%), reflecting our ongoing focus on strong overhead control, even in a period of investment driven growth.

Our underlying PBT continues to grow, up by 9.7% at AER to GBP10.9m (HY2017: GBP9.9m) and 4.5% at CER. This has resulted in a strong increase in our underlying diluted earnings per share (EPS) at AER, up 8.1% to 6.78p (HY2017: 6.27p).

Revenue (CER)

Revenues have increased across all our regions and this has been strongest in Asia, up by 10.7% to GBP28.0m (AER: up 16.8% to GBP29.6m; HY2017: GBP25.3m). This has largely been driven by increases in our domestic appliances business in Singapore and automotive wins for our Chinese, Malaysian and Taiwanese operations. In PSEP, Malaysia, it is especially encouraging to see that the increase in intercompany co-operation we put in place following the downturn in the domestic economy has continued to bear fruit, with total PSEP revenues increasing strongly in the period and up by 7.1% against the HY2017.

In the UK, we have seen good growth in what is a mature market, up 4.1% to GBP35.4m (HY2017: GBP34.0m). Our ability to deliver high quality products from our extensive range within 48 hours across the whole of mainland Europe has led to significant increases in our distributor revenues, which has been coupled with an increase in contract sales to several of our key multinational OEMs.

In Europe, growth overall has been steady at 2.4% to GBP33.7m (AER: up 9.8% to GBP36.1m; HY2017: GBP32.9m). Our automotive sector is experiencing the greatest growth, most specifically in Holland and Sweden with increases of 10.5% and 8.9% respectively. In Italy, the importance of automotive is also building, with sales to this sector increasing by 27.5% in HY2017, albeit off a small base. Consistent with the second half of FY2017, volume reductions at one of the Group's largest domestic appliances multinational OEMs, have partly offset other increases across the region. Trading volumes with this customer had been abnormally high in both the second half of FY2016 and HY2017, as we supported a significant global product recall programme.

In the USA, growth in the period has been good at 3.7% to GBP3.1m (AER: up 10.0% to GBP3.3m; HY2017: GBP3.0m), although lower than the double-digit rate anticipated. This reflects a reduction in our sales to the electronics sector, largely because of the manufacturing issues some of our key customers are experiencing in the wake of Hurricane Harvey. However, the start of production on new automotive wins in the region have helped to offset the negative impact of this.

Underlying operating profit (CER)

Underlying operating margins have remained steady at 11.3% (AER: 11.4%; HY2017: 11.4%), generating an overall increase in underlying operating profit of 3.4% to GBP10.6m (AER: up 8.5% to GBP11.1m; HY2017: GBP10.3m).

Asia has driven a large element of the increase with underlying operating margins climbing by an impressive 170bps to 14.7% (AER: up 180bps to 14.8%; HY2017: 13.0%) mainly due to increased sales levels across a semi-fixed cost base. Offsetting this gain, regional gross margins fell slightly, by 60bps, largely due to the ongoing weakness of both GBP and the US$ against the NT$.

In line with the second half of FY2017, our European region has seen a marked decrease in underlying operating margins against HY2017, reporting a 540bps fall to 10.9% (AER: fall of 540bps to 10.9%; HY2017: 16.3%). Most of the reduction arises from a decline in the gross profit margin. This is most specifically in our Italian operation where, as expected, the impact of increases in purchase costs at the end of HY2017 have continued into HY2018. This has been in addition to a planned increase in fixed production costs in Italy as we invest for future growth. Whilst investment costs to successfully get our new Spanish greenfield site up and running, represent most of the overhead led decrease in the region's underlying operating margin.

In the UK, underlying operating margins have improved strongly by 190bps to 11.1% (HY2017: 9.2%). Most of this rise comes through at gross profit level due to increases in revenues as well as several high margin sales in the period. Foreign exchange gains made on our EUR distributor sales reflecting a weak GBP, have to date, been able to offset the negative impact of inflationary pricing pressures following the Brexit vote. The rest of the increase reflects a reduction in our overhead spend. This is in line with our ongoing commitment to control costs wherever possible, so as to allow us to continue to invest in those areas where we see the greatest opportunities for growth.

In the USA, underlying operating margins have fallen sharply by 190bps to 3.7% (AER: fall of 200bps to 3.6%; HY2017: 5.6%) although, as this is our smallest region, the total decrease equates to less than GBP0.1m. The majority of this reduction reflects lower gross margins as our electronics sales have decreased in a large part due to Hurricane Harvey. As in prior periods, low underlying operating margins are to be expected in this region given the level of investments for future growth being made here.

Net financing costs (AER)

These have continued to fall to GBP0.2m (HY2017: GBP0.3m) in line with the reduction in average net debt.

Taxation (AER)

The HY2018 effective tax rate (ETR) of 11.2% is significantly lower than our underlying FY2018 ETR of c.23.5%. The main reason for this difference is due to the finalisation of a fully provided historic tax position in the UK relating to a combination of EU loss relief claims (GBP0.6m) for losses made in the run up to the closure of TR France in 2007 and EU dividend relief claims (GBP0.6m) to cover dividends paid up to Trifast plc between the years of 2007 to 2009.

The provision in the accounts at 31 March 2017 was GBP1.2m and the final settlement agreed on 7 September 2017 was GBP0.3m, leading to a prior year corporation tax adjustment of GBP0.9m. Due to the size and the nature of this amount, we have removed the positive impact of this release from our underlying ETR (see note 9).

Earnings per share (AER)

Our ongoing growth in underlying profit before tax, and foreign exchange translation tailwinds, has led to a strong increase in our underlying diluted EPS of 8.1% to 6.78p (HY2017: 6.27p).

Dividend

Confidence for the future and continued profitable growth in a period of investment, has driven an interim dividend increase of 10.0% to 1.10p (HY2017: 1.00p). The interim dividend will be paid on 12 April 2018, to shareholders on the Register as at 16 March 2018. The shares will become ex-dividend on 15 March 2018.

Shareholder equity (AER)

As at 30 September 2017, the Group's shareholders' equity increased to GBP104.0m (FY2017: GBP101.7m). The GBP2.3m uplift reflects retained earnings of GBP4.8m (HY2017: GBP3.8m), net of a foreign exchange reserve loss of GBP1.4m and share purchases (net of share issues) totalling GBP1.1m.

In HY2018, the Group used the Trifast Qualifying Employee Benefit Trust (EBT) for the first time to purchase 500,000 ordinary 5p shares in the market at 220p. At the 30 September 2017, these shares were still held by the EBT and will be used to honour future equity award commitments as required.

Net debt (AER)

Our net debt position at the end of HY2018 has increased by GBP1.5m to GBP7.9m (FY2017: GBP6.4m). Some GBP1.2m of this increase is due to the payment out of cash held specifically at 31 March 2017 to settle the national insurance and income tax payments relating to the Chairman, Malcolm Diamond's exercise of 1,000,000 share options on 17 February 2017.

Capital expenditure of GBP1.3m in the period supports the Board's ongoing investment in the business, most specifically within our manufacturing sites with additional capacity projects underway in Italy, Singapore and Taiwan. In addition, as previously mentioned, GBP1.1m has been used to acquire 500,000 5p ordinary shares on the open market via the Trifast EBT. Although our cash is held across a number of currencies around the world, our gross debt continues to be held predominantly in EUR and this has led to a GBP1.3m net increase in net debt mainly from the relative strengthening of the EUR in the period.

Outside of these movements, our cash generation has reduced with a conversion rate of underlying EBITDA to underlying cash of 52.3% (FY2017: 97.3%; HY2017: 82.6%). Our investment in gross stock in the period includes an extra GBP2.5m to normalise the very low position we ended FY2017 on and to bring stock weeks back up to 22.8 weeks (FY2017: 21.8 weeks, HY2017: 24.5 weeks). Without the impact of this, our conversion rate of underlying EBITDA to underlying cash would be higher at 73.1%.

As at 30 September the headroom on our banking facility was GBP16.2m (FY2017: GBP13.1m). The net debt to EBITDA ratio is 0.3x which is significantly less than our covenant limit of 2.75x. In addition, we continue to have access to an accordion facility of GBP20.0m within our Group banking facilities with HSBC. These provide the potential flexibility to debt finance future acquisitions and further investments as required.

Ongoing and future investment plans

In Asia, over the course of FY2018, we will be investing GBP1.0m in the construction of a mezzanine level at our Singapore facility to expand capacity, initially by 25%, and to increase R&D capabilities. While in Shanghai, we have just expanded our warehousing and inspection facilities to support the double-digit growth we are seeing both in the Chinese domestic market and via our recent expansion into the Japanese market.

In Europe, our greenfield site in Spain is now up and running. First orders have been processed, stock is on the shelves and the pipeline is looking strong. In Italy, the investments we have made in the heat treatment plant in FY2017 are beginning to pay back, bringing an end to the production bottlenecks that were limiting our ability to expand capacity at the plant. Looking ahead, we have further investment planned to support the ongoing growth in our European distribution sites including a warehouse expansion in Holland and a TR Innovation and Technical centre situated in the heart of Sweden's electric vehicle development area, Lindholmen, Gothenburg.

In the UK, we are in the process of expanding our warehousing facilities in Northern Ireland to support the strong ongoing growth we are seeing at this site. Whilst in the USA, despite the immediate difficulties following on from Hurricane Harvey, we plan to carry on investing to build the local team and to support future growth in this important market.

Complementing all of the above, we are continuing to invest in both our global and local sales resources and supporting teams. In addition, investments are also being made to improve our digital and business management systems to help facilitate the improved integration of our global business. A major part of this investment is the commencement of a long-term project to significantly develop and integrate our existing IT infrastructure platform across the world. The consistent levels of growth we have enjoyed over recent years, as well as our future growth plans, necessitate this in order to future proof the business and ensure we remain both fit for purpose and able to continue to meet the demands of our multinational OEM customers.

As ever, the search for the next successful acquisition remains an important strategic aim for the Group and one that is further supported by our newly formed global acquisitions team.

Outlook

HY2018 delivered another six months of strong growth, with ongoing investment across all our regions.

Our strong first half results, together with a robust balance sheet, good access to banking facilities and a proven track record of profitable investment, means the Group is in a great position to keep moving forward. The second half has started well and, with a robust pipeline in place, the Board remain confident of delivering its expectations for the current financial year. There are, of course, some macroeconomic factors we cannot fully mitigate, including the ongoing volatility in the foreign currency and raw materials markets, input cost pressures in the UK due to the protracted weakness of GBP, as well as the wider potential implications of Brexit on our business and the UK economy.

However, as an international business with over 70% of our revenue being generated outside of the UK, and a very well-balanced geographical and sector spread, the Board remains confident we have the flexibility and foresight to continue to grow, while facing any challenges head on as and when they arise.

RISKS AND UNCERTAINTIES

The Directors do not consider that the principal risks and uncertainties of the Group have changed since the publication

in June 2017 of the Group's Annual Report for the year ended 31 March 2017. A copy of this publication can be found on the website

www.trifast.com.

No system can fully eliminate risk and therefore the understanding of operational risk is central to the management process within TR. The Group operates a system of internal control and risk management to provide assurance that we are managing risk whilst achieving our business objectives. Risk assessment reviews are regularly carried out by management, with responsibilities for monitoring and mitigating personally allocated to a broad spread of individual managers. The review is analysed and discussed at Audit Committee meetings chaired by our Senior Independent Non-Executive Director.

As with all businesses, the Group faces risks, with some not wholly within its control, which could have a material impact on the Group, and may affect its performance with actual results becoming materially different from both forecast and historic results. There are indications that the macroeconomic climate is still under pressure, and so, we continue to remain vigilant for any indications that could adversely impact expected results going forward. Past and future acquisitions can also carry impairment risks on goodwill should there be a sustained downturn in trading within an acquired subsidiary.

The long-term success of the Group depends on the ongoing review, assessment and control of the key business risks it faces.

Trifast plc - responsibility statement

We confirm that to the best of our knowledge:

-- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

   --     the interim management report includes a fair review of the information required by:

a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Mark Belton, Chief Executive Officer

13 November 2017

Condensed consolidated interim income statement