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RNS Number:4379S
Trifast PLC
25 November 2003
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Tuesday, 25 November 2003
Embargoed: 7.00am
Trifast plc
"Leading distributors and manufacturers of a comprehensive range of industrial
fastenings"
Six months to Six months to Year ended
30 September 30 September 31 March 2003
2003 2002
Turnover #50.297m #51.938m #103.631m
Operating profit
before goodwill #2.345m #2.202m #4.403m
amortisation and exceptional
items
Operating profit #1.758m #1.531m #2.790m
Profit before
taxation, goodwill
amortisation #2.193m #1.958m #3.951m
and exceptional items
Profit on ordinary
activities before
taxation #1.606m #1.287m #2.225m
Earnings per share
Adjusted diluted 2.13p 1.99p 3.94p
Diluted 1.41p 1.05p 1.96p
Basic 1.42p 1.05p 1.96p
Dividend per share - Interim 0.66p 0.63p -
- Full Year - - 1.90p
"Our aim is to ensure that we continue to build our TR brand as the premier
brand in Europe.
"Over recent years businesses have seen a change in the way that markets operate
and visibility has proved to be more challenging with these first half trading
results certainly not reflecting an improvement in overall market conditions.
The strong actions we have taken as a Company ensure that we remain both
competitive and profitable as we move forward in this ever changing environment.
"Although we expect global recovery to remain slow, we have implemented a number
of initiatives which we believe will continue to assist the Group in improving
its trading performance and we remain confident that we will be able to report a
further improvement at the time of our year-end results."
David Dugdale, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Jim Barker, Chief Executive
Stuart Lawson, Group Finance Director Fiona Tooley
Trifast plc Citigate Dewe Rogerson
Today: 020 7282 8000 (8.00am - 12.30pm) Today: 020 7282 8000
Mobile: 07769 934148 (JB)/07765 253895 (SL) Mobile: 07785 703523
Thereafter: 01825 747366 Thereafter: 0121 455 8370
Web-site: www.trifast.com
Email: ceooffice@trifast.com
-2-
Trifast plc
Interim Results for the six months ended 30 September 2003
Statement by the Chairman, David Dugdale
Introduction
The Group has continued to make good progress across all sectors and markets in
which we operate. Our first half results reflect a creditable performance by all
our operations.
Although we have witnessed an on-going slowdown in our UK based business as have
many others, our international growth has been very encouraging in particular in
Asia where recovery has been steady.
These results clearly reflect our continuing focus on building on our solid
day-to-day transactional business whilst also further developing our
relationships with both Original Equipment Manufacturers ("OEM's") and Contract
Manufacturers as part of our global fastener management programme.
With the major restructuring and reorganisation programme initiated in 2001
completed in this period, the business is benefiting from a leaner and more
efficient operational structure which will allow us to further exploit the
number of opportunities that exist across the key continents particularly in
Mainland Europe and the Far East.
Results
Turnover for the six months ended 30 September 2003 was #50.3 million against
#51.9 million in the comparable period, with Europe accounting for 82.5%, the
Far East 13.4% and the Americas 4.1%.
Operating profits in the period (pre-goodwill and exceptionals) were #2.35
million against #2.20 million in the first half of the previous year (post
goodwill and exceptionals #1.76 million (2002: #1.53 million)) and the net
interest charge was #152,000 which was covered 15 times by operating profits.
Overall operating margins in the period remained constant.
Adjusted diluted earnings per share (pre-goodwill and exceptionals) improved
from 1.99 pence in 2002 to 2.13 pence, an increase of 7.0% (diluted 1.41p (2002:
1.05p)).
In the first half, capital expenditure was #330,000 with depreciation at
#700,000 (2002: #890,000). During the second half we have planned expenditure of
around #500,000.
Stocks in the first half are slightly up on the comparable period reflecting the
up-turn in business towards the latter part of the period, although compared to
the year end they have decreased from #20.4 million to #19.9 million.
During the period, we generated positive cashflows from our trading activities
which were used to pay interest, tax, dividend and make repayments on existing
gross debt balances. Debtor management continues to be a priority and once again
no significant bad debts were incurred in the period. Debtor days remain healthy
at 68.
Net debt at the end of the period stood at #10.8 million compared to #10.3
million at 30 September 2002 resulting in gearing of 30%.
The Balance Sheet remains solid with shareholders' funds standing at #34.9
million (year ended March 2003: #34.5 million).
continued...
-3-
Dividend
In line with the Group's progressive dividend policy, we are pleased to announce
a 5% increase in the interim dividend to 0.66 pence per ordinary share (2002:
0.63 pence) which will be paid on 21 January 2004 to shareholders on the
Register as at 5 December 2003.
Review
I am pleased to report that all our businesses have been able to improve their
position which has resulted in all operations trading more profitably during the
six month period being reported.
In Europe, as part of our marketing drive in particular within Central and
Eastern Europe, we have reorganised and focused our Scottish hub, where we have
considerable engineering and product knowledge to support the increased
enquiries coming from this region through the new Global & European sales teams
structure.
The Continental European territory has seen an improvement in both sales and
margins, in particular on branded and licensed products together with a number
of new customers across the sectors being secured in the period under review.
Both sales and manufacturing within the UK region have been clearly
re-structured into accountable teams which are supported by a leaner, more
defined operational management team which aims to achieve maximum efficiency.
Part of the on-going improvement in this territory will be gained through
further operational efficiencies and the implementation of specifically targeted
marketing campaigns definitive to each sector.
Our UK manufacturing business, Hank, experienced challenging conditions but
recorded an improved performance over last year. This business now falls within
our principal European operation and through its business intelligence it is now
aligned to more accurately manufacturing our Group requirements which directly
reflects what our customers are demanding.
Within Hungary, where we have seen revenues double, albeit from a low level, we
expect to increase our operational base in order to support the improving market
opportunities that exist. In Scandinavia, we have already upgraded our
facilities in order to support the growing local business and a new #1 million
industrial contract has been secured in Poland which will start to generate
profit towards the last quarter of this financial year. Our Dutch operations are
currently pursuing a number of automotive opportunities within Germany.
TR Asia produced a very creditable performance with sales up 10% year on year
despite the SARS outbreak which impacted our first quarter's performance. Within
our Asian territories, China was the best performing region with growth coming
from the strong demand from our global telecom customers such as Motorola and
Nokia whilst Singapore witnessed an improvement in its computer and related
products sector which contributed to a stronger performance in this period. One
area which proved to be disappointing was our direct business to the USA from
Taiwan where, due to the slowdown in automotive manufacture, demand from
distributors was slower than anticipated.
Our American operation, working in partnership with TR Asia has improved its
performance, clearly benefiting from its joint business focus to develop product
approvals and partnerships with US based OEM's and Contract Manufacturers. We
have recently appointed a new General Manager who will concentrate on acting as
the key liaison between Asia and USA.
continued...
-4-
As we continuously examine and research new ways to do business both
successfully and profitably whilst expanding our market penetration, the Group
has opened its e-business web-site (www.trifast.com). The site launched in
September, contains data on thousands of standard and specialist fasteners as
well as a comprehensive engineering knowledge base which we will continue to add
to ensure that we operate one of the most comprehensive fastener websites. The
site has already attracted much interest and the registrations to date are
promising as they provide us not only with a new customer base but a database
into which we can further market our products and services.
Our aim is to ensure that we continue to build our TR brand as the premier brand
in Europe.
People
As I indicated at the Annual General Meeting in September, I have decided, after
ten years with the Group, that I shall retire at the end of December. I shall be
handing over the helm to Anthony Allen who joined the Group at the beginning of
2003 as a Non-Executive Director. I would like to thank all the staff, directors
and shareholders for their support over the time I have been with the Group and
I would like to wish everyone continued success in the future.
Following Anthony Allen's appointment as Chairman from January, it is our
intention to seek the appointment of a further Independent Non-Executive
Director to the Main Board.
Prospects
Over recent years, businesses have seen a change in the way that markets operate
and visibility has proved to be more challenging with these first half trading
results certainly not reflecting an improvement in overall market conditions.
The strong actions we have taken as a Company ensure that we remain both
competitive and profitable as we move forward in this ever changing environment.
We believe that the declining UK manufacturing sector will continue to be very
challenging for all businesses that support it. We have already seen a
stabilisation and indeed an improvement in some areas of our business as we have
strictly focused on 'real value and returns' and completed our exit from low
margin business. This, together with the opportunities that exist for both new
business and consolidation in the sector across Mainland Europe and Asia, offers
exciting times ahead for businesses like ourselves. We now have in place an
operationally efficient network supported by a more focused and leaner
management team that provides support to both day to day transactional business
and manage relationships with our global partners.
Although we expect global recovery to remain slow, we have implemented a number
of initiatives which we believe will continue to assist the Group in improving
its trading performance and we remain confident that we will be able to report a
further improvement at the time of our year-end results.
-5-
Consolidated Profit and Loss Account
Unaudited interim results for the six months ended 30 September 2003
Note Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Turnover
Existing operations 50,297 51,938 103,631
Cost of sales (38,185) (39,444) (78,018)
------------ ------------ ----------
Gross profit 12,112 12,494 25,613
Net operating
expenses (9,767) (10,292) (21,210)
(excluding exceptional costs
and goodwill
amortisation)
------------ ------------ ----------
Operating profit
before goodwill 2,345 2,202 4,403
amortisation and exceptional
items
Exceptional costs (225) (266) (871)
Goodwill
amortisation (362) (405) (742)
------------ ------------ ----------
Operating profit 1,758 1,531 2,790
Loss on termination
of operations - - (113)
------------ ------------ ----------
Profit on ordinary
activities before
interest 1,758 1,531 2,677
Net interest (152) (244) (452)
------------ ------------ ----------
Profit on ordinary
activities before
taxation 1,606 1,287 2,225
Taxation on profit
on ordinary
activities 2 (584) (530) (817)
------------ ------------ ----------
Profit on ordinary
activities after
taxation 1,022 757 1,408
Dividends 3 (474) (453) (1,365)
------------ ------------ ----------
Retained profit 8 548 304 43
------------ ------------ ----------
Earnings per share 4
Basic 1.42p 1.05p 1.96p
Diluted 1.41p 1.05p 1.96p
Adjusted diluted 2.13p 1.99p 3.94p
The results for the period were derived wholly from continuing operations.
-6-
Summarised Consolidated Balance Sheet
Unaudited interim results as at 30 September 2003
Note 30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Intangible
fixed assets 12,078 12,959 12,638
Tangible fixed
assets 12,565 13,465 13,197
------------- ------------ ----------
24,643 26,424 25,835
Current assets 6 46,008 48,087 47,698
Creditors:
amounts falling
due (24,388) (25,080) (25,521)
within one year
------------- ------------ ----------
Net current
assets 21,620 23,007 22,177
------------- ------------ ----------
Total assets
less current
liabilities 46,263 49,431 48,012
Creditors:
amounts falling
due (10,577) (13,663) (12,327)
after more than one
year
Provisions for
liabilities and
charges (749) (1,037) (1,193)
------------- ------------ ----------
Net assets 34,937 34,731 34,492
============= ============ ==========
Capital and reserves
Called up share
capital 3,593 3,593 3,593
Share premium 4,588 4,588 4,588
Revaluation
reserve 1,017 1,017 1,017
Profit and loss
account 7 25,739 25,533 25,294
------------- ------------ ----------
Equity
shareholders'
funds 8 34,937 34,731 34,492
============= ============ ==========
-7-
Summarised Consolidated Cash Flow Statement
Unaudited interim results for the six months ended 30 September 2003
Note Six months Six months Year ended
ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Net cash inflow
from operating
activities 9 1,799 3,706 5,035
Returns on
investment and
servicing of
finance (196) (279) (472)
Taxation paid (205) (468) (1,033)
Capital expenditure
and financial
investment (218) (371) (762)
Acquisitions and
disposals (959) (1,162) (1,146)
Equity dividends
paid (913) (862) (1,314)
------------ ------------ -----------
Cash
(outflow)/inflow
before use of
liquid (692) 564 308
resources and
financing
Net cash outflow
from financing
Net decrease in debt (618) (1,843) (3,180)
------------ ------------ ----------
Decrease in cash in
the period 10 (1,310) (1,279) (2,872)
============ ============ ==========
-8-
Notes to the Interim Statement
Unaudited interim results for the six months ended 30 September 2003
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 2003.
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 2003 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 Taxation
The charge for tax is an estimate based on the anticipated effective rate of tax
for the year ending 31 March 2004, adjusted for prior year items as shown below:
Six months ended Six months ended
30 September 2003 30 September 2002
#'000 #'000
Current tax on income for the period
UK Tax 5 85
Foreign Tax 551 327
Adjustments in respect of prior years 28 118
------------- ------------
584 530
============= ============
3 Dividends
The directors have declared an interim dividend of 0.66 pence per ordinary share
to be paid on 21 January 2004 to shareholders on the register on 5 December
2003.
4 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 71,868,150 (September 2002:
71,868,150; March 2003: 71,868,150).
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 72,485,104
(September 2002: 71,868,150; March 2003: 71,999,959).
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 and exceptional
items but after tax.
5 Exceptional Costs
These costs relate to the additional redundancies of the restructuring program
started during the year ended 31 March 2002.
continued...
-9-
6 Current assets
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Stocks 19,952 19,595 20,406
Debtors 22,439 22,550 23,040
Cash at bank and in
hand 3,617 5,942 4,252
------------- ------------ -----------
46,008 48,087 47,698
============= ============ ===========
7 Profit and loss reserve
Six months ended Six months ended Year ended
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Opening balance 25,294 25,338 25,338
Retained profit for
period 548 304 43
Exchange differences (103) (109) (87)
------------- ------------ -----------
Closing Balance 25,739 25,533 25,294
============= ============ ===========
8 Reconciliation of movements in shareholders' funds
Six months ended Six months ended Year ended
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Profit for the
financial period 1,022 757 1,408
Dividends (474) (453) (1,365)
------------- ------------ -----------
Retained profit for
the period 548 304 43
E
xchange differences (103) (109) (87)
------------- ------------ -----------
Net addition
to/(reduction in)
shareholders' funds 445 195 (44)
Opening shareholders'
funds 34,492 34,536 34,536
------------- ------------ -----------
Closing shareholders'
funds 34,937 34,731 34,492
============= ============ ===========
9 Net cash flow from operating activities
Six months ended Six months ended Year ended
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Operating profit after
goodwill amortisation 1,758 1,531 2,790
Loss on termination of
operations - - (113)
Depreciation charge 701 889 1,597
Loss/(profit) on sale
of tangible fixed
assets 17 (4) 22
Goodwill amortisation 362 405 742
(Increase)/decrease in
working capital (1,039) 885 (3)
------------- ------------ -----------
1,799 3,706 5,035
============= ============ ===========
continued...
-10-
10 Reconciliation of net cash flow to movement in debt
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Decrease in cash in
the period (1,310) (1,279) (2,872)
Cash outflow from 618 1,843 3,180
decrease in debt and lease
financing
------------- ------------ -----------
Change in net debt
resulting from cash
flows (692) 564 308
Translation difference 360 (226) (216)
------------- ------------ -----------
(Increase)/decrease in
net debt in the period (332) 338 92
Net debt at beginning
of period (10,503) (10,595) (10,595)
------------- ------------ -----------
Net debt at end of the
period (10,835) (10,257) (10,503)
============= ============ ===========
-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.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which 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 for use in the United Kingdom. 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 2003.
KPMG Audit plc
Chartered Accountants
Crawley
24 November 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLBDBRSDGGXS
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