22nd Jun 2005 07:00
Trifast PLC22 June 2005 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 22 June 2005 Embargoed: 7.00am Trifast plc Preliminary Results for the year ended 31 March 2005 Significant profits and earnings per share growth in challenging global markets Year Ended Year Ended March 2005 March 2004 Sales £103.82m £102.35m Operating Profit (pre-goodwill and £6.15m £5.03m +22%exceptionals) Pre-tax profit (pre-goodwill, exceptionals andprofit on sale of fixed assets) £5.86m £4.65m +26% Pre-tax profit (post-goodwill and exceptionals) £5.56m £3.43m +62% Earnings per share: Adjusted diluted 5.76p 4.06p +42% Diluted 5.18p 2.24p +131% Basic 5.23p 2.26p +131% Final dividend 1.41p 1.34p Total for the year 2.10p 2.00p +5% Strong positive cash flow (pre-debt repayments) up from £0.8 million to £2.8million Net debt reduced to £5.6 million Effective operational efficiency drives improving profitability Major presence to be established in China providing the capacity tomanufacture 1.8 billion parts per year iStock (patent applied for), a revolutionary new concept in stock management tobe launched "This creditable performance clearly underpins our strategy and overallobjectives. Additionally, through the operational efficiencies and productivityimprovements achieved across the businesses we will continue to exploit thestrength of our brand both in the UK and overseas to operate efficiently andprofitably even in challenging markets." "We remain confident that our business is positioned well to take advantage ofmarket opportunities.... " Jim Barker, Chief Executive FULL STATEMENT ATTACHED Enquiries:Jim Barker, Chief Executive Fiona TooleyStuart Lawson, Group Finance Director Citigate Dewe RogersonTrifast plc Today: +44 (0)20 7282 8000Today: +44 (0)20 7282 8000 (8.00am - 12.00noon) Mobile: +44 (0)77 85703523 +44 (0)20 7398 1600 (12.30pm - 2.30pm) Thereafter: +44(0) 121 455 8370Mobile: +44 (0)7769 934148 (JB) or +44 (0)7765 253895 (SL)Thereafter: +44 (0)1825 747366Web-site: www.trifast.com -2- Trifast plc Preliminary Results for the year ended 31 March 2005 STATEMENT BY THE CHAIRMAN, ANTHONY ALLEN AND CHIEF EXECUTIVE, JIM BARKER IntroductionWe are delighted to report an excellent profit performance with a modestincrease in sales compared to last year. This is despite rises in raw materialsand energy prices, continuing cost down pressures and the global market sectorsin which we operate remaining challenging and to a certain extent,unpredictable. Our overall sales were up £1.5 million. The sales were adversely affected to thetune of £1.4 million by currency translation and we also witnessed a generalslow down from some of our top customers which amounted to £10.0 million, sooverall new business gained in the period was a very commendable £12.9 million. This creditable performance clearly underpins our strategy and overallobjectives. Additionally, through the operational efficiencies and productivityimprovements achieved across the businesses we will continue to exploit thestrength of our brand both in the UK and overseas to operate efficiently andprofitably even in challenging markets. ResultsTurnover in the twelve months ended 31 March 2005 was £103.8 million against£102.4 million in 2004. By destination, 48% of Group sales are now outside theUK, with 30% to Mainland Europe, 8% to Asia and 10% to the US. On the three major Continents from which TR operates, sales by origin were 80%from Europe, with 17% and 3% coming from Asia and North America respectively. Onan operating profit basis, 59% was generated in Europe and 41% in Asia. Through our focus on quality margin business and value-add rather than volume,our fully-costed gross margins have risen from 24.8% to 26.0%. We are notprepared to chase top line sales growth at the expense of our profitability. The biggest profit growth has come from within Europe and principally from theUK. Pre-tax profit (pre-goodwill, exceptionals and profit on sale of fixed assets)significantly increased by 26% from £4.65 million to £5.86 million. Post-goodwill and exceptionals, profit amounted to £5.56 million compared to£3.43 million last year, representing an increase of 62%. Adjusted diluted earnings per share were 5.76 pence, an increase of 42%, whilstdiluted earnings per share were 5.18 pence compared to 2.24 pence, up 131%. Further details on the financial results are contained in the Group FinanceDirector's Review. DividendIn line with our progressive dividend policy, the Directors are recommending anincreased final dividend of 1.41 pence per ordinary share (2004: 1.34 pence).This, together with the interim dividend of 0.69 pence per share already paid toshareholders in January makes a total for the year of 2.10 pence, an increase of5% over 2004. The final dividend, which is subject to shareholder approval at our AnnualGeneral Meeting on 20 September 2005 will be paid on 19 October 2005, toshareholders on the Register as at 1 July 2005. continued... -3- Review This financial period has seen the Group continue to strengthen its position,although the markets we operate in have produced mixed results. As a Group, Trifast has continued to work hard at initiating new and moreefficient ways of working whilst also developing the opportunities presented tous by both our customers and the global and economic environment. One example ofthis is our revolutionary new concept on component stock management under thename of iStock, which is a patent pending system devised by TR to utilise thevery latest IT technology to manage customers' inventory. The systemincorporates state of the art wireless cameras which allow us to remotelymonitor our customers' stock 24 hours a day. Not only does this offer customersthe very highest service level it also allows us to install full stockmanagement systems anywhere in the world. Although through our transactional business we have been able to pass on someraw material and commodity price increases we have, like others, continued toexperience some cost-down pressures from our contractual business. Because ofour close working relationships with our customers we are able to achieve thebest possible price and to retain reasonable margins. Global Account Sales have seen a 12% increase in business over the last yearfrom our customers who are located across Asia, Europe and the USA. As a Group,we are now supplying 53 countries with new business wins in the year fromHungary, Brazil, India, Estonia, UAE, China, Mexico, Romania and Poland. At the beginning of the year, we predicted that our profits in the UK businesswould decrease due to business transition and the impact of weaker output inmanufacturing which would impact our European results. However, despite thisdrop we are pleased to report a very strong performance by our Europeanoperations with the exception of France. Sales by destination to Mainland Europesaw a 13% growth. Our Scottish business has been re-structured and as a result has successfullysecured a notable aerospace contract expected to deliver sales of around £1million per annum when it becomes fully effective during this new financialyear. Our operation in Hungary continues to develop well. We have appointed commissionagents in the Ukraine and Poland, both have delivered good enquiry levels andsales are already being generated. In Scandinavia, we produced a satisfactory performance and during the year, weachieved ISO 9001:2000 in Norway. Our business in this region is focused towardstelecoms, electronics and automotive where we are benefiting from increasedactivity, as well as a number of new business wins from the Baltic countries andPoland. As a result of our global partnership with Electrolux we are nowproviding support from our office in Stockholm. In partnership with TR inShanghai, they are working with another major customer on a fastener solutionscontract.In Asia, we have continued to do well and Singapore remains focused onhigh-value add specialist production where we have undertaken a substantialinvestment in new plant which will enable us to produce new innovative andcomplex products for the sheet metal sector. In Taiwan, we have also undertakena significant investment which provides us with a leading edge capability toproduce sophisticated and more complicated parts for the automotive and generalindustrial sectors. The transfer of volume production to China is well documented as this industrialnation establishes itself as a major domestic and international manufacturingbase. We have attained significant growth over the last two years, and haveexperienced higher volumes being produced albeit at a lower overall net margin. continued... -4- Trifast's aim is to build a major presence within the Chinese economy. We planto invest US$5 million in a new purpose built manufacturing facility in Chinaover the next 3 years to support the production of over 150 million parts permonth. This decision is essential as we look to produce operationally efficienthigh quality product for worldwide consumption at competitive and profitablepricing. The re-structuring of our North American business is starting to produce resultsand although in the year being reported it performed near breakeven, under thenewly recruited managing and sales directors, we anticipate a significantimprovement in its performance during 2005/6. Web-site & e-businessWe are continually looking at ways we can keep our customers, investors andemployees up-to-date with the developments and opportunities that exist for thebusiness both internally and externally. The web-site, which remains one of the leading fastener sites targeted byengineers and buyers alike continues to develop. It incorporates an e-businesschannel that we use to extensively market our comprehensive portfolio of over100,000 products to both new and existing customers across the globe. During thelast year, we have been able to build on its successful foundations by addingadditional capabilities such as an on-line purchasing portal which allowscustomers to check stocks, and monitor and track orders that they have placed. Organisational Structure Board ChangesIn June 2004, Eric Hutchinson joined the Group as a Non-Executive Director. Ericis also Chairman of the Group's Audit Committee. The Combined Code on CorporateGovernance requires that the Audit Committee includes a member who has recent,significant and relevant financial experience and the Board believes that Ericis well placed to satisfy this through his career with Spirent Group (formerlyknown as Bowthorpe Holdings). In September 2004, we welcomed Andrew Cripps to the Board as a Non-ExecutiveDirector and Chairman of Trifast's Remuneration Committee. Andrew brings awealth of knowledge gained from the variety of roles he has undertaken withinthe global business BAT. In particular, his M&A and strategic planning anddevelopment experience will be invaluable to Trifast as we continue to developour global brand and positioning. Furthermore, on behalf of the Board, employees and shareholders, we would alsolike to take this opportunity to thank both Ben Stevens and John Wilson who,during the year, relinquished their Non-Executive roles. We wish them both wellfor the future. Management, People and Development TrainingAt the year-end, the Group employed 944 people. We would like to thank all ourstaff for their continued support and dedication which has resulted in producingthese commendable results and we were delighted to reward all those whoqualified, with a performance related payment as a result of their efforts. As a result of our investment in people, we have established a significant poolof experience and expertise. This knowledge base is now being channelled intodeveloping our international presence through secondments that range from a fewweeks to two years. This fast-track approach has enabled us to develop morequickly our local functionality, efficiency and productivity. continued... -5- Our Annual Conference in September 2004 gathered together staff from across Asiaand Europe. It provided an excellent forum for our people to better understandthe cultures and business practices through team-working and communication. At the beginning of 2005, we carried out a staff survey across Europe whichreflected an improvement in key areas since the previous one in 2002. Part ofthe survey highlighted the need to address remuneration packages across thestaff network. After detailed research externally, we introduced improvements toour staff benefit and remuneration packages which included a childcare voucherscheme which allows staff to take advantage of the Government's tax and NIincentives. Works Councils Ahead of legislation, we have introduced works councils throughout most of ourEuropean locations. This has proved a positive mechanism for staff andmanagement to work together to achieve a safe, happy and constructive workingenvironment as well as providing a good communication base to share ideas andbest practice. Sussex Business Awards - Company of the Year, Sponsored by DeloitteDuring the year, we were pleased to have been awarded "Company of Year 2004" bySussex Business Awards. This accolade was achieved through the hard work,dedication and commitment by our people. Strategy - Looking forwardWithin Europe, our aim is to provide the most cost efficient fastener networkand become the leading brand across this Continent. Although Europeanmanufacturing has experienced some decline as business has migrated to lowercost economies, coupled with raw materials cost and regulatory legislationincreasing, we remain optimistic that over the next five years we have thestructure, capabilities and skills to be able to double our European businessthrough acquisitions and organic growth, whilst also optimising the cost basethrough consolidation of resources and the full development of links withsuppliers on an international basis. With our significant presence in the Far East for volume and specialistmanufacturing, the Group is in a much stronger position than that of ourcompetitors as we are able to provide, through well established modernfacilities run by an experienced team capable of partnering our diversegeographically-spread customer base, flexible solutions for their overallfastener requirements. Current Trading & ProspectsOur sector continues to witness consolidation and we see a number of possibleopportunities where we are confident that the Group could achieve expansion andenhancement of its product and service offering. This can be supported bycost-efficient manufacturing and distribution facilities in the Far East andEurope. The sectors in which we operate remain challenging and it is too early topredict the overall outcome of this financial year. We remain confident that ourbusiness is positioned well to take advantage of market opportunities and lookforward to reporting our progress to shareholders, employees and customers overthe next period. -6- Trifast plc Preliminary Results for the year ended 31 March 2005 FINANCIAL REVIEW BY THE GROUP FINANCE DIRECTOR, STUART LAWSON Once again, I am pleased to announce another successful year of profits growthfor Trifast. Against a back-drop of raw material price increases, cost downpressures and a changing global marketplace, Trifast has succeeded in deliveringa 42% increase in adjusted earnings per share (see Results section below) andhas continued to increase the recommended dividend. In summary, the team hasbuilt on last years return to winning ways to deliver another very positivegrowth story. ResultsThe profit before tax, goodwill amortisation, exceptionals and profit on salesof fixed assets was £5.86 million (2004: £4.65 million), an increase of 26.0%.This was achieved on a relatively flat turnover of £103.8 million (2004: £102.4million), profit before tax after goodwill and exceptionals was £5.56 million(2004: £3.43 million), an increase of 62%. We have also continued the improvement of our gross margin from 24.8% last year(pre exceptionals) to 26.0%. The increase reflects the full year value of ouroperational changes, our continued focus on product mix and our on-going driveto be a value add provider to our customers. During the period we continued ourfocus on our core products and saw a continuing decline in the supply of lowmargin category 'c' components. Overheads remain under tight control at £19.7 million (pre goodwill andperformance related pay awards) representing 19.0% of turnover (2004: 19.3%). Wefeel that this underlying level of overhead is appropriate to sustain currentlevels of business and has the capacity to support an element of sales growth. This all results in adjusted diluted earnings per share of 5.76p, an increase of42% on last year's 4.06p with basic earnings per share increasing 131% to 5.23p. We have been asked a number of times about the impact of MG Rover and I canreport that whilst we have no direct trading with them, we did supply Tier1/Tier2 suppliers. It is therefore difficult to predict the overall impact oftheir demise, although we believe that the affect on Trifast sales should not bemore than £0.5 million in the financial year ending 31 March 2006. Profit on the Sale of Fixed AssetsDuring the period we completed the sale of two buildings. Firstly, a warehousein Uckfield and secondly, the sale of our building in Stockholm, an area ofwhich we then leased back from the landlord on a short term basis. The netprofit on the sale of fixed assets was £0.38 million (2004: £0.38 million). Wenow feel that we have the required number of freehold properties and don't seeany further disposals in the coming period. These sales, along with the sale ofour Belfast building in March 2004, had a positive cash flow impact of £2.3million. Working Capital and Treasury ManagementCash generation during the year was strong with £2.77 million being generatedbefore debt repayments of £2.24 million. We also absorbed the cash effect ofprior year exceptionals (£0.15 million). EBITDA (pre goodwill and exceptionals) increased 21% to £7.81m (2004: £6.44m). Controls continue to be tight on working capital with debtor days at 63 (2004:63 days), some 16% better than our industry average. Creditor days reducedslightly to 69 days (2004: 70 days) reflecting some new suppliers coming onboard with interim terms. During the period we saw an increase in the net stock to £21.6 million (2004:£18.7 million). continued... -7- This increase was broken down as follows: Europe - an increase of £1.6 million, reflecting a number of new managedaccounts won towards the end of the current year in the UK, Poland and Holland,and an increase in the products range available to merchants from oursubsidiary, Lancaster Fasteners. We have also had the impact of increased stocklevels which support a few of our major customers, as these customers' saleshave slowed during the period. Asia - an increase of £1.3 million, reflecting the continuing growth of ourChinese distribution business, the improved manufacturing output in Taiwan toit's automotive customers and the increased stockholding ranges being made andheld in Singapore to support the Group's product range drive. Overall our stock turn was 3 times, a reduction from last year's 3.4 times. Webelieve this reduction is a temporary position as our business gears up for somenew accounts recently won and increases its focus on the sales of our highermargin product range. We would expect stock levels to settle down to a lowerlevel which we feel would be adequate for us to provide the required level ofsecurity to our managed account customers and maintain the necessary levels ofproduct line stocks to continue the drive forward in this very profitable areaof our business. The above has meant that we have once again been able to significantly reduceour net debt position to £5.60 million (2004: £8.54 million) resulting in areduced gearing level of 14.7% (2004: 24.3%). This puts us in a very strongposition financially to take advantage of any opportunities in the currentconsolidating marketplace. At the year-end we had a net cash balance of £3.62 million of which £3.00million was held in foreign currencies. As a Group, our policy is to monitorexchange rates and buy or sell currencies in order to minimise our open exposureto foreign exchange risk, but we do not speculate on rates. During the year,currency fluctuations negatively impacted our turnover by £1.4 million andprofits by £0.15 million, and so as a global company in these times offluctuating exchange rates, we must continue to monitor our group currencyexposures on a daily basis. Net interest payable reduced again this year to £0.29 million (2004: £0.37million) with the interest paid element being £0.33 million (2004: £0.43million). This reduction was achieved (even after increases in interest rates)as a result of the continued repayment of our debt. We continue to review all ofour loans which are currently in variable rates. Net interest cover, on apre-exceptional and goodwill basis has again improved, increasing from 13 timesto its current level of 23 times. Our banking facilities are reviewed annually and currently provide more thanadequate headroom for our current and foreseeable business requirements. The Group's policy is to finance its operations through a combination ofretained earnings and external financing raised principally by the parentcompany. Capital expenditure remains under tight control, although, as reported lastyear, did increase to a level of £0.84m (2004: £0.70m) with depreciation at£1.28m. Investment during the coming period is planned to increase above theselevels as we implement plans to expand our Asian manufacturing base. TaxationThe tax charge for the year was £1.80 million (2004: £1.81 million) which afteradjusting for goodwill amortisation, timing differences (on US losses notrecognised as a deferred asset) and withholding tax suffered within group,represents an effective tax rate of 23.4%. This is an improvement on last year'srate of 29.2% predominantly as a result of the large reduction in the tax lossesin the USA for the current period and thus the reduced unrecognised deferred taxasset for the year. continued... -8- DividendA final dividend of 1.41 pence per share (2004: 1.34 pence) is proposed,bringing the total for the year to 2.10 pence (2004: 2.00 pence), an increase of5.0% on the prior year. This dividend is wholly covered by profit after tax. PensionsTrifast predominantly operates Defined Contribution Pension Schemes and so hasnot had to report any valuation shortfalls. All schemes payments are up to dateand we see no financial exposure to the Group with these schemes. Internal ControlWith the on-going support of my senior finance team around the world, wecontinue to review the internal controls and procedures at all of our sites atleast annually. We continue to refine these reviews as we do more of them andspread best practice around the group companies. Finally, I would like to thank my team for their continued support and hard workthroughout the year and look forward to presenting the next stage of the Trifastsuccess story in twelve months time. -9- Trifast plc Preliminary Results Consolidated Profit and Loss Accountfor the year ended 31 March 2005 2004 Note Results Exceptional Total pre-exceptional Costs 2005 costs £000 £000 £000 £000 Turnover 1 103,823 102,353 --- 102,353 Cost of sales (76,816) (76,976) (590) (77,566) -------------------------------------------------- Gross profit 27,007 25,377 (590) 24,787 Administrationexpenses - Before goodwill (17,435) (16,608) (297) (16,905) - Goodwill (686) (709) --- (709) -------------------------------------------------- Total administrative (18,121) (17,317) (297) (17,614)expenses Distribution costs (3,423) (3,743) --- (3,743) -------------------------------------------------- Operating profit 5,463 4,317 (887) 3,430 Profit on disposal of 384 --- 376 376fixed assets -------------------------------------------------- Profit on ordinaryactivities 1 5,847 4,317 (511) 3,806before interest andtaxation Interest receivable 44 53 --- 53 Interest payable andsimilar 3 (331) (427) --- (427)charges -------------------------------------------------- Profit on ordinaryactivities 2 5,560 3,943 (511) 3,432before taxation Tax charge on profiton ordinary 4 (1,801) (1,806)activities -------- ------- Profit for the 3,759 1,626financial year Dividends 5 (1,510) (1,438) -------- ------- Retained profit forthe financial 8 2,249 188year ========= ======= Earnings per share: 6Basic 5.23p 2.26pDiluted 5.18p 2.24pAdjusted diluted 5.76p 4.06p ========= ======= All amounts in the profit and loss account are derived from continuingoperations for the current and prior year. -10- Trifast plc Preliminary Results Consolidated Balance Sheetat 31 March 2005 Note 2005 2004 £000 £000 £000 £000Fixed assets Intangible assets 10,415 11,195 Tangible assets 8,463 10,180 Investments 126 127 -------- -------- 19,004 21,502 Current assets Stocks 7 21,573 18,679 Debtors 22,497 23,916 Cash at bank and in hand 4,161 3,312 -------- -------- 48,231 45,907 Creditors: amounts falling due (22,930) (22,878)within one year -------- -------- Net current assets 25,301 23,029 ------- ------- Total assets less current 44,305 44,531liabilities Creditors: amounts falling dueafter more than one (7,413) (9,698)year Provisions for liabilities and (411) (540)charges ------- ------- Net assets 36,481 34,293 ======= =======Capital and reserves Called up share capital 3,595 3,594 Share premium account 4,598 4,594 Revaluation reserve 465 652 Profit and loss account 27,823 25,453 ------- -------Equity shareholders' funds 8 36,481 34,293 ======= ======= -11- Trifast plc Preliminary Results Consolidated Cash Flow Statementfor the year ended 31 March 2005 2005 2004 £000 £000 £000 £000 Cash flow from operating activities 5,008 3,985 Return on investments and servicing of (282) (366)finance Taxation (1,680) (885) Capital expenditure 1,918 368 Acquisitions and disposals (734) (933) Equity dividends paid (1,460) (1,387) -------- -------- (2,238) (3,203) -------- -------- Cash inflow before financing 2,770 782 Financing Issue of ordinary share capital 5 7 Decrease in debt (2,237) (1,459) -------- -------- Net cash outflow from financing (2,232) (1,452) -------- -------- Increase/(decrease) in cash in the year 538 (670) ======== ======== -12- Trifast plc Preliminary Results Reconciliation of net cash flow to movement in net debtfor the year ended 31 March 2005 2005 2004 £000 £000 Increase/(decrease) in cash in the year 538 (670) Cash outflow from decrease in debt and lease financing 2,237 1,459 ---------------------Change in net debt resulting from cash flows 2,775 789 Translation difference 162 1,172 ---------------------Movement in net debt in the year 2,937 1,961 Net debt at beginning of year (8,542) (10,503) --------------------- Net debt at end of the year (5,605) (8,542) ===================== Consolidated statement of total recognised gains and lossesfor the year ended 31 March 2005 2005 2004 £000 £000 Profit for the Financial Year 3,759 1,626 Dividends (1,510) (1,438) Currency translation differences on foreign currency netinvestments (66) (394) ------------------- Total recognised gains/(losses) relating to the financialyear 2,183 (206) =================== Note of historical cost profits and lossesfor the year ended 31 March 2005 2005 2004 £000 £000 Reported profit on ordinary activities before taxation 5,560 3,432Realisation of property revaluation gains of previous years 187 365 ------------------ Difference between a historical cost depreciation charge andthe actual depreciation charge calculated on the revaluedamount (7) (10) ------------------ Historical cost profit on ordinary activities before 5,740 3,787taxation ------------------- Historical cost profit for the year retained after taxationand dividends 2,429 543 ================== -13- Trifast plc Preliminary Results NOTES 1. Geographical segments The Group's turnover, analysed by geographical market of destination, is asfollows: 2005 2004 £000 £000United Kingdom 54,439 58,795European Union (excluding UK) 27,650 19,773Europe - other 2,211 6,998North and South America 9,660 9,488Far East 9,052 6,847Other 811 452 -------------------------- 103,823 102,353 ========================== The Group's turnover, profit before tax and net assets, analysed by geographicalmarket of origin, are as follows: Europe Asia America Group 2005 2004 2005 2004 2005 2004 2005 2004 £000 £000 £000 £000 £000 £000 £000 £000 TurnoverContinuingbusinesses 88,279 89,343 21,199 17,776 3,120 4,062 112,598 111,181 Inter segmentsales (4,751) (4,573) (3,879) (3,853) (145) (402) (8,775) (8,828) ------------------------------------------------------------------------ Sales to thirdparties 83,528 84,770 17,320 13,923 2,975 3,660 103,823 102,353 ======================================================================== Profit/(loss)beforeinterest andtaxation Segmentprofit/(loss)beforegoodwill 4,760 3,141 3,505 3,771 (189) (403) 8,076 6,509 Goodwillamortisation (88) (88) (426) (449) (172) (172) (686) (709) Exceptionals --- 79 --- --- --- (590) --- (511) ----------------------------------------------------------------------- Segmentprofit/(loss) 4,672 3,132 3,079 3,322 (361) (1,165) 7,390 5,289 Central (1,543) (1,483)costs ----------------- Profit onordinaryactivitiesbeforeinterest andtaxation 5,847 3,806 ================= Segment netassets 26,715 23,561 9,824 6,808 2,025 2,051 38,564 32,420 Central net(liabilities)/assets --- --- --- --- --- --- (2,083) 1,873 ----------------------------------------------------------------------- 26,715 23,561 9,824 6,808 2,025 2,051 36,481 34,293 ======================================================================= Turnover is derived from the manufacture and logistical supply of industrialfasteners and category 'C' components. continued... -14- 2. Profit on ordinary activities before taxation 2005 2004 £000 £000Profit on ordinary activities before taxation is stated aftercharging and (crediting) Auditors' remuneration: Audit 201 180 Further assurance services 28 10 Tax services 59 60 Depreciation and other amounts written off tangible fixedassets: Owned 1,202 1,332 Leased 61 71 Amortisation on intangible assets 13 8 Hire of plant and machinery - operating leases 35 17 Hire of other assets - operating leases 2,070 1,952 Profit on disposal of fixed assets (384) (376) Net exchange (gains)/losses (30) 480 Goodwill amortisation 686 709 The audit fee included for the Company was £41,500 (2004: £33,000). 3. Interest payable and similar charges 2005 2004 £000 £000On bank overdraft 10 67Loans and mortgages 317 354Other 4 6 ------------- 331 427 ============= 4. Taxation Analysis of charge in period 2005 2004 £000 £000 £000 £000 UK corporation taxCurrent tax on income for the period 778 423 Adjustments in respect of prior periods 11 36 Double taxation relief (17) (19) ------- ------ 772 440Foreign taxCurrent tax on income for the period 1,085 914 Adjustments in respect of prior periods (10) (12) ------- ------ 1,075 902 ------- ------Total current tax 1,847 1,342 Deferred taxOrigination/reversal of timing differences 25 355Adjustment in respect of previous years (71) 109 ------- ------ (46) 464 ------- ------Tax charge on profit on ordinary activities 1,801 1,806 ======= ====== continued... -15-4. Taxation (continued)Factors affecting the tax charge for the current period The current tax charge for the period is higher (2004: higher) than the standardrate of corporation tax in the UK 30% (2004: 30%). The differences are explainedbelow: 2005 2004 £000 £000Current tax reconciliationProfit on ordinary activities before tax 5,560 3,432 ----------------- Current tax charge at 30% (2004: 30%) 1,668 1,030 Effects of:Expenses not deductible for tax purposes- Goodwill amortisation 206 213- Other 251 254 Other timing differences 136 (102) Deferred tax assets not recognised 108 459 Capital allowances for period in excess of depreciation (2) (9) Utilisation of brought forward tax losses (159) (171) Different tax rates on overseas earnings (362) (356) Adjustments to tax charge in respect of previous periods 1 24 ----------------Total current tax charge (see above) 1,847 1,342 ================ 5. DividendsOrdinary shares: 2005 2004 £000 £000 Interim paid - 2005: 0.69p per share (2004: 0.66p) 496 474Final proposed - 2005: 1.41p per share (2004: 1.34p) 1,014 964 ----------------Total dividend 1,510 1,438 ================ 6. Earnings per Share 2005 2004Weighted averagenumber of ordinaryshares in issue -basic 71,890,674 71,871,642 Adjustment in respectof share options 622,601 538,805 -------------------------Weighted averagenumber of ordinaryshares in issue -diluted 72,513,275 72,410,447 ========================= 2005 2004 EPS EPS --------------- --------------- Earnings Basic Diluted Earnings Basic Diluted £000 £000 Profit for thefinancial year 3,759 5.23p 5.18p 1,626 2.26p 2.24p Adjustments:Goodwill amortisationcharge 686 0.95p 0.95p 709 0.99p 0.98p Operating exceptionals --- --- --- 887 1.23p 1.23p Profit on disposal offixed assets (384) (0.53p) (0.53p) (376) (0.52p) (0.52p) Tax charge onexceptionals 115 0.16p 0.16p 93 0.13p 0.13p ------------------------------------------------------- Adjusted earnings andEPS 4,176 5.81p 5.76p 2,939 4.09p 4.06p ======================================================= The 'Adjusted diluted' earnings per share is detailed in the above table. In theDirectors' opinion this best reflects the underlying performance of the Groupand assists in the comparison with the results of earlier years. In accordance with FRS14 the weighted average number of shares in the period hasbeen adjusted to take account of the effects of all dilutive potential ordinaryshares. continued... -16- 7. Stocks Group 2005 2004 £000 £000 Raw materials and consumables 827 549Work in progress 447 382Finished goods and goods for resale 20,299 17,748 ---------------------- 21,573 18,679 ====================== The Group consignment stock held from suppliers at the year-end, which was notincluded on the balance sheet, was £10,000 (2004: £96,000). This stock will beinvoiced to the Group as it is drawn down. 8. Reconciliations of movements in shareholders' funds Group Company 2005 2004 2005 2004 £000 £000 £000 £000 Profit/(loss) for the financial year 3,759 1,626 (1,713) (3,420) Dividends (1,510) (1,438) (1,510) (1,438) ------------------------------------ Retained profit/(loss) for the year 2,249 188 (3,223) (4,858) Issue of ordinary shares 5 7 5 7 Exchange differences (66) (394) --- --- ------------------------------------ Net increase/(reduction) toshareholders' funds 2,188 (199) (3,218) (4,851) Opening shareholders' funds 34,293 34,492 16,789 21,640 ------------------------------------Closing shareholders' funds 36,481 34,293 13,571 16,789 ==================================== 9. Reconciliation of operating profit to net cash inflow from operatingactivities 2005 2004 £000 £000 Operating profit before exceptionals 5,847 4,317 Operating exceptionals --- (887) -----------------Operating profit after exceptionals 5,847 3,430 Depreciation charge 1,263 1,403 Amortisation on intangible assets 13 8 (Profit) on sale of tangible fixed assets (384) (376) Goodwill amortisation 686 709 (Increase)/decrease in stocks (2,822) 1,114 Decrease/(increase) in debtors 364 (1,248) Increase/(decrease) in creditors and other provisions 41 (1,055) -----------------Net cash inflows from operating activities 5,008 3,985 ================== 10. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 March 2004 or 2005 but is derived fromthose accounts. Statutory accounts for 2004 have been delivered to the Registrarof Companies and those for 2005 will be delivered following the Company's AnnualGeneral Meeting. The auditors have reported on those accounts; their reportswere unqualified and did not contain statements under Section 237(2) of theCompanies Act 1985. continued... -17- 11. This statement is not being posted to shareholders. The Report & Accountsfor the year ended 31 March 2005 will be posted to shareholders in July 2005.Further copies will be available from Nicky Kember at the Company's RegisteredOffice: Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW. 12. The Annual General Meeting will be held on 20 September 2005 at 12.00 noon,at the Company's Registered Office as above. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Trifast