2nd Feb 2009 07:00
TRIFAST PLC
('Trifast' or 'the Company' or 'the Group')
Interim Management Statement
Directorate Change
2 February 2009
Trifast, an international manufacturer and distributor of industrial fasteners and components today announces its interim management statement for its third quarter, the three months ended 31 December 2008, and a directorate change.
Interim Management Statement
Overall the Group's revenues and profitability have been impacted by the rapid onset of recession in Europe and North America and profits before taxation (before intangible amortisation, IFRS2 charges and impairment of associated company) are therefore expected to be below market expectations.
The third quarter trading period has seen revenue reductions in the UK, Turkey and our Scandinavian business units largely resulting from reductions in demand from both the automotive sub-contract manufacturing base and domestic appliance base. Our activities in Holland, Germany, Hungary and Poland have all reported revenue growth. Our planned approach to selling TR manufactured products to distributors in North America is developing well and we now have a number of regional customers and we are hoping to sign up with a national distributor shortly. This will allow us to maintain profitable growth in this region.
The Asian market has performed well in the third quarter and is in line with forecasts and our business activities in the North American market are ahead of our original forecasts. However, it is expected that the recessions in North America and Europe will impact on Asia for our fourth quarter and next financial year due to order cancellations and a reduction in overall demand.
As previously announced at our interim results the Group advised of the loss of a £1 million contract for screw components supplied to the hard disk market in Asia. We are pleased to report we are now receiving new orders and we are expecting to see revenue improvements from this business sector in the next financial year.
The expected impact of the factors described above on profit before taxation (before intangible amortisation, IFRS2 charges and impairment of associated company) for the year ending 31 March 2009 is likely to be as follows: the downturn in the UK and Scandinavia resulting in an expected reduction in the UK of £1.6m and in Sweden of £0.3m, and an expected reduction of £0.2m in Turkey.
In addition the Group expects to report the following exceptional items for the financial year: a £0.9m charge as a result of our ongoing redundancy programme which will result in annualised cost savings of £2.0m, and a stock provisioning and impairment charge of £1.6m for our Turkish operations. Additionally, the long standing settlement of the litigation by Zurich Insurance (as detailed in our Placing and Open Offer document for the acquisition of Serco Ryan in September 2005) will result in a $0.9m settlement cost, previously expected to be $3.9m, being agreed for this financial year.
The impact of the exceptional items outlined above on the Group's cash flow is expected to be £1.5m. Notwithstanding this, Trifast's overall cash flow remains healthy. The Company's working capital requirement is being managed tightly and recent negotiations with our bank have resulted in the Company securing a revised multi-currency revolving credit facility for a term period of three years.
Directorate Change
The Group advises that Stuart Lawson, currently Chief Financial Officer and European Managing Director, will be leaving the Company with effect from 31 January 2009. Steve Auld, Chief Executive Officer, will assume responsibility for the Group's European operations, whilst Mark Belton, Group Financial Controller and Company Secretary, will assume full responsibility for the Company's finance function.
Summary
In this challenging market place Trifast remains focused on cash generation, ensuring costs are under tight control, and positioning the business to compete effectively.
- ENDS -
Enquiries
Trifast Group plc Tel: 01825 747 366
Steve Auld, Chief Executive Officer
Smithfield Consultants
Reg Hoare / Will Swan / Will Henderson Tel: 020 7360 4900
Fairfax I.S. plc
Simon Bennett / Jeremy Porter Tel: 020 7598 5368
For more information please visit www.trifast.com
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