Final Results
Trifast PLC
23 June 2003
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Monday, 23 June 2003
Embargoed: 7.00am
Trifast plc
Preliminary Results for the year ended 31 March 2003
Year Year
March 2003 March 2002
Sales £103.63m £103.91m
EBITDA (pre-exceptionals) £6.00m £4.60m
Operating Profit (pre-goodwill and exceptionals) £4.40m £2.63m
Pre-tax profit (pre-goodwill and exceptionals) £3.95m £1.97m
Pre-tax profit (post-goodwill and exceptionals) £2.23m (£4.01m)
Adjusted diluted EPS 3.94p 1.51p
Diluted EPS 1.96p (5.02p)
•Cost reduction programme - restructuring near completion
•Improved operational efficiencies and returns
•Licenses & trademarks added to portfolio - including the acquisition of
Pozidriv(R) brand
•Business more evenly spread across variety of industries
"The Group has made considerable progress and has produced a creditable
performance in what can only be described as a very unpredictable market.
The next phase in our development is to strengthen our brand presence and
capabilities particularly in Mainland Europe where there is no single known
brand.
Although we see opportunities for consolidation in the market-place, we aim to
concentrate on strengthening our fastener based business which provides solid
returns at good margins.
Despite the lack of a general 'feel-good' factor' in the market-place, the Group
remains positive, robust, and motivated to achieve further growth this year."
Jim Barker, Chief Executive
FULL STATEMENT ATTACHED
Enquiries:
Jim Barker, Chief Executive
Stuart Lawson, Group Finance Director Fiona Tooley / Katie Dale
Trifast plc Citigate Dewe Rogerson
Today: 020 7282 8000 (8.00am - 12.30pm) Today: 020 7282 8000
Mobile: 07769 934148 (JB) or 07765 253 895 (SL) Mobile: 07785 703523
Thereafter: 01825 747366 Thereafter: 0121 455 8370
Web-site: www.trifast.com Email: ceooffice@trifast.com
---------------------------------------------------------
-2-
Trifast plc
Preliminary Results
for the year ended 31 March 2003
JOINT STATEMENT BY THE CHAIRMAN, DAVID DUGDALE AND CHIEF EXECUTIVE, JIM BARKER
The last year has been an exciting and challenging one for the Trifast
management team and the staff around the network.
The Group has made considerable progress and has produced a creditable
performance in what can only be described as a very unpredictable market. We
have focused on our core competence, which has provided the solid foundation for
our business and a platform to further increase our market share, which is
relatively small within the overall £5 billion European market and the £14
billion world market-place. TR is already recognised as one of the leading
brands within the industry.
Results
Pre-tax profit (pre-goodwill and exceptional items) increased by 100% to £3.95
million (2002: £1.97m) on a turnover of £103.63 million. Pre-tax profit,
(post-goodwill and exceptional items) amounted to £2.23 million (2002: loss
£4.01m). Adjusted diluted earnings per share were up 161% at 3.94p (2002:
1.51p). Diluted earnings per share were 1.96p (2002: loss 5.02p) Further
details are contained in the Group Finance Director's Financial Review.
Review
Trifast has continued to improve its position within the market-place and
through the cost reduction programme implemented last year which is now
completed, we have improved our returns mainly through operational efficiencies
and a stronger more focused approach towards our core fastener business.
The change in the market-place is reflected once again in the mix of our major
customers where we have added a number of new contract manufacturers. Thus, the
split of business across the sectors we now serve has become more evenly spread
giving us a better balanced business across a variety of industries.
Whilst we maintained our objective to exit low-margin business, we have also
continued to secure better margin business within the transactional arena as
well as winning a number of new logistics contracts. The net effect of these
initiatives has kept our turnover constant and improved our gross profit.
Following the significant cost reduction programme last year, re-focus of
activities and skills set, both the UK and European businesses produced
satisfactory results.
Our operations in the Far East performed well. Their strong cost-effective
manufacturing and technical expertise is a unique selling point for the Group.
Although excess capacity remains, we believe that through the further
development of major OEM business and Contract Manufacturing within North
America and Mainland Europe, this business will continue to perform strongly.
Although our US operation has improved its position on last year, the overall
result was disappointing. Towards the end of the year we began to examine and
review what we wanted to achieve through our US presence and how best we could
achieve this. Our review has concluded that our US presence should be mainly
focused on working with our Far East Operations to develop product approvals and
partnerships with American OEM's and contract manufacturers. Consequently this
business has been placed under the control of Steven Tan, our Director for Asia,
and the Board look forward to reporting on its progress in our next report.
continued...
-3-
Overall our focus remains to improve the mix of products we offer through better
analysis of supply methods and systems, thereby creating a framework for smarter
partnerships, which provide the customer with a seamless more efficient quality
service, as well as further driving cost out for both the customer and TR.
The next phase in our development is to strengthen our brand presence and
capabilities particularly in Mainland Europe where there is no single known
brand. Our business is about supplying customers with their fastener
requirements at the most cost-effective price and in the shortest timescale. In
support of this initiative we have expanded our stock range of standard products
to reflect this new direction. We now have the ability to provide a first class
service in any territory, which is backed by operationally efficient world-class
manufacturing capabilities - something that none of our key competitors can
offer.
Licences and Trademarks
During the year, we have added a number of product licences and trademarks to
our portfolio including the Japanese 'Totsu-pura'(R)- a specialist drive mechanism
which is utilised in the power tool sector.
As announced today, we have also purchased from the Receivers of European
Industrial Services, the intellectual property rights and engineering know-how
relating to a number of trademarks and patents for products specified by a
number of leading international customers. The trademarks include Pozidriv(R),
Polymate(R) and Thinfix(R). These brands are well known within the trade and their
acquisition is significant and underpins our strategy to building and enhancing
our portfolio of specialist products.
Management and People
During the year, a number of changes were made to both the operational
management and Main Board structure.
We have simplified the operational structure to more fully reflect the focus of
the business and to ensure better utilisation of the skills we have around the
Group.
Whilst Steven Tan has operational responsibility for the US and Far East, the
European operations under Geoff Budd have been divided into two territories, the
UK and Mainland Europe, with Bob Stevens heading up the UK business and David
Skilling the European business.
To allow us to provide the best possible service to our key international OEM
customers, Glenda Roberts has been appointed Global Accounts Director. Glenda
will concentrate on the on-going development of our top 20 global customers to
maximise our efficiencies through better communications with the customer and
between the various TR territories in both manufacture and supply.
As part of the significant restructuring and cost-down programme in 2002, Steven
Franklin, Executive Director resigned from the Board and left at the end of
August 2002.
John Wilson retired as Group Finance Director on 31 December 2002. John agreed
to become a Non-Executive Director, with effect from 1 January 2003, following
25 years with the Group. On behalf of the Board, staff and shareholders we
would like to thank John for his immense contribution and dedication.
We are pleased to say that Stuart Lawson, who has been with Trifast since 1995,
was promoted to Group Finance Director and joined the Main Board. In addition to
his Finance role, Stuart oversees the Group's IT and HR functions.
continued...
-4-
At the beginning of 2003, John Budgen, a Non-Executive Director since 1993
retired and we wish him well in the future and thank him for his dedication over
the last 10 years. We welcome Anthony Allen who joined the Board at the same
time as a Non-Executive Director.
Colin Hill, Executive Director has asked, for personal reasons, to stand down
from the Board with immediate effect. However, he will remain with the Group as
Managing Director of Trifast's Irish operations. On behalf of the Board, we
would like to thank Colin for the contribution he has made to the Group whilst
on the Board and we look forward to continuing our working relationship with him
as he oversees our Irish operations.
Over the last two years, the Executive Board has been reduced from 7 to 4 with
costs having been reduced by 42%. All Executive Director contracts now only run
for one year.
For the first time since 2000, we have been able to award our staff across the
Group with a bonus. On behalf of the Board, we would formally like to thank all
our employees both in the UK and overseas for their unstinting commitment and
exceptional effort, which has been a major contributory factor to these results.
SARS
As part of the Group's Risk Management Strategy, contingency plans are in place
with regard to our operations in the Far East in light of the SARS situation; we
continue to monitor the situation very closely.
Although the epidemic appears to be under control it is likely to have some
impact on the Chinese economy. As yet there has been no adverse effect on our
operations either operationally or commercially. Therefore, we believe that the
situation will have negligible effect on the current financial year as a whole.
Higgs Report
The recommendations made in the Higgs Report have been considered by the Board.
There are many points in the Report with which we already comply. Our current
view is that to adopt all of these changes could detract from the effectiveness
of the Board and have little consequential benefit for the shareholders in a
Company of our size.
If the Report's recommendations are implemented by the UK Listing Authority or
by Parliament, we will assess the extent to which compliance by the Company is
required, or would otherwise be in the best interests of the shareholders as a
whole, and appropriate action will then be considered.
Dividend
In light of these satisfactory results and, our confidence about the continuing
improvement in the Group's prospects, the Directors are recommending a final
dividend of 1.27 pence per share. This, together with the interim of 0.63 pence
per share makes a total for the year of 1.90 pence per share (2002: 1.80 pence
per share). The dividend, which is subject to shareholder approval at the AGM,
will be paid on 30 September 2003, to shareholders on the Register as at 4 July
2003.
Prospects
Over the last eighteen months we have transformed Trifast into a more focused,
lean and operationally efficient Group, which is fundamentally stronger and with
a better spread of customers and skills will combine to underpin our growth for
the future.
continued...
-5-
Although we see opportunities for consolidation in the market-place, we aim to
concentrate on strengthening our fastener based business which provides solid
returns at good margins whilst maximising the relationships and goodwill we have
built with our key global accounts through our first class logistics service and
support.
Trading in April and May has been encouraging with results in line with our
internal budgets.
Despite the lack of a general 'feel-good' factor' in the market-place, the Group
remains positive, robust, and motivated to achieve further growth this year.
-6-
Trifast plc
Preliminary Results
for the year ended 31 March 2003
FINANCIAL REVIEW BY THE GROUP FINANCE DIRECTOR, STUART LAWSON
I am pleased that we were able to deliver a satisfactory set of results for the
Trifast Group, in which we have recommended an increased dividend payment to the
shareholders, and at the same time, provided our staff with a bonus payment for
the first time since the year 2000.
During the year, we have had to deal not only with a rapidly changing
market-place and continuing price pressure from customers, but also unstable
world events which have caused much economic uncertainty especially in the
manufacturing industry.
Results
Profit before tax, goodwill amortisation, and exceptional items was £3.95m
(2002: £1.97m) an increase of 100% on turnover of £103.63m (2002: £103.91m).
Profit before tax after goodwill and exceptional items was £2.23 million (2002:
loss £4.01m).
We reported at the interim stage that our gross margin was improving. By the
year-end, it had increased further to 24.7% (2002: 23.0%) as a result of our
restructuring and a better mix of business.
Overheads remain under tight control at £21.2m (pre-exceptionals and goodwill)
representing 20.5% of sales revenue. We are confident that this level of
overhead is not only sustainable for our current level of business but also
robust enough to support future growth.
Exceptional Charge
This year we finalised our European restructuring programme, which resulted in
an exceptional charge of £0.98m.
The final stage of the European programme consisted of a number of management
teams being integrated. The net result of these changes has given us a better
utilisation of our resources, a simplified management structure, and improved
speed of communication, which is absolutely vital in the fast changing
market-place in which we operate.
At the end of the year, £0.57m of this balance had already been utilised, with
the remainder falling due in the current financial year.
Cash Position and Financing
Cash generation was positive before debt repayments of £3.18m. We also absorbed
the cash effect of current year and prior year exceptional charges to the value
of £1.3m. Controls continue to be high on working capital and all staff are
very well aware of the saying 'Cash is King'. Our net debt position improved
slightly to £10.5m despite funding the second deferred payment on our Taiwanese
acquisition of £1.1m.
At the year-end, we had a cash balance of £4.3m with £3.7m being non-sterling.
We monitor exchange rates and buy or sell currencies in order to minimise our
open exposure to foreign exchange risk. We are currently working with our
Bankers to set up a European pooling function to assist maximising the use of
our available cash balances around the Group, and continue to monitor our
currency exposure daily.
continued...
-7-
Our stock level has increased to £20.41m (2002: £19.79m), although this is
distorted by an increase of £0.61m of stock held for one customer. Whilst our
inventory stock levels are not excessive this is one area that we have targeted
for improvement during the coming year. I expect that we will increase our range
of standard and branded stocks whilst at the same time reducing stocks in other
areas.
Our net interest payable reduced to £0.45m (2002: £0.66m), with the interest
paid element being £0.55m (2002: £0.80m); this reduction has been brought about
by our repayment of debt and the reduced interest rates around the world. All
of our loans are currently structured on variable rates, which we believe is
appropriate at this period of time. However, we regularly review the option of
fixing these rates. Our net interest cover, on a pre-exceptional and goodwill
basis has improved from 4 times to 10 times.
Capital expenditure remains under tight control and was again historically low
at £0.94m with depreciation at £1.60m. Levels of expenditure have reduced as we
have scaled down our UK manufacturing capacity and completed our main European
satellite hub set-ups. I believe this expenditure will increase slightly in
future periods but is unlikely to return to historic levels.
During the year we made exceptional fixed asset disposals of £0.81m, producing a
loss of £0.69 million. This loss had been fully provided for in the prior year.
Our bank facilities at year-end totalled £3.21m. These are reviewed annually
and currently provide more than adequate headroom for our forthcoming
requirements.
Taxation
The tax charge for the year was £0.82m which represents an effective tax charge
of 24.4% after adjusting for goodwill amortisation and timing differences in the
US not recognised as a deferred tax asset. This lower than normal rate is due to
the mix of our profits between Europe and Asia.
Dividend
A final dividend of 1.27p per share (2002: 1.20p) is proposed bringing the total
for the year to 1.90p (2002: 1.80p), an increase of 5% on the prior year. This
will have a cash effect of £1.4m which is covered by our profit after tax.
Pensions
This is an area which has been receiving an unprecedented level of media
exposure in the past 24 months, with many companies' results and balance sheets
decimated by funding shortfalls. Trifast has not experienced any of this as it
operates Defined Contribution Pension Schemes which are not prone to the same
risks.
Control Reviews
In conjunction with my team, I continue to review our internal controls and
procedures with annual financial health checks undertaken by senior team members
at each key site.
I am confident that our controls are working effectively and that continuous
improvements are being made. By the 2003 interims we will have also implemented
a new management information system, which will provide us with even better
access to Group financial information.
Finally I would like to thank John Wilson for his support and wish him well for
the future. I look forward to my next review when I hope to report further
improvements in shareholder return.
-8-
Trifast plc
Preliminary Results
Consolidated Profit and Loss Account
for the year ended 31 March 2003
2003 2002
Results Results
Pre-exceptional Exceptional Pre-exceptional Exceptional
Costs costs* Total Costs Costs Total
£000 £000 £000 £000 £000 £000
Turnover - 103,631 - 103,631 103,910 - 103,910
Continuing
operations
Cost of (78,018) - (78,018) (80,001) - (80,001)
sales
Gross profit 25,613 - 25,613 23,909 - 23,909
Administration
expenses
- Before (17,317) (871) (18,188) (17,269) (442) (17,711)
goodwill
- Goodwill (742) - (742) (729) (981) (1,710)
Total (18,059) (871) (18,930) (17,998) (1,423) (19,421)
administrative
expenses
Distribution (3,893) - (3,893) (4,011) - (4,011)
costs
Operating 3,661 (871) 2,790 1,900 (1,423) 477
profit -
Continuing
operations
Loss on - (113) (113) - (3,828) (3,828)
termination of
operations
Profit/(loss) 3,661 (984) 2,677 1,900 (5,251) (3,351)
on ordinary
activities
before
interest and
taxation
Interest 95 - 95 138 - 138
receivable
Interest (547) - (547) (801) - (801)
payable and
similar
charges
Profit/(loss) 3,209 (984) 2,225 1,237 (5,251) (4,014)
on ordinary
activities
before
taxation
Tax (charge)/ (817) 401
credit on
profit/(loss)
on ordinary
activities
Profit/(loss) 1,408 (3,613)
for the
financial
year
Dividends (1,365) (1,308)
------- ------
Retained 43 (4,921)
profit/(loss)
for the
financial
year
Earnings/
(loss) per
share:
Basic 1.96p (5.03p)
Diluted 1.96p (5.02p)
Adjusted 3.94p 1.51p
diluted ------- ------
All amounts in the profit and loss account are derived from continuing
operations for the current and prior year. There is no material difference in
profit on ordinary activities before taxation and profit for the financial year
stated above and the historical cost equivalents and therefore no separate note
of historical cost profits and losses has been presented.
* further details on the exceptional costs are given in note 3.
-9-
Trifast plc
Preliminary Results
Consolidated Balance Sheet at 31 March 2003
2003 2002
£000 £000 £000 £000
Fixed assets
Intangible assets - goodwill 12,638 13,937
Tangible assets 13,197 14,922
------- --------
25,835 28,859
Current assets
Stocks 20,406 19,788
Debtors 23,040 22,851
Cash at bank and in hand 4,252 7,306
------- --------
47,698 49,945
Creditors: amounts falling due within (25,521) (25,527)
one year ------- --------
Net current assets 22,177 24,418
-------- --------
Total assets less current 48,012 53,277
liabilities
Creditors: amounts falling due after (12,327) (16,518)
more than one year
Provisions for liabilities and (1,193) (2,223)
charges ======== ========
Net assets 34,492 34,536
======== ========
Capital and reserves
Called up share capital 3,593 3,593
Share premium account 4,588 4,588
Revaluation reserve 1,017 1,017
Profit and loss account 25,294 25,338
======== ========
Equity shareholders' funds 34,492 34,536
======== ========
-10-
Trifast plc
Preliminary Results
Consolidated Cash Flow Statement for the year ended 31 March 2003
2003 2002
£000 £000 £000 £000
Cash flow from operating activities 5,035 8,926
Return on investments and servicing of (472) (624)
finance
Taxation (1,033) (2,370)
Capital expenditure and financial (762) (1,163)
investment
Acquisitions and disposals (1,146) (8,077)
Equity dividends paid (1,314) (2,221)
------- -------
(4,727) (14,455)
Cash inflow/(outflow) before 308 (5,529)
financing
Financing
Issue of ordinary share capital - 43
(Decrease)/increase in debt (3,180) 9,398
------- -------
Net cash flow from financing (3,180) 9,441
======= =======
(Decrease)/increase in cash in the (2,872) 3,912
year ======= =======
Reconciliation of net cash flow to movement in net debt
2003 2002
£000 £000
(Decrease)/increase in cash in the year (2,872) 3,912
Cash outflow/(inflow) from decrease/(increase) in debt and 3,180 (9,398)
lease financing ------- -------
Change in net debt resulting from cash flows 308 (5,486)
Loans and finance leases acquired with subsidiaries - (99)
Translation difference (216) 47
Movement in net debt in the year 92 (5,538)
Net debt at beginning of year (10,595) (5,057)
======= =======
Net debt at end of the year (10,503) (10,595)
======= =======
Consolidated statement of total recognised gains and losses for the year ended
31 March 2003
2003 2002
£000 £000
Profit/(loss) for the financial year 1,408 (3,613)
Currency translation differences on foreign currency net 29 (184)
investments
Tax charges in respect of the retranslation of related (116) -
borrowings ------- -------
Total recognised gains/(losses) relating to the financial 1,321 (3,797)
year ======= =======
-11-
Trifast plc
Preliminary Results
NOTES
1. Geographical segments
The Group's turnover, analysed by geographical market of destination, is as
follows:
2003 2002
£000 £000
United Kingdom 63,123 67,503
European Union (excluding UK) 17,796 16,540
Europe - other 4,767 3,590
North and South America 10,779 9,167
Far East 6,916 5,973
Other 250 1,137
------ ------
103,631 103,910
------ ------
The Group's turnover, profit before tax and net assets, analysed by geographical
market of origin, are as follows:
UK Asia Rest of World Group
2003 2002 2003 2002 2003 2002 2003 2002
£000 £000 £000 £000 £000 £000 £000 £000
Turnover
Continuing 73,302 78,236 17,763 15,046 20,838 19,356 111,903 112,638
businesses
Inter segment (5,155) (5,696) (2,705) (2,373) (412) (659) (8,272) (8,728)
sales ------ ------ ------ ------ ------- ------ ------- ------
Sales to third 68,147 72,540 15,058 12,673 20,426 18,697 103,631 103,910
parties ------ ------ ------ ------ ------- ------ ------- ------
Profit/(loss)
before interest
and taxation
Segment profit/
(loss) before
goodwill 3,031 2,348 3,804 3,082 (356) (917) 6,479 4,513
Goodwill (87) (87) (482) (423) (173) (1,200) (742) (1,710)
amortisation
Exceptional (871) - - - - - (871) -
costs ------ ------ ------ ------ ------- ------ ------- ------
Loss on
termination of
operations (113) (3,828) - - - - (113) (3,828)
------ ------ ------ ------ ------- ------ ------- ------
Segment profit 1,960 (1,567) 3,322 2,659 (529) (2,117) 4,753 (1,025)
Central costs - - - - - - (2,076) (2,326)
------- ------
------- ------
Profit/(loss) on ordinary activities before interest and taxation 2,677 (3,351)
======= ======
======= ======
Segment net 10,727 9,079 6,267 5,371 10,564 9,122 27,558 23,572
assets
Central net - - - - - - 6,934 10,964
assets ------ ------ ------ ------- ------- ------ ------- ------
10,727 9,079 6,267 5,371 10,564 9,122 34,492 34,536
====== ====== ====== ======= ======= ====== ======= ======
Turnover is predominantly derived from the manufacture and logistical supply of
industrial fasteners and category 'C' components.
continued...
-12-
2 Profit/(loss) on ordinary activities before taxation
2003 2002
£000 £000
Profit/(loss) on ordinary activities before taxation is stated
after charging and (crediting):
Auditors' remuneration:
Audit 171 169
Other fees paid to the auditors and their associates 112 52
Fees paid to other Group auditors 84 -
Depreciation and other amounts written off tangible fixed
assets:
Owned 1,507 1,870
Leased 90 96
Hire of plant and machinery - operating leases 19 8
Hire of other assets - operating leases 1,009 1,188
Loss on disposal of fixed assets 22 29
Rents receivable from property (5) (5)
Net exchange gains (95) (41)
Goodwill amortisation 742 1,710
The total amount charged for the hire of plant and machinery amounted to £22,000
(2002: £10,000). This comprises rentals payable under operating leases as well
as depreciation on plant and machinery held under finance leases together with
the related finance charges.
The audit fee included for the Company was £33,000 (2002: £33,000). The
auditors also received £nil (2002: £32,000) which had been capitalised as part
of the cost of an acquisition.
3. Exceptional costs
Administrative expenses
The operating exceptional cost of £871,000 related to:
£000
A payment made to John Wilson in accordance with his contract in 99
relation to loss of office.
Restructuring at 4 distribution sites, moving costs out of satellite 185
units into hubs resulting in redundancies.
Review of the management structure within Europe resulting in 425
redundancies.
Review of Trifast plc Board requirements resulting in Steven Franklin 162
stepping down from the Board in August 2002.
Loss of termination of operation
The loss on termination cost of £113,000 related to an additional accrual for
the closure of the two sites last year relating to higher than anticipated
dilapidation costs.
The operating cash flow impact of all the exceptional items above was £571,000
outflow in respect of redundancy payments and dilapidations payments. The tax
effect of the above items is a £295,000 tax credit.
4. Interest payable and similar charges
2003 2002
£000 £000
On bank overdraft 4 6
Finance charges payable in respect of finance leases and hire 1 3
purchase contracts
Loans and mortgages 531 779
Other 11 13
------ ------
547 801
------ ------
continued...
-13-
5. Taxation
Analysis of charge in period
2003 2002
£000 £000 £000 £000
UK corporation tax
Current tax on income for the period (16) -
Adjustments in respect of prior periods (39) (1)
------- -------
(55) (1)
Foreign tax
Current tax on income for the period (600) (809)
Adjustments in respect of prior periods 18 72
------- -------
(582) (737)
------- -------
Total current tax (637) (738)
Deferred tax
Origination/reversal of timing differences (143) 1,101
Adjustment in respect of previous years (37) 38
------- -------
(180) 1,139
------- -------
Tax (charge)/credit on profit/(loss) on (817) 401
ordinary activities ------- -------
Factors affecting the tax charge for the current period
The current tax charge for the period is higher (2002: credit is lower) than the
standard rate of corporation tax in the UK 30% (2002: 30%). The differences are
explained below:
2003 2002
£000 £000
Current tax reconciliation
Profit/(loss) on ordinary activities before tax 2,225 (4,014)
------- -------
Current tax (charge)/credit at 30% (2002: 30%) (668) 1,204
Effects of:
Expenses not deductible for tax purposes
- Goodwill amortisation (200) (512)
- QUEST - 23
- Other (221) (363)
Timing differences on exceptional items 185 (756)
Deferred tax assets not provided (34) (182)
Capital allowances for period in excess of depreciation 4 (410)
Utilisation of tax losses 69 -
Different tax rates on overseas earnings 249 187
Adjustments to tax charge in respect of previous periods (21) 71
------- -------
Total current tax charge (see above) (637) (738)
======= =======
6. Dividends
2003 2002
Ordinary shares: £000 £000
Interim paid - 2003: 0.63p per share (2002: 0.60p) 453 446
Final proposed - 2003: 1.27p per share (2002: 1.20p) 912 862
------- ------
Total dividend 1,365 1,308
------- ------
continued...
-14-
7. Earnings per share
2003 2002
Weighted average number of ordinary shares in issue 71,868,150 71,854,565
- basic
Adjustment in respect of share options 131,809 122,391
------- ------
Weighted average number of ordinary shares in issue 71,999,959 71,976,9561
- diluted ------- ------
2003 2002
EPS EPS
Earnings Basic Diluted Earnings Basic Diluted
£000 £000
Profit/(loss) for 1,408 1.96p 1.96p (3,613) (5.03)p (5.02)p
the financial year
Adjustments:
Goodwill 742 1.03p 1.03p 729 1.01p 1.01p
amortisation
charge
Goodwill impairment - - - 981 1.37p 1.36p
charge
Operating 871 1.21p 1.20p 442 0.62p 0.62p
exceptional items
Loss on termination 113 0.16p 0.16p 3,828 5.32p 5.32p
of operations
Tax credit on (295) (0.41)p (0.41)p (1,281) (1.78)p (1.78)p
exceptional items ------- ------- ------ ------- ------- ------
Adjusted earnings 2,839 3.95p 3.94p 1,086 1.51p 1.51p
and EPS ======= ======= ====== ======= ======= ======
The 'Adjusted diluted' earnings per share is detailed in the above table. In
the Directors' opinion this best reflects the underlying performance of the
Group and assists in the comparison with the results of earlier years.
In accordance with FRS14 the weighted average number of shares in the period has
been adjusted to take account of the effects of all dilutive potential ordinary
shares.
8. Stocks
2003 2002
£000 £000
Raw materials and consumables 519 570
Work in progress 448 425
Finished goods and goods for resale 19,439 18,793
------- --------
20,406 19,788
======= ========
During the period a review was undertaken of the Group stock provisioning policy
relative to changes in the dynamics of the business. The net effect of this
refinement on the method of estimation was a reduction in the provision of
£297,000 at 31 March 2003.
The Group consignment stock held from suppliers at the year end, which was not
included on the balance sheet, was £70,000 (2002: £80,000). This stock will be
invoiced to the Group as it is drawn down.
continued...
-15-
9. Reconciliations of movements in shareholders' funds
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Profit/(loss) for the financial year 1,408 (3,613) (2,335) (3,174)
Dividends (1,365) (1,308) (1,365) (1,308)
-------- -------- -------- --------
Retained profit(loss) for the year 43 (4,921) (3,700) (4,482)
Capitalisation of reserves on issue of - (78) - -
shares to QUEST
Issue of ordinary shares - 121 - 121
Exchange differences 29 (184) - -
Corporation tax on gains taken to (116) - - -
reserves -------- -------- -------- --------
Net reduction to shareholders' funds (44) (5,062) (3,700) (4,361)
Opening shareholders' funds 34,536 39,598 25,340 29,701
-------- -------- -------- --------
Closing shareholders' funds 34,492 34,536 21,640 25,340
-------- -------- -------- --------
10. The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 March 2002 or 2003 but is
derived from those accounts. Statutory accounts for 2002 have been delivered to
the Registrar of Companies and those for 2003 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under Section 237
(2) of the Companies Act 1985.
11. This statement is not being posted to shareholders. The Report &
Accounts for the year ended 31 March 2003 will be posted to shareholders in July
2003. Further copies will be available from Nicky Kember at the Company's
Registered Office: Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22
1QW.
12. The Annual General Meeting will be held on 24 September 2003 at 12.00
noon, at the Company's Registered Office as above.
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