Final Results - Part 2

Trifast PLC 20 June 2000 PART 2 Trifast plc Preliminary Results for the year ended 31 March 2000 Notes 1 Accounting policies The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements. Basis of preparation The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules modified to include the revaluation of certain land and buildings. Basis of consolidation The consolidated financial statements include the financial statements of the company and its subsidiary undertakings all of which have been made up to 31 March 2000. Where the acquisition method of accounting is required to be adopted the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal. In the Company's accounts, investments in subsidiary undertakings are stated at cost less amounts written off for any impairment in value. Under section 230(4) of the Companies Act 1985, Trifast plc is exempt from the requirement to present its own profit and loss account. The amount of profit for the year dealt with in the financial statements of Trifast plc is disclosed in the notes to the financial statements. Goodwill Purchased goodwill (both positive and negative) arising on consolidation in respect of acquisitions before 1 April 1998, when FRS 10 Goodwill and intangible assets was adopted, was written off to reserves in the year of acquisition. When a subsequent disposal occurs any related goodwill previously written off to reserves is written back through the profit and loss account as part of the profit or loss on disposal. Purchased goodwill (representing the excess of the fair value of the consideration given plus any related costs over the fair value of the separable net assets acquired) arising on consolidation in respect of acquisitions since 1 April 1998 is capitalised. Positive goodwill is amortised to nil by equal annual instalments over its estimated useful life. On the subsequent disposal or termination of a business acquired since 1 April 1998, the profit or loss on disposal or termination is calculated after charging/(crediting) the unamortised amount of any related goodwill. Employee share schemes No cost is recognised in respect of SAYE schemes that are offered on similar terms to all eligible employees. Fixed assets and depreciation During the year the Group adopted FRS 15. Details regarding the revaluation are set out in the notes to the financial statements. Depreciation is provided by the Group to write off the cost or valuation less the estimated residual value of tangible fixed assets over their estimated useful economic lives. The rates in use are as follows: Freehold and long leasehold buildings - 2% per annum straight line or the period of the lease Short leasehold properties - period of lease Motor vehicles - 25% on straight line basis Plant, machinery and fixtures - 10-20% per annum on straight line basis Fixtures, fittings and office equipment - 10-25% per annum on reducing balance basis No depreciation is provided on freehold land. Foreign currencies Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account. For consolidation purposes, the assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates. Profit and loss accounts of such undertakings are consolidated at the average rates of exchange during the year. Exchange differences arising on these translations are taken to reserves, net of exchange differences arising on related foreign currency borrowings. Leases Where the company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a 'finance lease'. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Future instalments under such leases, net of finance charges, are included with creditors. Rentals payable are apportioned between the finance element, which is charged to the profit and loss account, and the capital element which reduces the outstanding obligation for future instalments. All other leases are accounted for as 'operating leases' and the rental charges are charged to the profit and loss account on a straight line basis over the life of the lease. Pensions The Group operates defined contribution pension schemes. The assets of the schemes are held separately from those of the Group in independently administered funds. The amount charged against profits represents the contributions payable to the schemes in respect of the accounting period. Stocks Stocks are stated at the lower of cost and net realisable value with provision being made for obsolete and slow moving items. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used. For work in progress and finished goods manufactured by the Group, cost is taken as production cost, which includes an appropriate proportion of attributable overheads. Taxation Provision is made for deferred tax only to the extent that it is probable that a liability will crystallise. Turnover Turnover represents the amounts (excluding value added tax) receivable by the Group in the ordinary course of business from sales to outside customers for goods supplied. Cash Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand, less overdrafts repayable on demand. 2 Geographical segments The Group's turnover, analysed by geographical market of destination, is as follows: 2000 1999 £000 £000 United Kingdom 82,547 77,055 European Union (excluding UK) 15,963 6,594 Europe - other 4,878 5,759 North and South America 5,240 2,817 Far East 4,509 3,060 Other 176 144 113,313 95,429 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 2000 1999 2000 1999 2000 1999 2000 1999 £000 £000 £000 £000 £000 £000 £000 £000 Turnover Total 92,895 85,749 7,653 5,457 20,309 10,155 120,857 101,361 sales Inter (3,769) (3,665) (2,293) (1,437) (1,482) (830) (7,544) (5,932) segment sales Sales to 89,126 82,084 5,360 4,020 18,827 9,325 113,313 95,429 third parties Profit before taxation Segment 9,040 8,194 1,647 1,026 774 675 11,461 9,895 profit before goodwill Goodwill (88) (66) - - (229) (82) (317) (148) amortisation Profit 8,952 8,128 1,647 1,026 545 593 11,144 9,747 before interest Net (343) (263) interest Profit on ordinary activities 10,801 9,484 before taxation Segment 28,499 22,196 3,918 1,869 803 2,323 33,220 26,388 net assets Turnover is predominantly derived from the manufacture and logistical supply of industrial fasteners. 3 Operating profit Operating profit is analysed as follows: Existing Acquisitions Continuing operations operations 2000 1999 2000 1999 2000 1999 £000 £000 £000 £000 £000 £000 Turnover 105,998 95,429 7,315 - 113,313 95,429 Cost of (75,272) (68,676) (5,502) - (80,774) (68,676) sales Gross 30,726 26,753 1,813 - 32,539 26,753 profit Distribution (2,266) (1,812) (358) - (2,624) (1,812) costs Administrative expenses (before goodwill) (17,469) (15,030) (965) - (18,434) (15,030) Goodwill (208) (148) (109) - (317) (148) amortisation Other (77) (16) 57 - (20) (16) operating expenses Operating 10,706 9,747 438 - 11,144 9,747 profit 4 Profit on ordinary activities before taxation 2000 1999 £000 £000 Profit on ordinary activities before taxation is stated after charging and (crediting): Auditors' remuneration: Audit 106 96 Other fees paid to the auditors and their associates 186 166 Depreciation and other amounts written off tangible fixed assets: Owned 1,439 1,146 Leased 35 34 Hire of plant and machinery - operating leases 47 9 Hire of other assets - operating leases 1,061 1,017 Loss on disposal of fixed assets 192 117 Rents receivable from property (44) (2) Net exchange gains (67) (172) Goodwill amortisation (317) (148) The total amount charged for the hire of plant and machinery amounted to £51,000 (1999: £11,000). 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 £30,000 (1999: £29,000). The auditors also received £14,000 (1999: £112,000) which has been capitalised as part of the cost of the acquisitions. 5 Interest payable and similar charges 2000 1999 £000 £000 On bank overdraft 46 40 Finance charges payable in respect of finance leases and hire purchase 10 15 contracts Loans and mortgages 476 346 Other 2 8 534 409 6 Taxation 2000 1999 £000 £000 UK corporation tax at 30% (1999: 31%) 2,793 2,652 Overseas taxes 608 261 Deferred taxation (55) 59 Adjustment relating to an earlier year (29) 121 3,317 3,093 7 Dividends 2000 1999 Ordinary shares: £000 £000 Interim - 2000: 4.57p per share (1999: 4.17p) 810 739 Final proposed - 2000: 9.14p per share (1999: 8.33p) 1,641 1,467 Total dividend 2,451 2,206 8 Earnings per share 2000 1999 Earnings per share £000 £000 Post tax profit for the financial year 7,484 6,391 Goodwill amortisation charge 317 148 Post tax profit for the year before goodwill 7,801 6,539 amortisation 2000 1999 Weighted average number of ordinary shares in 17,727,819 17,475,875 issue - basic Adjustment in respect of share options 186,881 220,855 _________ _________ Weighted average number of ordinary shares in 17,914,700 17,696,730 issue - diluted _________ _________ Basic (after goodwill amortisation) 42.21p 36.58p Diluted (after goodwill amortisation) 41.77p 36.12p Adjusted diluted (before goodwill amortisation) 43.54p 36.96p The 'Adjusted diluted' earnings per share is calculated after adding back the goodwill amortisation of £317,000 (1999: £148,000). In the directors' opinion this best reflects the underlying performance of the Group and assists in the comparison with the results of earlier years. 9. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 1999 or 2000 but is derived from those accounts. Statutory accounts for 1999 have been delivered to the Registrar of Companies, and those for 2000 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) or (3) of the Companies Act 1985. 10. This statement is not being posted to shareholders. The Report & Accounts for the year to 31 March 2000 will be posted to shareholders on 7 July 2000. Further copies will be available from the Company's Registered Office: Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW. The Annual General Meeting will be held on Thursday, 24 August 2000, 12.00noon, at the Company's Registered Office as above. TRIFAST GROUP OF COMPANIES TRIFAST plc Uckfield East Sussex * * * * * * TR FASTENINGS Ltd Uckfield East Sussex * * * * * * Birmingham Division Leeds Division South-West Division West Bromwich Riverside Place Taunton West Midlands Leeds Somerset Bracknell Division Manchester Division Telford Division Bracknell Broadway Telford Berkshire Manchester Shropshire East Anglia Division Northampton Division Wales Division Sawston Brackmills Cwmbran Cambridge Northampton Gwent Edenbridge Division North East Division Edenbridge Newton Aycliffe Kent County Durham Hank & Products Scotland Division Division East Kilbride Uckfield Scotland East Sussex Ireland Division Stringers Division Mallusk Coventry Northern Ireland West Midlands OTHER UK SUBSIDIARIES Ivor Green (Exports) Ltd Lancaster Fastener Company Limited Arundel Morecambe West Sussex Lancashire INTERNATIONAL TR Southern Fasteners Ltd TR Miller Holding BV Samson Industries Inc. Mallow, Galway & Dublin Oldenzaal Los Angeles & Phoenix Divisions Holland Divisions Eire USA Ferreus Precision Ltd TR Norge AS FCF International AB Mallow Oslo Stockholm Eire Norway Sweden TR Formac Pte. Ltd TR Formac (Malaysia) SDN BHD Joint Venture Singapore Pulau Pinang Shanghai Malaysia China INFORMATION TECHNOLOGY Trifast Systems Ltd Brighton East Sussex

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