Final Results - Replacement

Trifast PLC 24 June 2002 The issuer has advised that the following amendment should be made to the Trifast PLC 'Final Results' announcement released at 07.02 today under RNS No 6256X. The record date for the final dividend should read 5 July 2002 and not 29 June 2002 as originally shown. All other details remain unchanged and the full amended text is shown below. Issued by Citigate Dewe Rogerson Ltd, Birmingham Date: Monday, 24 June 2002 Embargoed: 7.00am Trifast plc Preliminary Results for the year ended 31 March 2002 • Turnover £103.91m • Profit before tax, goodwill and exceptionals £1.97m • Adjusted earnings per share (pre-goodwill and exceptionals) 1.55p • Final dividend 1.20p • Group cash generation £3.91m • Balance sheet structure remains strong • Significant overheads removed - cost savings expected to benefit 2003 "The Group has undergone significant change in its organisational structure which we believe can support the business as we move forward. "Enquiry levels remain encouraging and we have already secured a number of contracts with new and existing customers across all sectors. Organic sales growth in the first two months of this financial year has been just below 3%. "We remain confident that our business strategy gives us a considerable commercial advantage significantly strengthening our position in being able to provide a one-stop, cost-effective solution to our customers - this will remain key to the future success of our business. "Although activity is yet to return to historic levels, the opportunities that exist should produce a much improved performance and we look forward to the future with confidence." David Dugdale, Chairman FULL STATEMENT ATTACHED Enquiries: Jim Barker, Chief Executive John Wilson, 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)/07711 103915 (JW) Mobile: 07785 703523 Thereafter: 01825 747600 Thereafter: 0121 455 8370 Web-site: www.trifast.com Email: ceooffice@trifast.com -2- Trifast plc Preliminary Results for the year ended 31 March 2002 STATEMENT BY THE CHAIRMAN, DAVID DUGDALE Over the last twelve months, the Group has had to react to significant changes in the marketplace. Like many other international manufacturers and logistics suppliers, Trifast's performance has been adversely affected by the global economic weakness across all Continents, in particular within the information technology and telecoms industries where the Group had a 32% exposure compared to 42% the previous year. This, together with the excess stock and inventory in the supply chain as a result of over-optimistic customer demand forecasting impacted on our overall performance. It is important to note however, that despite lower volumes, no major customers have been lost in the year. Although sales activity broadly stabilised by the last financial quarter, the losses incurred by our UK manufacturing businesses, caused by lack of throughput and our aggressive write-down policy, together with the impact of fixed costs and the mix of business, severely affected our gross margins which fell from 28.8% to 23.0%. To counter the effect of falling sales the Group implemented a cost reduction programme which removed £3.0m of annualised costs and included the closure of our manufacturing plants in Telford and Northampton. At the same time we refocused our resources into working much closer with the production and design departments of our major global customers and sub-contract manufacturers in order to gain further vendor approval for Trifast products and logistics which will benefit the Group as customer demand improves over the medium term. Financial Highlights Sales in the year ended March 2002 were 14% lower at £103.9m against £121.4m in 2001. However, I am pleased to report that Special Fasteners Engineering ('SFE') in Taiwan which, we acquired at the end of May 2001, has been successfully integrated and produced a strong contribution to the Group's results. SFE, together with our start-up venture in China accounted for 7% of Group turnover. The Group's profit before tax, goodwill and exceptional items was £1.97m, down from £11.85m the previous year which clearly shows the impact of the challenging environment in which we were operating. Adjusted earnings per share, pre-goodwill and exceptional items were 1.55p compared to 12.00p. Shareholders' funds were £ 34.5m (2001: £39.6m) During the year our operations produced a net cash inflow of £8.9m and net borrowings totalled £10.6m - giving gearing of 28.9%, which although higher than the 14.6% at the end of last year, it is 8.5 percentage points lower than reported at the interim stage. Dividend In line with our trading update in February, the Board is recommending a final dividend of 1.20p, which together with the interim dividend paid of 0.60p gives 1.80p for the year (2001: 3.75p). The total dividend is covered 0.9 times by adjusted earnings per share. If approved at the Annual General Meeting on 22 August 2002, the final dividend will be paid on 4 September 2002 to shareholders on the Register on 5 July 2002. People Whilst this has been a turbulent period for all employees, on behalf of the Directors I would like to thank each and every one of them for their continued support and dedication. I believe that with their continued motivation and hard work we will retain our leading position within the market. continued... -3- I would also like to take this opportunity to thank Malcolm Diamond for his contribution to the Group over 27 years. Malcolm retired as Chief Executive and Director at the end of the financial year. As shareholders will be aware, he was the principal driver of the Group's strategic development over that period, in particular our move to become a Public Company, which provided the solid foundation for our international expansion. Under his leadership he established a strong, experienced and capable management team. On behalf of everybody at Trifast and its shareholders, I would like to wish Malcolm every success in the future. I would also like to take this opportunity to congratulate Jim Barker on his appointment as Chief Executive. Jim has been with the Group since 1993, joining the Board in 1995. His extensive industrial and managerial experience, and in particular, the major role he played in the development of the Group's international manufacturing and distribution operations, has been invaluable to Trifast. We are confident that he has both the operational skills and the vision to lead the Group through its next stage of development. Prospects The Group has undergone significant change in its organisational structure which we believe can support the business as we move forward. Enquiry levels remain encouraging and we have already secured a number of contracts with new and existing customers across all sectors. Organic sales growth in the first two months of this financial year has been just below 3%. We remain confident that our business strategy gives us a considerable commercial advantage significantly strengthening our position in being able to provide a one-stop, cost-effective solution to our customers - this will remain key to the future success of our business. Although activity is yet to return to historic levels, the opportunities that exist should produce a much improved performance and we look forward to the future with confidence. 24 June 2002 -4- Trifast plc Preliminary Results for the year ended 31 March 2002 REVIEW BY THE CHIEF EXECUTIVE, JIM BARKER Background The dramatic downturn in the telecoms, media and technology sectors ('TMT') during the past financial year has forced us to take a long hard look at every area of our business and to implement changes that will stand us in good stead for the years to come. It is a tribute to the diligence of all Trifast staff that no major customer has been lost during the past twelve months. Having taken over the role as Chief Executive at Trifast following a year of severe turbulence in the sectors in which we operate, I have spent my first few months visiting the operations with a view to returning the Group to its historic growth pattern. Customers & Products In order to achieve our objectives, we need to establish a more even balance to the business, through supplying a better spread across the TMT, general industrial and automotive sectors. The acquisition last year of Special Fasteners Engineering ('SFE')' in Taiwan was part of our strategic plan to become more competitive in the automotive sector. SFE has integrated well into the Trifast Group and provides us with synergistic and growth opportunities in this important region. We aim to supply our customers wherever they might be based, by offering high quality research and development facilities, excellent design capabilities, low cost/high quality manufacturing supported by highly developed logistics systems to deliver product exactly when and where it is required. We operate out of fourteen countries and sell to over fifty, and our ambition remains to provide excellent service to all our customers. We intend to maintain industrial fasteners as our major product range, however, we also need to improve our purchase and supply of category 'C' items further in order to increase the profitability of this range up to the current level we achieve for industrial fasteners. Group Structure In Europe, we have reorganised and simplified our management structure. By reducing the administrative areas from twelve to four, we have removed a layer of management. This has given direct control to the Managing Directors of each of these regions, making them responsible for their profit and loss accounts. This has had the effect of speeding up decision making and allowing the local management teams more flexibility in managing their resources as well as exploiting their knowledge of the area to provide improved and more cost effective ways of doing business. The hub/satellite approach has been re-emphasised. By taking the administrative burden away from many of our smaller offices we have allowed them to concentrate on the service aspect they offer to our customers, with the 'hub' offices supplying back-up and specialist support. We have more clearly defined our buy/make philosophy. It is apparent to us that our manufacturing in the UK needs to be of high quality, value add and quick to marketplace product. To equip our UK manufacturing plant for this purpose we have invested heavily in research and development. With the assistance of new state of the art design software, our teams have already been successful in reducing the time from development to shop floor from months to weeks. continued... -5- In relation to high volume/ low cost items we are not able to be competitive from our UK manufacturing plant, therefore, it is inevitable that these items needed to be re-sourced from lower cost regions. This process has started, is on-going and we are optimistic that this will show results in this new financial year. Our Asian manufacturing plants in Singapore, Malaysia, Taiwan and our Joint venture in China have high visibility of all our stock requirements throughout the Group, enabling these local management teams to decide the benefits of in-house production or sub-contract manufacture. We have been granted Torx(R) and TorxPlus(R) licences for our operations in Asia adding them to our previously negotiated licences for Europe. This allows us to manufacture this specialist product, which is predominantly used in the electronics and automotive sectors and which is key to our global customer development activities. We expect to be granted further manufacturing licences this year. Purchasing & Logistics In Purchasing, we have established specialised sourcing teams, whose expertise ensures that we obtain product in the most efficient and cost-effective way possible. The changes to our central computer system have enabled a cultural change from localised purchasing to global group buying, bringing economy of scale benefits to the Group. To complement this we introduced an electronic scheduling and ordering system. As a supplier of 100,000 different items to an international customer base, keeping up to date with changing purchasing opportunities is crucial. 'Owning less and doing more' is what we are aiming to achieve, and we shall be looking to complete a number of consignment stock arrangements with our suppliers this year. Moving product efficiently around the world is becoming increasingly important as our customers expand their operations into new territories. Consequently, we have formed a global alliance with our freight-forwarding supplier Genesis, who provide an integrated sea and airfreight service, and later this year, they will service our road freight requirements. They have one of their team working within our business offering immediate access to expertise in shipping and freight movement; we also have use of their extensive warehousing facilities throughout the world - a unique situation - giving us a truly global coverage. We have invested in a business management system to define the processes of the business from start to finish. With the sale of over 100 million parts each day, we need to keep a watchful eye on all aspects that affect manufacture, purchase, quality and supply. The New Horizons system, our own developed internal IT communications system and customer management tool, is now functional, enabling us to call up from anywhere within our operation specific details of customers' requirements. We have also instigated a structure which involves having a number of global account managers, who link the requirements of specific businesses worldwide, liaising with our local offices to ensure continuity and stability of service wherever in the world that customer operates. We have continued to develop our people with training remaining a key fundamental requirement. The two-year Senior Management Development Programme which started during the year is proving to be both motivational to senior managers and forms an important part of our succession planning across the Group. We have also been successful in maintaining the 'Investors in People' accreditation. Markets In the past, our business in Scandinavia relied heavily on the supply of fasteners to the mobile phone industry. Whilst this sector is still flat we have increased our market share in the automotive and industrial sectors. New contracts have been won to supply Saab, and the branches in Norway and Sweden are back on to the growth path. In Holland, our market share continues to grow and we are beginning to supply goods and logistics services to Germany from this operation - to support this increase in activity we have recently increased our sales force to ensure that we can continue to exploit the many business opportunities that exist here. continued... -6- We are also seeing a number of opportunities to build on our position in Central Europe, and our foothold in Hungary is beginning to produce results. We have already successfully retained a Black & Decker contract that was transferred from the UK to the Czech Republic. We have operated in France from an implant situation for the past few years. Following the success of our working partnerships in this region we opened a subsidiary near Reims last month. Through current customer relationships and the prospects that exist, supported by the well trained and experienced team, we envisage further positive returns from this region. Our strong Asian presence offers efficient, high quality low cost manufacturing. Our targeted approach to sell value added logistics systems to major OEM's and their sub-contractors has been very successful. We aim to improve our value enhancement objective to our major customers through our one-stop design, product development, low cost manufacturing and logistics services in vendor managed inventory into customers' premises. To underpin our service offering we have to provide first class representation in Asia which is a key territory - we have been successful in achieving this and we expect to see a considerable up-turn in our activities here in the future. Within the USA, the new management team is working closely with a number of global OEM's in order to gain product specification approvals. Although we are relatively a small player in the US market it is a very important territory and we believe that with the local presence supported by world class manufacturing facilities in Asia we have a considerable competitive edge. We have completed the reorganisation of our European business into a structure that is lean, efficient and that has maintained its focus towards the needs of customers. The high-speed efficient communication links between our businesses across the world, guarantees stability of supply and service. We are well positioned in Central Europe to take advantage of this new growth area and our businesses in Asia continue to go from strength to strength. Major opportunities exist to become specified by OEM's in the USA. We believe that Trifast is back on the growth path and well placed to look to the future with confidence. 24 June 2002 -7- Trifast plc Preliminary Results for the year ended 31 March 2002 FINANCIAL REVIEW BY THE GROUP FINANCE DIRECTOR, JOHN WILSON I do not think it will come as a surprise to anyone when I say that the year to March 2002 was one of the most extraordinary ever experienced. Although there were some signs of volume reduction at the start of the year, the dramatic collapse in the electronics and the telecommunication sector was not foreseen. In addition, the events in America continued to depress all major economies and at the time of writing this Review it is impossible to play the forecasting game of guessing the recovery date. During the year, Trifast experienced the pain of reducing the number of UK distribution and manufacturing sites coupled with the inevitable emotional pressure of reducing our number of people. At the year end we had either closed or had started the necessary review period before making a closure decision on five UK sites. The associated costs of this action total £3.8m and we have shown these as exceptional items in our Accounts. Whilst not pleasant, it was a necessity and these measures have had an effect on the year just ended. However, we will see improvements in our performance this year. In line with this, we had to review our forecasts as the year progressed and we are pleased we were able to meet the current market expectations. With turnover at £103.9m, our gross margin was 23% which was adversely affected by the change in mix of our business. As reported at the interim stage, we have continued to reduce our inventory exposure which now stands at £19.8m including our Taiwanese acquisition, which had a stock value of £0.7m. Overheads as in previous years were under control and totalled £21.3m pre-exceptional, which represented 20.5% of sales. This resulted in a profit before tax, goodwill amortisation and exceptional items, of £1.97m (2001: £11.85m). Cash generation has been very strong. During the year, we instigated a number of controls on working capital and customer margin which contributed to a cash generation of £3.9m, compared to a decrease of £1.7m last year. Included in this cash generation is £1.5m of exceptional costs. In addition, our net debt position at the year end amounted to £10.6m which is an increase from the position of £5.1m last year, but we did fund the initial payment of the Taiwanese acquisition through a £12.4m medium term facility. At the year end we had net cash balances of £7.2m with £5.2m being non-Sterling. We monitor exchange rates and occasionally purchase or sell currencies in order to maximise return, but we do not enter hedging contracts as a matter of course. Overall, I am pleased with our cash performance. Our net interest was £0.7m with £0.8m being the paid element. In terms of cover, on a pre-exceptional basis, our net interest is covered 4 times. As expected, our capital expenditure was historically low at £1.4m with depreciation at £2.0m. Net assets at the year end totalled £34.5m which, although down on the year, is a perfectly acceptable number given the economic climate and our balance sheet structure remains strong. continued... -8- Our recent acquisition, Special Fasteners Engineering in Taiwan, has settled in well and accounted for £6.0m of sales, with a healthy profit contribution, as well as providing a more cost effective manufacturing resource for the rest of the Group. Since the year end we have made the first of the three deferred consideration payments. Together with Stuart Lawson, I have recently completed a review of internal controls in all Far East operations including a visit to our Chinese joint venture. I am pleased to report that all processes are operating to Group standards and showing good signs for the future. Some operational improvements were made including renegotiating an existing property loan on more favourable terms. We have also reviewed our existing acquisitions in the light of the current economic climate. This, plus the phenomenal change in the US economy, has resulted in us reducing the value of our American investment by £1m which has been included in our exceptional items. At the time of writing this report, we are only two months into our new financial year. Nevertheless, our sales are in accordance with our estimates and profits in line with current forecasts, and while it is still "early days" it is encouraging to see our people being winners again. 24 June 2002 -9- Trifast plc Preliminary Results Consolidated profit and loss account for the year ended 31 March 2002 2002 2001 Results Exceptional Pre-exceptional Costs* Total Costs £000 £000 £000 £000 Turnover - Continuing operations 97,949 - 97,949 121,426 - Acquisitions 5,961 - 5,961 - 103,910 - 103,910 121,426 Cost of sales (80,001) - (80,001) (86,430) Gross profit 23,909 - 23,909 34,996 Administration expenses - Before goodwill (17,269) (442) (17,711) (18,993) - Goodwill (729) (981) (1,710) (327) Total administrative expenses (17,998) (1,423) (19,421) (19,320) Distribution costs (4,011) - (4,011) (3,760) Operating profit - Continuing operations 1,224 (1,423) (199) 11,916 - Acquisitions 676 - 676 - 1,900 (1,423) 477 11,916 Loss on termination of operations - (3,828) (3,828) - (Loss)/profit on ordinary activities before interest and 1,900 (5,251) (3,351) 11,916 taxation Interest receivable 138 - 138 155 Interest payable and similar charges (801) - (801) (545) (Loss)/profit on ordinary activities before taxation 1,237 (5,251) (4,014) 11,526 Tax credit/(charge) on (loss)/profit on ordinary 401 (3,185) activities (Loss)/profit for the financial year (3,613) 8,341 Dividends (1,308) (2,680) Retained profit for the financial year (4,921) 5,661 (Loss)/earnings per share: Basic (5.03p) 11.67p Diluted (5.15p) 11.54p Adjusted diluted 1.55p 12.00p All amounts in the profit and loss account are derived from continuing operations. 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 detailed in note 3. -10- Trifast plc Preliminary Results Consolidated Balance sheet at 31 March 2002 2002 2001 £000 £000 £000 £000 Fixed assets Intangible assets - goodwill 13,937 5,741 Tangible assets 14,922 14,579 28,859 20,320 Current assets Stocks 19,788 24,961 Debtors 22,851 25,050 Cash at bank and in hand 7,306 3,264 49,945 53,275 Creditors: amounts falling due within one year (25,527) (26,659) Net current assets 24,418 26,616 Total assets less current liabilities 53,277 46,936 Creditors: amounts falling due after more than one year (16,518) (6,615) Provisions for liabilities and charges (2,223) (723) Net assets 34,536 39,598 Capital and reserves Called up share capital 3,593 3,590 Share premium account 4,588 4,470 Revaluation reserve 1,017 1,017 Merger reserve - 726 Profit and loss account 25,338 29,795 Equity shareholders' funds 34,536 39,598 -11- Trifast plc Preliminary Results Consolidated cash flow statement for the year ended 31 March 2002 2002 2001 £000 £000 £000 £000 Cash flow from operating activities 8,926 8,003 Return on investments and servicing of finance (624) (376) Taxation (2,370) (3,869) Capital expenditure and financial investment (1,163) (2,558) Acquisitions and disposals (8,077) (446) Equity dividends paid (2,221) (2,533) (14,455) (9,782) Cash outflow before financing (5,529) (1,779) Financing Issue of ordinary share capital 43 407 Increase/(decrease) in debt 9,398 (309) Net cash flow from financing 9,441 98 Increase / (decrease) in cash in the year 3,912 (1,681) Reconciliation of net cash flow to movement in net debt 2002 2001 £000 £000 £000 £000 Increase/(decrease) in cash in the year 3,912 (1,681) Cash inflow from (increase)/decrease in debt and lease (9,398) 309 financing Change in net debt resulting from cash flows (5,486) (1,372) Loans and finance leases acquired with subsidiaries (99) - Translation difference 47 (7) Movement in net debt in the year (5,538) (1,379) Net debt at beginning of year (5,057) (3,678) Net debt at end of the year (10,595) (5,057) Consolidated statement of total recognised gains and losses for the year ended 31 March 2002 2002 2001 £000 £000 (Loss)/profit for the financial year (3,613) 8,341 Currency translation differences on foreign currency net investments (148) 199 Total recognised (losses)/gains relating to the financial year (3,761) 8,540 -12- Trifast plc Preliminary Results For the year ended 31 March 2002 NOTES 1. Geographical segments The Group's turnover, analysed by geographical market of destination, is as follows: 2002 2001 £000 £000 United Kingdom 67,503 83,477 European Union (excluding UK) 16,540 21,500 Europe - other 3,590 4,039 North and South America 9,167 6,417 Far East 5,973 5,678 Other 1,137 315 103,910 121,426 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 2002 2001 2002 2001 2002 2001 2002 2001 £000 £000 £000 £000 £000 £000 £000 £000 Turnover Continuing businesses 78,236 96,765 9,085 8,998 19,356 25,423 106,677 131,186 Acquisition - - 5,961 - - - 5,961 - Inter segment sales (5,696) (5,825) (2,373) (2,558) (659) (1,377) (8,728) (9,760) Sales to third parties 72,540 90,940 12,673 6,440 18,697 24,046 103,910 121,426 (Loss)/profit before interest and taxation Segment (loss)/profit 2,348 11,065 2,406 2,368 (917) 705 3,837 14,138 before Goodwill Goodwill amortisation (87) (88) (423) - (1,200) (239) (1,710) (327) Acquisition - - 676 - - - 676 - Loss on termination of (3,828) - - - - - (3,828) - operations Segment profit (1,567) 10,977 2,659 2,368 (2,117) 466 (1,025) 13,811 Central costs - - - - - - (2,326) (1,895) (Loss)/profit on ordinary activities before interest and taxation (3,351) 11,916 Included in the 2002 central costs are accruals for payments of £442,000 to be made in accordance with Malcolm Diamond's compromise agreement. UK Asia Rest of World Group 2002 2001 2002 2001 2002 2001 2002 2001 £000 £000 £000 £000 £000 £000 £000 £000 Segment net assets 9,079 14,760 5,371 4,227 9,122 11,110 23,572 30,097 Central net assets - - - - - - 10,964 9,501 9,079 14,760 5,371 4,227 9,122 11,110 34,536 39,598 Turnover is predominantly derived from the manufacture and logistical supply of industrial fasteners and category 'C' components. continued... -13- 2. Profit on ordinary activities before taxation 2002 2001 £000 £000 Profit on ordinary activities before taxation is stated after charging and (crediting): Auditors' remuneration: Audit 169 152 Other fees paid to the auditors and their associates 52 164 Depreciation and other amounts written off tangible fixed assets: Owned 1,870 1,629 Leased 96 29 Hire of plant and machinery - operating leases 8 45 Hire of other assets - operating leases 1,188 1,125 Loss on disposal of fixed assets 29 78 Rents receivable from property (5) (41) Net exchange gains (41) (67) Goodwill amortisation 1,710 327 Bad debt provision 237 383 The total amount charged for the hire of plant and machinery amounted to £10,000 (2001: £49,000). 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 (2001: £32,000). The auditors also received £32,000 (2001: £ Nil) which had been capitalised as part of the cost of the acquisition. 3. Exceptional costs a) Administrative expenses The operating exceptional cost of £442,000 relates to an accrual for payments to be made to Mr Malcolm Diamond in accordance with his compromise agreement, £388,000 relates to Mr Malcolm Diamonds remuneration the remaining £54,000 refers to employment taxes and other employee costs. b) Goodwill The exceptional costs of £981,000 resulted when impairment tests were undertaken at 31 March 2002. These indicated that an impairment in goodwill had arisen on the subsidiary Samson Industries Inc. c) Loss on termination of operations The Loss on termination cost of £3,828,000 was incurred in relation to the rationalisation of the business to improve efficiencies, which necessitated the closure of some operations. The costs were broken down as follows: Closure of two UK manufacturing operations, one support site and £3,250,000 associated central costs Closure of two UK distribution sites and associated central costs £578,000 The operating cashflow impact of all the above exceptional item was a £1.5m outflow in respect of redundancy payments, lease payments and manufacturing closure costs. The tax affect of the above items is a £1,281,000 tax credit. 4. Interest payable and similar charges 2002 2001 £000 £000 On bank overdraft 6 5 Finance charges payable in respect of finance leases and hire purchase contracts 3 7 Loans and mortgages 779 524 Other 13 9 801 545 continued... -14- 5. Taxation Analysis of charge in period 2002 2001 £000 £000 £000 £000 UK corporation tax Current tax on income for the period - (2,597) Adjustments in respect of prior periods (1) 61 (1) (2,536) Foreign tax Current tax on income for the period (809) (770) Adjustments in respect of prior periods 72 (30) (737) (800) Total current tax (738) (3,336) Deferred tax Origination/reversal of timing differences 1,101 151 Adjustment in respect of previous years 38 - 1,139 151 Tax credit/(charge) on (loss)/profit on ordinary activities 401 (3,185) Factors affecting the tax charge for the current period: The current tax credit for the period is lower (2001: charge lower) than the standard rate of corporation tax in the UK 30% (2001: 30 %). The differences are explained below: 2002 2001 £000 £000 Current tax reconciliation (Loss)/profit on ordinary activities before tax (4,014) 11,526 Current tax credit/(charge) at 30% (2001: 30%) 1,204 (3,458) Effects of: Expenses not deductible for tax purposes - Goodwill amortisation (512) (98) - QUEST 23 266 - Tax losses (182) - - Other (363) (194) - Timing differences on exceptional items (756) - Capital allowances for period in excess of depreciation (410) - Different tax rates on overseas earnings 187 120 Adjustments to tax charge in respect of previous periods 71 28 Total current tax charge (see above) (738) (3,336) 6. Dividends Ordinary shares: 2002 2001 £000 £000 Interim paid - 2002: 0.60p per share (2001: 1.26p) 446 905 Final proposed - 2002: 1.20p per share (2001: 2.49p) 862 1,775 Total dividend 1,308 2,680 7. Earnings per share 2002 2001 70 Weighted average number of ordinary shares in issue - basic 71,854,565 71,470,971 Adjustment in respect of share options (1,706,240) 780,275 Weighted average number of ordinary shares in issue - diluted 70,148,325 72,251,246 continued... -15- 2002 EPS 2001 EPS Earnings Basic Diluted Earnings Basic Diluted £000 £000 (Loss)/profit for the financial year (3,613) (5.03)p (5.15)p 8,341 11.67p 11.54p Adjustments: Goodwill amortisation charge 729 1.01p 1.04p 327 0.46p 0.46p Goodwill impairment charge 981 1.37p 1.40p - - - Operating exceptional items 442 0.62p 0.63p - - - Loss on termination of operations 3,828 5.32p 5.46p - - - Tax credit (1,281) (1.78)p (1.83)p - - - Adjusted (loss)/earnings and EPS 1,086 1.51p 1.55p 8,668 12.13p 12.00p The 'Adjusted diluted' (loss)/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 affects of all dilutive potential ordinary shares. 8. Purchase of subsidiary undertakings 2002 £000 Net assets acquired 5,355 Goodwill 10,331 Consideration given 15,686 The consideration was satisfied by: 2002 £000 Cash 12,442 Deferred consideration 3,244 15,686 Special Fasteners Engineering Co Ltd was acquired on 28 May 2001 and has contributed £527,000 of profit to the group's reported profit after tax. The acquisition has also contributed £(1,465,000) to the Group's net operating cash flows, £67,000 in respect of net returns on investments and servicing of finance, paid £149,000 in respect of taxation and utilised £33,000 for investing activities. The deferred consideration represents cash, the payment of which is not dependant on any criteria. 9. Reconciliations of movements in shareholders' funds Group Company 2002 2001 2002 2001 £000 £000 £000 £000 Profit for the financial year (3,613) 8,341 (3,174) 3,035 Dividends (1,308) (2,680) (1,308) (2,680) Retained profit for the year (4,921) 5,661 (4,482) 355 Capitalisation of reserves on issue of shares to QUEST (78) (887) - - Issue of ordinary shares 121 1,403 121 1,403 Exchange gains/(losses) (184) 199 - - Reduction in Goodwill - 2 - - Net addition to shareholders' funds (5,062) 6,378 (4,361) 1,758 Opening shareholders' funds 39,598 33,220 29,701 27,943 Closing shareholders' funds 34,536 39,598 25,340 29,701 continued... -16- 10. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2001 or 2002 but is derived from those accounts. Statutory accounts for 2001 have been delivered to the Registrar of Companies, and those for 2002 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. 11. This statement is not being posted to shareholders. The Report & Accounts for the year ended 31 March 2002 will be posted to shareholders in July 2002. Further copies will be available from the Company's Registered Office: Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW. 12. The Annual General Meeting will be held on Thursday, 22 August 2002, 12noon, at the Company's Registered Office as above. This information is provided by RNS The company news service from the London Stock Exchange AQUPPGUC

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