Final Results
Trifast PLC
22 June 2005
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: 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 and
profit 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 £2.8
million
Net debt reduced to £5.6 million
Effective operational efficiency drives improving profitability
Major presence to be established in China providing the capacity to
manufacture 1.8 billion parts per year
iStock (patent applied for), a revolutionary new concept in stock management to
be launched
"This creditable performance clearly underpins our strategy and overall
objectives. Additionally, through the operational efficiencies and productivity
improvements achieved across the businesses we will continue to exploit the
strength of our brand both in the UK and overseas to operate efficiently and
profitably even in challenging markets."
"We remain confident that our business is positioned well to take advantage of
market opportunities.... "
Jim Barker, Chief Executive
FULL STATEMENT ATTACHED
Enquiries:
Jim Barker, Chief Executive Fiona Tooley
Stuart Lawson, Group Finance Director Citigate Dewe Rogerson
Trifast plc Today: +44 (0)20 7282 8000
Today: +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 8370
Mobile: +44 (0)7769 934148 (JB) or +44 (0)7765 253895 (SL)
Thereafter: +44 (0)1825 747366
Web-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
Introduction
We are delighted to report an excellent profit performance with a modest
increase in sales compared to last year. This is despite rises in raw materials
and energy prices, continuing cost down pressures and the global market sectors
in 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 the
tune of £1.4 million by currency translation and we also witnessed a general
slow down from some of our top customers which amounted to £10.0 million, so
overall new business gained in the period was a very commendable £12.9 million.
This creditable performance clearly underpins our strategy and overall
objectives. Additionally, through the operational efficiencies and productivity
improvements achieved across the businesses we will continue to exploit the
strength of our brand both in the UK and overseas to operate efficiently and
profitably even in challenging markets.
Results
Turnover 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 the
UK, 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. On
an 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 not
prepared to chase top line sales growth at the expense of our profitability.
The biggest profit growth has come from within Europe and principally from the
UK.
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%, whilst
diluted 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 Finance
Director's Review.
Dividend
In line with our progressive dividend policy, the Directors are recommending an
increased 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 to
shareholders in January makes a total for the year of 2.10 pence, an increase of
5% over 2004.
The final dividend, which is subject to shareholder approval at our Annual
General Meeting on 20 September 2005 will be paid on 19 October 2005, to
shareholders 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 more
efficient ways of working whilst also developing the opportunities presented to
us by both our customers and the global and economic environment. One example of
this is our revolutionary new concept on component stock management under the
name of iStock, which is a patent pending system devised by TR to utilise the
very latest IT technology to manage customers' inventory. The system
incorporates state of the art wireless cameras which allow us to remotely
monitor our customers' stock 24 hours a day. Not only does this offer customers
the very highest service level it also allows us to install full stock
management systems anywhere in the world.
Although through our transactional business we have been able to pass on some
raw material and commodity price increases we have, like others, continued to
experience some cost-down pressures from our contractual business. Because of
our close working relationships with our customers we are able to achieve the
best possible price and to retain reasonable margins.
Global Account Sales have seen a 12% increase in business over the last year
from 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 from
Hungary, Brazil, India, Estonia, UAE, China, Mexico, Romania and Poland.
At the beginning of the year, we predicted that our profits in the UK business
would decrease due to business transition and the impact of weaker output in
manufacturing which would impact our European results. However, despite this
drop we are pleased to report a very strong performance by our European
operations with the exception of France. Sales by destination to Mainland Europe
saw a 13% growth.
Our Scottish business has been re-structured and as a result has successfully
secured a notable aerospace contract expected to deliver sales of around £1
million per annum when it becomes fully effective during this new financial
year.
Our operation in Hungary continues to develop well. We have appointed commission
agents in the Ukraine and Poland, both have delivered good enquiry levels and
sales are already being generated.
In Scandinavia, we produced a satisfactory performance and during the year, we
achieved ISO 9001:2000 in Norway. Our business in this region is focused towards
telecoms, electronics and automotive where we are benefiting from increased
activity, as well as a number of new business wins from the Baltic countries and
Poland. As a result of our global partnership with Electrolux we are now
providing support from our office in Stockholm. In partnership with TR in
Shanghai, they are working with another major customer on a fastener solutions
contract.
In Asia, we have continued to do well and Singapore remains focused on
high-value add specialist production where we have undertaken a substantial
investment in new plant which will enable us to produce new innovative and
complex products for the sheet metal sector. In Taiwan, we have also undertaken
a significant investment which provides us with a leading edge capability to
produce sophisticated and more complicated parts for the automotive and general
industrial sectors.
The transfer of volume production to China is well documented as this industrial
nation establishes itself as a major domestic and international manufacturing
base. We have attained significant growth over the last two years, and have
experienced 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 plan
to invest US$5 million in a new purpose built manufacturing facility in China
over the next 3 years to support the production of over 150 million parts per
month. This decision is essential as we look to produce operationally efficient
high quality product for worldwide consumption at competitive and profitable
pricing.
The re-structuring of our North American business is starting to produce results
and although in the year being reported it performed near breakeven, under the
newly recruited managing and sales directors, we anticipate a significant
improvement in its performance during 2005/6.
Web-site & e-business
We are continually looking at ways we can keep our customers, investors and
employees up-to-date with the developments and opportunities that exist for the
business both internally and externally.
The web-site, which remains one of the leading fastener sites targeted by
engineers and buyers alike continues to develop. It incorporates an e-business
channel that we use to extensively market our comprehensive portfolio of over
100,000 products to both new and existing customers across the globe. During the
last year, we have been able to build on its successful foundations by adding
additional capabilities such as an on-line purchasing portal which allows
customers to check stocks, and monitor and track orders that they have placed.
Organisational Structure
Board Changes
In June 2004, Eric Hutchinson joined the Group as a Non-Executive Director. Eric
is also Chairman of the Group's Audit Committee. The Combined Code on Corporate
Governance requires that the Audit Committee includes a member who has recent,
significant and relevant financial experience and the Board believes that Eric
is well placed to satisfy this through his career with Spirent Group (formerly
known as Bowthorpe Holdings).
In September 2004, we welcomed Andrew Cripps to the Board as a Non-Executive
Director and Chairman of Trifast's Remuneration Committee. Andrew brings a
wealth of knowledge gained from the variety of roles he has undertaken within
the global business BAT. In particular, his M&A and strategic planning and
development experience will be invaluable to Trifast as we continue to develop
our global brand and positioning.
Furthermore, on behalf of the Board, employees and shareholders, we would also
like 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 well
for the future.
Management, People and Development Training
At the year-end, the Group employed 944 people. We would like to thank all our
staff for their continued support and dedication which has resulted in producing
these commendable results and we were delighted to reward all those who
qualified, with a performance related payment as a result of their efforts.
As a result of our investment in people, we have established a significant pool
of experience and expertise. This knowledge base is now being channelled into
developing our international presence through secondments that range from a few
weeks to two years. This fast-track approach has enabled us to develop more
quickly our local functionality, efficiency and productivity.
continued...
-5-
Our Annual Conference in September 2004 gathered together staff from across Asia
and Europe. It provided an excellent forum for our people to better understand
the cultures and business practices through team-working and communication.
At the beginning of 2005, we carried out a staff survey across Europe which
reflected an improvement in key areas since the previous one in 2002. Part of
the survey highlighted the need to address remuneration packages across the
staff network. After detailed research externally, we introduced improvements to
our staff benefit and remuneration packages which included a childcare voucher
scheme which allows staff to take advantage of the Government's tax and NI
incentives.
Works Councils
Ahead of legislation, we have introduced works councils throughout most of our
European locations. This has proved a positive mechanism for staff and
management to work together to achieve a safe, happy and constructive working
environment as well as providing a good communication base to share ideas and
best practice.
Sussex Business Awards - Company of the Year, Sponsored by Deloitte
During the year, we were pleased to have been awarded "Company of Year 2004" by
Sussex Business Awards. This accolade was achieved through the hard work,
dedication and commitment by our people.
Strategy - Looking forward
Within Europe, our aim is to provide the most cost efficient fastener network
and become the leading brand across this Continent. Although European
manufacturing has experienced some decline as business has migrated to lower
cost economies, coupled with raw materials cost and regulatory legislation
increasing, we remain optimistic that over the next five years we have the
structure, capabilities and skills to be able to double our European business
through acquisitions and organic growth, whilst also optimising the cost base
through consolidation of resources and the full development of links with
suppliers on an international basis.
With our significant presence in the Far East for volume and specialist
manufacturing, the Group is in a much stronger position than that of our
competitors as we are able to provide, through well established modern
facilities run by an experienced team capable of partnering our diverse
geographically-spread customer base, flexible solutions for their overall
fastener requirements.
Current Trading & Prospects
Our sector continues to witness consolidation and we see a number of possible
opportunities where we are confident that the Group could achieve expansion and
enhancement of its product and service offering. This can be supported by
cost-efficient manufacturing and distribution facilities in the Far East and
Europe.
The sectors in which we operate remain challenging and it is too early to
predict the overall outcome of this financial year. We remain confident that our
business is positioned well to take advantage of market opportunities and look
forward to reporting our progress to shareholders, employees and customers over
the 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 growth
for Trifast. Against a back-drop of raw material price increases, cost down
pressures and a changing global marketplace, Trifast has succeeded in delivering
a 42% increase in adjusted earnings per share (see Results section below) and
has continued to increase the recommended dividend. In summary, the team has
built on last years return to winning ways to deliver another very positive
growth story.
Results
The profit before tax, goodwill amortisation, exceptionals and profit on sales
of 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: £102.4
million), 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 our
operational changes, our continued focus on product mix and our on-going drive
to be a value add provider to our customers. During the period we continued our
focus on our core products and saw a continuing decline in the supply of low
margin category 'c' components.
Overheads remain under tight control at £19.7 million (pre goodwill and
performance related pay awards) representing 19.0% of turnover (2004: 19.3%). We
feel that this underlying level of overhead is appropriate to sustain current
levels 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 of
42% 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 can
report that whilst we have no direct trading with them, we did supply Tier1/
Tier2 suppliers. It is therefore difficult to predict the overall impact of
their demise, although we believe that the affect on Trifast sales should not be
more than £0.5 million in the financial year ending 31 March 2006.
Profit on the Sale of Fixed Assets
During the period we completed the sale of two buildings. Firstly, a warehouse
in Uckfield and secondly, the sale of our building in Stockholm, an area of
which we then leased back from the landlord on a short term basis. The net
profit on the sale of fixed assets was £0.38 million (2004: £0.38 million). We
now feel that we have the required number of freehold properties and don't see
any further disposals in the coming period. These sales, along with the sale of
our Belfast building in March 2004, had a positive cash flow impact of £2.3
million.
Working Capital and Treasury Management
Cash generation during the year was strong with £2.77 million being generated
before debt repayments of £2.24 million. We also absorbed the cash effect of
prior 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 reduced
slightly to 69 days (2004: 70 days) reflecting some new suppliers coming on
board 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 managed
accounts 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 our
subsidiary, Lancaster Fasteners. We have also had the impact of increased stock
levels which support a few of our major customers, as these customers' sales
have slowed during the period.
Asia - an increase of £1.3 million, reflecting the continuing growth of our
Chinese distribution business, the improved manufacturing output in Taiwan to
it's automotive customers and the increased stockholding ranges being made and
held 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. We
believe this reduction is a temporary position as our business gears up for some
new accounts recently won and increases its focus on the sales of our higher
margin product range. We would expect stock levels to settle down to a lower
level which we feel would be adequate for us to provide the required level of
security to our managed account customers and maintain the necessary levels of
product line stocks to continue the drive forward in this very profitable area
of our business.
The above has meant that we have once again been able to significantly reduce
our net debt position to £5.60 million (2004: £8.54 million) resulting in a
reduced gearing level of 14.7% (2004: 24.3%). This puts us in a very strong
position financially to take advantage of any opportunities in the current
consolidating marketplace.
At the year-end we had a net cash balance of £3.62 million of which £3.00
million was held in foreign currencies. As a Group, our policy is to monitor
exchange rates and buy or sell currencies in order to minimise our open exposure
to foreign exchange risk, but we do not speculate on rates. During the year,
currency fluctuations negatively impacted our turnover by £1.4 million and
profits by £0.15 million, and so as a global company in these times of
fluctuating exchange rates, we must continue to monitor our group currency
exposures on a daily basis.
Net interest payable reduced again this year to £0.29 million (2004: £0.37
million) with the interest paid element being £0.33 million (2004: £0.43
million). 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 of
our loans which are currently in variable rates. Net interest cover, on a
pre-exceptional and goodwill basis has again improved, increasing from 13 times
to its current level of 23 times.
Our banking facilities are reviewed annually and currently provide more than
adequate headroom for our current and foreseeable business requirements.
The Group's policy is to finance its operations through a combination of
retained earnings and external financing raised principally by the parent
company.
Capital expenditure remains under tight control, although, as reported last
year, 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 these
levels as we implement plans to expand our Asian manufacturing base.
Taxation
The tax charge for the year was £1.80 million (2004: £1.81 million) which after
adjusting for goodwill amortisation, timing differences (on US losses not
recognised 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's
rate of 29.2% predominantly as a result of the large reduction in the tax losses
in the USA for the current period and thus the reduced unrecognised deferred tax
asset for the year.
continued...
-8-
Dividend
A 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 of
5.0% on the prior year. This dividend is wholly covered by profit after tax.
Pensions
Trifast predominantly operates Defined Contribution Pension Schemes and so has
not had to report any valuation shortfalls. All schemes payments are up to date
and we see no financial exposure to the Group with these schemes.
Internal Control
With the on-going support of my senior finance team around the world, we
continue to review the internal controls and procedures at all of our sites at
least annually. We continue to refine these reviews as we do more of them and
spread best practice around the group companies.
Finally, I would like to thank my team for their continued support and hard work
throughout the year and look forward to presenting the next stage of the Trifast
success story in twelve months time.
-9-
Trifast plc
Preliminary Results
Consolidated Profit and Loss Account
for 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
Administration
expenses
- 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 --- 376 376
fixed assets
--------------------------------------------------
Profit on ordinary
activities 1 5,847 4,317 (511) 3,806
before interest and
taxation
Interest receivable 44 53 --- 53
Interest payable and
similar 3 (331) (427) --- (427)
charges --------------------------------------------------
Profit on ordinary
activities 2 5,560 3,943 (511) 3,432
before taxation
Tax charge on profit
on ordinary 4 (1,801) (1,806)
activities
-------- -------
Profit for the 3,759 1,626
financial year
Dividends 5 (1,510) (1,438)
-------- -------
Retained profit for
the financial 8 2,249 188
year
========= =======
Earnings per share: 6
Basic 5.23p 2.26p
Diluted 5.18p 2.24p
Adjusted diluted 5.76p 4.06p
========= =======
All amounts in the profit and loss account are derived from continuing
operations for the current and prior year.
-10-
Trifast plc
Preliminary Results
Consolidated Balance Sheet
at 31 March 2005
Note 2005 2004
£000 £000 £000 £000
Fixed 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 44,531
liabilities
Creditors: amounts falling due
after 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 Statement
for 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 debt
for 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 losses
for 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 net
investments (66) (394)
-------------------
Total recognised gains/(losses) relating to the financial
year 2,183 (206)
===================
Note of historical cost profits and losses
for the year ended 31 March 2005
2005 2004
£000 £000
Reported profit on ordinary activities before taxation 5,560 3,432
Realisation of property revaluation gains of previous years 187 365
------------------
Difference between a historical cost depreciation charge and
the actual depreciation charge calculated on the revalued
amount (7) (10)
------------------
Historical cost profit on ordinary activities before 5,740 3,787
taxation -------------------
Historical cost profit for the year retained after taxation
and dividends 2,429 543
==================
-13-
Trifast plc
Preliminary Results
NOTES
1. Geographical segments
The Group's turnover, analysed by geographical market of destination, is as
follows:
2005 2004
£000 £000
United Kingdom 54,439 58,795
European Union (excluding UK) 27,650 19,773
Europe - other 2,211 6,998
North and South America 9,660 9,488
Far East 9,052 6,847
Other 811 452
--------------------------
103,823 102,353
==========================
The Group's turnover, profit before tax and net assets, analysed by geographical
market 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
Turnover
Continuing
businesses 88,279 89,343 21,199 17,776 3,120 4,062 112,598 111,181
Inter segment
sales (4,751) (4,573) (3,879) (3,853) (145) (402) (8,775) (8,828)
------------------------------------------------------------------------
Sales to third
parties 83,528 84,770 17,320 13,923 2,975 3,660 103,823 102,353
========================================================================
Profit/(loss)
before
interest and
taxation
Segment
profit/(loss)
before
goodwill 4,760 3,141 3,505 3,771 (189) (403) 8,076 6,509
Goodwill
amortisation (88) (88) (426) (449) (172) (172) (686) (709)
Exceptionals --- 79 --- --- --- (590) --- (511)
-----------------------------------------------------------------------
Segment
profit/(loss) 4,672 3,132 3,079 3,322 (361) (1,165) 7,390 5,289
Central (1,543) (1,483)
costs -----------------
Profit on
ordinary
activities
before
interest and
taxation 5,847 3,806
=================
Segment net
assets 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 industrial
fasteners and category 'C' components.
continued...
-14-
2. Profit on ordinary activities before taxation
2005 2004
£000 £000
Profit on ordinary activities before taxation is stated after
charging and (crediting)
Auditors' remuneration:
Audit 201 180
Further assurance services 28 10
Tax services 59 60
Depreciation and other amounts written off tangible fixed
assets:
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 £000
On bank overdraft 10 67
Loans and mortgages 317 354
Other 4 6
-------------
331 427
=============
4. Taxation
Analysis of charge in period
2005 2004
£000 £000 £000 £000
UK corporation tax
Current tax on income for the period 778 423
Adjustments in respect of prior periods 11 36
Double taxation relief (17) (19)
------- ------
772 440
Foreign tax
Current 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 tax
Origination/reversal of timing differences 25 355
Adjustment 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 standard
rate of corporation tax in the UK 30% (2004: 30%). The differences are explained
below:
2005 2004
£000 £000
Current tax reconciliation
Profit 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. Dividends
Ordinary shares: 2005 2004
£000 £000
Interim paid - 2005: 0.69p per share (2004: 0.66p) 496 474
Final proposed - 2005: 1.41p per share (2004: 1.34p) 1,014 964
----------------
Total dividend 1,510 1,438
================
6. Earnings per Share
2005 2004
Weighted average
number of ordinary
shares in issue -
basic 71,890,674 71,871,642
Adjustment in respect
of share options 622,601 538,805
-------------------------
Weighted average
number of ordinary
shares in issue -
diluted 72,513,275 72,410,447
=========================
2005 2004
EPS EPS
--------------- ---------------
Earnings Basic Diluted Earnings Basic Diluted
£000 £000
Profit for the
financial year 3,759 5.23p 5.18p 1,626 2.26p 2.24p
Adjustments:
Goodwill amortisation
charge 686 0.95p 0.95p 709 0.99p 0.98p
Operating exceptionals --- --- --- 887 1.23p 1.23p
Profit on disposal of
fixed assets (384) (0.53p) (0.53p) (376) (0.52p) (0.52p)
Tax charge on
exceptionals 115 0.16p 0.16p 93 0.13p 0.13p
-------------------------------------------------------
Adjusted earnings and
EPS 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 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.
continued...
-16-
7. Stocks
Group
2005 2004
£000 £000
Raw materials and consumables 827 549
Work in progress 447 382
Finished 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 not
included on the balance sheet, was £10,000 (2004: £96,000). This stock will be
invoiced 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) to
shareholders' 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 operating
activities
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's
statutory accounts for the years ended 31 March 2004 or 2005 but is derived from
those accounts. Statutory accounts for 2004 have been delivered to the Registrar
of Companies and those for 2005 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.
continued...
-17-
11. This statement is not being posted to shareholders. The Report & Accounts
for 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 Registered
Office: 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
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