TIDMTRI
RNS Number : 5514O
Trifast PLC
08 November 2016
The information contained within this announcement
is deemed by the Company to constitute inside information
stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to
be in the public domain.
Tuesday, 8 November 2016
HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHSED 30 SEPTEMBER 2016
"Yet another record breaking six months, with strong underlying
trading growth driving our underlying PBT
up by 8.0% at CER (20.3% at AER)."
KEY FINANCIALS
--------------------------------------- -------- -------- -------- ---------
Change
HY2017
Continuing operations (Actual Exchange v
Rate, AER) HY2016 HY2017 HY2016 FY2016
--------------------------------------- -------- -------- -------- ---------
Group revenue +14.9% GBP89.7m GBP78.1m GBP161.4m
Gross profit % +230bps 31.6% 29.3% 29.7%
Underlying operating profit* +18.7% GBP10.3m GBP8.6m GBP16.8m
Operating profit +17.3% GBP8.8m GBP7.5m GBP13.9m
Underlying profit before tax* +20.3% GBP9.9m GBP8.3m GBP16.0m
Profit before tax +19.1% GBP8.5m GBP7.1m GBP13.1m
Underlying diluted earnings per
share* +24.2% 6.27p 5.05p 9.99p
Diluted earnings per share +24.8% 5.33p 4.27p 8.50p
Basic earnings per share +24.7% 5.50p 4.41p 8.78p
Interim/total dividend^ +25.0% 1.00p 0.80p 2.80p
--------------------------------------- -------- -------- -------- ---------
Net debt -GBP2.1m GBP14.2m GBP16.3m GBP16.0m
Return on capital employed (ROCE)* -70bps 18.6% 19.3% 18.5%
--------------------------------------- -------- -------- -------- ---------
* Before separately disclosed items (see note 2).
^ Change is in interim dividend only.
OPERATIONAL HIGHLIGHTS
-- Total revenue increase of 8.1% at Constant Exchange Rate (CER), 14.9% at AER
-- A growth strategy that continues to deliver - revenue from
multinational OEMs grew by 8.9% at CER
-- FX tailwinds bring additional GBP1.0m to underlying profit before tax
-- Underlying diluted earnings per share up by 10.3% at CER, 24.2% at AER
-- Growth in profitability drives interim dividend increase
-- GBP0.9m capital investment programme in our manufacturing
capabilities, which is expected to increase in the second half
-- Ongoing investment for growth in our sales teams and operations around the world
-- TR Fastenings Espana - an exciting new TR location near
Barcelona giving the Group access to a key growth market
"HY2017 has seen another six months of strong trading, putting
us firmly on track with our expectations to achieve another record
breaking financial year.
There are, of course, some macroeconomic factors we cannot fully
mitigate, including the ongoing volatility in the foreign currency
and raw materials markets, as well as the wider potential
implications of Brexit on our business and the UK economy. We are
already starting to see some purchase price challenges in our UK
business from the ongoing weakness in Sterling and we expect these
pressures to increase over time if that weakness persists. However,
as an international business with over 70% of our revenue being
generated outside of the UK, the Board remains confident we have
the flexibility and foresight to meet these challenges head on as
and when they arise.
Right now, in what is our seventh year of continuous profitable
growth, with a strong balance sheet, renewed banking facilities and
a dedicated, motivated and professional team of people around the
world, the Group is in a great position to keep moving
forward."
Malcolm Diamond MBE, Executive Chairman
Presentation of Results:
This will be held at 9.30am (UK) today at, The Wellington Room,
Octagon Point, St Paul's, London, EC2V 6AA.
Conference dial-in facility: on request, please contact Fiona
Tooley on +44 (0)7785 703523
or email fiona@tooleystreet.com .
Enquiries please contact:
Trifast plc
Malcolm Diamond MBE, Executive
Chairman
Mark Belton, Chief Executive
Officer
Clare Foster, Chief Financial
Officer
Today: Mobile: +44 (0)
7979 518493 (MMD)
Office: +44 (0) 1825 747630
Email: corporate.enquiries@trifast.com
Peel Hunt LLP
Stockbroker & financial
adviser
Justin Jones
Mike Bell
Tel: +44 (0)20 7418 8900
TooleyStreet Communications
IR & media relations
Fiona Tooley
Tel : +44 (0)7785 703523
Email : fiona@tooleystreet.com
Editors' note:
LSE Premium Listing: Ticker: TRI
Group website: www.trifast.com
About us: Trifast, leading international specialists in the
engineering, manufacturing and distribution of high quality
industrial fastenings to major global assembly industries. Key
sectors are automotive, domestic appliances, electronics and
distributors. The Group employs c.1,200 staff across 27 global
locations across the UK, Europe, Asia and the USA.
For more information, visit
Commercial website: www.trfastenings.com
LinkedIn: www.linkedin.com/company/tr-fastenings
Twitter: www.twitter.com/trfastenings
Facebook: www.facebook.com/trfastenings
Electronic Communications
The Company is not proposing to bulk print and distribute
hard copies of this half-yearly financial report for the
six months ended 30 September 2016 unless specifically
requested by individual shareholders. News updates, Regulatory
News, and Financial statements, can be viewed and downloaded
from the Group's website, www.trifast.com. Copies can
also be requested via corporate.enquiries@trifast.com
or, in writing to, The Company Secretary, Trifast plc,
Trifast House, Bellbrook Park, Uckfield, East Sussex,
TN22 1QW.
----------------------------------------------------------------
Forward-looking statements
This announcement contains certain forward looking statements.
These reflect the knowledge and information available to the
Company during the preparation and up to the publication of this
document. By their very nature, these statements depend upon
circumstances and relate to events that may occur in the future
thereby involving a degree of uncertainty. Therefore, nothing in
this document should be construed as a profit forecast by the
Company.
TRIFAST PLC
HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHSED 30 SEPTEMBER 2016
"OVER 75% of GROUP EBIT TODAY COMES FROM OUTSIDE THE UK"
INTRODUCTION
In addition to our ongoing focus on continuous operational
improvement, we are into a sustained period of investment in both
capital and people around the Group, an initiative that was
implemented back in mid-2015. This investment is enhancing not only
our manufacturing capacity and sales capability but is a clear
signal to everyone of the Board's confidence for the future.
Global market overview
Despite negative media predictions of both UK and global
economic malaise, the Group has sustained its trading dynamics in
virtually every one of its geographic and sector divisions. The one
exception is the reduced domestic automotive output in Malaysia
which has affected Power Steel & Electro-Plating Works (PSEP).
However, that is currently being addressed by promoting its
unutilised capacity to the Tier 1 automotive customers in the EU
and USA. Meanwhile, our other Asian businesses plus the UK, TR
Europe and TR USA are all maintaining organic growth in our key
customer sectors of automotive, electronics and domestic
appliances.
Our most recent acquisition, Kuhlmann in Germany (October 2015),
is performing extremely well and has enlarged its sales force to
add more resource to its domestic growth opportunities that have
been clearly identified by the team.
TR strategy update
We reported back in June the creation of a new senior role,
Sales Director TR Fastenings UK, which completes the UK operational
board. Kevin de Stadler, who took up this role, has since completed
his review of our UK sales strategy and during the rest of this
financial year we will look forward to beginning the roll out of
his recommendations.
Over recent years there has been a trend for high volume
assembly operations to migrate to new countries to preserve, or
even to achieve, competitive advantage. It is this transience that
has helped to drive TR's international expansion by following
customers to new production sites, our latest step seeing us open a
new logistics centre in Barcelona, Spain. Trading from this
greenfield site is expected to start early next calendar year and
responds positively to customer requests to provide technical and
logistics support locally in Spain.
Our perpetual search for acquisitions that align with our growth
strategy continues to be a key priority for the management team to
further add material value to our organic growth. Since 2011 we
have added three earnings enhancing businesses with highly
experienced and successful teams - PSEP (Malaysia), VIC (Italy) and
Kuhlmann (Germany). This clearly is an indication of the timescales
involved to not only identify the best fit, but also to ensure
growth and cultural harmony post transaction.
With meaningful manufacturing capacity expansion projects
underway in Italy and Singapore, the senior UK management team is
reviewing the cost benefits of how we collect, store and access the
Group's purchase, logistics and sales data by means of more
interactive systems that will vastly improve processing efficiency.
This is a long-term project with the benefits expected by year end
2018 and is a key example of how the Group now has the resource to
undertake fundamental modernisation of basic, highly labour
intensive core administrative processes.
Succession and people
It is over twelve months since Mark Belton moved to CEO with
Clare Foster replacing him as CFO. I must applaud how smooth this
transition has been, especially in view of the ongoing high
performance of the Group this year along with a cluster of new
policy initiatives they have introduced whilst maintaining
enthusiastic support for our well proven existing core strategies
for growth.
In May this year we wished Carlo Perini (MD of VIC) a fond
farewell as he retired from the Group and moved to the USA. We
welcomed Karol Gregorczyk and Francesco Cricco as new internally
appointed VIC board directors reporting to Geoff Budd (Group
Commercial Director). VIC continues to perform extremely well,
justifying the extra capacity investment that is being dedicated to
the plant.
TR Fastenings UK has created an additional management role for
major continuous improvement investments which resulted in the
appointment of Des Christian to the team in July as Project
Manager.
In March 2009, I re-joined Trifast as Executive Chairman
alongside Jim Barker as incoming CEO and over seven years I have
witnessed the gradual emergence of what is now considered a world
class player in our sector. The seamless senior management
succession has resulted in a motivated and experienced Executive
Board that has clear direction, focus and determination going
forward. For this reason, I think it is now appropriate that my
role as Executive Chairman switches to Non-Executive Chairman from
April 2017, a measured step that will provide continuity in the
Boardroom and allow me more time to support my other commitments
outside of Trifast.
As always these days, I never fail to be in awe of what our
nearly 1,200 colleagues achieve by driving Trifast consistently
forward, often in the face of challenging market and economic
headwinds. My colleagues and I sincerely thank them all for their
skill, energy and enthusiasm and look forward to our combined
continued success in the near and mid-term future.
Malcolm Diamond MBE, Executive Chairman
BUSINESS REVIEW
Unless stated otherwise, comparisons with prior year are
calculated at constant currency ("CER") and where we refer to
'underlying', this is defined as being before separately disclosed
items (see note 2). For consistency with the year end, CER
calculations have been calculated by translating the HY2017 figures
by the average exchange rate for FY2016.
Given the significant weakening of Sterling since June, more so
than ever before, CER is the best way of understanding the positive
progress of our underlying business. Over the second quarter of
HY2017, we witnessed Sterling weaken against our key global
currencies with average exchange rates falling 8.3% against the US
Dollar, 10.2% against the Euro, and 10.2% against the Singapore
Dollar.
The impact of foreign exchange movements has increased our
revenue by an additional 6.8% (GBP5.3m), our underlying profit
before tax by a further 12.3% (GBP1.0m) and our underlying diluted
EPS by 13.9% (0.70p) in HY2017.
Our Group performance
HY2017 HY2017 HY2016 Growth Growth
CER AER at CER at AER
---------------------- --------- --------- --------- -------- --------
Revenue GBP84.4m GBP89.7m GBP78.1m 8.1% 14.9%
---------------------- --------- --------- --------- -------- --------
Gross profit (GP) GBP26.7m GBP28.4m GBP22.9m 16.5% 24.1%
---------------------- --------- --------- --------- -------- --------
GP% 31.6% 31.6% 29.3% +230bps +230bps
---------------------- --------- --------- --------- -------- --------
Underlying EBITDA GBP10.2m GBP11.2m GBP9.3m 9.3% 20.9%
---------------------- --------- --------- --------- -------- --------
Underlying operating
profit (UOP)* GBP9.2m GBP10.3m GBP8.6m 6.9% 18.7%
---------------------- --------- --------- --------- -------- --------
UOP% 10.9% 11.4% 11.1% -20bps +30bps
---------------------- --------- --------- --------- -------- --------
Underlying profit
before tax* GBP8.9m GBP9.9m GBP8.3m 8.0% 20.3%
---------------------- --------- --------- --------- -------- --------
Underlying diluted
EPS* 5.57p 6.27p 5.05p 10.3% 24.2%
---------------------- --------- --------- --------- -------- --------
*The non-underlying measures are included in the Key Financials
table at the start of this report
In HY2017 we have seen strong, continued revenue growth of 8.1%
up by GBP6.3m to GBP84.4m.
Non-organic growth accounts for 3.6% of the 8.1% increase,
coming from a second successful six months of trading at our latest
acquisition, TR Kuhlmann in Germany. The strong organic growth of
4.5% was largely driven from our multinational OEMs where revenue
has increased by 8.1% on HY2016 (8.9% including TR Kuhlmann).
TR Kuhlmann is integrating well, having generated GBP2.8m of
revenue and GBP0.6m of underlying operating profit. This was
noticeably ahead of their first six months in the Group and their
performance continues to exceed our expectations.
Gross margins continue to strengthen, up by 190bps on FY2016,
and bringing us to above 30% for the first time in our history.
This represents the achievement of a long held ambition for the
Group, and is a tangible sign of how far we have come over the last
seven years of consistent growth. While gross margins increased,
underlying operating margins have slightly decreased compared to
HY2016 at 10.9%, reflecting the investments for growth we are
making around the Group in both our sales and operational
teams.
Our underlying PBT continues to grow, up by 20.3% at AER to
GBP9.9m (HY2016: GBP8.3m) and 8.0% at CER, driving a very strong
increase in our underlying diluted earnings per share (EPS) at AER,
up 24.2% to 6.27p (HY2016: 5.05p).
Revenue (CER)
By far the biggest driver of growth was our European business
where revenue has increased by 22.1% to GBP29.2m (HY2016:
GBP24.0m). Non-organic growth has driven 11.6% (GBP2.8m) of that
increase, coupled with very strong organic growth in our domestic
appliances business in Italy, electronics in Hungary and automotive
across Holland and Sweden.
In Asia, we saw strong growth across our Singaporean and Chinese
businesses being offset by slower sales in Malaysia, specifically
in the domestic automotive market as previously highlighted.
Overall revenue remains stable for the region with a 0.5% increase
to GBP19.9m (HY2016: GBP19.8m).
As expected, in the UK we have seen a return to marginal growth
of 1.7% to GBP32.6m after a slight overall fall in FY2016. This
represents a good recovery for what remains our biggest region by
sales. Our smallest region, the USA, continues to perform very well
with double-digit growth of 14.7% increasing revenue to GBP2.7m
(HY2016: GBP2.3m).
Underlying operating profit (CER)
Underlying operating margins have remained steady at 10.9%
(HY2016: 11.1%), generating an overall increase in profit of 6.9%
to GBP9.2m (HY2016: GBP8.6m). Once more it is Europe that has
driven a large element of the improvement with underlying operating
margins increasing 380bps to 15.9% (HY2016: 12.1%) mainly due to
gross margin improvements most specifically in Italy, Sweden and
Hungary. In Asia, underlying operating profits have fallen by
GBP0.9m to GBP2.9m (HY2016: GBP3.8m). Most of this decrease
(GBP0.7m) reflects foreign exchange movements on the retranslation
of non-local currency cash and debtor positions. In HY2016 we
experienced a one-off GBP0.5m gain on retranslation due to the
weakening in the Asian currencies following the sudden fall in the
value of the Chinese Yuan in September 2016. In HY2017, this
position has reversed to a GBP0.2m loss. Outside of this, lower
trading levels in our Malaysian business have also acted to reduce
underlying operating margins. Together explaining the majority of
the 390bps fall in margin to 12.6% (HY2016: 16.5%).
In the UK, margins reduced slightly by 60bps, reflecting good
ongoing control of our cost base as our growth investment projects
start to be implemented. The US business has seen the biggest
reduction in underlying operating margin with a fall of 510bps to
5.4% (HY2016: 10.5%). This fall has occurred through our ongoing
successful penetration into the automotive sector, as we have
invested in our US resourcing levels ahead of the curve to support
actual and expected revenue growth. We would expect to see margins
improve as revenue streams continue to increase.
Net financing costs and banking (AER)
These have continued to fall and at the end of the HY2017 stood
at GBP0.3m (HY2016: GBP0.4m) despite a broadly consistent average
net debt position against HY2016. This is due to both the decrease
in EURIBOR and a reduced reliance on our more expensive Asset Based
Lending (ABL) facilities.
Taxation (AER)
The HY2017 effective tax rate (ETR) of 23.6% is lower than our
normalised ETR of c.26.5%, based on the geographical split of the
Group's profits. The main reasons for this difference are
favourable prior year corporation tax adjustments in our Malaysian
and Italian businesses. In FY2016, this was lower still at 21.8%,
as we saw the recognition of a deferred tax asset in the US
relating to brought forward losses.
Earnings per share (AER)
Our strong growth in underlying profit before tax, coupled with
foreign exchange tailwinds from a weaker Sterling, has
significantly increased underlying diluted EPS by 24.2% to 6.27p
(HY2016: 5.05p).
Dividend
To reflect the Board's confidence in the business and its future
prospects, we are declaring an interim dividend of 1.00 pence per
share, an increase of 25.0%. The interim dividend will be paid on
13 April 2017, to shareholders on the Register as at 17 March 2017.
The shares will become ex-dividend on 16 March 2017.
Shareholder equity (AER)
As at 30 September 2016, the Group's shareholders' equity
increased considerably to GBP93.5m (FY2016: GBP83.8m). The GBP9.7m
increase is made up of retained earnings of GBP3.8m (HY2016:
GBP3.3m), share issues totalling GBP0.1m and a net foreign exchange
reserve gain of GBP5.8m arising from the weakening in Sterling in
the second quarter.
Net debt (AER)
Our net debt position at the end of HY2017 has decreased by
GBP1.8m to GBP14.2m (FY2016: GBP16.0m) despite the GBP1.5m
(EUR1.7m) deferred consideration payment for TR Kuhlmann. This
represents the final payment and timed in with the one year
anniversary of the successful joining of our two businesses.
Additional capital expenditure of GBP0.9m in the period reflects
our ongoing commitment to investing in the business, most
specifically within our manufacturing sites with additional
capacity projects both underway and planned in Italy and Singapore.
Although our cash is held across a number of currencies around the
world, our gross debt is held predominantly in Euros and so we have
seen a GBP1.1m net increase in net debt mainly from the weakness in
Sterling in the period.
Outside of these investments, our cash generation has remained
strong, reporting a conversion rate of underlying EBITDA to cash of
82.6% (FY2016: 88.9%; HY2016: 46.3%). This figure includes a
GBP2.1m additional investment in stock to support our ongoing
growth, most specifically within our Italian, Taiwanese and UK
businesses.
Banking facilities
The Group finalised amended banking facilities with HSBC just
after the HY2017 period end on 7 October 2016. In summary, the
amendments reduce the Group's reliance on the ABL facilities,
decrease the overall cost structure and extend the maturity profile
of a proportion of our borrowings to better reflect the Group's
core funding and investment requirements.
Taking these changes into account, headroom has increased by
c.GBP5.0m, helping to support our strategy of investment driven
growth. In addition, an Accordion facility of GBP20.0m has been
written in to the agreement, providing the potential flexibility to
debt finance future acquisitions and investment.
Outlook
HY2017 has seen another six months of strong trading, putting us
firmly on track with our expectations to achieve another record
breaking financial year.
For us, Europe remains a key area for organic growth. We have
investment projects already underway to increase our manufacturing
capacity in Italy and our new greenfield site in Spain (opened in
October 2016) is already providing ample opportunities to better
access the multinational OEMs head-quartered and operating in this
region.
Additional investments are being made across the world, in both
our global and local sales resources and supporting teams, as well
as to improve our digital and integrated business management
systems. Right now, in what is our seventh year of continuous
profitable growth, with a strong balance sheet, renewed banking
facilities and a dedicated, motivated and professional team of
people around the world, the Group is in a great position to keep
moving forward.
There are, of course, some macroeconomic factors we cannot fully
mitigate, including the ongoing volatility in the foreign currency
and raw materials markets, as well as the wider potential
implications of Brexit on our business and the UK economy. We are
already starting to see some purchase price challenges in our UK
business from the ongoing weakness in Sterling and we expect these
pressures to increase over time if that weakness persists. However,
as an international business with over 70% of our revenue being
generated outside of the UK, the Board remains confident we have
the flexibility and foresight to meet these challenges head on as
and when they arise.
RISKS AND UNCERTAINTIES
The Directors do not consider that the principal risks and
uncertainties of the Group have changed since the publication
in June 2016 of the Group's Annual Report for the year ended 31
March 2016. A copy of this can be found on our website
www.trifast.com.
No system can fully eliminate risk and therefore the
understanding of operational risk is central to the management
process within TR. The Group operates a system of internal control
and risk management in order to provide assurance that we are
managing risk whilst achieving our business objectives. Risk
assessment reviews are regularly carried out by management, with
responsibilities for monitoring and mitigating personally allocated
to a broad spread of individual managers. The review is analysed
and discussed at Audit Committee meetings chaired by our Senior
Independent Non-Executive Director.
As with all businesses, the Group faces risks, with some not
wholly within its control, which could have a material impact on
the Group, and may affect its performance with actual results
becoming materially different from both forecast and historic
results. There are indications that the macroeconomic climate is
still under pressure, and so, we continue to remain vigilant for
any indications that could adversely impact expected results going
forward. Past and future acquisitions can also carry impairment
risks on goodwill should there be a sustained downturn in trading
within an acquired subsidiary.
The long-term success of the Group depends on the ongoing
review, assessment and control of the key business risks it
faces.
Trifast plc - responsibility statement
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the information required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Mark Belton, Chief Executive Officer
7 November 2016
Condensed consolidated interim income statement
Unaudited results for the six months ended 30 September 2016
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
Notes GBP000 GBP000 GBP000
-------------------------------------- ------- ------------- ------------- ---------
Continuing operations
Revenue 89,747 78,142 161,370
Cost of sales (61,347) (55,260) (113,366)
-------------------------------------- ------- ------------- ------------- ---------
Gross profit 28,400 22,882 48,004
Other operating income 203 169 317
Distribution expenses (1,806) (1,717) (3,202)
-------------------------------------- ------- ------------- ------------- ---------
Administrative expenses before
separately disclosed items 2 (16,535) (12,690) (28,326)
Net acquisition costs - (252) (264)
Intangible amortisation (721) (302) (974)
IFRS 2 charge (670) (608) (1,687)
Sale of fixed assets 194 - -
Cost on exercise of executive
share options (287) - -
-------------------------------------- ------- ------------- ------------- ---------
Total administrative expenses (18,019) (13,852) (31,251)
-------------------------------------- ------- ------------- ------------- ---------
Operating profit 8,778 7,482 13,868
-------------------------------------- ------- ------------- ------------- ---------
Financial income 27 28 60
Financial expenses (340) (401) (851)
-------------------------------------- ------- ------------- ------------- ---------
Net financing costs (313) (373) (791)
-------------------------------------- ------- ------------- ------------- ---------
Profit before tax 8,465 7,109 13,077
Taxation 4 (1,995) (1,984) (2,852)
-------------------------------------- ------- ------------- ------------- ---------
6,470 5,125 10,225
-------------------------------------- ------- ------------- ------------- ---------
Profit for the period
(attributable to equity shareholders
of the parent company)
-------------------------------------- ------- ------------- ------------- ---------
Earnings per share
Basic 6 5.50p 4.41p 8.78p
Diluted 6 5.33p 4.27p 8.50p
-------------------------------------- ------- ------------- ------------- ---------
Condensed consolidated interim statement of comprehensive
income
Unaudited results for the six months ended 30 September 2016
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- ---------
Profit for the period 6,470 5,125 10,225
Other comprehensive income/(expense):
Exchange differences on translation
of foreign operations 8,231 (3,201) 4,764
Net loss on hedge of net investment
in foreign subsidiary (2,433) (302) (2,537)
-------------------------------------- ------------- ------------- ---------
Other comprehensive income/(expense)
recognised directly in equity,
net of income tax 5,798 (3,503) 2,227
-------------------------------------- ------------- ------------- ---------
Total comprehensive income recognised
for the period
(attributable to equity shareholders
of the parent company) 12,268 1,622 12,452
-------------------------------------- ------------- ------------- ---------
Condensed consolidated interim statement of changes in
equity
Unaudited results for the six months ended 30 September 2016
Unaudited results for the Share Share Translation Retained Total
six months ended 30 September capital premium reserve earnings equity
2016 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------- -------- -------- ----------- --------- -------
Balance at 1 April 2016 5,837 21,161 8,569 48,183 83,750
Total comprehensive income
for the period:
Profit for the period - - - 6,470 6,470
Other comprehensive income/(expense):
Foreign currency translation
differences - - 8,231 - 8,231
Net loss on hedge of net
investment in
foreign subsidiary - - (2,433) - (2,433)
-------------------------------------- -------- -------- ----------- --------- -------
Total other comprehensive
income - - 5,798 - 5,798
-------------------------------------- -------- -------- ----------- --------- -------
Total comprehensive income
for the period - - 5,798 6,470 12,268
-------------------------------------- -------- -------- ----------- --------- -------
Transactions with owners,
recorded directly
in equity:
Issue of share capital 104 42 - (52) 94
Share based payment transactions
(including tax) - - - 698 698
Dividends - - - (3,310) (3,310)
-------------------------------------- -------- -------- ----------- --------- -------
Total transactions with owners 104 42 - (2,664) (2,518)
-------------------------------------- -------- -------- ----------- --------- -------
Balance at 30 September 2016 5,941 21,203 14,367 51,989 93,500
-------------------------------------- -------- -------- ----------- --------- -------
Unaudited results for the Share Share Translation Retained Total
six months ended 30 September capital premium reserve earnings equity
2015 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- -------- -------- ----------- --------- -------
Balance at 1 April 2015 5,809 20,978 6,342 38,551 71,680
Total comprehensive income
for the period:
Profit for the period - - - 5,125 5,125
Other comprehensive expense:
Foreign currency translation
differences - - (3,201) - (3,201)
Net loss on hedge of net
investment in
foreign subsidiary - - (302) - (302)
------------------------------------- -------- -------- ----------- --------- -------
Total other comprehensive
expense - - (3,503) - (3,503)
------------------------------------- -------- -------- ----------- --------- -------
Total comprehensive (expense)/income
for the period - - (3,503) 5,125 1,622
------------------------------------- -------- -------- ----------- --------- -------
Transactions with owners,
recorded directly
in equity:
Issue of share capital 1 5 - - 6
Share based payment transactions
(including tax) - - - 650 650
Dividends - - - (2,440) (2,440)
------------------------------------- -------- -------- ----------- --------- -------
Total transactions with owners 1 5 - (1,790) (1,784)
------------------------------------- -------- -------- ----------- --------- -------
Balance at 30 September 2015 5,810 20,983 2,839 41,886 71,518
------------------------------------- -------- -------- ----------- --------- -------
Condensed consolidated interim statement of financial
position
Unaudited results for the six months ended 30 September 2016
30 September 30 September 31 March
2016 2015 2016
Group Notes GBP000 GBP000 GBP000
--------------------------------- ----- ------------ ------------ --------
Non-current assets
Property, plant and equipment 18,176 14,752 17,171
Intangible assets 40,350 31,306 38,259
Deferred tax assets 2,121 1,485 2,165
--------------------------------- ----- ------------ ------------ --------
Total non-current assets 60,647 47,543 57,595
--------------------------------- ----- ------------ ------------ --------
Current assets
Inventories 43,713 38,796 39,438
Trade and other receivables 46,230 39,503 43,386
Cash and cash equivalents 7 22,783 20,889 17,614
--------------------------------- ----- ------------ ------------ --------
Total current assets 112,726 99,188 100,438
--------------------------------- ----- ------------ ------------ --------
Total assets 173,373 146,731 158,033
--------------------------------- ----- ------------ ------------ --------
Current liabilities
Bank overdraft 7 94 1 33
Other interest-bearing loans and
borrowings 7 20,900 20,268 16,901
Trade and other payables 33,421 28,587 33,030
Tax payable 2,089 3,138 2,773
Dividends payable 5 2,376 1,743 -
Provisions 70 222 76
--------------------------------- ----- ------------ ------------ --------
Total current liabilities 58,950 53,959 52,813
--------------------------------- ----- ------------ ------------ --------
Non-current liabilities
Other interest-bearing loans and
borrowings 7 16,020 16,882 16,675
Provisions 1,117 883 1,117
Deferred tax liabilities 3,786 3,489 3,678
--------------------------------- ----- ------------ ------------ --------
Total non-current liabilities 20,923 21,254 21,470
--------------------------------- ----- ------------ ------------ --------
Total liabilities 79,873 75,213 74,283
--------------------------------- ----- ------------ ------------ --------
Net assets 93,500 71,518 83,750
--------------------------------- ----- ------------ ------------ --------
Equity
Share capital 5,941 5,810 5,837
Share premium 21,203 20,983 21,161
Reserves 14,367 2,839 8,569
Retained earnings 51,989 41,886 48,183
--------------------------------- ----- ------------ ------------ --------
Total equity 93,500 71,518 83,750
--------------------------------- ----- ------------ ------------ --------
Condensed consolidated interim statement of cash flows
Unaudited results for the six months ended 30 September 2016
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
Group Notes GBP000 GBP000 GBP000
---------------------------------------- ----- ------------- ------------- ---------
Cash flows from operating activities
Profit for the period 6,470 5,125 10,225
Adjustments for:
Depreciation, amortisation & impairment 1,697 952 2,331
Unrealised foreign currency loss/(gain) 46 (648) (119)
Financial income (27) (28) (60)
Financial expense 340 401 851
(Gain)/loss on sale of property,
plant & equipment and investments (206) (2) 15
Equity settled share based payment
charge 670 608 1,687
Taxation charge 1,995 1,984 2,852
---------------------------------------- ----- ------------- ------------- ---------
Operating cash inflow before changes
in working capital
and provisions 10,985 8,392 17,782
Change in trade and other receivables (127) (1,077) (1,360)
Change in inventories (2,087) (2,300) (421)
Change in trade and other payables 228 (708) (58)
Change in provisions (6) (2) (70)
---------------------------------------- ----- ------------- ------------- ---------
Net cash generated from operations 8,993 4,305 15,873
Tax paid (2,830) (931) (3,080)
---------------------------------------- ----- ------------- ------------- ---------
Net cash generated from operating
activities 6,163 3,374 12,793
---------------------------------------- ----- ------------- ------------- ---------
Cash flows from investing activities
Proceeds from sale of property,
plant & equipment 206 15 16
Interest received 29 43 91
Acquisition of subsidiary, net
of cash acquired (1,471) (3,361) (7,684)
Acquisition of property, plant
& equipment (928) (769) (2,339)
---------------------------------------- ----- ------------- ------------- ---------
Net cash used in investing activities (2,164) (4,072) (9,916)
---------------------------------------- ----- ------------- ------------- ---------
Cash flows from financing activities
Proceeds from the issue of share
capital 94 6 181
Proceeds from new loan 2,773 10,496 11,451
Repayment of borrowings (2,036) (2,129) (8,969)
Payment of finance lease liabilities (4) (13) (31)
Dividends paid (934) (697) (2,440)
Interest paid (340) (429) (895)
---------------------------------------- ----- ------------- ------------- ---------
Net cash (used)/generated from
financing activities (447) 7,234 (703)
---------------------------------------- ----- ------------- ------------- ---------
Net change in cash and cash equivalents 3,552 6,536 2,174
Cash and cash equivalents at 1
April 17,581 15,014 15,014
Effect of exchange rate fluctuations
on cash held 1,556 (662) 393
---------------------------------------- ----- ------------- ------------- ---------
Cash and cash equivalents at end
of period 7 22,689 20,888 17,581
---------------------------------------- ----- ------------- ------------- ---------
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
Unaudited results for the six months ended 30 September 2016
1. Basis of preparation
These condensed consolidated interim financial statements have
been prepared on the basis of accounting policies set out in the
full Annual Report and Accounts for the year ended 31 March
2016.
There are no new standards effective for the first time in the
current financial period with significant impact on the Group's
consolidated results or financial position.
These condensed consolidated interim financial statements have
been prepared in accordance with the Disclosure and Transparency
Rules (DTR) of the Financial Conduct Authority and International
Financial Reporting Standard (IFRS) IAS 34: Interim Financial
Reporting as adopted by the EU. They do not include all the
information required for full annual financial statements, and
should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 31 March 2016.
The annual financial statements of the Group are prepared in
accordance with International Reporting Standards (IFRSs) as
adopted by the EU.
This statement does not comprise full financial statements
within the meaning of Section 495 and 496 of the Companies Act
2006. The statement is unaudited but has been reviewed by KPMG LLP
and their Report is set out on page 16.
The comparative figures for the financial year ended 31 March
2016 are not the Company's statutory accounts for that financial
year and have been extracted from the full Annual Report and
Accounts for that financial year. Those accounts have been reported
on by the Company's auditor and delivered to the Registrar of
Companies. The Report of the Auditors was (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their Report, and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
Going concern
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the accompanying half-yearly financial report from
the Executive Chairman, Chief Executive Officer and Chief Financial
Officer. The financial position of the Company, its cash flows,
liquidity position and borrowing facilities also are described in
the same report. In addition, note 26 to the Company's previously
published financial statements for the year ended 31 March 2016
include the Company's objectives, policies and processes for
managing its capital; its financial risk management objectives;
details of its financial instruments and hedging activities; and
its exposures to credit risk and liquidity risk.
These condensed consolidated interim financial statements have
been prepared on a going concern basis which the Directors consider
to be appropriate.
Estimates
The preparation of financial statements in conformity with IFRSs
requires management to make estimates, judgements and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions take account of the circumstances and facts
at the period end, historical experience of similar situations and
other factors that are believed to be reasonable and relevant, the
results for which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily
available from other sources. Actual results may ultimately differ
from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were in the same areas as those that applied
to the consolidated financial statements as at and for the year
ended 31 March 2016. These were as follows:
-- Recoverable amount of goodwill
-- Inventory valuation
-- Valuation of intangible assets acquired in a business combination
-- Provisions
2. Underlying performance (before separately disclosed
items)
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------- ------------- ------------- ---------
Underling profit before tax 9,949 8,271 16,002
Separately disclosed items within administrative
expenses:
Net acquisition costs - (252) (264)
Intangible amortisation (721) (302) (974)
IFRS 2 share based payment charge (670) (608) (1,687)
Sale of fixed assets 194 - -
Cost on exercise of executive share
options (287) - -
Profit before tax 8,465 7,109 13,077
------------------------------------------------- ------------- ------------- ---------
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------- ------------- ------------- ---------
Underlying EBITDA 11,238 9,294 18,150
Separately disclosed items within administrative
expenses:
Net acquisition costs - (252) (264)
IFRS 2 share based payment charge (670) (608) (1,687)
Sale of fixed assets 194 - -
Cost on exercise of executive share
options (287) - -
EBITDA 10,475 8,434 16,199
------------------------------------------------- ------------- ------------- ---------
Intangible amortisation (721) (302) (974)
Depreciation (976) (650) (1,357)
------------------------------------------------- ------------- ------------- ---------
Operating profit 8,778 7,482 13,868
------------------------------------------------- ------------- ------------- ---------
3. Geographical operating segments
The Group is comprised of the following main geographical
operating segments:
-- UK
-- Europe includes Norway, Sweden, Germany, Hungary, Ireland,
Italy, Holland and Poland
-- USA includes USA and Mexico
-- Asia includes Malaysia, China, Singapore, Taiwan, Thailand and India
In presenting information on the basis of geographical operating
segments, segment revenue and segment assets are based on the
geographical location of our entities across the world consolidated
into the four distinct geographical regions, which the Board use to
monitor and assess the Group.
Goodwill and intangible assets acquired on business combinations
are included in the region to which they relate. This is an update
on prior year when, outside of Asia, they were previously included
in 'common' segment assets. The comparatives have been restated to
reflect this. This is consistent with the internal management
reports that are reviewed by the Chief Operating Decision
Maker.
Segment revenue and results under the primary reporting format
for the six months ended 30 September 2016 and 2015 are disclosed
in the table below:
Central costs,
assets and
UK Europe USA Asia liabilities Total
September 2016 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------- -------- -------- -------- -------------- --------
Revenue*
Revenue from external customers 32,612 32,570 2,917 21,648 - 89,747
Inter segment revenue 1,375 286 39 3,681 - 5,381
-------------------------------- -------- -------- -------- -------- -------------- --------
Total revenue 33,987 32,856 2,956 25,329 - 95,128
-------------------------------- -------- -------- -------- -------- -------------- --------
Underlying operating result 3,131 5,349 166 3,302 (1,686) 10,262
Net financing costs (87) (42) - 1 (185) (313)
-------------------------------- -------- -------- -------- -------- -------------- --------
Underlying segment result 3,044 5,307 166 3,303 (1,871) 9,949
Separately disclosed items
(see note 2) (1,484)
-------------------------------- -------- -------- -------- -------- -------------- --------
Profit before tax 8,465
-------------------------------- -------- -------- -------- -------- -------------- --------
Specific disclosure items
Depreciation and amortisation 298 874 12 480 33 1,697
Assets and liabilities
Segment assets 40,408 69,868 3,810 55,131 4,156 173,373
Segment liabilities (21,086) (13,949) (410) (11,195) (33,233) (79,873)
-------------------------------- -------- -------- -------- -------- -------------- --------
Central costs,
assets and
UK Europe USA Asia liabilities Total
September 2015 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ -------- -------- -------- -------- -------------- --------
Revenue*
Revenue from external
customers 32,054 23,998 2,332 19,758 - 78,142
Inter segment revenue 1,093 159 63 3,079 - 4,394
------------------------------ -------- -------- -------- -------- -------------- --------
Total revenue 33,147 24,157 2,395 22,837 - 82,536
------------------------------ -------- -------- -------- -------- -------------- --------
Underlying operating
result 3,239 2,921 247 3,764 (1,527) 8,644
Net financing costs (143) (56) (1) (20) (153) (373)
------------------------------ -------- -------- -------- -------- -------------- --------
Underlying segment
result 3,096 2,865 246 3,744 (1,680) 8,271
Separately disclosed
items
(see note 2) (1,162)
------------------------------ -------- -------- -------- -------- -------------- --------
Profit before tax 7,109
------------------------------ -------- -------- -------- -------- -------------- --------
Specific disclosure
items
Depreciation and amortisation 106 395 10 409 32 952
Assets and liabilities
Segment assets 45,272 49,983 2,309 45,969 3,198 146,731
Segment liabilities (21,902) (12,011) (332) (9,606) (31,362) (75,213)
------------------------------ -------- -------- -------- -------- -------------- --------
* Revenue is derived from the manufacture and logistical supply
of industrial fasteners and category 'C' components.
4. Taxation
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- ---------
Current tax on income for the period
UK tax 241 616 554
Foreign tax 2,122 1,636 3,052
Deferred tax expense (175) (285) (196)
Adjustments in respect of prior years (193) 17 (558)
-------------------------------------- ------------- ------------- ---------
1,995 1,984 2,852
-------------------------------------- ------------- ------------- ---------
5. Dividend
The dividend payable of GBP2.4m represents the final dividend
for the year ended 31 March 2016 which was approved by Shareholders
at the AGM on 27 July 2016 and paid to Members on the Register on
14 October 2016.
6. Earnings per share
The calculation of earnings per 5 pence ordinary share is based
on profit for the period after taxation and the weighted average
number of shares in the period of 117,594,097 (HY2016: 116,198,101;
FY2016: 116,388,265).
The calculation of the fully diluted earnings per 5 pence
ordinary share is based on profit for the period after taxation. In
accordance with IAS 33 the weighted average number of shares in the
period has been adjusted to take account of the effects of all
dilutive potential ordinary shares. The number of shares used in
the calculation amount to 121,352,678 (HY2016: 119,967,521; FY2016:
120,345,662).
The underlying diluted earnings per share, which in the
Directors' opinion best reflects the underlying performance of the
Group, is detailed below:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------------- ------------- ------------- ---------
Profit after tax for the period 6,470 5,125 10,225
Net acquisition costs - 252 264
Intangible amortisation 721 302 974
IFRS 2 share based payment charge 670 608 1,687
Sales of fixed assets (194) - -
Costs on exercise of executive share
options 287 - -
Tax adjustment (341) (232) (1,132)
------------------------------------- ------------- ------------- ---------
Underlying profit after tax 7,613 6,055 12,018
------------------------------------- ------------- ------------- ---------
Basic EPS 5.50p 4.41p 8.78p
Diluted EPS 5.33p 4.27p 8.50p
Underlying diluted EPS 6.27p 5.05p 9.99p
7. Analysis of net debt
At At At
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------ ------------- ------------- ---------
Cash and cash equivalents 22,783 20,889 17,614
Bank overdraft (94) (1) (33)
------------------------------ ------------- ------------- ---------
Net cash and cash equivalents 22,689 20,888 17,581
------------------------------ ------------- ------------- ---------
Debt due within one year (20,900) (20,268) (16,901)
Debt due after one year (16,020) (16,882) (16,675)
------------------------------ ------------- ------------- ---------
Gross debt (36,920) (37,150) (33,576)
------------------------------ ------------- ------------- ---------
Net debt (14,231) (16,262) (15,995)
------------------------------ ------------- ------------- ---------
8. Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------------------ ------------- ------------- ---------
Net increase in cash and cash equivalents 3,552 6,536 2,174
Net increase in borrowings (733) (8,354) (2,451)
------------------------------------------ ------------- ------------- ---------
2,819 (1,818) (277)
Exchange rate differences (1,055) (1,029) (2,303)
------------------------------------------ ------------- ------------- ---------
Movement in net debt 1,764 (2,847) (2,580)
Opening net debt (15,995) (13,415) (13,415)
------------------------------------------ ------------- ------------- ---------
Closing net debt (14,231) (16,262) (15,995)
------------------------------------------ ------------- ------------- ---------
INDEPENDENT REVIEW REPORT TO TRIFAST PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2016 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity, the
consolidated statement of financial position, the consolidated
statement of cash flows and the related explanatory notes. We have
read the other information contained in the half-yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA"). Our review
has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRS as adopted by the EU.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2016 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FCA.
Mark Sheppard
for and on behalf of KPMG LLP
Chartered Accountants
1 Forest Gate
Brighton Road
Crawley
West Sussex, RH11 9PT
7 November 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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