RNS Number : 1022Y
Trifast PLC
29 July 2024
 

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

 

 

Monday, 29 July 2024

Trifast_col_blue

 

 

Trifast plc

(Trifast, TR or the Company)

 

Annual results

Publication of the 2024 Annual report and financial statements

 

Trifast publishes the Group's audited Annual report and financial statements for the year ended 31 March 2024. The publication can be read in full via this link:

 

http://www.rns-pdf.londonstockexchange.com/rns/1022Y_1-2024-7-26.pdf

 

Webcast presentation

The Company is holding a 'live' presentation via the Investor Meet Company platform (IMC) on Thursday 1 August at 11.30am.  To register and join the event please follow the link:https://www.investormeetcompany.com/trifast-plc/register-investor

 

This session will also be uploaded and available to watch after the event on the Company's website at Trifast plc | Our reports

 

 

 

A hexagon with blue and green graphics and text Description automatically generated

We have defined a clear purpose and vision:

"To sustainably drive our customers' success by simplifying their fastener supply chain and supporting them in their technical requirements through our world-class engineering and manufacturing capabilities"

 


Key markers for the business

 

FY2024:

·      Underlying operating profit in line with last year, notwithstanding lower revenue base

·      Underlying profit before tax £6.5m (AER), slightly higher than January guidance

·      Strong performance in light vehicle sector with 22% increase in FY24 revenues compared to prior year

·      Pipeline wins demonstrate the Group continues to have growth opportunities

·      Initial benefits of cost and productivity initiatives supported margin increase despite a challenging operating environment

·      Significant decrease in inventory c.£15m - driving high cash conversion and lowering net debt

·      Launched manufacturing facility in China with JV partner to better service domestic demand in the region


Moving ahead:

·      The Group's refreshed strategy is underway and will drive performance going forward

·      Our transformation journey will go through three phases - Recover - Rebuild - Resilience, creating 'One TR'

·      Consolidation of the National Distribution Centre in the UK completed last month - stabilisation and efficiency gains will deliver significant savings going forward

·      Working capital initiatives will continue to help in reducing inventories and net debt

·      FY2024 contract wins beginning to feed through, and the benefits of organisational change across the Company is having a positive impact on the operational business and people culture

·      FY2025 will be a significant turning point for the Group - clear ambition to deliver measurable progress in profitability, cash generation and ROCE

·      The Board is confident in the future outlook for the business over the medium term

·      Dividend re-investment plan being introduced

 

 

Forward Looking Statements

This document may contain certain forward-looking statements. The forward-looking statements 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 involve a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company.

 

 

The following information contained within this announcement is a summary extracted from the Group's audited FY2024 Annual report and financial statements.

 

Unless stated otherwise, amounts and comparisons with prior year are calculated at constant currency (Constant Exchange Rate (CER)). Where reference is made to 'underlying' this is defined as being before separately disclosed items.

 

Summary of the Group's FY24 financial performance

Underlying measures:

CER

FY24

 

CER

change

AER

FY24

 

AER

change

AER

FY23

 

Revenue4

£237.9m

(2.7)%

£233.7m

(4.4)%

£244.4m

Gross profit %

25.5%

20bps

25.4%

10bps

25.3%

Underlying operating profit (UOP)1

£12.7m

5.7%

£11.9m

(0.3)%

£12.0m

Underlying operating profit %1

5.3%

40bps

5.1%

20bps

4.9%

Underlying profit before tax1,4

£7.2m

(22.2)%

£6.5m

(29.8)%

£9.3m

Underlying diluted earnings per share1

-

-

1.62p

(68.4)%

5.13p

Adjusted leverage ratio1,3

-

-

1.3x

(0.9)x

2.2x

Adjusted net debt1,2

-

-

£(21.0)m

£17.0m

£(38.0)m

Return on capital employed (ROCE)1

-

-

5.7%

30bps

5.4%

Total dividend



1.80p


2.25p

 

GAAP measures



 



 

Operating (loss) /profit

-

-

£4.6m


£(0.0)m

 

Operating (loss) / profit %

-

-

2.0%

200bps

(0.0)%

 

(Loss) / profit before tax

-

-

£(0.8)m

70.4%

£(2.7)m

 

Diluted (loss) / earnings per share

-

-

(3.29)p

(55.2)%

(2.12)p

 










1 .Before separately disclosed items (see note 1)

2. Adjusted net debt is stated excluding the impact of IFRS 16 Leases. Including right-of-use lease liabilities, net debt increases by £(18.4)m to £(39.4)m (FY23: net debt increases by £(15.8)m to £(53.8)m)

3. Adjusted leverage ratio is calculated using adjusted net debt against adjusted underlying EBITDA

4. FY24 saw some strengthening of the British pound against the Singapore dollar, Taiwanese dollar, Swedish krona, Chinese renminbi, Malaysian ringgit and US dollar. This reduced the value of AER sales by £4.2m and AER underlying profit before tax by £0.7m on translation into British pounds.

 


Reference links:

The Board believe that the 2024 Annual report gives a fair and balanced review of the Trifast business and its strategy for the future.

For ease of reference, the following links will be of interest:

Refer to:

Our new strategic direction

Our culture and our values

Pages 10-17

Pages 8-9,11

Being a responsible business

Pages 37-54

The National Distribution Centre

Page 27

Delivering growth through our business model

Page 18-19

EBIT margin bridge

Page 17

Key performance indicators

Pages 20-21

Board and leadership structure

Pages 82-84

Stakeholder engagement

Pages 24-26

 

 

Trifast plc

Annual results for the year ended 31 March 2024

Extracts from the letter to shareholders from the Non-Executive Chair, Serena Lang


 Serena Lang

One of my first roles as Chair was to work with the Board and conclude the appointment of the new CEO. After a thorough and rigorous process, the Board were delighted to appoint Iain Percival to the role in September 2023. Iain brings with him deep leadership and business transformation experience and it is clear that he is already making a significant impact at Trifast.

 

Having taken over as Chair in September 2023, halfway through our financial year, I would like to take the opportunity to thank my predecessor, Jonathan Shearman, who served on the Board of Trifast for 14 years, and as Chair for the final four years. A role he did with care, passion and diligence during some very challenging times. On behalf of the Board, I also want to thank Scott MacMeekin for stepping in as the interim CEO for seven months, allowing the Board the time to undertake a comprehensive search process.


Looking back at FY24

Last year marked our 50th anniversary for Trifast and another inflection point in the Company's history. Good companies continue to change and transform to meet the needs of their stakeholders and Trifast is no different. The Company, driven by a 'customer first' attitude, ramped up inventory levels during the pandemic to protect our customers manufacturing lines and the subsequent impact of cost inflation, the Ukraine conflict and customer destocking led to high inventories and high net debt.

 

Following Scott Mac Meekin's appointment as interim CEO in February 2023, together with the Board, he launched a recovery roadmap for the business based on several key self-help operational and commercial improvement programmes. Working closely with Chief Commercial Officer, Dan Jack, they created a process of Sprints that would enable the business to start turning the trend on inventories, better understand customer profitability and focus business development on the top 200 customers.

 

I am delighted to say that our inventory levels have been managed downwards significantly over the year.

 

The current geopolitical uncertainty, leading to supply chain disruption, together with the macroeconomic environment, continued to challenge the business and we saw further unexpected destocking and continued inflation‑led price increases and interest rates, resulting in significant downward pressure on our revenues and profitability measures, and our transformation plan will look to address greater resilience in these areas.

 

The UK team worked tirelessly to establish our new National Distribution Centre in the Midlands. This facility will lead to better efficiencies, improved supply chain management and clarity of inventory levels across the UK business. There is still work to do to deliver world‑class processes and more efficient ways of working and a multi-disciplinary team has been pulled together to make that happen.

 

Our People

It has been an absolute delight to visit the Trifast operations and meet our wonderful people. I have yet to meet everyone; however, what is obvious from those I have met, is that our employees are dedicated to delivering excellence to our customers and are passionate about the business, which comes through clearly in the regular customer satisfaction surveys we run.

 

During my visits, it became clear that we needed greater communication and employee engagement, to actively listen more and to put in place formal structures that allow the Board to have better access to the voice of our employees. This will be critical to the success of strategic transformation and together with a bottom‑up culture approach, will be a priority for the Board going forward.

 

Throughout FY24, our employees have faced substantial change both from external factors as well as internal initiatives designed to improve the sustainability of the business. It was therefore a difficult year for many, as colleagues moved on from the business and workplaces changed.

 

On behalf of the Board, I would like to recognise the amount of change and personal impact that this period of the Company has had on our employees and thank them for their continued hard work and loyalty. Together, we will make Trifast a great place to work again.

 

Looking forward

It is essential that Trifast becomes more resilient, and the new strategy and transformation plan that Iain and the Executive Leadership Team have developed under the Recover, Rebuild, Resilience framework is aimed at achieving that, and the Board is pleased that progress on 'Recover' has already begun during FY24. The business will be focusing on the commercial outcomes, whilst building a strong new culture where our people thrive, so we can continue to delight our customers and drive shareholder value.

 

To read the Chair's letter in full please refer to pages 4-5 of the 2024 Annual report.

 

Trifast plc

Annual results for the year ended 31 March 2024

Extracts from the CEO Review by the Iain Percival


Iain Percival



This year's Annual Report reflects a year of transformation for Trifast; a year where we have faced challenges but can also reflect and celebrate success. We delivered a resilient trading and operational performance in a challenging macroeconomic and geopolitical environment impacting our customers' demands. I am proud of our achievements, delivered through our dedicated people. Without their significant efforts and contribution, our FY24 achievements would not have been possible. I look forward to celebrating further success this year as we collectively execute on the first phase of our journey.

 



Our journey - Recover - Rebuild - Resilience

In 2023, TR celebrated 50 years of business with a proud heritage of serving customers with engineered fastening supply chain solutions. I feel privileged and excited to be leading our business as we write the next chapter of our growth and success story.

 

 

Trifast has gained many strengths over that 50-year history which represent a solid platform on which to build:


·     We are passionate about the customers that we serve, whether that is a single engineered component or fulfilling a customers' fastening requirements with both product and supply chain solutions

·      We have a loyal, skilled and experienced team

·     We are positioned to serve our customers using our engineering, manufacturing and distribution capabilities globally

 

'One TR'

Whilst celebrating our core strengths and achievements, we must also recognise that the last few years have been challenging for many of our customers and also for our business. I have set out in the Annual report attached to this announcement the transformation plan that will underpin a return to sustained profitable growth within a safe, engaged and consistent people culture called 'One TR'.


A hexagon with blue and green graphics and text Description automatically generated

Our transformation journey will take us through three phases:

 

Ø Recover

Our initial focus is returning to positive margin growth. Despite the continued challenging macroeconomic and geopolitical environment in which we are operating, our clear ambition in FY25 is to deliver measurable progress in profitability, cash generation and return on capital employed. This will be achieved through focused margin management actions, supporting our positive profitable growth with new pipeline wins, combined with continued strict cost control and working capital management.

 

This is all supported by our increasingly robust approach to risk management, more of which can be read about in our Annual report.

 

Ø Rebuild

Our medium-term ambition of the Company strategy is to deliver a business which is performing with EBIT Margins >10% and ROCE of >12% through the execution of our new focused business strategy and transformation plan.

 

Ø Resilience

We will implement best practice in our people and business processes that become our means of generating profitable growth momentum and delivering longer-term EBIT margins in the range 12-15% and ROCE in the range 15-20%, and a business that is able to sustain that level of high performance through future economic cycles and continued supply chain challenges.

 

Business strategy

We have spent time during this year challenging our business strategy, reflecting on what we truly believe to be our winning ambition, where we play, how we win and what capabilities are required to execute successfully.

 

Trifast has operated successfully for many of its 50-year history as a company built through a series of acquisitions globally. In the past few years, challenges around supply chain and demand volatility, as well as increased customer and stakeholder expectations and demands, has stretched our ability to support what is a diverse portfolio of operations and markets.

 

Our new business strategy is therefore built on ensuring we recognise, build and focus our core strengths of customer focus, excellent quality and service, fastening supply solutions and manufacturing and engineering capability in selected markets and geographies where we can align this value proposition with our core customer needs and expectations.

 

Building capabilities

We have started to reshape the organisation to align with our business strategy, creating an organisational structure of four regional leadership teams, each headed by a Managing Director that sits on the Executive Leadership Team (ELT). These regional teams are fully accountable for their profit and loss and cash flow performance and are supported by six central enabling functions. Both our ELT and our Senior Leadership Team, those senior leaders who report directly to ELT members, are aligned and incentivised per our variable pay policy through a management bonus scheme linked directly to delivery of our strategy and budgeted financial performance.

 

Recognising that we are managing transformative change, there has been investment into experienced transformation skills that will ensure we programme, and project manage strategy execution effectively.

 

To support our value proposition, we will also invest in key account management and application engineering which we see as a critical component of our differentiation and competitive advantage in the market, helping our targeted customers solve their fastening supply chain solution needs.

 

Finally, having now completed Project Atlas, to replace the outdated Tribune ERP system with Microsoft D365, and given the increased needs of our customers in helping deliver agile and data‑driven solutions, we will be augmenting our existing technology systems with targeted transformation projects.

 

Our people

Our people are at the centre of our business. It is their passion, talent and drive for quality and service excellence that stands out for our customers time and again and sets Trifast apart from the competition. This was echoed in the customer feedback we received during our strategy review. I am truly grateful for all the support and hard work of our people, in what has been a year of challenge and change.

 

Our new organisational structure has fundamentally changed the business from operating as individual profit centres to a standardised regional business supported by central enabling functions. This more streamlined approach has allowed us to both reduce the overhead cost, whilst facilitating clearer accountabilities and responsibilities, and enable best practice leverage. There are already benefits being delivered through enhanced teamwork.

 

A diagram of different colored hexagons Description automatically generated

Our new strategic direction

When starting our strategic review process last year, we felt it important to reflect on the strong legacy of being a passionately customer focused business whilst taking the time to understand how their needs are changing and how our differentiated capabilities at Trifast can ensure that we Recover, Rebuild and deliver a Resilient future.

 

Our new purpose statement is a consequence of customer, employee and other external stakeholder feedback and helps us shape our new focused business strategy.

 

We recognise that our role is to help our customers remove and manage complexity in their fastener supply chain and add value to our relationship through the engineering and manufacturing talent and capabilities we have. We are rightly proud of the high‑quality, reliable and responsive solutions that we provide our customers every day and of the knowledge and expertise we can leverage to help them succeed.

 

Our ambition, described through our Recover, Rebuild, Resilience journey, is to create a high‑performing Trifast that is a safe, inclusive and an enjoyable place to work for our employees and operates at the upper quartile of the industrial peer group performance resiliently.

 

We recognise that whilst Trifast retained strong performance for our customers, our fragmented strategy and business model meant we lost momentum in delivering sustainable and acceptable financial returns.

 

Our new business strategy sets out the approach we will take to address the short, medium and longer‑term delivery of a sustainable and profitable growth business.

 

A diagram of a company's model

 

 

 

 

 

To read more about our new strategic direction please refer to pages 10-17 of the 2024 Annual report.

 

To read the CEO review in full please refer to pages 6-9 of the 2024 Annual report.

 

 

 

 

 

 

 

 



Trifast plc

Annual results for the year ended 31 March 2024

Extracts from the Financial review by Kate Ferguson, Interim CFO

 

As highlighted in Iain's CEO review, we faced various challenges but also celebrated some significant achievements as we commenced our Recover, Rebuild and Resilience journey in FY24.


Kate Ferguson

Recover: We have significantly stabilised our balance sheet through control of inventories and subsequent reduction in net debt.

 

Rebuild: Despite the challenging year and revenue decline, we made gross and EBIT margin improvements through our commitment to deliver better gross margins and offset inflationary pressures through a reduction in non-operating headcount.

 

We are especially proud of the consolidation of the National Distribution Centre (NDC) in the Midlands and, the successful completion of the Atlas project with the implementation of D365 in Houston, Texas.

 

FY25 will see a greater focus on efficiency targets during our Rebuild phase. This will drive our strategic mid-term commitment to achieve 10% EBIT margin.

 

Resilience: Beyond FY25, we see significant opportunity for sustainable growth. We have refreshed our strategy and are committed to executing it successfully.

 

Revenue

FY24 revenue declined by (2.7)% to £237.9m (AER: (4.4)% to £233.7m; FY23: £244.4m). It was a challenging year with performance hampered by volatile demand in the distribution business and customer destocking activity. (Further details on page 31 of the Annual report and note 2 of this announcement).

 

Gross margin was 25.5%, 20bps higher than FY23 (AER: 25.4% and 10bps higher than FY23).


A screenshot of a website

Pricing initiatives countered the impact of cost inflation (on raw materials, freight and supply of energy), and higher-than-anticipated costs to consolidate the UK distribution into one National Distribution Centre (NDC). We expect most of the benefits for the NDC will be realised in FY25.

 

Underlying operating profit was £12.7m, £0.7m higher than last year (FY23: £12.0m). On an AER basis it was in line with the last year.

 

 

On 2 June 2023, the Group signed a new revolving credit facility (RCF) agreement, supported by a UK Export Finance - Export Development Guarantee (UKEF - EDG) agreement, providing a combined facility limit of £120.0m. Interest margins on the new facilities increased within a range of between 2.1%-3.6%, in line with market conditions.

 

The higher interest and average borrowings resulted in a £2.7m increase in net finance expense which reduced the underlying profit before tax to £7.2m (AER: £6.5m; FY23: £9.3m).

 

As a response to the higher interest rates, the Group focused efforts on improving working capital to reduce net debt.

 

Consequently, adjusted net debt reduced to £21.0m (FY23: £38.0m) primarily due to the significant reduction in gross inventory to £82.3m from £98.7m in FY23.

 

The leverage ratio under the new banking arrangement was 1.3x (FY23: 2.2x under old facility). This remains within the covenant range of < 3.0x. An addendum to our interest cover covenant was signed in May 2024 and the ratio was 3.6x as at 31 March, within the temporary covenant range of 3.5x. Headroom under the new facility was £76.7m. Details of the refinancing arrangement are provided within the Annual report (note 26).

 

Dividend policy

Our focus on growth through the transformation process allows us to remain committed to a progressive dividend policy that shares the benefit of ongoing growth with our shareholders.

 

As a Board we are proposing the final dividend in FY24 at 1.20p (FY23: 1.50p). This, together with the interim dividend of 0.60p (paid on 11 April 2024), brings the total for the year to 1.80p per share (FY23: 2.25p). The final dividend, subject to shareholder approval at the AGM, will be paid on 11 October 2024 to shareholders on the register at the close of business on 13 September 2024. The ordinary shares will become ex-dividend on 12 September 2024. The underlying dividend cover is currently 0.9x; the Board considers that an appropriate future level of underlying dividend cover is in the range of 3.0x to 4.0x.

 

Dividend Re-investment Plan

With effect from the Company's final dividend, which will be paid on 11 October 2024 to shareholders on the register on 13 September 2024, the Company will be introducing the option for shareholders to invest their dividend in a Dividend Re-investment Plan ("DRIP"). Participation in the DRIP is optional and will not affect shareholders' cash dividends unless they elect to participate in the DRIP.

 

Shareholders will have the option to elect for their cash dividend payment to be automatically re-invested through the purchase of additional ordinary shares in the Company. Shareholders wishing to receive their dividends via the DRIP should complete the online DRIP election form, which can be accessed at www.investorcentre.co.uk, or if a CREST Member, shareholders can submit their election using the CREST system before 20 September 2024. The DRIP document mailing date to shareholders will be 21 October 2024.

 

Underlying operating profit (CER)

The underlying operating profit (UOP) increased to £12.7m with a UOP margin of 5.3% (FY23: 4.9%).

 

In Europe, UOP margins increased 350bps to 6.9% and operating profit improved to £6.1m (FY23: 3.4% and £2.9m). In addition to the transfer of the distribution business from the UK to TR Germany, there was higher margin in Sweden and significant margin improvement in TR Italy resulting from actions last year to manage rising costs, price increases and improved plant utilisation.


A screenshot of a computer

In the UK & Ireland, UOP margins decreased from 6.4% to 4.4% with UOP at £3.4m (FY23: £5.5m). Decline in distribution sales was the main contributor, offset by improvement in the light vehicle sector following the reduction in semiconductor shortages.

 

The lower UOP also included the transfer of the European distribution business to Germany and was partially offset by the delivery of costs savings from the NDC.

 

UOP in Asia has decreased from £9.5m to £8.4m at a UOP margin of 15.4% (FY23: 15.7%). Consumer demand in China was low in our second half-year and, overall general market softness impacted across the Asia region. During the period, we did however see a significant uplift in light vehicle activity at TR Malaysia and Thailand, together with price increases in TR Malaysia.

 

North America UOP increased £0.3m to £1.6m, a 5.4% margin (FY23: £1.3m, 4.2%). The improvement was driven by new contract wins in the light vehicle sector across several vehicle models. Production started on new models in the second half of FY24 at a higher margin, while production ended for several older lower-margin models. The other sectors general decline was driven by customers burning through their excess stock following the Pandemic.

 

Central improved to a loss of £6.9m (FY23: £7.2m), driven by operational efficiencies and reduction in headcount as part of a series of self-help initiatives.

 

Operating cash flow (AER)

The Group has seen excellent operating cash flow in 2024. Operating cash flow from operations was £31.9m (FY23: £6.5m), equating to a cash conversion of underlying EBITDA of 173.0% (FY23: 33.6%). The improvement was driven by the material reduction in working capital: net inventory reduced by £15.0m (FY23: £0.2m) and trade creditors increased by £3.6m (FY23: decreased by £11.7m).

 

Adjusted net debt

The Group's adjusted net debt has decreased by £17.0m to £21.0m (FY23: £38.0m) supported by an operating cash inflow before working capital of £14.2m. This was partially offset by interest payments of £6.7m (including arrangement fees of £1.5m on the refinancing in the year), tax payments of £3.3m and dividend payments of £3.0m. The net spend on property, plant, equipment and intangibles was only £0.3m as acquisition of PPE (£4.6m), primarily relating to our investments in the NDC and in our manufacturing plant in Italy, were significantly offset with proceeds from sale of PPE (£4.2m) relating to the sale of the Uckfield premises in the year.

 

A graph showing a bridge that has been cut down

Banking facilities

The Group signed new banking facilities in June 2023 to support our focus on growth. The two agreements provide a total facility limit of £120.0m, split between an RCF (£70.0m) and a UKEF Export Development Guarantee (EDG) (£50.0m). Interest margins have increased in line with market conditions and will now be within a range of 2.10-3.60% (compared to 1.10-2.20% under the previous RCF). Post year end, KBC Bank NV (KBC) became a lender as part of the RCF agreement. The facility commitment remained at £70.0m as an existing lender transferred part of their commitment to KBC. This commitment will support the Group's treasury strategy and plans in Eastern Europe.

 

 

Taxation (at AER)

The underlying effective tax rate (ETR) is high at 66.6% (FY23: underlying effective tax rate: 25.6%). The higher ETR in FY24 is primarily related to deferred tax assets not recognised on tax losses and reversal of deferred tax assets on carried forward losses primarily in the UK region. Subject to future tax changes and excluding prior year adjustments, our normalised underlying ETR is expected to remain in the range of c.20-25% going forward.

 

Underlying diluted earnings per share (AER)

Reflecting the challenging performance as explained above, our underlying PBT at AER is down 29.8% to £6.5m (FY23: £9.3m). This, coupled with the increase in our underlying effective tax rate, has resulted in a reduction in underlying diluted earnings per share (EPS) of 68.4% to 1.62p at AER (FY23: 5.13p).

 

Outlook

Whilst the macroeconomic environment continues to present short-term challenges, current trading remains in line with management expectations. We continue to have a strong focus on cash generation to reduce net debt and working capital and are driving EBIT improvement through margin management, focused growth, organisational effectiveness and operational efficiency.

 

Operationally, we have been setting ourselves up for growth when the market recovers by rightsizing the business through a restructuring programme, the completion of the Atlas Project and the consolidation of the NDC.

 

We are ensuring our focus remains on core business with the disposal of the TR Norway business in April 2024 and the establishment of a China JV to support our strategy for manufacturing and distribution in China.

 

We believe there is significant scope for improvement in the mid-term and are confident we will be more profitable, effective and efficient in FY25.

 

The macroeconomic and geopolitical environment remains volatile, and we continue to be challenged by inflationary pressures. We are confident we have the right strategy to capture margin upside and deliver sustained growth. We believe there is significant opportunity to return performance to historic levels.

 

Trifast has made strong progress in managing working capital to reduce its net debt through working capital initiatives and remains focused on driving profit initiatives to improve our margins.

 

To read the Financial review in full please refer to pages 28-35 of the 2024 Annual report.


Trifast plc

Annual results for the year ended 31 March 2024

 

The notes on pages 168-227 of the 2024 Annual Report form part of these financial statements.

 

Consolidated income statement

Annual results for the year ended 31 March 2024

 

 


Annual report note

2024

£000

2023

£000

Continuing operations


 


Revenue

3, 35

233,671

244,391

Cost of sales


(174,404)

(182,462)

Gross profit


59,267

61,929

Other operating income

4

721

510

Distribution expenses


(6,633)

(6,727)

Administrative expenses before separately disclosed items


(41,321)

(43,728)

Acquired intangible amortisation

2, 13

(1,780)

(1,798)

Project Atlas

2

(2,079)

(1,722)

Restructuring and related charges

2

(1,491)

(4,235)

Impairment of non-current assets

2, 10,12,13

(1,964)

(2,926)

Settlement for loss of office

2

-

(1,050)

Aborted acquisition costs

2

-

(261)

Total administrative expenses


(48,635)

(55,720)

Share of loss of joint venture accounted for using the equity method

36

(90)

-

Operating profit / (loss)

5, 6, 7

4,630

(8)

Financial income

8

269

158

Financial expenses

8

(5,688)

(2,842)

Net financing costs


(5,419)

(2,684)

Loss before taxation

3

(789)

(2,692)

Taxation

9

(3,651)

(174)

Loss for the year

(attributable to equity shareholders of the Parent Company)

 

 

 

(4,440)

 

(2,866)

Loss  per share


 


Basic

25

(3.29)p

(2.12)p

Diluted

25

(3.29)p

(2.12)p

 

Consolidated statement of comprehensive income

for the year ended 31 March 2024

 


2024

£000

2023

£000

Loss for the year

(4,440)

(2,866)

Other comprehensive income / (expense) for the year:



Items that may be reclassified subsequently to profit or loss:



Exchange differences on translation of foreign operations

(5,075)

4,053

Gain / (loss) on a hedge of a net investment taken to equity

889

(1,655)

Other comprehensive income / (expense)

(4,186)

2,398

Total comprehensive (expense) / income recognised for the year



(attributable to the equity shareholders of the Parent Company)

(8,626)

(468)

 

 

Trifast plc

Annual results for the year ended 31 March 2024


Consolidated statement of changes in equity

for the year ended 31 March 2024

 

 


Share

Share

Merger

Own

Translation

Retained

Total


capital

premium

reserve

shares held

reserve

earnings

equity


 £000

£000

£000

£000

£000

£000

£000

Balance at 31 March 2023

6,805

22,530

16,328

(3,017)

14,682

78,561

135,889

Total comprehensive expense for the year:








Loss for the year

-

-

-

-

-

(4,440)

(4,440)

Other comprehensive expense for the year

-

-

-

-

(4,186)

-

(4,186)

Total comprehensive expense recognised for the year

-

-

-

-

(4,186)

(4,440)

(8,626)

Issue of share capital

1

7

-

-

-

-

8

Share-based payment transactions (net of tax)

-

-

-

-

-

(67)

(67)

Movement in own shares held

-

-

-

823

-

(823)

-

Dividends

-

-

-

-

-

(3,026)

(3,026)

Total transactions with owners

1

7

-

823

-

(3,916)

(3,085)

Balance at 31 March 2024

6,806

22,537

16,328

(2,194)

10,496

70,205

124,178

 

 

Consolidated statement of changes in equity

for the year ended 31 March 2023

 

 


Share

Share

Merger

Own

Translation

Retained

Total


capital

premium

reserve

shares held

reserve

earnings

equity


 £000

£000

£000

£000

£000

£000

£000

Balance at 31 March 2022

6,804

22,512

16,328

(3,487)

12,284

84,704

139,145

Total comprehensive income / (expense) for the year:

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

-

(2,866)

(2,866)

Other comprehensive income for the year

-

-

-

-

2,398

-

2,398

Total comprehensive income / (expense) recognised for the year

-

-

-

-

2,398

(2,866)

(468)

Issue of share capital

1

18

-

-

-

-

19

Share-based payment transactions (net of tax)

-

-

-

-

-

5

5

Movement in own shares held

-

-

-

470

-

(470)

-

Dividends

-

-

-

-

-

(2,812)

(2,812)

Total transactions with owners

1

18

-

470

-

(3,277)

(2,788)

Balance at 31 March 2023

6,805

22,530

16,328

(3,017)

14,682

78,561

135,889

 

Note: Company statement of changes in equity can be found on pages 163-164 of the Annual report.

 

Trifast plc

Statements of financial position

at 31 March 2024

 



Group

Company


Annual report

note

2024

2023

(

(

 

2024

2023


 

(restated)

 


£000

£000

£000

£000

Non-current assets






Property, plant, and equipment

10, 11

19,070

19,417

5

6

Right-of-use assets

12

16,450

14,395

55

36

Intangible assets

13, 14

36,275

40,451

6,097

7,854

Equity investments

15,36

159

-

42,186

42,298

Non-current trade and other receivables

19

-

-

61,208

76,848

16, 17

4,256

4,289

63

998


76,210

78,552

109,614

128,040

Current assets


 


 


Inventories

18

73,403

90,948

-

-

Trade and other receivables

19

59,039

63,158

3,623

3,754

Assets classified as held for sale

10, 11,29

623

2,130

-

2,130

26

20,884

31,798

910

640


153,949

188,034

4,533

6,524

3

230,159

266,586

114,147

134,564

Current liabilities


 


 


Trade and other payables

21

36,218

35,507

1,660

2,395

Right-of-use liabilities

12, 20, 26

3,392

3,498

11

21

Other interest-bearing loans and borrowings

20,26

-

-

6,447

-

Provisions

23

2,432

2,809

607

396

Liabilities classified as held for sale

29

348

-

-

-


2,167

2,560

-

-


44,557

44,374

8,725

2,812

Non-current liabilities


 


 


Other interest-bearing loans and borrowings

20, 26

41,848

69,825

41,848

69,825

Right-of-use liabilities

12, 20, 26

15,031

12,315

99

17

Other payables

21

892

1,077

-

-

Provisions

23

1,548

1,443

-

-

16, 17

2,105

1,663

-

-


61,424

86,323

41,947

69,842

3

105,981

130,697

50,672

72,654


124,178

135,889

63,475

61,910

Equity


 


 


Share capital


6,806

6,805

6,806

6,805

Share premium


22,537

22,530

22,537

22,530

Merger reserve


16,328

16,328

16,328

16,328

Own shares held


(2,194)

(3,017)

(2,194)

(3,017)

Translation reserves


10,496

14,682

-

-


70,205

78,561

19,998

19,264

Total equity


124,178

135,889

63,475

61,910

 

The profit after tax for the Company is £4.6m (FY23: loss after tax £4.3m)

 

Trifast plc

 

Statements of cash flows

for the year ended 31 March 2024



Group

Company


Annual report

note

2024

2023

2024

2023


 

(restated)

 



£000

£000

£000

£000

Cash flows from operating activities


 


 


(Loss) / profit for the year


(4,440)

(2,866)

4,663

(4,325)

Adjustments for:


 


 


Depreciation and amortisation

10, 11, 13, 14

5,616

5,471

711

638

Right-of-use asset depreciation

12

4,068

3,640

26

23

Unrealised foreign currency loss / (gain)


(248)

(50)

1

(43)

Financial income

8

(269)

(158)

(1,792)

(1,268)

Financial expense (excluding right-of-use liabilities)

8

4,893

2,412

4,914

2,383

Right-of-use liabilities' financial expense

8, 12

796

430

3

1

Profit on assets classified as held for sale


(2,014)

-

(2,014)

-

Loss / (profit) on sale of property, plant and equipment, intangibles, and investments


(59)

149

-

9

Dividends received


-

-

(15,657)

(7,434)

Equity settled share-based payment charge


(101)

24

1

(398)

Impairment of goodwill and intangible assets

2,3,13

1,476

2,926

1,476

-

Gain on termination of right-of-use liabilities and


 


 


expense on lease back


(454)

-

44

-

Loans due to subsidiaries written back


-

-

(267)

-

Investments and loans / debtors due from subsidiaries written off


-

-

175

-

Impairment of right-of-use assets and property, plant




 


and equipment

2,10,11,12

1,330

1,426

-

-

Taxation expense / (income)

9

3,651

174

953

(300)

Operating cash inflow / (outflow) before changes in working capital and provisions


14,245

 

13,578

(6,764)

(10,714)

Change in trade and other receivables


(4)

392

1,037

(536)

Change in inventories


14,977

215

-

-

Change in trade and other payables


3,593

(10,487)

(450)

661

Change in provisions


(900)

2,792

214

396

Cash generated from / (used in) operations


31,911

6,490

(5,963)

(10,193)

Tax paid


(3,335)

(3,529)

(10)

-

Net cash generated from / (used in) operating activities


28,576

2,961

(5,973)

(10,193)

Cash flows from investing activities


 


 


Proceeds from sale of property, plant, and equipment


91

27

-

-

Proceeds from sale of assets classified as held for sale

10

4,144

-

4,144

-

Interest received


265

138

804

366

Investment in joint venture


(162)

-

-

-

Acquisition of property, plant and equipment and intangibles

10,11,13,14

(4,573)

(5,625)

(429)

(1,394)

Lending to subsidiary undertakings


-

-

(6,421)

(9,897)

Repayment by subsidiary undertakings


-

-

20,512

2,125

Dividends received


-

-

15,115

7,434

Net cash generated (used in) / from investing activities


(235)

(5,460)

33,725

(1,366)

Cash flows from financing activities


 


 


Proceeds from the issue of share capital

24

8

19

8

19

Proceeds from new loan


-

16,423

-

16,423

Repayment of external loans


(116,500)

-

(116,500)

-

Proceeds from external loans


91,414

-

91,414

-

Proceeds from loans from subsidiaries


-

-

6,447

-

Repayment of right-of-use liabilities

12

(3,362)

(3,792)

(22)

(24)

Dividends paid

24

(3,026)

(2,812)

(3,026)

(2,812)

Interest paid


(6,702)

(2,477)

(5,803)

(2,011)

Net cash generated (used in) / from financing activities


(38,168)

7,361

(27,482)

11,595

Net change in cash and cash equivalents


(9,827)

4,862

270

36

Cash and cash equivalents at 1 April


31,798

26,741

640

604

Effect of exchange rate fluctuations on cash held


(1,087)

195

-

-

Cash and cash equivalents at 31 March


20,884

31,798

910

640

 


Trifast plc

Annual results for the year ended 31 March 2024

Summary notes to the Annual Results Announcement:

 

1. Underlying profit before tax and separately disclosed items


Annual report

2024

2023

 

note

£000

£000

Underlying profit before tax


6,525

9,300

Separately disclosed items within administrative expenses:


 


Acquired intangible amortisation

13

(1,780)

(1,798)

Project Atlas


(2,079)

(1,722)

Restructuring and reorganisation related charges


(1,491)

(4,235)

Impairment of non-current assets

13

(1,964)

(2,926)

Settlement for loss of office1


-

(1,050)

Aborted acquisition costs


-

(261)

Profit / (loss) before tax


(789)

(2,692)

 


Annual report

2024

2023


note

£000

£000

Underlying EBITDA


19,848

19,297

Separately disclosed items within administrative expenses:


 


Project Atlas


(2,079)

(1,722)

Restructuring and reorganisation related charges


(1,491)

(4,235)

Impairment of non-current assets

13

(1,964)

(2,926)

Settlement for loss of office1


-

(1,050)

Aborted acquisition costs


-

(261)

EBITDA


14,314

9,103

Acquired intangible amortisation

13

(1,780)

(1,798)

Depreciation and non-acquired amortisation


(7,904)

(7,313)

Operating (loss) / profit


4,630

(8)

 

 1The settlement for loss of office costs of £0.5m (FY23: £1.1m) within restructuring and reorganizational related charges, (see note 2 and 7).

 

2. Geographical operating segments

The Group is comprised of the following main geographical operating segments:

UK & Ireland

Europe: includes Norway, Sweden, Hungary, Holland, Italy, Germany and Spain

North America

Asia: includes Malaysia, China, Singapore, Taiwan, Thailand and India

 

Ireland up until FY23 was reported as part of Europe. However, for FY24 it is now reported and reviewed as part of UK & Ireland segment. Hence, for the disclosure in FY24 below Ireland is reported as part of UK segment and FY23 numbers are restated to include Ireland within UK.

 

March 2024

UK & Ireland

 £000

Europe

 £000

North

America

£000

Asia

£000

Common
amounts

£000

Total

£000

Revenue

 

 

 

 

 

 

Revenue from external customers

73,394

86,403

28,989

44,885

-

233,671

Inter-segment revenue

4,151

1,635

236

7,177

-

13,199

Total revenue

77,545

88,038

29,225

52,062

-

246,870

Underlying operating result

3,383

5,925

1,552

7,996

(6,912)

11,944

Net financing costs

(485)

(1,101)

(1,096)

400

(3,137)

(5,419)

Underlying segment result

2,898

4,824

456

8,396

(10,049)

6,525

Separately disclosed items

(2,336)

(2,552)

(530)

(207)

(1,689)

(7,314)

Profit / (loss) before tax

562

2,272

(74)

8,189

(11,737)

(789)

Specific disclosure items

 

 

 

 

 

 

Depreciation and amortisation

(2,634)

(3,767)

(825)

(1,723)

(735)

(9,684)

Assets and liabilities

 

 

 

 

 

 

Non-current asset additions

9,517

1,417

177

713

474

12,299

Non-current assets

24,763

15,352

5,080

20,598

6,161

71,954

Segment assets

73,738

69,610

24,342

55,107

7,362

230,159

Segment liabilities

(21,024)

(17,990)

(3,911)

(11,861)

(51,195)

(105,981)

1.Non-current assets exclude financial instruments and deferred tax.

 

March 2023

UK & Ireland

(restated)

 £000

Europe

(restated)

 £000

North

America

£000

Asia

£000

Common
amounts

£000

Total

(restated)

£000

Revenue

 

 

 

 

 

 

Revenue from external customers

80,620

82,599

29,657

51,515

-

244,391

Inter-segment revenue

6,034

3,075

271

8,893

-

18,273

Total revenue

86,654

85,674

29,928

60,408

-

262,664

Underlying operating result

5,507

2,917

1,256

9,473

(7,169)

11,984

Net financing costs

(376)

(634)

(593)

28

(1,109)

(2,684)

Underlying segment result

5,131

2,283

663

9,501

(8,278)

9,300

Separately disclosed items

4,002

4,073

401

88

3,428

(11,992)

Profit / (loss) before tax

1,129

(1,790)

262

9,413

(11,706)

(2,692)

Specific disclosure items







Depreciation and amortisation

(2,279)

(3,500)

(902)

(1,770)

(660)

(9,111)

Government support income

-

-

-

-

-

-

Assets and liabilities







Non-current asset additions

1,231

5,702

1,082

2,222

1,412

11,649

Non-current assets

17,880

19,838

5,920

22,725

7,900

74,263

Segment assets

75,713

82,221

27,426

69,475

11,751

266,586

Segment liabilities

(23,657)

(17,659)

(3,612)

(13,608)

(72,161)

(130,697)

1.Non-current assets exclude financial instruments and deferred tax.

 

There were no material differences in North America between the external revenue based on location of the entities and the location of the customers.

 

Of the UK & Ireland external revenue, £7.3m (FY23: £12.0m) was sold into the European market. Of the Asian external revenue, £5.3m (FY23: £5.8m) was sold into the North American market and £4.5m (FY23: £7.6m) was sold into the European market.

 

Within Europe, TR Italy has revenue of £28.2m (FY23: £27.3m) and non-current assets of £10.0m (FY23: £11.7m). Within Asia, TR Formac Singapore has revenue of £18.7m (FY23: £20.4m) and non-current assets of £3.9m (FY23: £4.5m).

 

Revenue is derived solely from the manufacture and logistical supply of industrial fasteners and Category 'C' components.

 

3. Revenue by sector (CER)


A screenshot of a graphEurope has seen revenues increase 3.8% to £88.9m (FY23: £85.7m), driven by the uplift in the light and heavy vehicle sectors in Sweden, helped by new and existing customers transitioning to EV technology, and during FY24, we successfully completed the transfer of the European distribution business from the UK to TR Germany. Hungary continues to be impacted by the current downturn in customer demand and the ongoing Ukraine conflict, whilst our manufacturing facility in Italy is starting to see some recovery in legacy business and new business opportunities from manufacturing investment.

 

In Asia, we have reported a 9.3% decrease in revenue to £54.8m (FY23: £60.4m), mainly driven by the distributor sector and the continuing softness in the Asia market. China is still experiencing low consumer demand following the Pandemic shutdowns and the general macroeconomic climate. The result also appears less favourable in comparison to TR Taiwan's outstanding performance in FY23. There was however a significant uplift in the light vehicle sector in Malaysia and Thailand.

 

UK & Ireland's revenue reduced by 10.5% to £77.5m (FY23: £86.7m) due to reduced distribution sales as a blend of volume (destocking and demand), lower market pricing and the completed transfer of distribution business to TR Germany.

 

The decline has been partially offset by revenues from contract OEM customers from new wins secured in FY23.

 

North America demonstrates continued growth, mainly in the light vehicle sector, offset by declines in E,T&I and general industrial sectors, resulting in revenue of £30.2m (FY23: £29.9m).

 

4. 2024 Annual report

The Annual report and financial statements for the year ended 31 March 2024 were approved by the Board of Directors on 26 July 2024.

 

In addition to the link on the front of this announcement to a pdf of the 2024 Annual report, a copy of this report, together with the Notice of Meeting will in due course be available to view and download from the Company website at www.trifast.com. The documents will also be uploaded to the National Storage Mechanism at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

The financial information set out in this release does not constitute the Group's statutory Report and Accounts for the years ended 31 March 2024 or 2023. However, it is derived from the 2024 Report and Accounts (pdf attached to this announcement).

The Report and Accounts for 2023 has been delivered to the Registrar of Companies and those for 2024 will be delivered in due course. The external auditor has reported on the 2024 Report and Accounts; the report was (i) unqualified, (ii) did not include references to any matters to which the external auditor drew attention by way of emphasis without qualifying the reports and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.

 

The Independent auditor's report to the members of Trifast plc can be read on pages 151-158 of the 2024 Annual report.

 

5. Annual General Meeting (AGM)

The Annual General Meeting will be held at the National Distribution Centre, West Midlands on 10 September 2024 at 12.30pm.

 

The Notice of Meeting, which includes special business to be transacted at the AGM together with an explanation of the resolutions to be considered at the meeting, will be made available on the Company website in due course and communicated directly to shareholders.

 

Any questions relating to the 2024 Annual report can be sent to: The Company Secretary, Trifast plc, Trifast House, Bellbrook Park, Uckfield, East Sussex TN22 1QW, alternatively email: Companysecretariat@trifast.com.

 

 

 

Further enquiries please contact:

Trifast plc

Iain Percival, CEO

Kate Ferguson, Interim CFO

Christopher Morgan, Company Secretary

Tel: +44 (0) 1825 747630

Email: corporate.enquiries@trifast.com

Shareholders: Companysecretariat@trifast.com


Peel Hunt LLP (Stockbroker & financial adviser)

Mike Bell

Tel: +44 (0) 20 7418 8900


TooleyStreet Communications, (IR & media relations)

Fiona Tooley

 

Tel: +44 (0) 7785 703523

Email: fiona@tooleystreet.com

 

 

 

Logo Description automatically generatedAbout Trifast plc (LSE Main listing: symbol: TRI)

Founded in 1973, Trifast is a leading international specialist in the design, engineering, manufacture, and distribution of high-quality industrial fastenings and Category 'C' components principally to major global assembly industries. 

As an international business we can provide customer support from across key regions in the UK & Ireland, Asia, Europe and North America. In addition to our service locations, we operate several manufacturing facilities focused on high volume cold forged fasteners and special parts. We have also established Engineering & innovation centres to support R&D and customer collaboration across the world.


The Group supplies to customers in c.70 countries across a wide range of industries, including light vehicle, heavy vehicle, health & home, energy, tech, & infrastructure (ET&I), general industrial and distributors. As a full-service provider to multinational OEMs and Tier 1 companies spanning several sectors, we deliver comprehensive support to our customers across every requirement, from concept design through to technical engineering consultancy, manufacturing, supply management and global logistics.


For more information, visit:

TRIFAST PLC TRI Stock | London Stock Exchange

website: www.trifast.com

LinkedIn: www.linkedin.com/company/tr-fastenings

X: www.x.com/trfastenings

Facebook: www.facebook.com/trfastenings

 

 

Note

Trifast, TR and TR Fastenings are registered trademarks of the Company

LEI number: 213800WFIVE6RWK3CR22

A logo with circles and text Description automatically generatedA picture containing text, logo, symbol, graphics Description automatically generatedA white circle with black text and a gold ribbon Description automatically generated

 













This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR FZGZNRVFGDZM