REG - Trifast PLC - Annual Results - 31 March 2024 - Annual Report
29/07/2024 07:00
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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 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
(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
(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
(https://www.trfastenings.com/investors/reports-and-presentations)
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 CER AER AER AER
FY24 change FY24 change FY23
Revenue(4) £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 tax(1,4) £7.2m (22.2)% £6.5m (29.8)% £9.3m
Underlying diluted earnings per share(1) - - 1.62p (68.4)% 5.13p
Adjusted leverage ratio(1,3) - - 1.3x (0.9)x 2.2x
Adjusted net debt(1,2) - - £(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 Pages 10-17
Our culture and our values 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
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
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'.
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.
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.
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.
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).
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 (http://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.
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.
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 2023
£000 £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 2023
£000 £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 2024 2023 2024 2023
note (
(
(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
Deferred tax assets 16, 17 4,256 4,289 63 998
Total non-current assets 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
Cash and cash equivalents 26 20,884 31,798 910 640
Total current assets 153,949 188,034 4,533 6,524
Total assets 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 - - -
Tax payable 2,167 2,560 - -
Total current liabilities 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 - -
Deferred tax liabilities 16, 17 2,105 1,663 - -
Total non-current liabilities 61,424 86,323 41,947 69,842
Total liabilities 3 105,981 130,697 50,672 72,654
Net assets 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 - -
Retained earnings 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 2024 2023 2024 2023
note
(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 (59) 149 - 9
investments
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 14,245 (6,764) (10,714)
provisions
13,578
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 office(1) - (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 office(1) - (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 Europe North Asia Common Total
amounts
£000 £000 America £000
£000
£000
£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 Europe North Asia Common Total
amounts
(restated) (restated) America £000
(restated)
£000
£000 £000 £000 £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)
Europe 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 (http://www.trifast.com) . The documents will also be uploaded
to the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(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
(mailto:Companysecretariat@trifast.com) .
Further enquiries please contact:
Trifast plc
Iain Percival, CEO Tel: +44 (0) 1825 747630
Kate Ferguson, Interim CFO Email: corporate.enquiries@trifast.com
(mailto:corporate.enquiries@trifast.com)
Christopher Morgan, Company Secretary
Shareholders: Companysecretariat@trifast.com
(mailto: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 (mailto:fiona@tooleystreet.com)
About 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
(https://www.londonstockexchange.com/stock/TRI/trifast-plc/company-page)
website: www.trifast.com (http://www.trifast.com)
LinkedIn: www.linkedin.com/company/tr-fastenings
(http://www.linkedin.com/company/tr-fastenings)
X: www.x.com/trfastenings (http://www.x.com/trfastenings)
Facebook: www.facebook.com/trfastenings (http://www.facebook.com/trfastenings)
Note
Trifast, TR and TR Fastenings are registered trademarks of the Company
LEI number: 213800WFIVE6RWK3CR22
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