REG - Trifast PLC - Half Yearly Report <Origin Href="QuoteRef">TRFT.L</Origin> - Part 2
11/11/2014 08:31
- Part 2: For the preceding part double click ID:nRSK6526Wa
Acquisition costs (1,200) - -
Intangible amortisation (238) (166) (221)
NI on exercise of 2009 Director options (228) - -
IFRS 2 share-based payment charge (22) (46) (67)
Profit from continuing operations before tax 4,939 4,339 8,874
3. Geographical operating segments:
The Group is comprised of the following main geographical operating segments:
Ø UK
Ø Mainland Europe includes Norway, Sweden, Hungary, Ireland, Italy, Holland and Poland
Ø USA includes USA and Mexico
Ø Asia includes Malaysia, China, Singapore, Taiwan, Thailand and India
In presenting information on the basis of geographical operating segments, segment revenue and segment assets are based on the geographical location of our entities across the world, and are consolidated into the four distinct geographical regions, which the Board use to monitor and assess the Group.
Segment revenue and results under the primary reporting format for the six months ended 30 September 2014 and 2013 are disclosed in the table below:
September 2014 UK MainlandEurope USA Asia Central costs, assets and liabilities Total
£000 £000 £000 £000 £000 £000
Revenue*
Revenue from external customers 31,989 21,171 1,903 18,970 - 74,033
Inter segment revenue 929 184 25 2,868 - 4,006
Total revenue 32,918 21,355 1,928 21,838 - 78,039
Underlying operating result 2,920 2,877 193 2,661 (1,577) 7,074
Net financing costs (147) (46) (1) (38) (215) (447)
Underlying segment result 2,773 2,831 192 2,623 (1,792) 6,627
Separately disclosed items (see note 2) (1,688)
Profit before tax 4,939
Specific disclosure items
Depreciation and amortisation 79 74 7 426 234 820
Assets and liabilities
Segment assets 38,016 29,768 1,728 47,148 20,548 137,208
Segment liabilities (22,616) (9,159) (300) (11,081) (27,403) (70,559)
(70,559)
September 2013 UK MainlandEurope USA Asia Central costs, assets and liabilities Total
£000 £000 £000 £000 £000 £000
Revenue*
Revenue from external customers 31,345 12,274 1,482 20,163 - 65,264
Inter segment revenue 796 230 56 2,555 - 3,637
Total revenue 32,141 12,504 1,538 22,718 - 68,901
Underlying operating result 2,585 799 176 2,584 (1,284) 4,860
Net financing costs (185) (14) - (83) (27) (309)
Underlying segment result 2,400 785 176 2,501 (1,311) 4,551
Separately disclosed items (see note 2) (212)
Profit before tax 4,339
Specific disclosure items
Depreciation and amortisation 71 25 7 473 159 735
Assets and liabilities
Segment assets 37,383 10,760 1,514 48,648 5,871 104,176
Segment liabilities (26,500) (2,737) (111) (12,134) (3,245) (44,727)
*Revenue is derived from the manufacture and logistical supply of industrial
fasteners and category 'C' components.
4. Acquisition of Viterie Italia Centrale Srl ('VIC')
On 30 May 2014, the Group acquired the entire issued capital stock of VIC for an initial consideration of E27.00 million (£22.02m), satisfied by way of E24.15 million (£19.65m) in cash and E2.85m (£2.37m) by the issue and allotment of 3,000,000 shares of 5
pence each in the Company to Carlo Perini, the Managing Director and 30% owner of VIC. In addition, a further payment of maximum E5.00 million (£4.07m) may be due to the Vendors depending upon the performance of VIC over the 12 month period ending 31
December 2014. If VIC generates an adjusted post-tax profit (as defined in the Acquisition Agreement) for the year ending 31 December 2014 which exceeds E3.00 million then for each E1 above this sum an additional E5 is payable to the Vendors, subject to a
maximum amount of E5.00 million. VIC is a manufacturer and distributor of fastenings systems and is complementary to the Group's business model; it significantly strengthens the Group's presence in the domestic appliance market whilst also offering TR
additional opportunities in existing electronic and automotive Tier 1 markets. The business will also provide an additional competitive manufacturing facility in Europe to complement the Group's existing resources in Asia. In the four months since
acquiring VIC to 30 September 2014, the subsidiary contributed £1.63 million to the consolidated net profit for the period and £7.51 million to the Group's revenue. If the acquisition had occurred on 1 April 2014, Group revenue would have increased by an
estimated £11.08 million and net profit would have been increased by an estimated £2.36 million. In determining these amounts management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same as if the
acquisition had occurred on 1 April 2014.
Effect of Acquisition Recognised values on acquisition
£000
Property, plant and equipment 3,950
Intangible assets 8,108
Inventory 5,967
Trade and other receivables 4,589
Cash and cash equivalents 3,405
Trade and other payables (4,703)
Corporation tax payable (1,225)
Deferred tax liabilities (941)
Net identifiable assets and liabilities 19,150
Consideration paid:
Initial cash price paid 22,015
Deferred consideration at fair value 4,067
Total consideration 26,082
Goodwill on acquisition 6,932
Intangible assets that arose on the acquisition include the following:-
Ø £5.45 million of customer relationships, with an amortisation period deemed to be 15 years
Ø £2.33 million of technology knowhow, with an amortisation period deemed to be 10 years
Ø £0.27 million of technological patents, with an amortisation period deemed to be 15 years
Ø £0.05 million of other intangibles, with an amortisation period deemed to be between 3-5 years
Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is not deductible for tax purposes. It mostly represents potential synergies, e.g. cross-selling opportunities between VIC and Trifast Group and VIC's assembled workforce.
Fair values determined on a provisional basis £000
Corporation tax payable (1,225)
Deferred tax liabilities (941)
The above have been determined on a provisional basis because an in-depth tax analysis has not yet been undertaken on the fair value adjustments - this will be completed by the financial year end.
4. Acquisition of Viterie Italia Centrale Srl (continued)
Effect of AcquisitionThe Group estimates that it will incur costs of £1.20 million in relation to the acquisition of VIC. These costs have been included in administrative expenses in the Group's consolidated statement of comprehensive income.
5. Taxation
Six monthsended30 September2014 Six monthsended30 September2013 Year ended31 March2014
£000 £000 £000
Current tax on income for the period
UK tax (69) 294 510
Foreign tax 1,562 842 1,603
Deferred tax expense (50) - 49
Adjustments in respect of prior years 10 (119) 114
1,453 1,017 2,276
6. Dividend
The dividend payable of £1.13 million represents the final dividend recommended for the year ended 31 March 2014, approved by shareholders at the AGM on 18 September 2014 and paid to shareholders on the Register on 17 October 2014.
7. Earnings per share
The calculation of earnings per 5 pence ordinary share is based on profit for the
period after taxation and the weighted average number of shares in the period of
113,495,406 (HY2013: 108,439,566; FY2014: 108,533,645). The calculation of the fully
diluted earnings per 5 pence ordinary share is based on profit for the period after
taxation. In accordance with IAS 33 the weighted average number of shares in the
period has been adjusted to take account of the effects of all dilutive potential
ordinary shares. The number of shares used in the calculation amount to 117,436,525
(HY2013: 114,411,329;FY2014: 114,485,387).
The adjusted diluted earnings per share, which in the Directors' opinion best
reflects the underlying performance of the Group is detailed below:
Six monthsended30 September2014£000 Six monthsended30 September2013£000 Year ended31 March2014£000
Profit for the period 3,486 3,322 6,598
Acquisition costs 1,200 - -
Intangible amortisation 238 166 221
NI on exercise of 2009 Director options 228 - -
IFRS 2 Share option 22 46 67
Tax adjustment (354) (170) (66)
Adjusted profit 4,820 3,364 6,820
Basic EPS 3.10p 3.06p 6.08p
Diluted basic EPS 2.97p 2.90p 5.76p
Adjusted diluted EPS 4.10p 2.94p 5.95p
8. Analysis of net (debt)/ cash
At30 September2014£000 At30 September2013£000 At31 March2014£000
Cash and cash equivalents 13,596 13,680 15,535
Bank overdraft (47) (171) (31)
Net cash and cash equivalents 13,549 13,509 15,504
Debt due within one year (11,691) (13,711) (10,950)
Debt due after one year (19,389) (3,350) (2,524)
(31,080) (17,061) (13,474)
Total (17,531) (3,552) 2,030
Reconciliation of net cash flow to movement in net debt
Six monthsended30 September2014£000 Six monthsended30 September2013£000 Year ended31 March2014£000
Net (decrease) / increase in cash and cash equivalents (1,861) 3,742 6,143
Net (increase) / decrease in borrowings (18,420) (1,714) 1,679
(20,281) 2,028 7,822
Exchange rate differences 720 (383) (595)
Movement in net debt (19,561) 1,645 7,227
Opening net cash / (debt) 2,030 (5,197) (5,197)
Closing net (debt) / cash (17,531) (3,552) 2,030
Independent review report by KPMG LLP to Trifast plc
IntroductionWe have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2014 which comprises the consolidated income statement, the consolidated statement of comprehensive Income, the consolidated statement of changes in equity, the consolidated statement of financial position, the consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This Report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those
matters we are required to state to it in this Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this Report, or for the conclusions we have reached. Directors' responsibilitiesThe half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the
UK FCA. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this Half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Our responsibilityOur responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of
reviewWe conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. ConclusionBased on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2014 is not
prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Martin Newsholmefor and on behalf of KPMG LLPChartered Accountants, 1 Forest Gate, Brighton Road, Crawley, West Sussex, RH11 9PT11 November 2014
Editor's NoteTrifast's trading business TR Fasteningsis a leading international manufacturer and distributor of industrial fastenings to the assembly industries, with
operations in Europe, the Americas and Asia. For more information:LSE Listing: Ticker: TRI FTSE index sector: FTSE Small Cap and FTSE All-share indices Group
website:www.trifast.comFollow us on: Twitter: www.twitter.com/trfastenings ; www.facebook.com/trfastenings : www.linkedin.com/company/tr-fastenings
Enquiries or for further details please contact:Trifast plcMalcolm Diamond MBE, Executive ChairmanToday: + 44 (0) 20 7418 8900 (Peel Hunt)Mobile: +44 (0) 7979 518493 TooleyStreet CommunicationsIR & media relationsFiona TooleyTel: +44 (0)7785 703523 Email:fiona@tooleystreet.com Peel Hunt LLPStockbroker & financial adviserJustin JonesMike BellTel: +44 (0)20 7418 8900
(MMD)Jim Barker, Chief ExecutiveMark Belton, Group Finance DirectorOffice: +44 (0) 1825 747630Email: corporate.enquiries@trifast.com
Electronic Communications
The Company is not proposing to bulk print and distribute hard copies of this half-yearly financial report for the six months ended 30 September 2014 unless specifically requested by individual shareholders. News updates, Regulatory News, and Financial statements, can be viewed and downloaded from the Group's website, www.trifast.com. Copies can also be requested via corporate.enquiries@trifast.com or, in writing to, The Company Secretary, Trifast plc, Trifast House, Bellbrook Park, Uckfield, East Sussex,
TN22 1QW
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