I am pleased to inform you that we have made excellent progress for the period, as our ambitious performance objectives have been achieved for yet another year.
We indicated back in mid June 2012, that having restored a healthy momentum to the Group by then reporting a profit of £5.0 million, that we would aim to double profits by mid June 2015 and would have a well established progressive dividend policy.
By reporting an underlying pre-tax profit of £9.2 million for the year ended March 2014, it seems clear that we are well on our way to this doubling of profit aspiration by the same time next year; however, after the 2013–14 reporting period, on 30 May 2014 shareholders approved the acquisition of Viterie Italia Centrale (VIC) in Italy for an initial £22.5 million funded mainly by bank debt, thus considerably adding to the next year’s profit performance with minimal shareholder dilution — and so, potentially, considerably outperforming our 2015 forecast made three years earlier.
Our strategy over the past three years has primarily been to drive organic growth via the six elements of our Group business model:
- Combining our low cost Asian manufacturing with global distribution logistics — both supported by engineering design and application to multi site/multi-nationals in Europe, Asia and the USA. By the end of this reporting year we had achieved Approved Supplier status with over 40 multi-national customers — each of whom projecting multi-million dollar annual fastener and Category ‘C’ component purchasing budgets
- Own brand specialist fasteners — for sheet metal and plastics selling internationally to both OEMs and distributors
- TR Direct — 24 hour UK delivery of standard DIN fasteners to OEMs offering competitive pricing and guaranteed quality and service levels
- Lancaster Fastener — 24 hour UK and EU delivery of a wide range of standard and specialised fasteners promoted by an extensive online and printed catalogue that is regularly updated with new product ranges
- Plastic fasteners and spacing pillars — promoted throughout the Group and just completed its successful second year since launch
- Highly engineered manufacturing licences — investments have been made within the period for both existing and newly developed fastener drives and thread forms aimed to improve OEM assembly time or component weight. These tangibly support our reputation, status and growth within the automotive, electronics and domestic appliance customer sectors
It has also been our mission to supplement steady organic growth with a sustained search for the ‘right’ acquisition to extend our geographic and product range and customer base. However, our target business has to be profitable, cash generative and self-managing with strong leadership — plus have a realistic independent growth strategy for the foreseeable future. This demanding requirement was met in late 2011 the acquisition of Power Steel & Electro Plating works (PSEP) in Malaysia, and we are delighted that this was again met 30 months later at the end of May 2014 by the VIC acquisition. We accept that we apply extremely strict criteria to acquisitions, and so we are grateful to colleagues and shareholders for their forbearance and patience throughout our search and selection process.
During the period, the UK TR Fastenings Board of Directors, under the leadership of Dave Fisk (UK MD) and mentorship of Geoff Budd (MD — TR Europe), has taken full responsibility for the strategy, policies and operations of what has hitherto been half of the Group’s revenue, thus allowing the Main Board to focus more on acquisition activity and other aspects of Group strategy. In fact, all of our Group’s country and business location directors and managers have successfully risen to the demanding challenges of continuing to improve their operating margins, inventory management and cash generation, and so, to them and their hard working teams, I offer my sincere respect and grateful thanks.
Trifast has historically been categorised by the LSE as a Fledgling PLC, but with our improved share price and trading liquidity, we achieved a promotion to the Small Cap index on 23 June 2014, thus making us eligible to be a Tracker Fund investment and so possibly enhancing our value.
Finally, thank you for your loyalty and support as a valued investor in our Company, and I very much look forward to keeping you updated as we continue our further exciting development.
Malcolm Diamond MBE