TR's KPI objectives setResults delivered by: March 2014
  • Increase revenue, organically & acquisitively
+ 7% Organic growth
  • Increase profitability
  • Ongoing margin enhancement
Increase to 7.5%
  • Maintain positive cash generation
+50% y-o-y
  • Build on Return on capital (ROCE)
Uplift to 16%
  • Increase Earnings per share
  • Broaden the skills of management and staff
The development and implementation of a new training matrix, succession planning and Apprentice schemes modules

It gives me great pleasure to report that we have had another successful year, building on the strong, solid foundations laid down in the previous years. In summary:

  • all our target KPI's delivered, with top line Revenue growth
  • strong overhead control contributed to a significant increase in underlying profitability to £9.2 million (2013: £7.3m)
  • increase in net operating margins to 7.5% (2013: 6.6%)
  • cash generation was particularly impressive with operating cash flows of £11.8 million up 50% on prior year
  • cash conversion rate in excess of 100%
  • ROCE improvement reflects the increase in operating profit and the Group's success in cash generation, which by March reflected a positive net cash position
  • adjusted diluted earnings per share rose by 26% to 5.95p (2013: 4.73p)


The Group's key regions can be analysed as follows:

Continuing operationsFull Year
31 March
Full Year
31 March
% Increase
Total for the year£129.78m£121.54m6.8%

Nuts lined up 2014

Mark Belton

It gives me great pleasure to report that we have had another successful year, building on the strong, solid foundations laid down in the previous years"

Mark Belton
Group Finance Director

Read more about Performance

UK, Europe and USA all showed strong, organic growth in excess of 10%. The UK continues to benefit from the resurgence from the automotive sector as well as the general macro-economic outlook. Holland and Sweden also benefitted from the growth in automotive, whereas Hungary grew by 18% on the back of its electronic sales. Within Asia, although revenue was down 1.3%, this part of our business delivered an impressive performance which included 'back-filling' the end of two sizeable component supply contracts, which we highlighted in last year's Annual Report and delivering a set of results which was adversely affected by the weakening of the Asian currencies. Malaysia's currency for instance, weakened by 16% against Sterling, Singapore 11%, China 10% and Taiwan 12% respectively. The effect of this was a reduction in Asian revenue of £0.89 million; at constant currency the result would have shown a small growth for the Asian region.

Despite this foreign exchange impact on revenue, the Asian profitability has witnessed strong growth as shown below.

Underlying operating results

The underlying operating result across the TR represented regions can be analysed as follows:

Continuing operationsFull Year
31 March
% of
Full Year
31 March 2013
% of
Underlying operating result
Central costs(£3.01m)(2.3)(£1.98m)(1.6)
Total before financing costs£9.70m7.5£7.97m6.621.7%
Net financing costs(£0.54m)(£0.72m)
Total underlying profit for the year£9.16m7.1£7.25m6.026.3%
Separately disclosed items(£0.29m)(£0.81m)
Profit before tax£8.87m6.8£6.44m5.337.7%

With the exception of USA, which has been investing in additional resources to support their potential future growth, the other regions have showed respective increases in their operating margins. Underlying operating profit was up by 21.7% to £9.70 million, which has been achieved by increasing gross profit margins by 170pbs to 27.7% (2013: 26.0%), whilst maintaining overheads at around 20% of revenue and an average headcount increase of only 1%.

Net financing costs fell by a quarter to £0.53 million (2013: £0.72m) reflecting the reduction in gross debt in the UK and Asian regions.

Overall this resulted in an increase in underlying profit before tax of £9.16 million (2013: £7.25m) representing 7.1% of revenue (2013: 6.0% of revenue).


Taxation in the period was £2.28 million (2013: £1.73m), which equates to an Effective Tax Rate ('ETR') of 25.6% (2013: 26.9%) — the decrease being assisted by the reduction in the UK tax rate. The Group's blended tax rate based on the geographical regimes was 20.9% (2013: 21.3%).

Balance sheet

Despite the Group's increase in retained profit during the period, the net assets were only marginally up by 2.1% to £61.67 million (2013: £60.42m), as foreign exchange translation, largely resulting from the weakening Asian currencies reduced the Group's assets by £5.08 million. This consequently also impacted working capital which, as a percentage of sales, reduced significantly during the year from 30% to 26%, resulting in a positive effect on operating cash flow.

Cash generated from operations in the period was £11.83 million (2013: £7.87m) with net cash generated of £10.02 million (2013: £6.44m).

There was a decrease in the Group's property, plant and equipment to £11.83 million (2013: £13.36 million), which represents 11.4% of the Group's total assets. Intangible assets reduced to £16.96 million (2013: £18.37m).

The monitoring of inventory levels remains a priority and at the end of the year being reported, levels were consistent with the previous year at £30.57 million (2013: £30.44m). Net inventory weeks were 19.1 (2013: 20.2). Debtor days improved slightly at 65 days (2013: 67). Total bad debt charge for the year was £0.15 million (2013: £0.29m).

Modest capital expenditure of £0.84 million, predominantly within our ASEAN operations was at similar levels to last year. It is envisaged that during this current financial year ending 2015 further increased investment will be made, particularly at our Taiwanese and Malaysian sites.

Cash flow

Full Year
31 March 2014
Full Year
31 March 2013
Adjusted EBITDA*£10.80m£9.23m
Adjusted working capital changes£1.03m(£1.36m)
Adjusted operating cash flows£11.83m£7.87m
Cash conversion109.5%85.3%
Net capital expenditure(£0.83m)(£0.85m)
Taxation paid(£1.81m)(£1.43m)
Net interest(£0.53m)(£0.72m)
Adjusted free cash flow£8.66m£4.87m
Deferred consideration/Acquisition consideration(£1.39m)
Proceeds from shares issued£0.08m£0.23m
Dividends paid(£0.87m)(£0.53m)
Net change in cash and cash equivalents£7.87m£3.18m
Net debt as at 1 April(£5.20m)(£8.41m)
Effect of exchange rate on net debt(£0.64m)£0.03m
Net debt as at 31 March£2.03m(£5.20m)

* Pre IFRS 2 Charge and intangible amortisation.



Bar Chart Gearing 2014

net debt


Bar Chart Net Debt 2014

Carolyn Emsley, Lyndsey Case, Mark Belton, Maria Johnson, Jon Gibb

I would personally like to acknowledge the finance teams around the business who support and add value to the TR business teams"

Mark Belton
Group Finance Director

Group net cash balances as at 31 March 2014 were £15.50 million (2013: net cash £10.55 million) of which, £12.22 million was held in foreign currencies (2013: £9.47 million). Net debt at the beginning of the financial year stood at £5.20 million; at the year end the Group was in a net cash position of £2.03 million and gross debt fell by £2.28 million to £13.47 million (2013: £15.75 million).

With no gearing at the period end, the Group has been able to leverage up in order to complete and finance its recent move into Italy, more details can be read below (2013: gearing 8.6%).

Post balance sheet event

On 30 May 2014, the Group acquired the entire issued capital stock of Viterie Italia Centrale Srl ('VIC') for an aggregate consideration of €27.00 million (£22.50 million).

The consideration for the acquisition comprised €24.15 million (£20.12 million) payable in cash on completion of the acquisition and €2.85 million (£2.38 million) to be represented by the issue and allotment of 3,000,000 shares of 5 pence each in Trifast plc, subject to adjustment in the event that the agreed level of working capital was not left in VIC at completion. Under Italian law, the capital stock of VIC is represented solely by 'quotas' rather than shares, and Trifast will be purchasing the entire issued capital stock of VIC.

In addition, it was agreed that a further payment may become due to the vendors of VIC (the 'Vendors') depending on the performance of VIC over the twelve month period ending on 31 December 2014. If VIC generates a post-tax profit (as defined in the Acquisition Agreement) for the year ending 31 December 2014 which exceeds €3,000,000, then for each €1 above this sum an additional €5 is payable to the Vendors, subject to a maximum amount of €5,000,000. This sum would be paid once the post-tax profit has been calculated in accordance with the Acquisition Agreement. Until such time as these additional monies have been paid in accordance with the Acquisition Agreement, any warranty or indemnity claims can be off-set (if proved or settled) against monies due to be paid, and if any claim is not settled or resolved an amount can be withheld from the monies paid until this matter is resolved.

The cash element of the consideration is funded from a new bank facility, details of which are set out further below.

VIC had net assets and gross assets as at 31 December 2013 of €17.89 million and €31.88 million respectively. A summary of the trading results for VIC as extracted, without material adjustment, from the VIC historical financial information is below:

Year ended
31 December 2013
Gross profit€7.90m
Profit before tax€5.42m
Total assets€31.88m
Net cash€2.30m
Total equity€17.89m

Note: Full details of the acquisition are contained in the Class 1 Circular issued to shareholders on 6 May 2014, a copy of which can be found on both our IR website and lodged at the National Storage Mechanism ('NSM').

Group Banking

The Group had combined facilities within the UK of £23.30 million at 31 March 2014 and the business traded well within its facilities and covenants.

In May 2014, the Group agreed new additional banking facilities with HSBC, comprising:

  • a term loan facility of up to €25.00 million ('Facility A') used to fund the acquisition of VIC; and
  • a revolving, multi-currency credit facility (RCF) of up to £10.00 million ('Facility B'), replacing the existing £5.00 million RCF.

The obligations of Trifast under Facility A and Facility B (the 'Facilities') are guaranteed by the UK non-dormant subsidiaries of the Company.

Facility A is repayable in semi-annual instalments of €1.25 million on 31 October 2014, 30 April 2015, 31 October 2015, 30 April 2016 and 31 October 2016; then at the rate of €2.50 million payable on 30 April 2017, 31 October 2017, 30 April 2018 and 31 October 2018, with the final balance being payable on the date five years after the date of the facility.

Interest on the Facilities is charged at the aggregate rate of LIBOR/EURIBOR plus a margin (initially 2.40%), ratcheted from six months after drawdown in accordance with a formula incorporating the ratio of consolidated net debt of the Group against the consolidated EBITDA of the Group.

Return on capital employed

ROCE remains a key driver, therefore it is pleasing to report that this has increased to 16.3% (2013: 12.1%) reflecting the increase in operating profit and the Group's success in cash generation, giving the Group a net cash position at the period end.

Earnings per share

The adjusted diluted earnings per share ('EPS') which, in the Directors' opinion, best reflects the underlying performance of the Group rose by 25.8% to 5.95 pence (2013: 4.73p). Basic earnings per share increased by 38.5% to 6.08 pence (2013: 4.39p).


Subject to Shareholder approval at the Annual General Meeting which is to be held on 18 September 2014, the Directors are proposing a final dividend of 1.00 pence per share. This together with the interim dividend for 0.40 pence (paid on 18 April 2014) brings the total of the year to 1.40 pence an increase of 75% on prior year (2013: 0.80p).

The final dividend will be paid on 17 October 2014 to Shareholders on the Register at the close of business on 27 June 2014. The Ordinary shares will become ex-dividend on 25 June 2014.


I would personally like to acknowledge the finance teams around the business who support and add value to the TR business teams by delivering timely information and analytics which assist them to improve their overall understanding of their performance. I look forward to working with them all over the coming year.

Mark Belton
Group Finance Director
16 June 2014