Trifast Regulatory News (TRI)

24 Nov 2006 07:00

Trifast PLC24 November 2006 24 November 2006 TRIFAST PLC Interim results for the six months ended 30 September 2006 "Solid revenue and profit growth driven by strengthened international presence" Financial and Operational Highlights: • Revenues increased by 33% to £67.8m (2005: £50.9m) • Operating profit grew by 72% to £3.8m (2005: £2.2m) • Fully diluted earnings per share increased by 59% to 2.95p (2005: 1.85p) • Interim dividend increased by 5% to 0.77p (2005: 0.73p) • Successful integration of Serco-Ryan, planned £2m cost savings achieved • Agreement to purchase 25% stake in leading Malaysian manufacturer Techfast for circa £2.8m • 55% of operating profits now being generated outside of the UK • International growth strategy in place and delivering Commenting on the interim results, Anthony Allen, Chairman, said: "The business performed strongly in the first half and delivered solid earningsand profit growth across the Group. Trifast is now truly international with overhalf of its profits being generated outside the UK and a growing presence in thefast growing Asian markets, as illustrated by the recent acquisition of 25% ofTechfast, the leading Malaysian manufacturer of self-clinch fasteners. With itsglobal reach, strong brand and innovative products the Group is ideallypositioned to take advantage of further growth opportunities in the globalindustrial fastener market." Enquiries: Trifast Group plc Tel: 020 7360 4900 on 24 November only, thereafter Tel: 01825 747 366Jim Barker, Chief Executive OfficerStuart Lawson, Group Finance Director Smithfield Consultants Tel: 020 7360 4900 / 07973 387 473Noemie de Andia Arden Partners Tel: 020 7398 1632Richard Day / Steve Pearce Trifast plc Interim results for the six months ended 30 September 2006 Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 Revenue £67.81m £50.94m £117.28mGross profit £17.45m £12.87m £29.13mOperating profit £4.66m £2.48m £6.38m(pre-goodwill, intangibleamortisation, IFRS 2 charges andrestructuring costs) Operating profit £3.81m £2.22m £3.24mPre-tax profit £4.22m £2.28m £5.69m(pre-goodwill, intangibleamortisation, IFRS 2 charges andrestructuring costs)Pre-tax Profit £3.38m £2.02m £2.55mEarnings per share- Basic 2.95p 1.86p 1.86p- Diluted 2.95p 1.85p 1.85pDividend 0.77p 0.73p 2.21p Notes to Editors Trifast plc is an international manufacturer and distributor of industrialfastenings to the assembly industries, with operations in Europe, the Americasand Asia. The Company's products include micro screws, customer specific itemsand high tolerance fastenings. Established in the South of England in 1973, the Company has grown byacquisitions over the years and floated on the London Stock Exchange in 1994. The acquisition of Serco Ryan, the third largest UK competitor, in 2005 hastransformed the Company into a major player in the industrial fastener marketwith ambitions to become Europe's leading brand. Trifast has a market capitalisation of £55m. For more information please visit www.trifast.com CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW The business performed strongly in the first half of the year delivering a 33%increase in revenues and a 72% operating profit improvement over the same periodlast year. This solid growth demonstrates the benefits of the Group's increasedinternational presence with over half of its profits now generated outside theUK. The Global industrial fasteners industry is experiencing solid growth andthe management team continues to focus on expanding the Group's market share inboth Europe and Asia through an aggressive sales and marketing strategy. Operational Review These solid results were achieved despite recent shortages in raw materials, thesubsequent price escalation and consolidation in the market, which forced manyof our competitors to cut costs and decrease their focus on innovation andproduct support. We grew our revenues and profit margins, which is testimony toour strong reputation for excellent service, technical support and innovativeproducts. We have reviewed our product pricing and increased our focus onpremium-priced products during the period. In addition our diverse customerbase, by market sector and geography, enabled us to mitigate the risks of sectorand regional downturns. Further, our Asian manufacturing base provides us withthe ability to offer all important security of supply to our customers. Operationally we have reduced our stockturn by combining the benefits of bothSerco-Ryan's and Trifast's procurement processes and supply chain managementsystems. During the last twelve months we have completed a detailed analysis of themarket-place for industrial fasteners to identify our customers' future needs interms of global manufacturing capability and innovative products and services.In line with our sales and marketing strategy to capture the opportunitiesidentified, we have put in place a four year growth plan. Our geographic expansion strategy is progressing well with over half of theGroup's profits now generated outside the UK. This diversification has beenachieved during a period when we have successfully integrated Serco-Ryan intothe Group and the resulting increase of our UK revenues. We expect this trend ofinternationalisation of the Group's profits to continue. This will be achieved through a continued focus on our unique competitiveadvantages which are summarised below: •Research and Development Capability, as illustrated by our innovative Hexiform screw designed and developed by our world class facility in Singapore especially for the Manganese Casting industry; •First Class Design Expertise: we continue to work with global original equipment manufacturers (OEMs) to design innovative products to meet their specifications; •Low Cost Manufacturing: our high quality low cost manufacturing facilities in Suzhou (Jiangsu province) is an example of our ability to cut manufacturing costs; •Sophisticated Inventory Systems: Trifast's Inventory System is a dynamic logistical system for managing customer's product inventory; •Branded Global Operations: Trifast operates in 37 locations in 16 countries under the distinctive brand TR. In addition the global demand for fasteners is projected to grow by 4.8%annually to approximately £29 billion in 2010 (source: Freedonia, industrialdata specialists). This represents a significant growth opportunity for Trifastand we aim to build our global market share from 0.6% to 1% within five years.To achieve this the following objectives have been set and actions implementedfor the following regions: Europe The European market is worth £7.2 billion (source: Freedonia, industrial dataspecialists) today and we plan to grow our market share from 1.8% to 3% over thenext four years. We have streamlined our European operations to pursue astrategy of organic and acquisitive growth. In addition, we have re-organisedour European sales force and put in place a clear recognition and reward systemto drive sales growth further. We have successfully integrated Serco-Ryan and Keba Fastenings (Turkey), bothacquired last year, and achieved £2 million of cost savings as forecasted. Weare now in the process of re-organising our supply chain management to supportfuture growth. We appointed a new Head of Purchasing to focus on maximising thepurchasing benefits of the enlarged Group and to underpin our current and futuresales drives. He has already started to rationalise our supply chain and reduceour overall stock holding and we are pleased with the early progress made inthese areas. Asia Asia is one of the fastest growing industrial fasteners markets in the world andwe aim to maintain our strong growth rate, currently in excess of 20% per annum,in the region. As announced in October, we have agreed the purchase, for circa£2.8m, of 25% of Techfast, the leading Malaysian manufacturer of Self Clinchfasteners, and whose manufacturing capability complements our own. AlreadyTechfast has helped us secure new business within the lucrative LCD flat screenindustry in Turkey through TR Keba which is located in the region. North America We have made good progress in turning around our North American operations,which have now moved into profitability during the period. Our aim is toestablish our North American business as a provider of specialist products tothe American distribution industry and we have successfully continued to expandour network of self-clinch distributors while expanding the activities of oursatellite team in HP (Houston). Financial Review The results for both periods under review have been prepared using thepresentation, recognition and measurement requirements of InternationalFinancial Reporting Standards (IFRS). Group revenues increased by 33% to £67.81 million (2005: £50.94 million) in thesix months ended 30 September 2006. Of this increase 6% has come from organicgrowth with the remaining 27% attributable to the acquisition of Serco-Ryan inOctober 2005. Whereas organic growth is 6%, allowing for the strategic reductionof one key account, the underlying organic growth level is 12%. Our gross marginimproved by 0.4% points against the comparable period last year and by 0.9%points on the overall gross margin for the year ended 31st March 2006. Thismargin gain reflects our continued focus on reducing all costs as well asimproving our business mix and maintaining pressure on low margin accounts. European/USA revenues, which now represent 80.8% of the Group's revenue,increased by 35% over the period to £54.77 million (2005: £40.59 million). 29%of this increase comes from the acquisition of Serco-Ryan and 6% from organicgrowth (or 11% organic growth if adjusted as explained above). Organic growthwas particularly strong in Norway, Holland, Poland and the USA, with all thesecountries having experienced double digit growth. This contributed to an 83.3%increase in the operating profit for the regions. Our Asian revenues were up 26.0% at £13.04 million (2005: £10.35 million), agood result reflecting sustained growth of our operations in China whichcontinue to benefit from the movement of global customers from relatively highercost economies to lower cost areas. This increased revenue also resulted in a38.8% increase in operating profits confirming that we are now maintaining grossmargins in this region and keeping overheads under tight control. Finally ournew Chinese factory in Suzhou is now commercially operational. Asia remains astrategic region for the Group and we expect to invest a further US$0.5 millionover the next 12 months. Gross profit for the six month period was £17.45 million compared to £12.87million in 2005, an increase of 35.6% reflecting both the acquisition ofSerco-Ryan and the increase in our gross margin percentage as explained above. Our increased focus on cost reductions is now delivering. Administrationexpenses (before amortisation, restructuring costs and IFRS 2 charge) as apercentage of revenue continued to fall over the period and now represent 17.0%.We have achieved our target of reducing the combined overheads of our UKbusiness and Serco-Ryan by the forecasted £2.00 million annualised savings, andexpect some further reductions to be realised over the next few months.Restructuring costs for the period amounted to £0.63 million representing costsof redundancy and onerous leases. The IFRS 2 charge in the period under reviewwas £0.08 million (2005: £0.08 million). Operating profit before financing costs was £3.81 million, up 71.6% from lastyear's £2.22 million, an increase reflecting greater revenue, higher grossmargins and lower operating costs as a percentage of revenues, all excellenttrends which we expect to continue in the second half of the year. We continue to generate cash from the majority of our trading activities and theGroup's gross debt has been reduced by a further £1.91 million to £17.05 millionwith net debt at £9.62 million at the period end, representing a gearing levelof 24.2%. Cash generated from operations in the period amounted to £4.80 millionbefore restructuring costs of £0.75 million. This has been helped by a tightmanagement of stock levels across the Group. Stock has increased from September2005 by £2.08 million to £24.84 million as a result of the acquisition ofSerco-Ryan which brought with it £4.12 million of stock. However underlyingstock movement for the period is a significant reduction of £2.04 million whichreflects our sustained effort to improve stock management across the combinedbusiness. Cash flow for the second six months of the financial year is forecast to remainstrong. Accordingly in October 2006 we made the final £2.00 million payment forSerco-Ryan in cash rather than issuing shares, effectively enhancing earningsper share and we will also fund the acquisition of the 25% shares in Techfastfor £2.80 million with cash. These payments will be made from existing cashflowand additional debt of £3.80 million. Debtor management remains a core priority and we are pleased to report that wehave had no significant bad debts in the period and our debtor days remainstrong at 67. Creditor days were at 70. Capital expenditure was low at £0.27 million (2005: £0.38 million) withdepreciation at £0.60 million (2005: £0.60 million). We expect these figures toincrease during the second half of the year as we add further capability to ourChinese manufacturing facility. Net financing costs increased to £0.43 million of which interest payableamounted to £0.50 million (2005: £0.25 million), reflecting the cost of takingon £11.20 million of additional debt to part fund the acquisitions of Serco-Ryanand TR Keba. Profit before income tax in the period was £3.38 million (2005: £2.02 million),reflecting the positive sales growth in all regions, gross margin increases andthe on-going containment of overheads as a percentage of sales. With aneffective tax rate of 26.3% (2005: 33.5%) profit after tax was £2.49 million(2005: £1.34 million). Basic earnings per share in the period amounted to 2.95 pence against 1.86 pencefor the 2005 equivalent period last year. Adjusting for restructuring costs, theadjusted diluted earnings per share was 3.47 pence (2005: 2.03 pence). Interim Dividend The Directors have declared an increased interim dividend of 0.77 pence perordinary share (2005: 0.73 pence) reflecting the Board's confidence in thefuture of the enlarged Group. The interim dividend will be paid on 17 January2007 to shareholders on the Register on 8 December 2006; with an ex-dividenddate of 6 December 2006. Current Trading and Prospects The Group has made a good start to the second half with revenues and profits todate ahead of last year. Trifast has a strong brand, innovative products, globalreach and a clear growth strategy in place and, is well positioned to grow andto capture further market share in the expanding global industrial fasteningmarket. We believe that the Group is well positioned for further profitablegrowth and we are confident of a positive outcome for the year. Anthony AllenChairman Jim BarkerChief Executive Officer Condensed consolidated interim income statement Unaudited results for the six months ended 30 September 2006 Notes Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 £000 £000 £000 Revenue 67,807 50,939 117,282Cost of Sales (50,356) (38,068) (88,150) ----- ------------ ------------ ----------Gross Profit 17,451 12,871 29,132 Other OperatingIncome 86 109 238DistributionExpenses (1,372) (1,736) (3,774)---------------------- ----- ------------ ------------ ----------AdministrativeExpenses before (11,508) (8,765) (19,218)the following items:Goodwill Impairment - - (786)- IntangibleAmortisation (131) - (121)- RestructuringCosts (634) (180) (2,108)- IFRS 2 Charge (83) (79) (121)---------------------- ----- ------------ ------------ ----------TotalAdministrationExpenses (12,356) (9,024) (22,354) ----- ------------ ------------ ----------Operating Profitbefore FinancingCosts 3,809 2,220 3,242 ----- ------------ ------------ ---------- Financial Income 69 47 54Financial Expenses (502) (251) (743) ----- ------------ ------------ ----------Net Financing costs (433) (204) (689) Profit beforeIncome Tax 3,376 2,016 2,553 Income Tax 3 (887) (676) (1,115) ----- ------------ ------------ ----------Profit for thePeriod 2,489 1,340 1,438 ===== ============ ============ ========== Earnings per Share- Basic 5 2.95p 1.86p 1.86p- Diluted 5 2.95p 1.85p 1.85pDividends 4 0.77p 0.73p 2.21p Condensed consolidated interim statement of recognised income and expense Unaudited results for the six months ended 30 September 2006 Six months ended Six months ended Year ended 30 September 2006 30 September 2005 31 March 2006 £000 £000 £000 Foreign exchangetranslationdifferences(loss)/gain (1,378) 677 1,470Net gain on hedge ofnet investment inforeign subsidiary 12 20 4 ----------- ----------- ---------(Expense) and IncomeRecognised Directly inEquity (1,366) 697 1,474 ----------- ----------- --------- Profit for the Period 2,489 1,340 1,438 ----------- ----------- ---------Total RecognisedIncome and Expense forthe Period 1,123 2,037 2,912 =========== =========== ========= Condensed consolidated interim balance sheet Unaudited results as at 30 September 2006 Notes 30 September 30 September 31 March 2006 2005 2006 £000 £000 £000Non-current assetsProperty,plant andequipment 8,586 8,390 9,208Intangibleassets 24,046 11,413 24,591Deferred taxassets 573 482 573 ----- ------------ ------------ ---------Totalnon-currentassets 33,205 20,285 34,372 ----- ------------ ------------ --------- Current assetsStocks 24,837 22,756 25,123Trade andotherreceivables 29,678 22,581 30,070Cash and cashequivalents 7,421 1,894 6,524 ----- ------------ ------------ ---------Total currentassets 61,936 47,231 61,717 ----- ------------ ------------ --------- Total assets 95,141 67,516 96,089 ----- ------------ ------------ --------- Current liabilitiesBank and otherloans 2,893 1,899 3,280Trade andother payables 24,158 17,250 24,404Tax payable 835 801 365Dividendspayable 1,248 1,014 -Deferredconsideration 2,562 - 2,562Provisions 166 - 242 ----- ------------ ------------ ---------Total currentliabilities 31,862 20,964 30,853 ----- ------------ ------------ --------- Non-currentliabilitiesBank and otherloans 14,152 6,907 15,950Provisions forliabilitiesand charges 1,170 181 1,215Deferred taxliabilities 753 419 826 ----- ------------ ------------ ---------Totalnon-currentliabilities 16,075 7,507 17,991 ----- ------------ ------------ ---------Totalliabilities 47,937 28,471 48,844 ----- ------------ ------------ ---------Net assets 47,204 39,045 47,245 ----- ------------ ------------ --------- EquityShare capital 4,219 3,595 4,219Share premium 11,874 4,598 11,873Reserves (495) 94 871Retainedearnings 6 31,606 30,758 30,282 ----- ------------ ------------ ---------Total equity 7 47,204 39,045 47,245 ----- ------------ ------------ --------- Condensed consolidated interim statement of cash flows Unaudited results for the six months ended 30 September 2006 Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 £000 £000 £000Cash Flows from OperatingActivitiesProfit for the Period 2,489 1,340 1,438 ------------ ----------- ----------Adjustments for: 746 597 2,124Depreciation,amortisation &impairment (69) (47) (54)Financial income 502 251 743Financial expense 3 6 (24)Loss/(profit) on saleof property, plant &equipment - (32) -Profit on sale ofinvestments 83 79 121Equity settled sharebased payment expense 887 676 1,115Taxation ------------ ----------- ----------Operating profitbefore changes inworking 4,641 2,870 5,463capital and provisionsIncrease/(decrease) intrade payables 326 (1,569) (50)(Increase)/decrease instocks (272) (905) 1,073Increase in tradereceivables (562) (26) (691)(Decrease)/increase inprovisions (121) - 1,243 ------------ ----------- ----------Cash generated fromoperations 4,012 370 7,038Tax paid (446) (867) (1,738) ------------ ----------- ----------Net Cash fromOperating Activities 3,566 (497) 5,300 ------------ ----------- ----------Cash Flows from InvestingActivities(Acquisition)/disposalof subsidiaries (18) 137 (16,575)and investments net of cashAcquisition ofproperty, plant &equipment (269) (377) (1,150)Proceeds from sale ofproperty, plant &equipment - 1 17Interest received 71 46 52 ------------ ----------- ----------Net cash frominvesting activities (216) (193) (17,656) ------------ ----------- ----------Cash Flows from FinancingActivitiesProceeds from issue ofshare capital - - 8,274Expenses for issue ofshare capital - - (375)Proceeds from new loan - - 11,200Repayment of long termborrowings (1,416) (900) (2,103)Dividends paid - - (1,630)Interest paid (474) (245) (618) ------------ ----------- ----------Net Cash fromFinancing Activities (1,890) (1,145) 14,748 ------------ ----------- ----------Netincrease/(decrease) inCash 1,460 (1,835) 2,392and Cash EquivalentsCash and CashEquivalents at startof period 6,252 3,622 3,622Effect of exchangerate fluctuations oncash held (291) 107 238 ------------ ----------- ----------Cash and CashEquivalents at end ofperiod 7,421 1,894 6,252 ------------ ----------- ---------- Notes to the condensed consolidated interim financial statements Unaudited results for the six months ended 30 September 2006 1. Basis of preparationThis interim statement has been prepared on the basis of accounting policies setout in the full Annual Report and Accounts for the year ended 31 March 2006.This statement does not comprise full financial statements within the meaning ofSection 240 of the Companies Act 1985. The statement is unaudited but has beenreviewed by KPMG Audit Plc and their report is set out below.The comparative figures for the financial year ended 31 March 2006 have beenextracted from the full Annual Report and Accounts for that financial year.Those accounts have been reported on by the company's auditors and delivered tothe registrar of companies. The report of the auditors was (i) unqualified, (ii)did not include a reference to any matters to which the auditors drew attentionby way of emphasis without qualifying their report, and (iii) did not contain astatement under section 237(2) or (3) of the Companies Act 1985. 2. Segment reportingSegment information is presented in the condensed consolidation interimfinancial statements in respect of the Group's geographical segments, which arethe primary basis of segment reporting. The geographical segment reportingformat reflects the Group's management and internal reporting structure.Inter-segment pricing is determined on an arm's length basis.Segment results include items directly attributable to a segment as well asthose that can be allocated on a reasonable basis. Business segmentsThe Group is comprised of the following main geographical segments:Europe includes UK, Norway, Sweden, France, Hungary, Southern Ireland,Holland and TurkeyAsia: includes Malaysia, China, Singapore and TaiwanAmerica: includes Los Angeles, Phoenix and Mexico Segment revenue and result under primary reporting format are disclosed in thetable below: Europe Asia America Central Group 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000RevenueRevenue fromexternalcustomers 55,618 41,551 15,118 12,778 1,840 1,438 - - 72,576 55,767Inter segmentrevenue (2,670) (2,374) (2,080) (2,433) (19) (21) - - (4,769) (4,828)---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Total revenue 52,948 39,177 13,038 10,345 1,821 1,417 - - 67,807 50,939---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Segmentresults beforeitems 2,911 1,508 2,756 1,986 9 (107) (1,019) (908) 4,657 2,479listed belowIntangibleamortisation (131) - - - - - - - (131) 0Restructuringcosts (584) (180) - - - - (50) - (634) (180)Equity settledshare based (22) (30) - - - - (61) (49) (83) (79)payments---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Operatingprofit/(loss) 2,174 1,298 2,756 1,986 9 (107) (1,130) (957) 3,809 2,220before financingcostNet financingcosts (433) (204)---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Profit onordinary 3.376 2,016activitiesbeforetaxationTaxation (887) (676)---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Profit for thePeriod 2,489 1,340---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ---------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Segment netassets/(liabilities) 42,264 26,261 15,077 13,220 2,201 2,353 (12,338) (2,789) 47,204 39,045---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Revenue is derived from the manufacture and logistical supply of industrialfasteners and Category 'C' components. 3. TaxationThe charge for tax is an estimate based on the anticipated effective rate of taxfor the year ending 31 March 2007, adjusted for prior year items as shown below: Six months Six months ended ended 30 September 2006 30 September 2005 £000 £000 Current tax on income for the periodUK Tax 170 63Foreign Tax 797 622Adjustments in respect of prior years (80) (9) ------------- ------------ 887 676 ============= ============ 4. DividendsThe dividend payable figure of £1.25 million represents the final dividendrecommended at the March 2006 Year End and approved at the AGM in September2006. The Directors have declared an interim dividend of 0.77 pence per ordinary shareto be paid on 17 January 2007 to shareholders on the register on 8 December2006. 5. Earnings per shareThe calculation of earnings per 5p ordinary share is based on profit for theperiod after taxation and the weighted average number of shares in the period of84,380,807 (September 2005: 71,891,969; March 2006: 77,516,115). The calculation of the fully diluted earnings per 5p ordinary share is based onprofit for the period after taxation. In accordance with IAS 33 the weightedaverage number of shares in the period has been adjusted to take account of theeffects of all dilutive potential ordinary shares. The number of shares used inthe calculation amount to 84,441,564 (September 2005: 72,354,246; March 2006:77,639,682). The adjusted diluted earnings per share for the six months ended 30 September2006 is as follows: Six months Six months Year ended ended ended 31 March 2006 30 September 2006 30 September 2005 £000 £000 £000Profit for the period 2,489 1,340 1,438Goodwill impairment - - 786Restructuring costs 634 180 2,108Tax effect (190) (54) (632) ------------- ------------- ---------Adjusted Profit 2,933 1,466 3,700 ============= ============= ========= Basic EPS 2.95p 1.86p 1.86pDiluted Basic EPS 2.95p 1.85p 1.85pAdjusted Diluted EPS 3.47p 2.03p 4.76p 6. Retained Earnings Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 £000 £000 £000 Opening balance 30,282 30,353 30,353Retained profit for 2,489 1,340 1,438periodEquity-settled share 83 79 121basedpayment transactionsDividends (1,248) (1,014) (1,630) ------------- ------------- ---------Closing Balance 31,606 30,758 30,282 ============= ============= ========= 7. Reconciliation of Movements in Total Equity Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 £000 £000 £000Profit for the financial 2,489 1,340 1,438periodNet issue of ordinary shares 1 - 7,899Equity settled share basedpayment transactions 83 79 121Exchange differences (1,366) 697 1,474Dividends (1,248) (1,014) (1,630) ------------- ------------ ----------Net addition to Total Equity (41) 1,102 9,302Opening Total Equity 47,245 37,943 37,943 ------------- ------------ ----------Closing Total Equity 47,204 39,045 47,245 ============= ============ ========== Independent review report by KPMG Audit Plc to Trifast plc IntroductionWe have been instructed by the company to review the financial information forthe six months ended 30 September 2006, which comprises the Consolidated IncomeStatement, the Consolidated Balance Sheet, the Consolidated Statement ofRecognised Income and Expense, the Consolidated Cash Flow Statement and therelated notes. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted bylaw, we do not accept or assume responsibility to anyone other than the companyfor our review work, for this report, or for the conclusions we have reached. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the Directors. The Directorsare responsible for preparing the interim report in accordance with the ListingRules which require that the accounting policies and presentation applied to theinterim figures should be consistent with those applied in preparing thepreceding annual financial statements except where any changes, and the reasonsfor them, are disclosed. Review work performedWe conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the UK. A review consistsprincipally of making enquiries of Group management and applying analyticalprocedures to the financial information and underlying financial data and, basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Statements on Auditing and therefore provides alower level of assurance than an audit. Accordingly, we do not express an auditopinion on the financial information. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2006. KPMG Audit PlcChartered Accountants1 Forest GateBrighton RoadCrawleyWest Sussex RH11 9PT 23 November 2006 This information is provided by RNS The company news service from the London Stock Exchange