Trifast Regulatory News (TRI)

21 Nov 2007 07:01

Trifast PLC21 November 2007 21 November 2007 TRIFAST PLC Interim Results for the six months ended 30 September 2007 Commenting on the interim results, Steve Auld Chief Executive, said: "Trifast performed strongly and delivered a solid operating profit in achallenging market. During the period we have made significant progress with ourNew Business Development Team and are currently developing new quality businessplans to drive growth going forward." Financial and Operational Highlights: • Revenues at £62.07 million • Profit before tax (pre-goodwill, intangible amortisation, IFRS 2 charges, and restructuring costs) up 13% at £4.75 million. • Statutory profit before tax was up 32% at £4.46 million • Basic earnings per share increased by 34% to 3.96p • Interim dividend increased to 0.93p • Investment in Key Account Management Team and business strategy fully operational • Marketing plan to develop the TR brand into one of the recognised leading brands within the industry Enquiries Trifast Group plc Tel: 020 7360 4900Steve Auld, Chief Executive Officer today only, thereafterStuart Lawson, Chief Financial Officer Tel: 01825 747 366 Smithfield ConsultantsReg Hoare / Will Swan Tel: 020 7360 4900 Arden PartnersRichard Day Tel: 020 7398 1632 Notes to Editors Trifast plc is a leading international manufacturer and distributor ofindustrial fastenings to the assembly industries, with operations in Europe, theAmericas and Asia. For more information please visit www.trifast.com Trifast plc Summary interim results for the six months ended 30 September 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007Revenue £62.07m £67.81m £131.95mGross profit £17.09m £17.45m £34.72mOperating profit £5.23m £4.66m £9.74m(pre-goodwill, intangibleamortisation, IFRS 2 chargesand restructuring costs) Operating profit £4.94m £3.81m £6.36mPre-tax profit £4.75m £4.22m £8.81m(pre-goodwill, intangibleamortisation, IFRS 2 chargesand restructuring costs)Pre-tax Profit £4.46m £3.38m £5.43m Earnings per share- Basic 3.96p 2.95p 4.70p- Diluted 3.94p 2.95p 4.70p Dividend 0.93p 0.77p 2.43p Statement by the Chairman Anthony Allen and Chief Executive Steve Auld Business Review During the first half of the financial year the Company delivered profits inline with market expectations. This is especially pleasing as the market hasbecome an increasingly competitive environment due to globalisation ofmanufacturers, and as previously reported, the impact of increased prices of rawmaterials, energy, and freight costs. The Company has taken the appropriateaction over the past months which will enable it to meet these challenges. Results In spite of the challenges highlighted above, the Company reported a solidperformance for the first half year. Although sales show a decline on the previous year this was due to the loss oflower margin business moving away from the Group, after a detailed customerreview. This review was conducted as a result of our continued focus onimproving profitability. The highlights to be noted in the interim are the TR Asia results. Thebusinesses have reported sales growth and improved profitability for the period.TR Asia continues to set world class standards for the Industry. Initiatives taken in first half We have strengthened our key sales account management team, and appointed anumber of senior sales managers who are now working with our business operationsto drive organic growth. These initiatives together with our fully operationalbusiness strategy are intended to improve our performance this yearnotwithstanding challenging market conditions. The New Business Development Team is a work in progress as we still have a fewvacancies left to fill. However, we are delighted with the calibre of our newrecruits, and these when added to the existing experienced salesmen, form apowerful force. New business plans for 2008 focus on the development of our European Divisions.Additional resources are planned to expand sales in Asia by establishing a newbusiness sales team to mirror that formed in Europe. Transactional sales activity for our business operations has been strengthenedby staff training and recruitment. We have also invested in a software solutionthat improves sales monitoring, which we expect to be fully operational in thesecond half of the year and we can already see sales growth for TR Proprietaryparts. Our marketing plan to support these initiatives will develop the TR brand intoone of the recognised leading brands within the industry. The Master Distributor Programme (MDP) is progressing well in Europe and salesare growing. This product base, focused on sales to distributors, has alreadybeen launched in North America. The MDP, focusing on selling TR Proprietary products, is expected to result inrapid sales growth during the next three year period. The development of theteam will involve additional recruitment and again we will only select highcalibre candidates. Staff and customer surveys have recently been conducted. These have given riseto a review of staff training needs and measures to optimise and improvebusiness unit performance. Acquisitions During the period we reviewed a number of potential acquisitions, but have notprogressed any as we were not satisfied they met our stringent criteria. Summary Trifast performed strongly and delivered a solid operating profit in achallenging market. During the period we have made significant progress with ourNew Business Development Team and are currently developing new quality businessplans to drive growth going forward. Trifast has a proven ability to follow business into new territories. CurrentlyIndia and Vietnam are countries where customer based opportunities are beingsupported. Sales to the challenging automotive sector have found success in providingeither comprehensive supply solutions or focussed manufacturing capability. Particular success is being found also with domestic appliance manufacturers inEastern Europe. Trifast continues to seek out customers committed to long term relationships toachieve mutual benefits whilst paying attention to the quality and its earnings. Current Trading and Prospects The current short term focus of our business operations is to deliver the fullyear profit targets. The first half results above and the good start to thesecond half gives us confidence that these profits are achievable. With thedevelopment of our sales teams and our detailed marketing policy the medium tolong term prospects for profitable sales growth are good. FINANCIAL OVERVIEW This period has given us many external challenges including raw material priceincreases, foreign exchange movements and general market uncertainties. However,Trifast has dealt with these challenges along with our own internal issues ofnew sites, changing computer systems and reviewing profitability of salesaccounts, to deliver an increase in net profit (pre goodwill, IFRS2, intangibleamortisation and restructuring costs) of 12.6% at £4.75million. Results Gross profit for the six month period was £17.09million (2006:£17.45million),representing a £0.36million reduction, but an increase in return on sales from25.7% to 27.5%. We continue to focus on new sales and are confident that we canmaintain this improved gross margin level. Profit before income tax in the period was £4.46million (2006:£3.38million),indicating a better business mix to move forward on and an improved net profitpercentage on sales of 2.2% points to 7.2% (or 8.0% at operating profit level).With an effective tax rate of 24.9% (2006:26.3%), profit after tax was£3.35million (2006:£2.49million). Operating profit before financing costs was £4.94million, up 29.7% from lastyear's £3.81million reflecting the higher gross margin and effective overheadcontrol. As a result of our continued review of profitability of key accounts and atoughening market, Group revenue reduced by £5.74million on prior year and£2.07million from the second half of the year ended March 2007 to £62.07million. Allowing for known reductions, the underlying revenue growth was disappointingat 2.7%. The result of a profitability review and our continued focus on costsand efficiency of our sourcing has helped us to continue to improve our grossmargins with an improvement of 1.8% points on the prior year and 1.2% points onthe full year ended 31 March 2007. Europe/USA European/USA revenues which now represent 78.2% (2006:80.8%) have decreased by£6.27m as explained above but the gross margin has increased to 23.7%. Salesrevenue in the UK declined by £5.15million. Positive growth was seen in Holland,Hungary, Poland and Turkey. A large proportion of the UK reduction wasattributable to the movement of accounts to Asia. Asia Our Asian revenues were up on last year at £13.52million, up 3.7%, with lowermargin sales from Taiwan to the USA automotive industry declining but highermargin sales from Singapore and China replacing this. The result being anincrease in gross margin of 3.7% points to 34.8%. Other factors impacting on theincreased margin include more inter-Group sourcing from Asia, increasedconsolidated purchasing and continued improvements to the efficiency ourfactories. China continues to benefit from the movement of global customers tolower cost regions and is now proving to be an excellent place to locate ourAsian sourcing office. One Off Items Our focus on Group efficiencies has resulted in us absorbing a further£0.25million of one-off costs within our results and we should see a similarnumber in the second half. The Group's distribution and administration overheadsnow stand at 19.3% of sales (2006:19.0%), a level at which we are comfortableand feel that there is still some spare capacity for sales growth, thus reducingthe percentage overheads to sales. As indicated at the year end, we had nofurther material restructuring costs, but we continue to set costs against theprovisions made in the prior two years. Debt / Cash Gross debt in the period has been reduced by a further £1.84million to£17.69million since the year ended 31st March 2007 with net debt now at£12.97million at the period end, giving a gearing of 25.0%. Cash generated fromoperations in the period amounted to £2.23m before restructuring costs of£1.11million. This figure is lower than the prior year due to the increasedpurchasing from Asia which results in lower payment terms but higher grossmargins and the tightening up of supply chain controls to reduce customer riskin the supply chain. Working Capital Stock levels have remained consistent to year end, as stock reduction procedurestake effect, however, a number of sites saw an increase in stock levels inpreparation for new accounts commencing delivery in the second half of the year.The team continues to work to stock turn targets and manage the fine linebetween reduction in stock levels and maintenance of customer supply continuity. Debtor management remains a core control and we are pleased to report that wehave had no significant bad debts in the period and our debtor days remainstrong at 65. Creditor days were 63. Net working capital levels were increased in the period due to the decreasedlevel of the accounts payable. This resulted from bringing the recentacquisitions of Serco Ryan and Keba in line with Group policies to ensuresupplier continuity for customers, increased purchases from Asia resulting inlower credit terms but higher gross margins, and lastly an increase in theproduct bought from our own factories again resulting in higher margins. Capital Expenditure As indicated last year, capital expenditure has increased on prior periods at£0.51million (2006:£0.27million), reflecting expenditure on IT Systems andinvestment into both our manufacturing and distribution facilities now that wehave a stable distribution network from which we will grow the business. Net Financing Costs Net financing costs increased to £0.62million of which interest payable amountedto £0.69million (2006:£0.50million), reflecting both the full period of debt atcurrent levels and increased bank base rates over the last 12 months. Earnings Per Share Basic earnings per share in the period was 3.96pence, an increase of 34% on theequivalent period last year. Interim Dividend The Directors have declared an increased interim dividend of 0.93pence perordinary share (2006:0.77pence) reflecting the Board's confidence in the futureof the Group and to further bring the dividend cover in line with our long termgoal of 3 times. The interim dividend will be paid on 17 January 2008 toshareholders on the Register on 30 November 2007, with an ex dividend date of 28November 2007. Responsibility Statement We confirm that to the best of our knowledge: (a) the condensed set of financial statements contained in this document has been prepared in accordance with International Accounting Standard 34 ("IAS 34"), "Interim Financial Reporting" as adopted by the European Union; (b) the Interim management report contained in this document includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules ("DTR") 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and (c) this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein). By order of the Board Steve Auld Stuart LawsonChief Executive Officer Chief Finance Officer21 November 2007 21 November 2007 Cautionary Statement The Interim Management Report has been prepared for the shareholders of theCompany, as a body, and no other persons. Its purpose is to assist shareholdersof the Company to assess the strategies adopted by the Company and the potentialfor those strategies to succeed and for no other purpose. This InterimManagement Report contains forward looking statements that are subject to riskfactors associated with, amongst other things, the economic and businesscircumstances occurring from time to time in the countries, sectors and marketsin which the Group operates. It is believed that the expectations reflected inthese statements are reasonable but they may be affected by a wide range ofvariables which could cause actual results to differ materially from thosecurrently anticipated. No assurances can be given that the forward-lookingstatements in this Interim management report will be realised. Theforward-looking statements reflect the knowledge and information available atthe date of preparation. Description of Business Trifast plc is a leading international manufacturer and distributor ofindustrial fastenings to the assembly industries, with operations in Europe, theAmericas and Asia. Condensed consolidated interim income statementUnaudited results for the six months ended 30 September 2007 Notes Six months Six months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Revenue 62,074 67,807 131,946Cost of Sales (44,985) (50,356) (97,224) ----- ------------ ------------ ----------Gross Profit 17,089 17,451 34,722 Other Operating Income 134 86 220Distribution Expenses (1,394) (1,372) (2,868)--------------------------------------------------------------------------------AdministrativeExpenses before (10,601) (11,508) (22,336)the following items:- Intangible Amortisation (137) (131) (274)- Restructuring Costs - (634) (2,894)- IFRS 2 Charge (153) (83) (213)--------------------------------------------------------------------------------Total AdministrationExpenses (10,891) (12,356) (25,717) ----- ------------ ------------ ----------Operating Profit 4,938 3,809 6,357 ----- ------------ ------------ ---------- Financial Income 71 69 144Financial Expenses (690) (502) (1,175) ----- ------------ ------------ ----------Net Financing costs (619) (433) (1,031) Share of profit ofassociate 141 - 100 ----- ------------ ------------ ----------Profit before Tax 4,460 3,376 5,426 Taxation 3 (1,109) (887) (1,453) ----- ------------ ------------ ----------Profit for thePeriod attributableto equity holdersof the parent 3,351 2,489 3,973 ===== ============ ============ ==========Earnings per Share- Basic 5 3.96p 2.95p 4.70p- Diluted 5 3.94p 2.95p 4.70pDividends 4 0.93p 0.77p 2.43p Condensed consolidated interim statement of recognised income and expenseUnaudited results for the six months ended 30 September 2007 Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 £000 £000 £000Foreign currencytranslation differences (net of tax) (95) (1,378) (1,511)Net (loss)/gain onhedge of net investment in foreign subsidiary (net of tax) (18) 12 14 ------------- ----------- ---------Net Expense RecognisedDirectly in Equity (113) (1,366) (1,497) ------------- ----------- ---------Profit for the Period 3,351 2,489 3,973 ------------- ----------- ---------Total RecognisedIncome for the Periodattributable to equityholders of the parent. 3,238 1,123 2,476 ============= =========== ========= Condensed consolidated interim balance sheetUnaudited results as at 30 September 2007 Notes 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000Non-current assetsProperty, plant andequipment 8,212 8,586 8,324Intangible assets 23,066 24,046 23,316Investment in associate 2,896 - 2,836Deferred tax assets - 573 350 ----- ----------- ----------- ---------Total non-currentassets 34,174 33,205 34,826 ----- ----------- ----------- ---------Current assetsStocks 25,877 24,837 25,611Trade and otherreceivables 27,472 29,678 28,109Cash and cashequivalents 9,724 7,421 6,757 ----- ----------- ----------- ---------Total current assets 63,073 61,936 60,477 ----- ----------- ----------- ---------Total assets 97,247 95,141 95,303 ----- ----------- ----------- --------- Current liabilitiesBank and other loans 7,741 2,893 3,082Trade and other payables 19,919 24,158 24,181Tax payable 981 835 192Dividends payable 1,406 1,248 -Deferred consideration - 2,562 -Provisions 725 166 1,624 ----- ----------- ----------- ---------Total current liabilities 30,772 31,862 29,079 ----- ----------- ----------- --------- Non-current liabilitiesBank and other loans 14,953 14,152 16,394Provisions 900 1,170 1,096Deferred tax liabilities 406 753 509 ----- ----------- ----------- ---------Total non-currentliabilities 16,259 16,075 17,999 ----- ----------- ----------- ---------Total liabilities 47,031 47,937 47,078 ----- ----------- ----------- ---------Net assets 50,216 47,204 48,225 ----- ----------- ----------- --------- EquityShare capital 4,236 4,219 4,236Share premium 12,052 11,874 12,046Reserves (739) (495) (626)Retained earnings 6 34,667 31,606 32,569 ----- ----------- ----------- ---------Total equity 7 50,216 47,204 48,225 ----- ----------- ----------- --------- Condensed consolidated interim statement of cash flowsUnaudited results for the six months ended 30 September 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000Cash Flows from Operating ActivitiesProfit for the Period 3,351 2,489 3,973 ----------- ---------- ---------Adjustments for: Depreciation, amortisation &impairment 703 746 1,445Financial income (71) (69) (144)Financial expense 690 502 1,175 Loss/(gain) on sale of property, plant & equipment (11) 3 (7)Equity settled share based payment expense 153 83 213Profit from associate (141) - (100)Taxation 1,109 887 1,453 ----------- ---------- ---------Operating profit before changes inworking capital and provisions 5,783 4,641 8,008Change in trade andother payables (4,441) 326 72Change in stocks (190) (272) (1,066)Change in trade andother receivables 1,084 (562) 973Change in provisions (1,106) (121) 1,262 ----------- ---------- ---------Cash generated from operations 1,130 4,012 9,249Tax paid (413) (446) (1,668) ----------- ---------- ---------Net Cash from Operating Activities 717 3,566 7,581 ----------- ---------- ---------Cash Flows from Investing ActivitiesAcquisition of subsidiaries (4) (18) (4,761)and investments net of cashAcquisition of property, plant &equipment (511) (269) (683)Dividends received 81 - -Proceeds from sale of property, plant & equipment 20 - 64Interest received 66 71 145 ----------- ---------- ---------Net cash from investing activities (348) (216) (5,235) ----------- ---------- ---------Cash Flows from Financing ActivitiesProceeds from issue of share capital 6 - 190Proceeds from new loan - - 3,799Repayment of long term borrowings (1,518) (1,416) (2,810)Dividends paid - - (1,899)Interest paid (672) (474) (1,090) ----------- ---------- ---------Net Cash from Financing Activities (2,184) (1,890) (1,810) ----------- ---------- ---------Net change in Cash (1,815) 1,460 536and Cash EquivalentsCash and Cash Equivalents at startof period 6,470 6,252 6,252Effect of exchange rate fluctuations on cash held 64 (291) (318) ----------- ---------- ---------Cash and Cash Equivalents at end ofperiod 4,719 7,421 6,470 ----------- ---------- --------- Notes to the condensed consolidated interim financial statementsUnaudited results for the six months ended 30 September 2007 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 2007. These condensed consolidated interim financial statements have been prepared inaccordance with the Disclosure and Transparency Rules of the Financial ServicesAuthority and International Financial Reporting Standard (IFRS) IAS 34: InterimFinancial Reporting as adopted in the EU. They do not include all of theinformation required for full annual financial statements, and should be read inconjunction with the consolidated financial statements of the Group as at andfor the year ended 31 March 2007. 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 2007 are not theCompany's statutory accounts for that financial year and have been extractedfrom the full Annual Report and Accounts for that financial year. Those accountshave been reported on by the company's auditors and delivered to the registrarof companies. The report of the auditors was (i) unqualified, (ii) did notinclude a reference to any matters to which the auditors drew attention by wayof 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/America: includes UK, Norway, Sweden, France, Hungary, Southern Ireland, Holland, Turkey, Los Angeles, Phoenix and MexicoAsia: includes Malaysia, China, Singapore and Taiwan Segment revenue and result under primary reporting format for the 6 months ended30 September 2007 and 2006 are disclosed in the table below: Europe/USA Asia Central Group 2007 2006 2007 2006 2007 2006 2007 2006 £000 £000 £000 £000 £000 £000 £000 £000RevenueRevenue fromexternalcustomers 48,551 54,769 13,523 13,038 - - 62,074 67 807Inter segmentrevenue 2,635 2,689 1,617 2,080 - - 4,252 4,769 ------- ------- ------- ------- ------- ------- ------- --------Total 51,186 57,458 15,140 15,118 - - 66,326 72,576revenue ------- ------- ------- ------- ------- ------- ------- -------- Segment resultsbefore 2,387 2,920 3,669 2,756 (687) (1,019) 5,369 4,657itemslistedbelowIntangibleamortisation (137) (131) - - - - (137) (131)Restructuringcosts - (584) - - - (50) - (634)Equitysettledshare based - - - - (153) (83) (153) (83)payments ------- ------- ------- ------- ------- ------- ------- --------Segment 2,250 2,205 3,669 2,756 (840) (1,152) 5,079 3,809ResultNet financingcosts (619) (433) ------- ------- ------- ------- ------- ------- ------- --------Profit onordinary 4,460 3.376activitiesbeforetaxationTaxation (1,109) (887) ------- ------- ------- ------- ------- ------- ------- -------Profit forthe 3,351 2,489Period ------- ------- ------- ------- ------- ------- ------- -------Segment netassets/(liabil 45,288 44,465 17,516 15,077 (12,588) (12,338) 50,216 47,204ities) ------- ------- ------- ------- ------- ------- ------- ------- 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 2008, adjusted for prior year items as shown below: Six months Six months ended ended 30 September 2007 30 September 2006 £000 £000Current tax on income for the period UK Tax 178 170 Foreign Tax 971 797Adjustments in respect of prior years (40) (80) ------------- ------------ 1,109 887 ============= ============ 4. DividendsThe dividend payable figure of £1.41 million represents the final dividendrecommended at the March 2007 Year End and approved at the AGM in September2007. The Directors declared an interim dividend of 0.93 pence per ordinary share tobe paid on 17 January 2008 to shareholders on the register on 30 November 2007.In accordance with IAS10 no accrual has been made in these interims statements. 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 of84,715,325 (September 2006: 84,380,807; March 2007: 84,459,931). 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 85,069,832 (September 2006: 84,441,564; March 2007:84,584,980). The adjusted diluted earnings per share for the six months ended 30 September2007 is as follows: Six months Six months Year ended ended ended 31 March 2007 30 September 30 September £000 2007 2006 £000 £000Profit for the period 3,351 2,489 3,973Restructuring costs - 634 2,894Tax effect - (190) (698) ------------- ------------- ---------Adjusted Profit 3,351 2,933 6,169 ============= ============= ========= Basic EPS 3.96p 2.95p 4.70pDiluted Basic EPS 3.94p 2.95p 4.70pAdjusted Diluted EPS 3.94p 3.47p 7.29p 6. Retained Earnings Six months Six months Year ended ended ended 31 March 2007 30 September 30 September £000 2007 2006 £000 £000 Opening balance 32,569 30,282 30,282Retained profit for period 3,351 2,489 3,973Equity-settled share 153 83 213based payment transactionsDividends (1,406) (1,248) (1,899) ------------- ------------- ---------Closing Balance 34,667 31,606 32,569 ============= ============= ========= 7. Reconciliation of Movements in Total Equity Six months Six months Year ended ended ended 31 March 30 September 30 September 2007 2007 2006 £000 £000 £000Profit for the financial period 3,351 2,489 3,973Net issue of ordinary shares 6 1 190Equity settled share basedpayment transactions 153 83 213Exchange differences (113) (1,366) (1,497)Dividends (1,406) (1,248) (1,899) ------------- ------------ ----------Net addition to/(reductionin) Total Equity 1,991 (41) 980Opening Total Equity 48,225 47,245 47,245 ------------- ------------ ----------Closing Total Equity 50,216 47,204 48,225 ============= ============ ========== 8. Related party transactions Key management personnel compensationIn addition to their salaries, the Group also provides non-cash benefits todirectors and executive officers, and contributes to a non-contributory definedcontribution pension plan on their behalf. Executive officers also participate in the Group's share option programme.Key management represented by the Main Board, European Board and the Asian Boardwhose personnel compensation including termination payments amounted to £969k(2006: £1,136k). 9. Cash and Cash Equivalents at end of period. Six months Six months Year ended ended ended 31 March 30 September 30 September 2007 2006 2007 £000 £000 £000 Cash and cash equivalents 9,724 7,421 6,757Bank overdraft (5,005) - (287) ------------- ------------ ----------Net cash and cash 4,719 7,421 6,470equivalents ============= ============ ========== Independent review report by KPMG Audit Plc to Trifast plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30September 2007 which comprises the Consolidated Income Statement, theConsolidated Balance Sheet, the Consolidated Statement of Recognised Income andExpense, the Consolidated Cash Flow Statement and the related explanatory notes.We have read the other information contained in the half-yearly financial reportand considered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. 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 Disclosureand Transparency Rules ("the DTR") of the UK's Financial Services Authority("the UK FSA"). Our review has been undertaken so that we might state to thecompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company for our review work, forthis report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the DTR of the UK FSA. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the EU. The condensed set offinancial statements included in this half-yearly financial report has beenprepared in accordance with IAS 34 Interim Financial Reporting as adopted by theEU. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing (UK and Ireland) and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with IAS 34 as adopted by the EU and the DTR ofthe UK FSA. KPMG Audit PlcChartered Accountants1 Forest GateBrighton RoadCrawleyWest Sussex RH11 9PT 20 November 2007 This information is provided by RNS The company news service from the London Stock Exchange