Trifast Regulatory News (TRI)

17 Jun 2009 07:02



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Wednesday, 17 June 2009 

Trifast plc

Preliminary Results for year ended 31 March 2009

Appointment of Malcolm Diamond as Executive Chairman and Jim Barker as Chief Executive Officer

Main Board bolstered by appointments of Neil Chapman and Jonathan Shearman as Non-Executive Directors

Adjusted pre-tax profit of £2.54 million, despite prevailing market conditions*

Pre-tax loss from continuing operations: (£11 million)

Continued cash generation from operations of £5.91 million through reduction of working capital

Reduction in gross debt of £1.64 million

No payment of final dividend, in view of lack of visibility and in order to preserve cash

*excluding discontinued operations and takes into account separately disclosed items

"Like many other businesses, the current unprecedented turmoil of both the global financial and economic conditions has provided additional pressure to the business and our teams, but having spent time with our staff it is very clear that we have people with drive, ambition and expertise who are capable of building on the solid foundation and position we have in the marketplace and also exploiting the opportunities that will present themselves when confidence returns and the economic conditions improve.

"The 2009 financial numbers provide the base from where we are rebuilding, and as a Board we intend to implement our revised strategy which will see the business improve profitability and increase shareholder value."

Malcolm Diamond, Executive Chairman, and

Jim Barker, Chief Executive Officer, Trifast plc

FULL STATEMENT ATTACHED

Enquiries:
Trifast plc	Citigate Dewe Rogerson
Malcolm Diamond, Executive Chairman	Fiona Tooley, Director
Jim Barker, Chief Executive	Keith Gabriel, Senior Account Manager
Today: +44 (0)207 638 9571	Today: +44 (0)207 638 9571
Thereafter: +44 (0)1825 747366	Thereafter: +44(0)121 362 4035
Mobile: +44 (0)7979 518493 (MMD)	Mobile: +44 (0)7785 703523 (FMT)
	Mobile: +44 (0)7770 788624 (KG)
Arden Partners plc
Richard Day
Adrian Trimmings
Tel:+44 (0)20 7398 1600

Editors Note:

Ticker: TRI

Group website: www.trifast.com

Trifast's trading business, TR Fastenings is a leading international manufacturer and distributor of industrial fastenings to the assembly industries, with operations in Europe, the Americas and Asia. For more information, please visit www.trfastenings.com.

  -2-

Trifast plc

Preliminary Results for year ended 31 March 2009

Statement by the Chairman, Malcolm Diamond MBE and

Chief Executive, Jim Barker

Introduction

In March we were asked to consider returning to the Group to rebuild its position with the market.

In the short time we have been back we have reviewed the business by visiting nearly all of the operations to meet the people who front the trading operations and it has been clear that the business has been lacking clear leadership and motivation to the 'troops' from the top.

Our first task has been to address the low staff morale, followed swiftly by a broad assessment of current trading and its link with our financial and banking status, and finally to formulate a realistically positive sales strategy designed to carry the Group forward over at least the next three years.

Like many other businesses, the current unprecedented turmoil of both the global financial and economic conditions has provided additional pressure to the business and our teams, but having spent time with our staff it is very clear that we have people with drive, ambition and expertise who are capable of building on the solid foundation and position we have in the marketplace and also exploiting the opportunities that will present themselves when confidence returns and the economic conditions improve.

The 2009 financial numbers provide the base from where we are rebuilding, and as a Board we intend to implement our revised strategy which will see the business improve profitability and increase shareholder value.

2009 Operational Overview

This year under review has been the toughest the business has had in recent years. However, in line with most of the UK and indeed global manufacturing demand from our customers in the automotive, electronics and domestic appliances sectors reduced dramatically in Q3 of the year under review; this has been reflected in the Group revenue, and more importantly, our operating margin, and due to curtailment or delay to customers schedules, the impact on stock.

By cruel coincidence in Q4 the EU imposed anti-dumping duties on steel components from China that ranged up to as much as 105%. Price competition within the fastener industry over the past decade has driven European bulk sourcing to the lower cost sourcing economies, of which China is the most prolific supplier. Consequently most European fastener distributors ramped up their buying quantities from this region last year so as to ensure requirements were received ahead of the due imposition date. This, combined with the significant decline in customer requirements, created overstocking in the sector of which we as a Group were not immune from.

continued…

  -3-

Against a backdrop of weakening markets and lack of visibility, Trifast focused in the second half of the year on wide scale global cost, overhead and stock reduction programmes, the impact of which can be seen under the restructuring costs reflected above in our financial numbers reported. These include compensation costs relating to the termination of the employment of the Finance Director by the former CEO, Steve Auld, who himself, following shareholder representation in March resigned from the Company.

After the Storm - the renewed strategy

Clearly, the resignation of the CEO, Chairman and NED's on 17 March 2009 was not only a dramatic demonstration of the power of shareholder dissatisfaction but an indisputable indicator of what is now expected of us and our teams in delivering a turnaround in both the Group's commercial and financial performance, as well as its future prospects.

At the time of writing, the actions we have taken and being implemented are:

As some of our purchasing aspects are no longer competitive within our fast-changing sector, we have devoted resource to focus on market testing in order to yield alternative suppliers and constrain habit buying

Significantly reduced 1 on 1 reporting and cut the management structure from five levels to three which will allow key personnel to concentrate on adding value to the business

Renewed dynamics injected into converting stock to cash which is now reversing stock trends downwards and this will remain priority during this year

Re-instated the Global sales team under the leadership of Glenda Roberts, TR's former Sales Director with many years of international business experience, with the objective of obtaining new customer business from multi-nationals on a global basis that generates material revenue sufficient to restore momentum from the current flat level. Key sector focus includes IT, Telecoms/base stations, power generation and Automotive in the regions of India and China

TR UK has been hit the hardest by a combination of the economic downturn, an inappropriate sales structure and strategy plus high overheads. As a result, we are merging the two large distribution units in the Midlands, whilst also returning the sales responsibility function to the individual business units and curtail centralised control where there has been a geographic disconnect between customer and quotation ownership

The substantially loss making investment in Turkey has now been disposed of and we are close to finalising the disposal of a further investment for which impairment has been made in the year under review with no negative impact on staff for the financial year ending March 2010

Regular dialogue and communications with all employees has been re-introduced thus ensuring that everyone knows what is happening in and outside the Group - this will help stimulate working partnerships and ultimately be reflected in both our commercial and financial performances

continued…

  -4-

Finally, Trifast has a broad range of capabilities. These are manufacturing, predominantly in Asia, plus worldwide distribution and Vendor-Managed Inventory to Original Equipment Manufacturers ('OEMs') and branded products sales to distributors in the European and US markets

The above combination, although strong, has presented a rather muddled profile to the international market; therefore, this format has been restructured and the Group now operates under three focused divisions providing a clearer and more distinct identity to the business, whilst providing more flexibility in attributing valuations at a later stage of our regeneration programme. These are:

Manufacturing

OEM Distribution and Vendor Managed Inventory

Branded Products

Sales to OEM and MRO - Europe

stock needs to be concentrated into fewer locations 

introduce 'Hub and Spoke' operations in UK and Europe

widen stock range to include products for the building industry and for the MRO sector

introduce an online selling facility for standard products especially in the above sectors

Merchant Sales

sales activities to be concentrated in Lancaster Fasteners who already have a good foothold in this market

appoint distributors to handle proprietary products in the USA

Asia

the basic structure in Asia is sound

introduce into the Singapore operation a very specialist manufacturing unit, capable of producing the highest end components - including those from high specification material

Why implement this business structure?

very few fastener companies are involved in all three major sectors in any significant way. Separating the sectors will help the operations to work more effectively, enable financial markets to understand the businesses more easily and allow for clearer future evaluation

each sector to be headed up by one person 

People

On 17 March 2009, the Board of Trifast plc resigned (with the exception of Geoff Budd) and we were appointed with the backing of the key investors within the business.

Over the short time since that date we have visited all the operations within the Group not only to review the business but also to understand the people within them and the dynamics that they are operating under. Over the next few months we will be working closely with all the teams to renew their confidence in building their operation and exploiting the opportunities that lie ahead.

continued…

  -5-

In addition we have been joined by Neil Chapman on the PLC Board as Senior Independent Non-Executive Director and today, we are pleased to announce our second NED, Jonathan Shearman will join the Board with effect from 1 July 2009. Both gentlemen have solid experience and excellent pedigrees and we believe that they can add value to the executive team and contribute to the on-going development of the TR business.

We would also like to take this opportunity on behalf of everyone at TR to welcome back to work Geoff Budd, who after a serious short illness has returned to the business and is contributing significantly to the new recovery strategy.

It is also important to recognise the tremendous efforts put in by the finance team which, under the excellent stewardship of the Group Financial Controller Mark Belton, who in addition to his additional CFO responsibilities, has supported the operations and produced the Group financial statements being reported. 

All our people are key to this business and on behalf of the Board and all stakeholders we thank them for their dedication and commitment particularly in these tougher times. We look forward to working with everyone over the coming year.

Finance Review 2009

Income Statement

The income statement for the year ended 31 March 2009 in relation to continuing operations can be summarised as follows:

	2009	2008
Revenue*	£104.90m	£120.40m
Adjusted EBITDA*	£4.55m	£11.42m
Adjusted pre-tax profit*	£2.54m	£8.99m
Pre-tax loss from continuing operations	(£11.00m)	£6.18m
Adjusted diluted EPS*	1.15p	7.69p
Dividend	0.93p	2.80p

\* These figures exclude discontinued operations and take into account the separately identifiable items as below, which the management believe provide a better understanding of the Group's underlying performance.

Revenue

Revenue has fallen by 12.9%. This reduction is due to the economic slowdown across all industry sectors and geographic segments. Particularly hard hit has been the automotive sector, which affected our UK, Swedish and Taiwanese operations.

Although the first half of the year saw a slight decrease in year on year revenue of 2.2%, as we started to head further into the recession, the second half of the year began to take the full impact of the economic downturn with like for like revenue dropping by 26.7%. Based on the anticipated drop off in sales, the Board reacted quickly in formulating a restructuring programme, as explained later.

continued…

  -6-

Adjusted pre-tax profit and operating margins

Despite the economic turmoil, the Board are pleased that the Group showed an underlying profit figure of £2.54 million (2008: £8.99 million). This profit figure is arrived at before charging the separately disclosed items shown further below.

Buy/Sell margins remained relatively stable year on year, however, gross profit margins deteriorated from 27.7% to 25.3%, largely as a result of fixed overheads over a lower revenue base, and a greater production variance due to reduced capacity utilisation.

To ensure the Group continued to be profitable the Board proactively reviewed the operations at the end of H1 and formulated a restructuring programme, which is estimated to provide annual savings of circa. £4 million; these savings started to be realised during H2.

Separately disclosed items

The Board believe that the items below need to be taken into consideration to understand the Group's underlying performance:

i. Restructuring programme	£3.70 million
ii. Goodwill impairments	£8.30 million
iii. Associate impairment	£0.66 million
iv. Settlement claim	£0.56 million
v. Intangible amortisation	£0.27 million
vi. IFRS 2 charges	£0.05 million
Total:	£13.54 million

i. Restructuring programme

A full review of our global operational sites was undertaken, which resulted in £1.75 million redundancy/compensation payments worldwide and £1.95 million in relation to site closures, downsizing, and mergers within the UK and USA operations. In particular, within TR UK we have started to merge two large distribution units in the Midlands. Included in the above payments £0.66 million relate to compensation payments to Directors for loss of office as a result of Board changes.

The cash effect of the above restructuring costs is £2.4 million, £1.2 million of which had been expended already by 31 March 09.

ii. Goodwill impairments

The Board has reviewed the carrying value of its investments in conjunction with external valuers and, given the uncertain economic environment, has impaired goodwill for the following entities:- 

Serco Ryan (UK, within TR Fastenings)	£6.20 million
TR Fastenings AB (Sweden)	£0.60 million
Special Fasteners Engineering Co. Ltd (Taiwan)	£1.50 million

continued…

  -7-

In addition, as a result of the sale of TR Keba (Turkey) back to its existing management team, a full impairment of £0.81 million was made. This is shown within discontinued operations

These impairments have no cash impact.

iii. Associate impairment

The Group has a 25% investment in Techfast Holding Bhd, a Company listed on the Kuala Lumpur Stock Exchange. Given the continuing deterioration of Techfast's share price and management's view on its recoverable amount, the Board decided to fully impair the remaining value of the investment in Techfast, of £0.66 million. This impairment has no cash impact.

iv. Settlement claim

This represents a long standing legal claim going back to 2002 in relation to alleged defects in products supplied by Special Fasteners Engineering Ltd ("SFE"), and was detailed in our placing and open offer document for the acquisition of Serco Ryan Ltd in September 2005. The claim against SFE was for approximately US$3.9 million and SFE strongly denied all such liability. However, in order for the issue to be resolved and prevent further legal costs being incurred, a settlement figure was agreed upon in December 2008 without prejudice and without admission of liability whereby SFE would waive its counterclaims (for which it had deferred judgement of US$0.18 million) and would pay US$0.9 million (£0.56 million). Half of this payment will be made in June 2009 and the remainder in December 2009.

Interest and interest cover

The Group has benefited from the decrease in the Bank base rates during the year, and tight control over the Group's cash resources has resulted in a reduction of net interest of 37.6%. Given the reduced level of profits however, net interest cover has dropped from 8.9 to 5.7 (defined as EBITDA to Net interest).

Taxation

Despite the Group making pre-tax losses of £11.00 million, there was still a charge in the year of £0.52 million, ETR (4.7%), largely due to the non tax deductibility of the significant impairments made during the year (2008: a charge of £2.44 million, ETR 39.5%). All of the 2009 tax charge related to overseas operations.

Dividend

The Group paid an interim dividend of 0.93p on 17 January 2009. In view of the lack of visibility and in order to preserve cash for the future investment in the business the Board are not recommending the payment of a final dividend. It is the objective of the Board to return to a progressive dividend policy in the future and the position will be considered as trading improves.

Balance sheet

Group

At 31 March 2009, total shareholder equity amounted to £42.47 million (2008: £52.97 million), a decrease of 19.8%.

This reduction is largely in relation to intangible asset and associate Company impairments and reduced working capital.

continued…

  -8-

The Group has continued to generate cash through reducing its working capital and this is evident in the stock and debtor reductions shown at £1.31 million and £7.00 million respectively.

Company

Given the large restructuring costs, the goodwill and associate impairments, and an investment impairment of £3.17 million in relation to TR Keba, the Company has negative distributable reserves of £6.98 million. In order for the Company to eventually return to its progressive dividend policy, the Board will be taking the necessary steps during 2010 to rectify this position.

Cashflow

Despite the economic downturn, the Group continued to generate cash operationally. It really was a game of two halves. During H1 the adjusted operating profit of £4.13 million was offset by a £3.67 million increase in working capital giving £0.46 million cash generated from operations. The increase in working capital was largely as a result of forward purchasing of stock to protect against raw material price increases in Asia.

During H2, the Group has been able to utilise this stock and slow down future ordering. Management recognise that cash is "King" and the emphasis is on reducing stock further during 2010. In addition, continual tight control over receivables has resulted in a true working capital turnaround for H2 of circa. £7.00 million.

Debtor days remain strong at 70 (2008: 70) and bad debts in the period were of £0.10 million similar to last year, which is felt acceptable given the current climate.

As stated previously under the separately disclosed items, £3.00 million cash outflow has been identified of which £1.20 million has already been incurred during 2009.

Finally, capital expenditure has reduced from £1.11 million in 2008 to £0.73 million in 2009, as the Group is taking a stronger view on its capital expenditure requirements and will only invest if the requirements are for legal, health and safety or for increased cash generation.

Funding

Loan repayments of £2.73 million during the year were offset by a foreign exchange loss on our US$ loan of £1.09 million resulting in a gross debt reduction of £1.64 million to £14.82 million as at 31 March 2009 (2008: £16.46 million).

Net debt remained relatively constant at £8.40 million (2008: £8.21 million) but showed an improvement of £1.31 million in H2 due to the working capital improvements as already discussed. This gives an overall gearing now of 20% (2008: 16%) due to the lower equity base.

At the year end the Group held net cash balances of £6.42 million (2008: £8.25 million). Gross cash balances of £8.90 million (2008: £8.62 million) were held in foreign currencies. As a Group, our policy is to monitor exchange rates and buy and sell currencies in order to minimise our open exposure to foreign exchange risk, but we do not speculate on rates.

continued…

  -9-

Bank Facilities

Currently the Group has a £6.00 million overdraft payable on demand and term loans outstanding of £14.92 million used to fund prior acquisitions. Full details of the maturity dates of the group's borrowings are disclosed in the Report & Accounts. These vary between less than one year and 3.5 years from the balance sheet date.

All the bank loans are secured by an unlimited multilateral guarantee between the main trading companies of the group and are reviewed using quarterly covenants

Although one of the covenants relating to EBITDA will be tested in the next quarter and compliance is dependent on the current trading outlook, management do not forecast a breach will occur in the next 12 months. As a result of the uncertain economic environment and the imminent renewal date in September 2009 of the current overdraft facility, the company has started negotiations with its bankers to put the facilities on to a longer term basis with a new set of covenants with appropriate headroom against the forecasts.

The Board is pleased to report that these discussions have been positive and are at an advanced stage. HSBC have proposed terms for a three year asset backed facility to replace the current overdraft. HSBC have also confirmed their intention to restructure the overall facility with covenants more appropriate to reflect the current levels of trading. Inevitably in the current lending market these facilities will attract a higher cost. However, the directors believe that the added security of term and flexibility offered by the facilities will justify such cost and they are confident of concluding final agreement with the bank within a short period of time.

Discontinued Operations

During March 2009, a review was undertaken as to the commercial and strategic viability of keeping our Turkish operation, TR Keba.

The Board decided that given the economic uncertainty it did not want to continue to fund a loss making subsidiary and entered into negotiations with TR Keba's Management team to sell the Company back to them.

The sale was agreed and resulted in a discontinued loss of £3.79 million, comprising £0.81 million relating to goodwill impairment, £0.84 million relating to TR Keba's operational losses and £2.14 million loss on disposal.

Current Trading

enquiry levels increasing

customer stocks now depleting, leading to order renewals being imminently expected

buy/sell margins generally being preserved

Outlook

Long term banking facilities being finalised with HSBC

Competitive edge purchasing and sourcing resources feeding bottom line

Sales led culture

Cash generative - with a foreseeable restoration of dividends

An organisation transformed from decline to growth with sustained reliability of performance

Open, honest and clear communications with our shareholders on a predictably reliable basis

continued…

  -10-

Summary

the Senior team believe that

TR has experienced and capable teams who now have renewed motivation & focus

leadership from the top to drive the business forward is highly motivated and determined

TR can respond to the challenging environment by exploiting its market position and brand internationally

to re-build margin & operational profitability requires IT and incoming/outgoing supply logistics to be the priority (specialist adviser now identified)

its main responsibility is to re-build shareholder value and respect by restoring confidence in delivering sustainable profit growth

  -11-

Consolidated income statement

for year ended 31 March 2009

	Note	2009	2008
		£000	£000
Revenue	3	104,901	120,397
Cost of sales		(78,312)	(87,039)
Gross profit		26,589	33,358
Other operating income		156	290
Distribution expenses		(2,814)	(2,802)
Administrative expenses before separately disclosed  items:	2	(20,593)	(20,721)
IFRS2 charge		(55)	(303)
Intangible amortisation	2,7	(266)	(273)
Goodwill impairment	2,7	(8,303)	-
Settlement claim	2	(555)	-
Restructuring costs	2	(3,701)	-
Impairment of associate	2	(659)	(2,236)
Total administrative expenses		(34,132)	(23,533)
Operating (loss)/profit	3	(10,201)	7,313
Financial income		99	156
Financial expenses		(896)	(1,433)
Net financing costs		(797)	(1,277)
Share of profit of associate		-	140
(Loss)/profit before tax	2,3	(10,998)	6,176
Taxation	5	(520)	(2,442)
(Loss)/profit from continuing operations (attributable to equity shareholders of the Parent Company)		(11,518)	3,734
Discontinued operations	3,6	(3,792)	(141)
Loss from discontinued operations (net of income tax)
(Loss)/profit for the period		(15,310)	3,593
(Loss)/earnings per share (total)
Basic	12	(17.98p)	4.23p
Diluted	12	(17.98p)	4.22p
(Loss)/earnings per share (continuing operations)
Basic	12	(13.53p)	4.40p
Diluted	12	(13.53p)	4.39p
Dividends
Final proposed 2009 - nil p (2008: 1.87p)	11	-	1,589
Interim paid 2009 - 0.93p (2008: 0.93p)	11	793	790

  -12-

Statements of recognised income and expense

for year ended 31 March 2009

		Group		Company
	Note	2009	2008	2009	2008
		£000	£000	£000	£000
Foreign exchange translation differences		7,135	2,962	-	-
Net gain/(loss) on hedge of net investment in  foreign subsidiary		7	(55)	-	-
Net income recognised directly in equity	11	7,142	2,907	-	-
(Loss)/profit for the year	11	(15,310)	3,593	(8,900)	1,625
Total recognised (expense) / income for  the year	11	(8,168)	6,500	(8,900)	1,625

  -13-

Balance sheets

at 31 March 2009

	Note	Group			Company
		2009	2008		2009	2008
		£000	£000		£000	£000
Non-current assets
Property, plant and equipment		8,606	8,570	2,711		2,775
Intangible assets	7	16,380	23,828	-		4
Investment in associate		-	659	-		500
Equity investments		-	-	21,874		29,110
Deferred tax assets		707	383	-		-
Total non-current assets		25,693	33,440	24,585		32,389
Current assets
Stocks	8	23,952	25,263	-		-
Trade and other receivables		18,362	25,363	1,677		2,877
Cash and cash equivalents	9	9,063	8,618	4,019		5,254
Total current assets		51,377	59,244	5,696		8,131
Total assets	3	77,070	92,684	30,281		40,520
Current liabilities
Bank overdraft	9	2,641	371	5,728		4,000
Other interest-bearing loans and  borrowings	10	2,547	2,590	1,135		1,510
Trade and other payables		14,838	20,135	1,175		1,049
Tax payable		8	1,328	-		-
Provisions		1,166	70	517		9
Total current liabilities		21,200	24,494	8,555		6,568
Non-current liabilities
Other interest-bearing loans and  borrowings	10	12,271	13,865	10,446		11,582
Provisions		781	901	-		-
Deferred tax liabilities		348	459	306		169
Total non-current liabilities		13,400	15,225	10,752		11,751
Total liabilities		34,600	39,719	19,307		18,319
Net assets	3	42,470	52,965	10,974		22,201
Equity attributable to equity  holders of the parent
Share capital	11	4,262	4,248	4,262		4,248
Share premium	11	12,167	12,167	12,167		12,167
Reserves	11	8,958	1,816	1,521		2,393
Retained earnings	11	17,083	34,734	(6,976)		3,393
Total equity	11	42,470	52,965	10,974		22,201

  -14-

Cash flow statements

for year ended 31 March 2009

	Note	Group		Company
		2009	2008	2009	2008
		£000	£000	£000	£000
Cash flows from operating activities
(Loss)/profit for the year		(15,310)	3,593	(8,900)	1,625
Adjustments for:
Depreciation, amortisation and impairment		9,780	1,425	9,419	4,021
Financial income		(99)	(156)	(51)	(301)
Financial expense		896	1,433	678	882
(Gain)/loss on sale of property, plant and  equipment and investments		436	(24)	-	-
Loss on disposal of subsidiary	6	2,950	-	-	-
Dividends received		-	-	(4,679)	(9,373)
Equity settled share-based payment  expenses		55	303	(32)	190
Profit from associate		-	(140)	-	-
Impairment of associate		659	2,236	500	2,236
Taxation		585	2,407	136	(20)
Operating (loss)/profit before changes  in working capital and provisions		(48)	11,077	(2,929)	(740)
Change in trade and other receivables		8,078	3,926	(356)	1,211
Change in stocks		2,746	1,357	-	-
Change in trade and other payables		(5,847)	(4,893)	373	(1,669)
Change in provisions		976	(1,771)	508	(466)
Cash generated from/used in the  operations		5,905	9,696	(2,404)	(1,664)
Tax paid		(2,270)	(1,454)	-	(3)
Net cash from operating activities		3,635	8,242	(2,404)	(1,667)
Cash flows from investing activities
Proceeds from sale of property, plant and  equipment		41	74	-	-
Interest received		103	153	51	301
Acquisition of subsidiary and associates,  net of cash acquired		-	(4)	-	(4,097)
Disposal of discontinued operation, net of  cash disposed of	6	(104)	-	(573)	-
Acquisition of property, plant and  equipment		(730)	(1,113)	(29)	(100)
Dividends received		-	81	4,679	9,373
Net cash from investing activities		(690)	(809)	4,128	5,477
Cash flows from financing activities
Proceeds from the issue of share capital	11	-	133	-	133
Repayment of borrowings		(2,732)	(2,739)	(1,506)	(1,651)
Dividends paid	11	(2,382)	(2,196)	(2,382)	(2,196)
Interest paid		(1,030)	(1,462)	(799)	(911)
Net cash from financing activities		(6,144)	(6,264)	(4,687)	(4,625)
Net change in cash and cash equivalents		(3,199)	1,169	(2,963)	(815)
Cash and cash equivalents at 1 April		8,247	6,470	1,254	2,069
Effect of exchange rate fluctuations on  cash held		1,374	608	-	-
Cash and cash equivalents at 31 March	9	6,422	8,247	(1,709)	1,254

  -15-

Notes

1. Basis of preparation

The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons:

Although one of the covenants relating to EBITDA will be tested in the next quarter and compliance is dependent on the current trading outlook, management do not forecast a breach will occur in the next 12 months. As a result of the uncertain economic environment and the imminent renewal date in September 2009 of the current overdraft facility, the company has started negotiations with its bankers to put the facilities on to a longer term basis with a new set of covenants with appropriate headroom against the forecasts. 

The Board confirms that these discussions have been positive and are at an advanced stage. HSBC have proposed terms for a three year asset backed facility to replace the current overdraft. HSBC have also confirmed their intention to restructure the overall facility with covenants more appropriate to reflect the current levels of trading. The directors are confident of concluding final agreement with the bank within a short period of time.

Detailed information regarding the group's current facility levels, liquidity risk and maturity dates are provided in the Report & Accounts.

2. Underlying profit and separately disclosed items

		2009	2008
	Note	£000	£000
Underlying profit before tax		2,541	8,988
Separately disclosed items within administrative  expenses
Goodwill impairments	7	(8,303)	-
Restructuring costs		(3,701)	-
Impairment of associate		(659)	(2,236)
Settlement claim		(555)	-
Intangible amortisation	7	(266)	(273)
IFRS 2 share based payment charges		(55)	(303)
(Loss)/profit from continuing operations  before tax		(10,998)	6,176

2009 restructuring costs comprise £1.75 million redundancy/compensation payments worldwide and £1.95 million in relation to site closures and downsizing within our UK and USA operations. £0.66 million of the above payments relate to compensation for loss of office for Steve Auld and Stuart Lawson following their departure from the Board on the 17 March and 31 January 2009 respectively.

The Associate Techfast has been impaired by £0.66 million (2008: £2.24 million) to a carrying value of £nil, (2008 £0.50 million) in the Company (Group: £nil, 2008: £0.66 million) to reflect Management's view on the recoverable amount (higher of value in use and fair value less costs to sell) and the continuing deterioration of Techfast's share price.

The settlement claim of £0.56 million relates to a long standing settlement claim going back to 2002 of the litigation by Zurich Insurance (as detailed in our placing and open offer document for the acquisition of Serco Ryan in September 2005).

continued…

  -16-

3. Operating segmental analysis

Segment information, is presented in the consolidated financial statements in respect of the Group's geographical segments. This reflects the Group's management and internal reporting structure and the operating basis on which individual operations are reviewed by the Chief Operating decision maker.

Inter-segment pricing is determined on an arm's length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

continued…

-17-

Geographical operating segments

The Group is comprised of the following main geographical operating segments:

UK
Mainland Europe/USA:	includes Norway, Sweden, Hungary, Southern Ireland, Holland, Turkey (discontinued), Poland, USA, Mexico and Costa Rica
Asia:	includes Malaysia, China, Singapore and Taiwan

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.

continued…

  -19-

2009	UK	Mainland Europe/ USA	Asia	Central	Subtotal	Discontinued Turkish Business	Total
	£000	£000	£000	£000	£000	£000	£000
Cashflows
Operating activities
Segment cashflow	3,355	347	3,019	(2,660)	4,061	(426)	3,635
Investing activities
Segment cashflow	(324)	12	(259)	(402)	(973)	283	(690)
Financing activities
Segment cashflow	(93)	(22)	(73)	(5,954)	(6,142)	(2)	(6,144)
Capital expenditure
Segment cashflow	(345)	(39)	(300)	(29)	(713)	(17)	(730)

2008	UK	Mainland Europe/ USA	Asia	Central	Subtotal	Discontinued Turkish Business	Total
	£000	£000	£000	£000	£000	£000	£000
Cashflows
Operating activities
Segment cashflow	5,184	(791)	3,263	842	8,498	(256)	8,242
Investing activities
Segment cashflow	(327)	(199)	(480)	47	(959)	150	(809)
Financing activities
Segment cashflow	(256)	45	(12)	(5,962)	(6,185)	(79)	(6,264)
Capital expenditure
Segment cashflow	(348)	(76)	(549)	(100)	(1,073)	(40)	(1,113)

4. Expenses and auditors' remuneration

Included in (loss)/profit for the year are the following:

	Note	2009	2008
		£000	£000
Depreciation		1,211	1,152
Impairment/amortisation of acquired intangibles	7	9,377	273
Forex (gains)/loss		(546)	170

Auditors' remuneration:

	2009	2008
	£000	£000
Audit of these financial statements	34	42
Audit of financial statements of subsidiaries pursuant to legislation	155	193
Other services relating to taxation	120	75
All other services	33	27

continued…

  -20-

5. Taxation

Recognised in the income statement	Note	2009	2008
		£000	£000
Current UK tax expense
Current year		755	1,730
Double taxation relief		(755)	(745)
Adjustments for prior years		-	(168)
		-	817
Current tax on foreign income for the year		1,079	1,729
Adjustments for prior years		(31)	(39)
		1,048	1,690
Total current tax		1,048	2,507
Deferred tax expense
Origination and reversal of temporary differences		(475)	(52)
Adjustments for prior years		(53)	(13)
		(528)	(65)
Tax in income statement from continuing operations		520	2,442
Tax from discontinued operations	6	65	(35)
Total tax in income statement		585	2,407

Reconciliation of effective tax rate and tax expense

	2009	ETR	2008	ETR
	£000	%	£000	%
(Loss)/profit for the period	(15,310)		3,593
Total tax from continued operations	520		2,442
Tax from discontinued operations	65		(35)
(Loss)/profit before tax	(14,725)		6,000
Tax using the UK corporation tax rate of 28% (2008: 30%)	(4,123)	28	1,800	30
Goodwill impairment	2,325	(16)
Impairment of associate	185	(1)	671	11
Tax suffered on dividends	579	(4)	856	14
Non-deductible expenses	294	(2)	160	3
Effect of change in tax rate	-	-	(24)	-
IFRS2 share option charge	164	(1)	(11)	-
Associate tax	-	-	(18)	-
Deferred tax assets not recognised	616	(4)	201	3
Losses on discontinued operation	1,107	(8)
Different tax rates on overseas earnings	(478)	3	(1,008)	(17)
Over provided in prior years	(84)	1	(220)	(4)
Total tax in income statement	585	(4)	2,407	40

continued…

  -21-

6. Discontinued operation

In March 2009 the Group sold the Turkish business (TR Keba Ltd) back to Keba's original management team. The segment was not a discontinued operation or classified as held for sale as at 31 March 2008 and the comparative income statement has been re-presented to show the discontinued operation separately from continuing operations.

	2009	2008
	£000	£000
Results of discontinued operation
Revenue	2,697	2,068
Expenses	(3,474)	(2,244)
Results from operating activities	(777)	(176)
Income tax	(65)	35
Results from operating activities, net of income tax	(842)	(141)
Loss on sale of discontinued operation (including goodwill impairment)	(2,950)	-
Loss for the period	(3,792)	(141)
Basic earnings (loss) per share	(4.45p)	(0.17p)
Diluted earnings (loss) per share	(4.45p)	(0.17p)
Cash flows from/(used in) discontinued operation
Net cash used in operating activities	(426)	(256)
Net cash from investing activities	387	150
Net cash used in financing activities	(2)	(79)
Net cash from used in discontinued operation	(41)	(185)
Effect of disposal on the financial position of the Group
Goodwill	808
Property, plant and equipment	65
Stock	1,031
Trade and other receivables	939
Cash and cash equivalents	104
Deferred tax liabilities	(207)
Trade and other payables	210
Net assets and liabilities	2,950
Consideration received, satisfied in cash	-
Cash disposed of	(104)
Net cash outflow	(104)

continued…

  -22-

7. Intangible assets - Group

	Goodwill	Other	Total
	£000	£000	£000
Cost
Balance at 1 April 2007	26,216	2,152	28,368
Additions to existing subsidiaries	4	-	4
Effect of movements in foreign exchange	781	-	781
Balance at 31 March 2008	27,001	2,152	29,153
Balance at 1 April 2008	27,001	2,152	29,153
Effect of movements in foreign exchange	2,586	-	2,586
Balance at 31 March 2009	29,587	2,152	31,739
Amortisation and impairment
Balance at 1 April 2007	4,636	416	5,052
Amortisation for the year	-	273	273
Balance at 31 March 2008	4,636	689	5,325
Balance at 1 April 2008	4,636	689	5,325
Amortisation for the year	-	266	266
Impairment losses on continuing operations	8,303	-	8,303
Impairment loss on discontinued operation	808	-	808
Effect of movements in foreign exchange	657	-	657
Balance at 31 March 2009	14,404	955	15,359
Net book value
At 1 April 2007	21,580	1,736	23,316
At 31 March 2008	22,365	1,463	23,828
At 31 March 2009	15,183	1,197	16,380

£1.20 million (2008: £1.46 million) of other intangible assets is made up of customer relationships acquired as part of the acquisition of Serco Ryan Ltd. The remaining amortisation period of this asset is 4.5 years.

The following cash generating units have significant carrying amounts of goodwill:

	2009	2008
	£000	£000
Special Fasteners Engineering Co. Ltd (Taiwan)	8,688	8,262
TR Fastenings AB (Sweden)	1,063	1,663
Lancaster Fastener Company Ltd	1,245	1,245
Serco Ryan Ltd (within TR Fastenings Ltd)	4,083	10,283
Other	104	912
	15,183	22,365

continued…

  -23-

The Group tests goodwill annually for impairment. The recoverable amount of cash generating units are determined from value in use calculations.

Value in use was determined by discounting the future cashflows generated from the continuing use of the unit. In this method, the cashflow available for distribution after funding internal needs (increased working capital and capital expenditure) of the subject Company are forecasted for a finite period of 5 years based on actual operating results, budgets and economic market research. Beyond the finite period, a terminal (residual) value is developed by capitalising an assumed stabilised cashflow figure.

The values assigned to the key assumptions represent management assessment of future trends in the fastenings market and are based on both external and internal sources of historical data.

The table below highlights the key assumptions

	Taiwan	UK	Sweden
Pre-tax discount rate	16%	16%	16%
Growth rate	4%	3%	2%

The above estimates are particularly sensitive in the following areas:

A change in the growth rate used.

A change in the discount rate used.

A change in future planned revenues.

A change in working capital requirements.

The results of the goodwill review determined that the following cash generating units "CGU's" should be impaired.

Serco Ryan (within TR Fastenings)	£6.20 million impairment
TR Fastenings AB	£0.60 million impairment
Special Fasteners Engineering Co. Ltd (Taiwan)	£1.50 million impairment

The £1.50 million goodwill impairment in SFE was offset in the balance sheet by a £1.93 million foreign exchange gain.

Going forward SFE is to become more integrated and dependant within the Asia Group and therefore for the purposes of reviewing goodwill impairment it is expected that the combined Asian operations will be treated as one CGU in the future.

The change in goodwill under 'other' is a full impairment of £0.81 million on TR Keba resulting from the sale of TR Keba back to its existing management team (see note 7).

8. Stocks

	Group
	2009	2008
	£000	£000
Raw materials and consumables	2,109	1,223
Work in progress	376	612
Finished goods and goods for resale	21,467	23,428
	23,952	25,263

continued…

  -24-

9. Cash and cash equivalents/bank overdrafts

	Group		Company
	2009	2008	2009	2008
	£000	£000	£000	£000
Cash and cash equivalents per balance sheet	9,063	8,618	4,019	5,254
Bank overdrafts per balance sheet	(2,641)	(371)	(5,728)	(4,000)
Cash and cash equivalents per cash flow statements	6,422	8,247	(1,709)	1,254

UK overdrafts are secured by an unlimited multilateral guarantee between the UK trading companies.

10. Other interest-bearing loans and borrowings

This note provides information about the contractual terms of the Group and Company's interest-bearing loans and borrowings.

			Current		Non-Current
Initial Loan Value Company	Rate	Maturity	2009	2008	2009	2008
			£000	£000	£000	£000
Acquisition $3.45m	Libor +0.95%	2008	-	87	-	-
Acquisition £1.95m	Libor +0.90%	2008	-	98	-	-
Acquisition SEK30m	Libor +0.95%	2009	64	254	-	64
Acquisition £15.0m	Libor +0.91%	2012	1,071	1,071	10,446	11,518
			1,135	1,510	10,446	11,582
Other Group
Acquisition $21.78m	Libor +0.80%	2011	1,412	1,018	1,825	2,283
Funding $0.25m	Sibor +2%	2008	-	62	-	-
			1,412	1,080	1,825	2,283
Total Group			2,547	2,590	12,271	13,865

All the bank loans, with the exception of the $0.25 million (funded in Singapore) included in the table above, are secured by an unlimited multilateral guarantee between the main trading companies of the Group.

11. Capital and reserves

Reconciliation of movement in capital and reserves - Group

	Share Capital £000	Share Premium £000	Translation Reserve £000	Retained Earnings £000	Total Equity £000
Balance at 1 April 2007	4,236	12,046	(1,091)	33,034	48,225
Total recognised income and expense	-	-	2,907	3,593	6,500
Issue of shares	12	121	-	-	133
Equity-settled share based payment transactions	-	-	-	303	303
Dividends	-	-	-	(2,196)	(2,196)
Balance at 31 March 2008	4,248	12,167	1,816	34,734	52,965
Balance at 1 April 2008	4,248	12,167	1,816	34,734	52,965
Total recognised income and expense	-	-	7,142	(15,310)	(8,168)
Equity-settled share based payment transactions	14	-	-	41	55
Dividends	-	-	-	(2,382)	(2,382)
Balance at 31 March 2009	4,262	12,167	8,958	17,083	42,470

The cost of issuing new shares under the LTIP was £14,000, which has been offset against the IFRS 2 equity reserve.

The translation reserve comprises all foreign exchange differences arising from the translation of foreign operations, as well as from the translation of liabilities that hedge the Company's net investment in foreign subsidiaries.

continued…

  -25-

Reconciliation of movement in capital and reserves - Company

	Share capital	Share premium	Merger reserve	Retained earnings	Total Equity
	£000	£000	£000	£000	£000
Balance at 1 April 2007	4,236	12,046	2,393	3,774	22,449
Total recognised income and expense	-	-	-	1,625	1,625
Issue of shares	12	121	-	-	133
Equity-settled share based payment transactions	-	-	-	190	190
Dividends	-	-	-	(2,196)	(2,196)
Balance at 31 March 2008	4,248	12,167	2,393	3,393	22,201
Balance at 1 April 2008	4,248	12,167	2,393	3,393	22,201
Total recognised income and expense	-	-	-	(8,900)	(8,900)
Utilisation of merger reserve	-	-	(872)	872	-
Equity-settled share based payment transactions	14	-	-	41	55
Dividends	-	-	-	(2,382)	(2,382)
Balance at 31 March 2009	4,262	12,167	1,521	(6,976)	10,974

The cost of issuing new shares under the LTIP was £14,000 and has been offset against the IFRS 2 equity reserve.

The merger reserve has arisen under Section 131 Companies Act 1985 and is a non-distributable reserve.

The utilisation in the year has arisen due to the impairment of related goodwill balances.

continued…

  -26-

Share capital

	Ordinary shares
In thousands of shares	2009	2008
On issue at 1 April	84,965,427	84,708,035
Shares issued	280,659	257,392
On issue at 31 March - fully paid	85,246,086	84,965,427

	2009	2008
	£000	£000
Authorised
Ordinary shares of 5p each	10,000	5,000
Allotted, called up and fully paid
Ordinary shares of 5p each	4,262	4,248

During the year 280,659 ordinary shares of 5p were issued as a result of LTIP performance criteria being met for Jim Barker and Steven Tan as at end of March 2008. The LTIP cost of this issue was offset against the IFRS 2 equity reserve.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. 

Dividends

During the year the following dividends were declared and paid by the Group:

	2009	2008
	£000	£000
Final paid 2008 - 1.87p, (2008: 1.66p) per qualifying ordinary share	1,589	1,406
Interim paid 2009 - 0.93p (2008: 0.93p) per qualifying ordinary share	793	790
	2,382	2,196

After the balance sheet date no final dividend per qualifying ordinary share was proposed by the Directors (2008: 1.87p).

	2009 £000	2008 £000
Final proposed 2009 - nil p, (2008: 1.87p) per qualifying ordinary share	-	1,589

12. Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 March 2009 was based on the loss attributable to ordinary shareholders of £15.31 million; (2008: profit of £3.59 million) and a weighted average number of ordinary shares outstanding during the year ended 31 March 2009 of 85,136,525 (2008: 84,819,205), calculated as follows:

Weighted average number of ordinary shares

	2009	2008
Issued ordinary shares at 1 April	84,965,427	84,708,035
Effect of shares issued	171,098	111,170
Weighted average number of ordinary shares at 31 March	85,136,525	84,819,205

continued…

  -27-

Diluted earnings per share

The calculation of diluted earnings per share at 31 March 2009 was based on loss attributable to ordinary shareholders of £15.31 million; (2008: profit of £3.59 million) and a weighted average number of ordinary shares outstanding during the year ended 31 March 2009 of 85,136,525 (2008: 85,053,209), calculated as follows:

Weighted average number of ordinary shares (diluted)

	2009	2008
Weighted average number of ordinary shares at 31 March	85,136,525	84,819,205
Effect of share options on issue	-	234,004
Weighted average number of ordinary shares (diluted) at 31 March	85,136,525	85,053,209

The average market value of the Company's shares for the purposes of calculating the dilutive effect of share options was based on quoted market prices for the period that the options were outstanding.

EPS (Total)		2009 EPS			2008 EPS
	Earnings £000	Basic	Diluted	Earnings £000	Basic	Diluted
(Loss)/profit for the financial year	(15,310)	(17.98p)	(17.98p)	3,593	4.23p	4.22p
Separately disclosed items:
Goodwill & intangible impairment	8,569	10.07p	10.07p	273	0.31p	0.31p
Associate impairment	659	0.77p	0.77p	2,236	2.64p	2.63p
Restructuring costs	3,701	4.35p	4.35p	-	-	-
Settlement claim	555	0.65p	0.65p	-	-	-
IFRS Share option	55	0.06p	0.06p	303	0.36p	0.36p
Tax charge on adjusted items	(1,036)	(1.22p)	(1.22p)	-	-	-
Adjusted	(2,807)	(3.30p)	(3.30p)	6,405	7.54p	7.52p

EPS (Continuing operations)		2009 EPS			2008 EPS
	Earnings £000	Basic	Diluted	Earnings £000	Basic	Diluted
(Loss)/profit for the financial year	(11,518)	(13.53p)	(13.53p)	3,734	4.40p	4.39p
Adjustments:
Goodwill & intangible impairment	8,569	10.07p	10.07p	273	0.31p	0.31p
Associate impairment	659	0.77p	0.77p	2,236	2.64p	2.63p
Restructuring costs	3,701	4.35p	4.35p	-	-	-
Settlement claim	555	0.65p	0.65p	-	-	-
IFRS Share option	55	0.06p	0.06p	303	0.36p	0.36p
Tax charge on adjusted items	(1,036)	(1.22p)	(1.22p)	-	-	-
Adjusted	985	1.15p	1.15p	6,546	7.71p	7.69p

The 'Adjusted diluted' earnings per share is detailed in the above tables. In the Directors' opinion, this best reflects the underlying performance of the Group and assists in the comparison with the results of earlier years. (See note 2).

13. The financial information in this announcement which was approved by the Board of Directors and does not constitute the Company's statutory accounts for the years ended 31 March 2008 or 2009 but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under Section 237(2) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with the accounting policies adopted under IFRS.

continued…

  -28-

14. Annual General Meeting

The Annual General Meeting will be held on 23 September 2009, 12.00noon at Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW.

15. This Preliminary statement is not being posted to shareholders. The Report & Accounts for the year ended 31 March 2009 will be posted to shareholders in late July. Further copies will be available from the Company Secretary, Trifast plc, Trifast House, Bellbrook Park, Uckfield, East Sussex, TN22 1QW or on-line www.trifast.com.

ENDFR UNAKRKORNAAR