Trifast Regulatory News (TRI)

RNS Number : 6784N

Trifast PLC

16 June 2010

 

 

Issued by Citigate Dewe Rogerson Ltd, Birmingham

Wednesday, 16 June 2010

Embargoed: 7.00am

 

 

Preliminary Results for the year ended 31 March 2010

"New three-phased strategy playing a key role in the TR recovery story"

 

Key points - financial

	H1	H2	Full Year	Full Year
	30.09.09	31.03.10	2010	2009
Continuing Operations
Revenue	£39.85m	£46.09m	£85.94m	£104.90m
Adjusted EBITDA*	£0.59m	£1.54m	£2.13m	£4.55m
Overheads	£9.87m	£10.29m	£20.16m	£23.41m
Adjusted pre-tax profit*	-	£0.92m	£0.92m	£2.54m
Operating cash generation	£2.25m	£1.66m	£3.91m	£5.91m
Net debt	£5.57m	£4.68m	£4.68m	£8.40m

 

* excludes discontinued operations and separately disclosed items

 

Key points - commercial

·; Return to 'sales led' structure

·; By the year-end and ahead of management expectations, all TR business units traded profitably whilst stocks were reduced by £3.8m

·; Recovering optimism coming through from customers and key TR sectors

·; Market positioning substantially improved, both domestically and with multinationals

·; Sales daily run-rate continues to perform well and enquiry levels are higher than for many months. Global sales contracts secured beginning to come on stream and the focus on key sectors is driving further opportunities.

·; Trading in Asia remains buoyant in both manufacturing and in distribution, whilst UK, Europe and the US are beginning to recover

·; Broadening leadership team to drive strategy

 

"The uplift in Q4 in the year being reported has continued into Q1 of the current financial year and we would hope to report further positive news as we go through the period. Our focus will remain sales-led with margin improvement, tight control on costs and working capital, the reduction in debt and the ability to continue to generate cash."

 

"The on-going optimism of customers from within the key sectors we serve which include medical equipment, electronics and automotive, provides a solid foundation for us to remain cautiously optimistic that Trifast is now positioned for recovery."

 

"We anticipate the Group will make further progress during this current financial year as we implement "Phase 2" of our growth strategy and the Directors are confident that TR remains on target with its three-pronged strategy and stated objective to return the business back to stronger levels of profitability."

 

Enquiries:
Trifast plc	Citigate Dewe Rogerson
Malcolm Diamond, Executive Chairman	Fiona Tooley, Director
Mobile: +44 (0)7979 518493 (MMD) or +44 (0)20 7 638 9571 (7.15am-10.00am)	Today: +07785 703523 or +44 (0)20 7638 9571
Jim Barker, Chief Executive	Keith Gabriel, Senior Account Manager
Mobile: + (0)7769 934148	+44 (0)121 362 4035
Office Telephone: +44 (0)1825 747366
Arden Partners plc
Richard Day or Adrian Trimmings
Tel: +44 (0)20 7614 5900

 

Editors Note:

 

LSE 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.

Trifast plc

Review of the year ended 31 March 2010

 

Joint Statement by: Malcolm Diamond, Chairman and Jim Barker, Chief Executive.

 

Introduction

The recovering optimism initially witnessed in our Q3 period by customers followed through into Q4 particularly within some of the sectors we serve. This, together with our implemented 'Phase 1' recovery strategy instigated during the year by the Board has seen the Group improve its market positioning significantly by the end of March 2010. As we finished the year, all 21 business units traded profitably and ahead of management expectations, this underpins our confidence that TR's recovery can be sustained.

 

As we enter the second year since we returned to Trifast in March 2009, it is pleasing to report that our recovery plan is performing ahead of target, however, as a team, we are well aware of the need continually to apply ourselves to a further array of improvement opportunities that have been clearly identified during Phase 1 of our turnaround programme.

 

Key operational targets for year 2010/11 are vendor development, internal warehousing, logistics and freight, transactional sales within the UK and Europe as well as HR management (including the restoration of staff appraisals and management training schedules that had been abandoned in 2007).

 

The Rebuild Strategy

Manufacturing demand for assembly components is increasingly Asia centric and the activity in this region clearly demonstrates that an economic recovery has now arrived in the Far East whilst Europe ticks over at a steadily increasing rate, with the UK manufacturing presence regaining momentum. America is gradually showing more activity, and with Trifast having only a minor market share there, there is increasing opportunity for us to grow the business in this region going forward, especially as we are gaining a good reputation for TR branded products.

 

This demand profile provides a clear and simple pointer to our strategic planning.

 

Historically, multinationals based in the UK employed local staff who wanted the reassurance of locally held component supplies along with local sales and technical support. Being a sales/customer led organisation, during the nineties, TR successfully established a network of branches across the UK to satisfy this demand.

 

The market is different now. Many multinationals, especially in Scotland, have fled to lower cost countries, plus the present day sophistication with freight logistics has drastically reduced - even removed the need to hold stock within a network of localised warehouses, with current best practice creating centralised stocking "Hubs" feeding long distance overnight next-day customer deliveries. We have already benchmarked such systems against successful hub based organisations in Sweden and Denmark which serve their network of Western European mainland customers on a next-day delivery basis from a single stockholding location.

 

However, this strategy has to be combined with retaining knowledgeable sales and technical customer facing personnel placed geographically local to their existing and potential clients.

 

Therefore, this removes stock duplication, reduces incoming freight and packaging costs, warehousing and materials handling costs, simplifies quality control and enhances the scope for vendor management - and all without sacrificing customer care and service reaction speed.

Key points include broadening leadership teams and investing in processes and expertise whilst also continuing to 'work smarter' to further profitability and efficiencies.

 

It is both rare and motivating in the current economic climate to be able to implement a cost rationalisation strategy that reduces indirect costs without the loss of key employees. This is the main element of Phase 2 - our 'rebuild' year.

 

This in turn permits us to return to making capital investment within our Asian manufacturing and distribution facilities.

 

Group Structure

As we have previously indicated, the Board's review of the TR Group business will remain on-going so we not only ensure that we have the core skills to drive the business forward but that they also accurately reflect our commercial position.

 

Whilst in the main, the restructuring of our Asian and Mainland Europe operations is complete, TR's UK programme remains in progress and whilst a number of issues have already been addressed we anticipate further consolidation during the current year: these plans are well advanced and we expect to roll-out the initiatives over coming months.

 

People

The Trifast Board are keen to acknowledge the enthusiasm and willingness of the TR teams around the world; they have all embraced our continuous improvement and "working smarter" philosophy in the key areas of service, supply chain, logistics, pricing and packaging.

 

In what has been one of the toughest two-year periods for the business, on behalf of all stakeholders we thank every one of our people for their hard work and determination to pull this business around and working with the management towards a sustained recovery.

 

Our ability to sustain our continuous improvement momentum is, of course, totally dependent on the commitment, energy and focus of our entire workforce, which to date has been outstanding; however, with many having to accept a four-day working week during much of 2009 plus a pay freeze for the last two years, it would be irresponsible of the Board to fail to attempt at least a partial remedy to this situation during the financial year ending March 2011.

 

Broadening the skills of the Board

As Trifast continue their recovery strategy, a key element is to ensure that the Board is even more operationally focused with Group wide responsibility and authority in order to implement new initiatives quickly and consistently.

 

In order to drive our next phase of growth across our global operations and to ensure continuity and implementation of consistent policies across the Group the Board is making a number of senior appointments at both Board and Senior Management level:-

 

We welcome the following to the Main Board with effect from today (16 June 2010):

·; Mark Belton appointed Group Finance Director

·; Seamus Murphy, Director of Operations, HR and IT

·; Glenda Roberts, Group Sales Director

 

Taking on Senior Posts are:-

·; Roberto Bianchi as Director of Sourcing

·; Keith Gibb as SD TR Branded Products

·; Ian Carlton as Director of Quality

 

The last twelve months has enabled the Main Board to work with the management teams around the business and we expect these appointments to play key roles in driving this business forward in the future.

The Board is mindful of the fact that the above additions stretches the ratio of Independent Directors (NEDs) to Executives beyond recommended Best Practice. It is considered that, with the high level of time commitment and support being received from the two incumbent Independent Directors, the recruitment of a third director is not an immediate business priority. Nevertheless, the Board has agreed to revisit the situation by Q4 of this financial year.

 

Further details of all our people can be found on our website www.trifast.com

 

Financing and Banking Facilities

We believe the banking facilities put in place in the latter part of the year provide the Company with adequate resources to achieve its short term financial objectives and also form an important part of enabling us to deliver our strategy going forward.

 

Our on-going focus remains on working capital and cash management; as a result, debt and stock levels continue to reduce, and at the same time, we have had sufficient scope to allow the Trifast teams to compete effectively.

 

Further details of the Group's banking facilities are contained within the Group Finance Review.

 

Current Trading

The uplift in Q4 in the year being reported has continued into Q1 of the current financial year ending March 2011 and we would hope to report further positive news as we go through the period.

 

Our focus will remain sales-led with margin improvement, whilst also mindful of retaining a tight control on costs and working capital, reducing debt and continuing the ability to generate cash.

 

Whilst a growing number of UK manufacturers are enjoying a rise in demand for their products overseas and in UK markets we have to be mindful of the number of external macro-factors which could slow global and UK economic recovery.

 

This apart, looking at Trifast, as we have already touched on, trading in Asia remains buoyant in both manufacturing and in distribution, whilst UK, Europe and the US are beginning to recover.

 

We are encouraged with sales daily run-rate and enquiry levels are higher than for many months. Global sales contracts successfully secured in the latter part of 2009 are beginning to come on stream and the focus on key sectors is driving further opportunities. This coupled with the on-going optimism of customers from within the key sectors we serve which include medical equipment, electronics and automotive, provides a solid foundation for us to remain cautiously optimistic that Trifast is now positioned for recovery.

 

Summary

We anticipate the Group will make further progress during this current financial year as we implement "Phase 2" of our growth strategy.

 

The Directors are confident that TR remains on target with its three-pronged strategy and stated objective, to return the business back to stronger levels of profitability through lean logistics, targeted sales and marketing with on-going margin improvement.

 

We look forward to updating throughout the coming year of our progress.

Finance Review by Mark Belton, Group Finance Director

 

A review of the year is set out in the Joint Chairman's and CEO Statement.

 

Results for the year

 

The income statement for the year ended 31 March 2010 can be summarised as follows:

 

	H1	H2	Full Year	Full Year
	30.09.09	31.03.10	2010	2009
Continuing Operations
Revenue	£39.85m	£46.09m	£85.94m	£104.90m
Adjusted EBITDA*	£0.59m	£1.54m	£2.13m	£4.55m
Overheads	£9.87m	£10.29m	£20.16m	£23.41m
Adjusted pre-tax profit*	-	£0.92m	£0.92m	£2.54m
Pre-tax profit/(loss) from  continuing operations	£0.18m	£(2.99)m	£(2.81)m	£(11.00)m
Operating cash  generation	£2.25m	£1.66m	£3.91m	£5.91m
Net debt	£5.57m	£4.68m	£4.68m	£8.40m

 

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

 

Revenue

As indicated in our 2010 half-year statement, turnover reached its lowest point in Q4 2009 (January to March 2009). This level remained unchanged for the first half of 2010 providing some degree of stability. Then in H2 2010 we began to see a gradual rise, in particularly Q4 2010 (Jan '10 - Mar '10) as demand increased, reflecting now, what we believe be the underlying usage.

 

Adjusted pre-tax profit operating margins

To stem the losses of H2 2009 (Oct '08 - Mar '09), Management continued to cut costs and improve efficiencies, thus enabling the Group to breakeven during H1 2010. Further rationalisation was undertaken during H2 2010 primarily in the UK (which had been the hardest hit by the recession).

 

As at 31 March 2010 the Board is encouraged in being able to show an underlying profit figure for the Group of £0.92 million (2009: £2.54 million). The underlying profit figure is derived before separately disclosed items as stated below. The Board believe this profit figure provides a better understanding of the Group's underlying performance.

 

Asia was the first area to see demand increase, followed slowly by Mainland Europe, then the UK and USA. This was reflected in the Regional underlying results before Central costs, with Asia showing an adjusted profit of £2.79 million, whilst the UK and the Rest of the World lagged behind with adjusted losses of £0.59 million and £0.34 million respectively.

 

Gross profit margins by the year end stood at 24.4% compared with 25.3% in 2009. This decrease is due to fixed overheads being spread over a lower revenue base. However a clearer picture is shown when comparing to H2 2009, which had a gross profit margin of 22.8%. This shows an increase of 1.6 percentage points reflecting the efficiency savings made during the year.

 

Overheads are down by £3.25 million compared to last year based on the saving initiatives already implemented. If we exclude the foreign exchange cost swing between the years of £1.07 million, the true overhead savings were actually £4.32 million.

The Board continue to remain vigilant and review areas where efficiencies can be made. However, they are mindful that to achieve on-going growth, further investment will be required.

 

Separately disclosed items

The following items are shown separately in the Income Statement and need to be taken into consideration to truly understand the underlying performance of the Group:

 

(i)	Sale of associate	£0.33 million
(ii)	Restructuring programme	(£3.42 million)
(iii)	Expense of changing banking facilities	(£0.52 million)
	Intangible amortisation	(£0.26 million)
	IFRS 2 credit	£0.14 million
		(3.73 million)

 

i) Sale of associate

 

On 24 September 2009, the Company sold its 25% shareholding in the associate undertaking, Techfast Holding Bhd. Techfast is a Malaysian company, listed on the Kuala Lumpur Stock Exchange. The sale generated a one-off gain and a positive cash impact of £0.33 million.

 

ii) Restructuring programme

 

Phase 1 of the restructuring programme has been implemented, totalling £3.42 million in the year. £2.80 million is in relation to closures and downsizing of sites within the UK. £0.62 million refers to redundancy / compensation payments, £0.56 million of which, relates to the UK.

 

The cash effect of the above restructuring costs will total £3.42 million, £0.63 million of which had been incurred during 2010.

 

iii) Expense of changing banking facilities

 

In February 2010 the Group renegotiated its old banking facilities and secured new more flexible banking arrangements. The cost of achieving this was £0.52 million in respect of one-off legal, due diligence, and bank arrangement fees. £0.30 million of the £0.52 million cash outflow was incurred during 2010.

 

Interest and interest cover

Net interest before one-off financing cost has fallen significantly from £0.80 million to £0.15 million. This is due to the Group's lower net debt levels and reduced interest base rates.

 

Net interest cover has increased from 5.7 to 14.2 (defined as EBITDA to net interest, before the one-off separately disclosed items).

 

Going forward, it is anticipated that finance expenses will increase as higher banking charges have been agreed as part of the new banking facilities.

 

To protect against significant interest rate increases, the Company has taken out a 3% fixed cap interest rate hedging instrument for three years.

 

Taxation

Overall there was a tax credit of £0.62 million, ETR 22%; (2009: a tax charge of £0.52 million, ETR 4.7%) in the year. This largely reflects a deferred tax credit as a result of the increase in the UK's deferred tax asset in relation to brought forward losses.

 

All of the 2010 current tax charge related to overseas operations.

Balance Sheet and Funding

At 31 March 2010, total shareholder equity amounted to £40.18 million (2009:£42.47 million) a decrease of 5.4%, reflecting the loss incurred in the period.

 

Net working capital fell by £3.58 million, largely as a result of the Group's reduction in gross stock levels in order in generate cash.

 

As a result of the Group's concerted effort to generate cash, the Board is pleased to show that Net Debt reduced significantly from £8.40 million in 2009 to £4.68 million as at 31 March 2010.

 

In February 2010 the Group's banking facilities were changed in order to provide more security and flexibility. The existing Gross Debt of £14.82 million was repaid and the overdraft facility of £6.00 million cancelled; replacing these were a 3 year Asset Based Lending facility of £13.50 million (as at 31 March 2010, £7.22 million was utilised), a bridging loan of £2.00 million and a term loan of £4.00 million (as at 31 March 2010 the amount outstanding was £4.88 million).

 

Trading forecasts show that these new facilities provide sufficient headroom up until the date of renewal. In addition current forecasts show that the Group will retain liquidity headroom beyond this date, however the Board are keen to renegotiate terms of facilities with the Bank to provide the Group with more security and flexibility for the longer-term.

 

As a result of the above changes, Gross debt at 31 March 2010 was £12.10 million a reduction of £2.72 million. Overall gearing is down to 12% (2009: 20%) reflecting the reduced Net Debt position.

 

The Group's net cash balances were £7.42 million (2009: £6.42 million) of which £7.81 millionwas held in foreign currencies (2009: £6.42 million). As a Group, our policy is, where possible to hold the same local currency as the respective local entity. We monitor exchange rates and buy and sell currencies in order to minimise our open exposure to foreign exchange rates but remain mindful of operational requirements. We do not speculate on rates.

 

Cash Flow

Cash generation is a continual key objective of the Group. Stock levels have been driven down to an optimum level, but without being detrimental to the business.

 

Cash generated from operations was £3.91million before tax (2009: £5.91 million). However, during the year, cash paid out on one-off separately disclosed items was £2.61 million, which reflects that the underlying cash generation was £6.52 million and the true cash generated from working capital was £7.80 million.

 

Debtor days remain strong at 69 (2009: 70) and bad debts in the period were £0.07 million, which is felt acceptable given the current economic climate.

 

Capital expenditure in the period was modest at £0.22 million. Although conservation of cash is still extremely important, the Board will not stifle Capex plans that will expand the business and lead to future cash and profit generation.

 

Dividend

No dividend payment is being proposed in respect of the year ended 31 March 2010.

 

As already indicated, the restoration of a yield is an important issue and it is the Directors intention to redress the situation as soon as practical.

Consolidated income statement

for year ended 31 March 2010

 

 

 

	Note	2010	2009
		£000	£000
Continuing operations
Revenue	3	85,935	104,901
Cost of sales		(64,927)	(78,312)
Gross profit		21,008	26,589
Other operating income before separately disclosed items:		218	156
Sale of associate	2	332	-
Total other operating income		550	156
Distribution expenses		(2,146)	(2,814)
Administrative expenses before separately disclosed items:		(18,015)	(20,593)
IFRS2 credit / (charge)		143	(55)
Intangible amortisation	2, 7	(261)	(266)
Goodwill impairment	2, 7	-	(8,303)
Settlement claim	2	-	(555)
Restructuring costs	2	(3,420)	(3,701)
Impairment of associate	2	-	(659)
Total administrative expenses		(21,553)	(34,132)
Operating loss	4	(2,141)	(10,201)
Financial income		96	99
Financial expenses before separately disclosed items:		(246)	(896)
Expense of changing banking facilities		(517)	-
Total financial expenses		(763)	(896)
Net financing costs		(667)	(797)
Loss before tax	2, 3	(2,808)	(10,998)
Taxation	5	621	(520)
Loss from continuing operations  (attributable to equity shareholders of the Parent Company)		(2,187)	(11,518)
Discontinued operations	3, 6
Loss from discontinued operations (net of income tax)		-	(3,792)
Loss for the period		(2,187)	(15,310)
Loss per share (total)
Basic	12	(2.57p)	(17.98p)
Diluted	12	(2.57p)	(17.98p)
Loss per share (continuing operations)
Basic	12	(2.57p)	(13.53p)
Diluted	12	(2.57p)	(13.53p)
Dividends
Interim paid 2010 - nil (2009: 0.93p)	11	-	793

Statements of comprehensive income for year ended 31 March 2010

	Group		Company
	2010	2009	2010	2009
	£000	£000	£000	£000
(Loss)/profit for the year	(2,187)	(15,310)	4,530	(8,900)
Other comprehensive income:
Foreign currency translation differences	42	7,135	-	-
Net (loss)/gain on hedge of net investment in foreign subsidiary	(1)	7	-	-
Other comprehensive income recognised directly in equity net  of income tax	41	7,142	-	-
Total comprehensive (expense)/income recognised for the  Year (attributable to equity shareholders of the Parent Company)	(2,146)	(8,168)	4,530	(8,900)

 

 

Consolidated statement of changes in equity for year ended 31 March 2010

	Share Capital	Share Premium	Translation Reserve	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
Balance at 1 April 2009	4,262	12,167	8,958	17,083	42,470
Total comprehensive income for the year:
Loss for the year	-	-	-	(2,187)	(2,187)
Other comprehensive income:
Foreign currency translation differences	-	-	42	-	42
Net loss on hedge of net investment in foreign subsidiary	-	-	(1)	-	(1)
Total other comprehensive income	-	-	41	-	41
Total comprehensive income/(expense)  recognised for the year	-	-	41	(2,187)	(2,146)
Transactions with owners, recorded directly in equity
Share based payment transactions	-	-	-	(143)	(143)
Total transactions with owners	-	-	-	(143)	(143)
Balance at 31 March 2010	4,262	12,167	8,999	14,753	40,181

 

Consolidated statement of changes in equity for year ended 31 March 2009

	Share Capital	Share Premium	Translation Reserve	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
Balance at 1 April 2008	4,248	12,167	1,816	34,734	52,965
Total comprehensive income for the year:
Loss for the year	-	-	-	(15,310)	(15,310)
Other comprehensive income:
Foreign currency translation differences	-	-	7,135	-	7,135
Net gain on hedge of net investment in foreign  subsidiary	-	-	7	-	7
Total other comprehensive income	-	-	7,142	-	7,142
Total comprehensive income/(expense)  recognised for the year	-	-	7,142	(15,310)	(8,168)
Transactions with owners, recorded directly in equity
Share based payment transactions	14	-	-	41	55
Dividends	-	-	-	(2,382)	(2,382)
Total transactions with owners	14	-	-	(2,341)	(2,327)
Balance at 31 March 2009	4,262	12,167	8,958	17,083	42,470

Company statement of changes in equity for year ended 31 March 2010

	Share Capital	Share Premium	Merger Reserve	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
Balance at 1 April 2009	4,262	12,167	1,521	(6,976)	10,974
Total comprehensive income for the year:
Profit for the year	-	-	-	4,530	4,530
Other comprehensive income:
Foreign currency translation differences	-	-	-	-	-
Net gain/(loss) on hedge of net investment in  foreign subsidiary	-	-	-	-	-
Total other comprehensive income	-	-	-	-	-
Total comprehensive income recognised for  the year	-	-	-	4,530	4,530
Transactions with owners, recorded directly in equity
Share based payment transactions	-	-	-	(143)	(143)
Total transactions with owners	-	-	-	(143)	(143)
Balance at 31 March 2010	4,262	12,167	1,521	(2,589)	15,361

 

 

Company statement of changes in equity for the year ended 31 March 2009

	Share Capital	Share Premium	Merger Reserve	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
Balance at 1 April 2008	4,248	12,167	2,393	3,393	22,201
Total comprehensive income for the year:
Loss for the year	-	-	-	(8,900)	(8,900)
Other comprehensive income:
Foreign currency translation differences	-	-	-	-	-
Net gain/(loss) on hedge of net investment in  foreign subsidiary	-	-	-	-	-
Total other comprehensive income	-	-	-	-	-
Total comprehensive expense recognised for the year	-	-	-	(8,900)	(8,900)
Transactions with owners, recorded directly in  equity
Utilisation of merger reserve	-	-	(872)	872	-
Share based payment transactions	14	-	-	41	55
Dividends	-	-	-	(2,382)	(2,382)
Total transactions with owners	14	-	(872)	(1,469)	(2,327)
Balance at 31 March 2009	4,262	12,167	1,521	(6,976)	10,974

Statements of Financial Position

at 31 March 2010

 

	Note	Group		Company
		2010	2009	2010	2009
		£000	£000	£000	£000
Non-current assets
Property, plant and equipment		7,740	8,606	2,624	2,711
Intangible assets	7	16,358	16,380	-	-
Equity investments		-	-	21,874	21,874
Deferred tax assets		2,046	707	-	-
Total non-current assets		26,144	25,693	24,498	24,585
Current assets
Stocks	8	20,141	23,952	-	-
Trade and other receivables		20,458	18,362	1,397	1,677
Cash and cash equivalents	9	7,420	9,063	2,176	4,019
Total current assets		48,019	51,377	3,573	5,696
Total assets	3	74,163	77,070	28,071	30,281
Current liabilities
Bank overdraft	9	-	2,641	6,524	5,728
Other interest-bearing loans and borrowings	10	12,103	2,547	4,877	1,135
Trade and other payables		16,701	14,838	1,215	1,175
Tax payable		847	8	-	-
Provisions		841	1,166	-	517
Total current liabilities		30,492	21,200	12,616	8,555
Non-current liabilities
Other interest-bearing loans and borrowings	10	-	12,271	-	10,446
Provisions		3,144	781	-	-
Deferred tax liabilities		346	348	94	306
Total non-current liabilities		3,490	13,400	94	10,752
Total liabilities	3	33,982	34,600	12,710	19,307
Net assets		40,181	42,470	15,361	10,974
Equity
Share capital	11	4,262	4,262	4,262	4,262
Share premium		12,167	12,167	12,167	12,167
Reserves		8,999	8,958	1,521	1,521
Retained earnings		14,753	17,083	(2,589)	(6,976)
Total equity		40,181	42,470	15,361	10,974

Statements of cash flows

for year ended 31 March 2010

 

 

	Note	Group		Company
		2010	2009	2010	2009
		£000	£000	£000	£000
Cash flows from operating activities
(Loss)/profit for the year		(2,187)	(15,310)	4,530	(8,900)
Adjustments for:
Depreciation, amortisation and impairment		1,329	9,780	87	9,419
Financial income		(96)	(99)	(2)	(51)
Financial expense		763	896	520	678
Loss on sale of property, plant and equipment and investments		10	436	-	-
Loss on disposal of subsidiary	6	-	2,950	-	-
Dividends received		-	-	(5,289)	(4,679)
Equity settled share based payment (credit)/charge		(143)	55	(105)	(32)
Gain on sale of associate		(332)	-	(332)	-
Impairment of associate		-	659	-	500
Taxation		(621)	585	(212)	136
Operating cash outflow before changes in working  capital and provisions		(1,277)	(48)	(803)	(2,929)
Change in trade and other receivables		(1,983)	8,078	242	(356)
Change in stocks		3,748	2,746	-	-
Change in trade and other payables		1,599	(5,847)	113	373
Change in provisions		1,821	976	(667)	508
Cash generated from/(used) in the  operations		3,908	5,905	(1,115)	(2,404)
Tax recovered/(paid)		119	(2,270)	-	-
Net cash from operating activities		4,027	3,635	(1,115)	(2,404)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		13	41	-	-
Interest received		97	103	3	51
Proceeds from sale of associate		332	-	332	-
Disposal of discontinued operation, net of cash disposed of	6	-	(104)	-	(573)
Acquisition of property, plant and equipment		(220)	(730)	-	(29)
Dividends received		-	-	5,289	4,679
Net cash from investing activities		222	(690)	5,624	4,128
Cash flows from financing activities
Proceeds from new loan	10	12,103	-	4,877	-
Repayment of long term borrowings		(14,818)	(2,732)	(11,581)	(1,506)
Dividends paid	11	-	(2,382)	-	(2,382)
Interest paid		(620)	(1,030)	(444)	(799)
Net cash from financing activities		(3,335)	(6,144)	(7,148)	(4,687)
Net change in cash and cash equivalents		914	(3,199)	(2,639)	(2,963)
Cash and cash equivalents at 1 April		6,422	8,247	(1,709)	1,254
Effect of exchange rate fluctuations on cash held		84	1,374	-	-
Cash and cash equivalents at 31 March	9	7,420	6,422	(4,348)	(1,709)

Notes

1 Basis of preparation

The financial statements are prepared in Sterling, rounded to the nearest thousand. They are prepared on the historical cost basis with the exception of certain items which are measured at fair value as disclosed in the accounting policies below.

 

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects current and future periods.

 

Judgements made by management in the application of IFRS that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the Report & Accounts.

 

A review of the business activity and future prospects of the Group are covered in the Chairman's and CEO's Statement and the Directors' Business Review. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Finance Review. Detailed information regarding the Group's current facility levels, liquidity risk and maturity dates are provided in the Report & Accounts.

 

Current trading and forecasts show that the Group will continue to be profitable and generate cash. The banking facilities have been secured and covenants and facilities are in place to provide appropriate headroom against our forecasts.

 

The asset backed lending facility (max £13.50 million) has a three year term. The Group term loan of £4.00m is due to be repaid by 31 December 2010. Current forecasts show that the Group has sufficient liquidity headroom to continue to operate within its facilities beyond this date. However, management remain keen to renegotiate term facilities with the bank to provide the Group with more secure and flexible facilities for the longer term.

 

As a result, the Group has held a number of positive discussions with its bankers about its future borrowing needs and no matters have been drawn to its attention to suggest that renewal, if required, may not be forthcoming on acceptable terms.

 

Considering the Directors understanding of the bank's current position and in conjunction with its current forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

2 Underlying profit and separately disclosed items

	Note	2010	2009
		£000	£000
Underlying profit before tax		915	2,541
Separately disclosed items within other operating income:
Sale of associate		332	-
Separately disclosed items within administrative expenses
Goodwill impairments	7	-	(8,303)
Restructuring costs		(3,420)	(3,701)
Impairment of associate		-	(659)
Settlement claim		-	(555)
Intangible amortisation	7	(261)	(266)
IFRS 2 share based payment credit/(charge)		143	(55)
Separately disclosed items within financial expenses
Expense of changing banking facilities		(517)	-
Loss from continuing operations before tax		(2,808)	(10,998)

 

2010 restructuring costs of £3.42 million include £2.80 million in relation to closures and downsizing of sites within the UK. The remaining £0.62 million refers to redundancy/compensation, £0.56 million of which relates to our UK operations.

 

The sale of the associate related to the sale of our 25% shareholding in the associate undertaking Techfast Holding Bhd, a company listed on the Kuala Lumpur Stock Exchange. This resulted in a net profit and cash inflow of £0.33 million.

 

The change in our banking facilities related to one-off fees including legal, due diligence and bank arrangement fees, which in total amounted to £0.52 million.

 

3 Operating segmental analysis

Segment information, as discussed above, 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.

 

Performance is measured based on segment underlying profit before finance costs and income tax as included in the internal management reports that are reviewed by the Chief Operating Decision Maker. This is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within the industry.

 

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.

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, 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, and are consolidated into the three distinct geographical regions, which the Board use to monitor and assess the Group.

 

March 2010	UK	Mainland Europe/ USA	Asia	Common Costs	Total
	£000	£000	£000	£000	£000
Revenue*
Revenue from external customers	46,464	18,027	21,444	-	85,935
Inter segment revenue	1,154	271	2,596	-	4,021
Total revenue	47,618	18,298	24,040	-	89,956
Segment result before separately  disclosed items	(590)	(341)	2,787	(941)	915
Separately disclosed items  (see note 2)					(3,723)
Loss before tax					(2,808)
Specific disclosure items
Depreciation and amortisation	318	49	615	347	1,329
Impairment loss	-	-	-	-	-
Assets and liabilities
Segment assets	27,799	8,608	29,249	8,507	74,163
Segment liabilities	(21,351)	(2,031)	(4,356)	(6,244)	(33,982)

 

March 2009	UK	Mainland Europe/ USA	Asia	Common Costs	Total
	£000	£000	£000	£000	£000
Revenue*
Revenue from external  customers	58,881	20,717	25,303	-	104,901
Inter segment revenue	2,749	369	3,900	-	7,018
Total revenue	61,630	21,086	29,203	-	111,919
Segment result before separately disclosed  items	789	732	3,906	(2,886)	2,541
Separately disclosed items (see note 2)					(13,539)
Loss before tax from continuing operations					(10,998)
Discontinued Turkish business loss  before tax (see note 6)					(3,727)
Loss before tax					(14,725)
Specific disclosure items
Depreciation and amortisation	458	72	588	359	1,477
Impairment loss	-	-	1,503	7,608	9,111
Assets and liabilities
Segment assets	24,487	9,884	30,739	11,960	77,070
Segment liabilities	(11,743)	(2,117)	(6,561)	(14,179)	(34,600)

 

*Of the Asian external revenue, £2.01 million (2009: £3.3 million) was sold into the American market and £4.68 million (2009: £5.2 million) sold into the European market.

 

There were no major customers that represent more than 10% of the revenue.

 

There was no material difference in the UK, Europe Mainland and USA regions between the external revenue based on location of the entities and the location of the customers.

 

Revenue is derived solely from the manufacture and logistical supply of industrial fasteners and category 'C' components.

 

4 Expenses and auditors' remuneration

Included in loss for the year are the following:

	Note	2010	2009
		£000	£000
Depreciation		1,068	1,211
Impairment/amortisation of acquired intangibles	7	261	9,377
Forex loss/(gain)		524	(546)

 

Auditors' remuneration:
Audit of these financial statements	34	34
Audit of financial statements of subsidiaries pursuant to legislation	164	155
Other services relating to taxation	84	120
All other services	47	33

 

5 Taxation

Recognised in the income statement	Note	2010	2009
		£000	£000
Current UK tax expense
Current year		-	755
Double taxation relief		-	(755)
		-	-
Current tax on foreign income for the year		790	1,079
Adjustments for prior years		(76)	(31)
		714	1,048
Total current tax		714	1,048
Deferred tax expense
Origination and reversal of temporary differences		(1,254)	(475)
Adjustments for prior years		(81)	(53)
		(1,335)	(528)
Tax in income statement from continuing operations		(621)	520
Tax from discontinued operations	6	-	65
Total tax in income statement		(621)	585

 

Reconciliation of effective tax rate ("ETR") and tax expense

 

	2010	ETR	2009	ETR
	£000	%	£000	%
Loss for the period	(2,187)		(15,310)
Tax from continuing operations	(621)		520
Tax from discontinued operations	-		65
Loss before tax	(2,808)		(14,725)
Tax using the UK corporation tax rate of  28% (2009: 28%)	(786)	28	(4,123)	28
Goodwill impairment	-	-	2,325	(16)
Impairment of associate	-	-	185	(1)
Tax suffered on dividends	94	(3)	579	(4)
Non-deductible expenses	168	(6)	294	(2)
IFRS2 share option (credit)/charge	(7)	-	164	(1)
Sale of associate	(93)	3	-	-
Deferred tax assets not recognised	343	(12)	616	(4)
Losses from discontinued operations	-	-	1,107	(8)
Different tax rates on overseas earnings	(183)	6	(478)	3
Over provided in prior years	(157)	6	(84)	1
Total tax in income statement	(621)	22	585	(4)

 

6 Discontinued operation

In March 2009, the Group sold the Turkish business (TR Keba Ltd) back to Keba's original management team and this was shown as a discontinued operation as at 31 March 2009.

 

	2009
	£000
Results of discontinued operation
Revenue	2,697
Expenses	(3,474)
Results from operating activities	(777)
Income tax	(65)
Results from operating activities, net of income tax	(842)
Loss on sale of discontinued operation (including goodwill impairment)	(2,950)
Loss for the period	(3,792)
Basic loss per share	(4.45p)
Diluted loss per share	(4.45p)
Cash flows from/(used in) discontinued operation
Net cash used in operating activities	(426)
Net cash from investing activities	387
Net cash used in financing activities	(2)
Net cash used in discontinued operation	(41)
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)

 

7 Intangible assets - Group

	Goodwill	Other	Total
	£000	£000	£000
Cost
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
Balance at 1 April 2009	29,587	2,152	31,739
Effect of movements in foreign exchange	(476)	-	(476)
Balance at 31 March 2010	29,111	2,152	31,263
Amortisation and impairment
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 operations	808	-	808
Effect of movements in foreign exchange	657	-	657
Balance at 31 March 2009	14,404	955	15,359
Balance at 1 April 2009	14,404	955	15,359
Amortisation for the year	-	261	261
Effect of movements in foreign exchange	(715)	-	(715)
Balance at 31 March 2010	13,689	1,216	14,905
Net book value
At 1 April 2008	22,365	1,463	23,828
At 31 March 2009	15,183	1,197	16,380
At 31 March 2010	15,422	936	16,358

 

Other intangible assets are made up of customer relationships acquired as part of the acquisition of Serco Ryan Ltd. The remaining amortisation period of this asset is 3.5 years.

 

There were no impairments made during 2010 (2009: £9.11 million).

 

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

	2010	2009
	£000	£000
Special Fasteners Engineering Co. Ltd (Taiwan) ('SFE')	8,927	8,688
TR Fastenings AB (Sweden)	1,063	1,063
Lancaster Fastener Company Ltd (UK)	1,245	1,245
Serco Ryan Ltd (within TR Fastenings Ltd) (UK)	4,083	4,083
Other	104	104
	15,422	15,183

 

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 cash flows generated from the continuing use of the unit. In this method, the free cash flows after funding internal needs of the subject company are forecast 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 estimated using an assumed stable cash flow figure.

 

The values assigned to the key assumptions represent management's 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
	2010	2009	2010	2009	2010	2009
Pre-tax discount rate	17%	16%	17%	16%	17%	16%
Growth rate	4%	4%	3%	3%	2%	2%

 

Long-term growth rate

Five year management plans are used for the Group's value in use calculations. Long-term growth rate into perpetuity has been determined as the lower of:

 

- the nominal GDP rates for the country of operation; and

 

- the long-term compound annual growth rate in EBITDA in years six to ten estimated by management.

 

Pre-tax risk adjusted discount rate

The discount rate applied to the cash flows of each of the Group's operations is based on the risk free rate for ten year bonds issued by the government in the respective market, adjusted for a risk premium to reflect both the increased risk of investing in equities and the systematic risk of the specific Group operating company.

 

In making this adjustment, inputs required are the equity market risk premium (that is the increased return required over and above a risk free rate by an investor who is investing in the market as a whole) and the risk adjustment, beta, applied to reflect the risk of the specific Group operating company relative to the market as a whole.

 

In determining the risk adjusted discount rate, management has applied an adjustment for the systematic risk to each of the Group's operations determined using an average of the betas of comparable listed fastener distribution and manufacturing companies and, where available and appropriate, across a specific territory. Management has used a forward-looking equity market risk premium that takes into consideration both studies by independent economists, the average equity market risk premium over the past ten years and the market risk premiums typically used by investment banks in evaluating acquisition proposals.

 

The table above discloses pre-tax discount rates of 17% across the three CGU's. This reflects that certain components increase the discount rate in one region more than others, such as higher cost of debt in Asia. However, the slower recovery and automotive exposure in the UK & Sweden means a higher territorial premium has been applied. Overall, the Board is confident the pre-tax adjusted discount rates adequately reflect the circumstances in each region and are in accordance with IAS36.

Sensitivity to changes in assumptions

Other than as disclosed below, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of any cash generating unit to exceed its recoverable amount.

 

The estimated value in use at 31 March 2010 of the Group's operations in Taiwan, UK and Sweden were S$ 0.80 million, £3.02 million and £0.30 million above their respective carrying value and, consequently, any material adverse change in key assumptions would, in isolation, cause an impairment loss to be recognised.

 

The tables below show the key assumptions used in the value in use calculation for Taiwan, UK and Sweden and the amount by which each key assumption must change in isolation in order for the estimated recoverable amount to be equal to its carrying value.

 

	Taiwan	UK	Sweden
Pre-tax adjusted discount rate	18%	19%	18%
Budgeted change in EBITDA	3%	15%	11%
Long term growth rate	3.6%	0.2%	0.3%

 

Other subsidiaries are not included in the calculation as their individual cash generating units show a significant headroom over the goodwill carrying value.

 

The £0.24 million increase in the goodwill of SFE refers to a foreign exchange gain, as the investment is held in Singapore dollars within TR Asia Investment Pte.

 

8 Stocks

	Group
	2010	2009
	£000	£000
Raw materials and consumables	1,625	2,109
Work in progress	749	376
Finished goods and goods for resale	17,767	21,467
	20,141	23,952

 

9 Cash and cash equivalents/bank overdrafts

	Group		Company
	2010	2009	2010	2009
	£000	£000	£000	£000
Cash and cash equivalents per balance sheet	7,420	9,063	2,176	4,019
Bank overdrafts per balance sheet	-	(2,641)	(6,524)	(5,728)
Cash and cash equivalents per cash flow  statements	7,420	6,422	(4,348)	(1,709)

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. More information about the Group and Company's exposure to interest rate and foreign currency risk will be contained in the Report & Accounts.

 

			Current		Non-Current
Initial Loan Value Company	Rate	Maturity	2010	2009	2010	2009
			£000	£000	£000	£000
Bridging loan £2.00m	Base +4.00%	2010	1,210	-	-	-
Term loan £4.00m	Libor +3.75%	2010	3,667	-	-	-
Acquisition SEK 30m	Libor +0.95%	2009	-	64	-	-
Acquisition £15.0m	Libor +0.91%	2012	-	1,071	-	10,446
			4,877	1,135	-	10,446
Other Group
Acquisition $21.78m	Libor +0.80%	2011	-	1,412	-	1,825
Asset based lending £13.50m (maximum)	Base (+2.25% to 2.75%)	2013	7,226	-	-	-
			7,226	1,412	-	1,825
Total Group			12,103	2,547	-	12,271

 

The Company's bridging and terms loans are secured by corporate guarantees and debentures over the Group's UK, Singapore and Swedish entities.

 

The asset based lending facility is secured over the receivables and stock of the Group's UK companies and the property of the Company. The amount available is dependent on the receivables and stock levels at that point in time. Due to the revolving nature of this facility, it is shown as current on the Statement of financial position. However, the facility agreement runs until February 2013.

 

11 Capital and reserves

Capital and reserves - Group and Company

Please refer to Statements of changes in equity that will be contained in the Report & Accounts.

 

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.

 

The merger reserve has arisen under Section 612 Companies Act 2006 and is a non-distributable reserve.

 

Share capital

	Number of Ordinary shares
	2010	2009
In issue at 1 April	85,246,086	84,965,427
Shares issued	-	280,659
In issue at 31 March - fully paid	85,246,086	85,246,086

 

	2010	2009
	£000	£000
Authorised
Ordinary shares of 5p each	10,000	10,000
Allotted, called up and fully paid
Ordinary shares of 5p each	4,262	4,262

 

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:

	2010	2009
	£000	£000
Final paid 2009 - nil p (2008: 1.87p) per qualifying ordinary  share	-	1,589
Interim paid 2010 - nil p (2009: 0.93p) per qualifying  ordinary share	-	793
	-	2,382

 

After the Balance sheet date no final dividend per qualifying ordinary share was proposed by the Directors (2009: nil p).

 

	2010 £000	2009 £000
Final proposed 2010 - nil p, (2009: nil p) per qualifying  ordinary share	-	-

 

12 Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 March 2010 was based on the loss attributable to ordinary shareholders of £2.19 million (2009: loss of £15.31 million) and a weighted average number of ordinary shares outstanding during the year ended 31 March 2010 of 85,246,086 (2009: 85,136,525), calculated as follows:

 

Weighted average number of ordinary shares

	2010	2009
Issued ordinary shares at 1 April	85,246,086	84,965,427
Effect of shares issued	-	171,098
Weighted average number of ordinary shares at 31 March	85,246,086	85,136,525

 

Diluted earnings per share

The calculation of diluted earnings per share at 31 March 2010, was based on loss attributable to ordinary shareholders of £2.19 million (2009: loss of £15.31 million) and a weighted average number of ordinary shares outstanding during the year ended 31 March 2010 of 86,262,349 (2009: 85,136,525), calculated as follows:

 

Weighted average number of ordinary shares (diluted)

	2010	2009
Weighted average number of ordinary shares at 31 March	85,246,086	85,136,525
Effect of share options on issue	1,016,263	-
Weighted average number of ordinary shares (diluted)  at 31 March	86,262,349	85,136,525

 

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)	2010 EPS			2009 EPS
	Earnings £000	Basic and Diluted (1)	Adjusted Diluted (2)	Earnings £000	Basic	Diluted
Loss for the financial year	(2,187)	(2.57p)	(2.54p)	(15,310)	(17.98p)	(17.98p)
Separately disclosed items:
Goodwill & intangible impairment	261	0.31p	0.30p	8,569	10.07p	10.07p
Associate impairment	-	-	-	659	0.77p	0.77p
Sale of associate	(332)	(0.39p)	(0.38p)	-	-	-
Restructuring costs	3,420	4.01p	3.97p	3,701	4.35p	4.35p
Settlement claim	-	-	-	555	0.65p	0.65p
IFRS2 Share option	(143)	(0.17p)	(0.17p)	55	0.06p	0.06p
Tax charge on adjusted items	(958)	(1.12p)	(1.11p)	(1,036)	(1.22p)	(1.22p)
Adjusted	61	0.07p	0.07p	(2,807)	(3.30p)	(3.30p)

 

 

EPS (Continuing operations)	2010 EPS			2009 EPS
	Earnings £000	Basic and Diluted (1)	Adjusted Diluted (2)	Earnings £000	Basic	Diluted
Loss for the financial year	(2,187)	(2.57p)	(2.54p)	(11,518)	(13.53p)	(13.53p)
Separately disclosed items:
Goodwill & intangible impairment	261	0.31p	0.30p	8,569	10.07p	10.07p
Associate impairment	-	-	-	659	0.77p	0.77p
Sale of associate	(332)	(0.39p)	(0.38p)	-	-	-
Restructuring costs	3,420	4.01p	3.97p	3,701	4.35p	4.35p
Settlement claim	-	-	-	555	0.65p	0.65p
IFRS2 Share option	(143)	(0.17p)	(0.17p)	55	0.06p	0.06p
Tax charge on adjusted items	(958)	(1.12p)	(1.11p)	(1,036)	(1.22p)	(1.22p)
Adjusted	61	0.07p	0.07p	985	1.15p	1.15p

 

(1) The diluted loss per share is equal to the basic loss per share of (2.57p) as IFRS does not allow loss per share to be reduced by the effect of share options in issue.

 

(2) However, the adjusted earnings per share does need to reflect the dilutive effect of these share options and is therefore reconciled to non-adjusted loss per share in the tables above.

 

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 does not constitute the Company's statutory accounts for the years ended 31 March 2009 or 2010 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 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 s498(2) or (3) Companies Act 2006.

 

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

14 Annual General Meeting

The Annual General Meeting will be held on 21 September 2010, 12noon 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 2010 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.