Trifast Regulatory News (TRI)

Trifast's relentless focus on profit growth and cash generation has been reflected in a strong trading performance; resulting in all KPIs being met at the end of the financial year:

2013 Preliminary results

Year ended

31 March 2013

Year ended

31 March 2012

change

Financial Highlights

Ø Group revenue

£121.54m

£112.51m

+8%

Ø Underlying operating profit*

£7.97m

£5.63m

+42%

Ø Underlying profit before taxation*

£7.25m

£5.00m

+45%

Ø Operating profit

£7.16m

£5.39m

+33%

Ø Profit before tax

£6.44m

£4.76m

+35%

Ø Earnings per share:

-Basic

-Adjusted diluted*

4.39p

4.73p

3.45p

3.76p

+27%

+26%

Ø Dividend - Final proposed

0.80p

0.50p

+60%

Ø Positive cash generation (adjusted)

£7.87m

£4.57m

+72%

Ø Net borrowings reduced

£5.20m

£8.41m

£3.21m

Ø Return on Capital (ROCE)*

12.1%

**11.3%

+80bps

Commercial Highlights

Ø Asia

ü New business, PSEP and healthier demand from existing customers despite loss of transfer contracts to China

Ø Europe

ü Strong gains from automotive focus - diversifying from historic electronics & domestic appliances sectors

Ø United Kingdom

ü Very strong performance - the benefit of 'self - help' initiatives

ü Securing significant new business at improved margins

ü Steady profit growth across all regions including Ireland and encouraging contribution from TR Direct

Ø U.S.A

ü Creditable performance reflecting renewed vigour in the US economy and new multinational contract wins

ü Currently, a small part of TR but strategic to the business' future growth plans

Ø Globally

ü Investment in sourcing, automation, IT analytics and specialist sales engineers

Enquiries:

Trifast plc

LSE Ticker: TRI

TooleyStreet Communications

IR & media relations

Arden Partners plc

Stockbroker & financial adviser

Today : +44 (0) 20 7614 5900

Malcolm Diamond MBE, Executive Chairman

Tel: +44 (0)7979 518493

Fiona Tooley, Director

Today: Tel: +44 (0)7785 703523

or

Adrian Trimmings

Katelin Kennish

Tel: +44 (0)20 7614 5920

Mark Belton, Group Finance Director

+44 (0)7710 177459

Graeme Cull, Consultant

Tel: +44 (0) 7976 228397

Thereafter: +(0) 1825 747630

Office: +44 (0)121 309 0099

The Results presentation is being held at 9.30am (UK time) today - further details can be obtained from TooleyStreet Communications

Tel: +44 (0)7785 703523 or corporate.enquiries@trifast.com

GROUP OPERATIONAL BUSINESS REVIEW

By Executive Chairman, Malcolm Diamond and Jim Barker, Chief Executive

Introduction

Trifast's relentless focus on profit growth and cash generation has been reflected in a strong trading performance; resulting in all KPIs being met at the end of the financial year:

All this has been achieved on a lower percentage cost base and within a global 'mixed' market sector backdrop but more importantly by the TR teams focus on the objectives set before them last year; their hard work and commitment has delivered what we are reporting to shareholders - on behalf of all stakeholders, we congratulate our colleagues around the globe.

The key financials are covered in the Group Finance Director's Report, so we will focus on what we have achieved operationally over the year.

Business Overview

The 2012/13 financial year has seen many operational developments and we summarise the key ones below:

Ø Organic performance of the business

·; Asia

Despite the loss of two previously long-held major component supply European transfer contracts to competing domestic Chinese assemblers, TR Asia has managed to improve overall profitability with a combination of new business wins, the integration of PowerSteel and Electro-Plating Works Sdn. Bhd ("PSEP") and healthier demand from existing customers.

·; Europe /Automotive

The decision taken in 2010 to focus our sales engineering resources on Tier 1 automotive assemblers has proved to be timely for two reasons: the product lifecycle - once designed and approved, (it can take between 12-18 months for the specifying, quoting and testing period prior to production start-up) lasts between five to six years, thus providing a stable and lengthy forward revenue stream; also with the edge having come off peak demand for global electronics products in the past four years, our growth has been sustained by diversifying our customer target sector beyond electronics and domestic appliances. This strategy is no better reflected than by TR Europe with its new automotive contract wins during the year.

·; United Kingdom

TR UK has gained by far the most benefit from the Management team's determined focus on 'self-help'. Operational efficiency gains have taken nearly three years to fully yield the material profit gains through lowering both fixed and variable costs and consolidating and re-negotiating terms with key suppliers.

The new TR Direct next day delivery of standard products has also made an important contribution to this year's substantial profit growth.

·; Ireland

Both our Southern and Northern Ireland operations have enjoyed steady growth in a tough environment, with no sign of their renewed momentum diminishing as we look forward.

·; USA

TR's recently restructured US location is performing well; with the additional global multinational customers secured last year we have recently enlarged our US warehouse facilities with a further unit in Houston.

Although the US operation is currently the smallest contributor to Group revenue, TR Inc. is strategic to our future plans. A high proportion of our globally sited multinationals are headquartered in the USA, where many of the product designers and engineers are based and who all expect to receive fastener specification advice locally 'on the spot'. Once TR is nominated on any component drawing, then buyers in Europe and Asia will be able to source exactly to specification as originally designated by their HQ.

Ø Competitive advantage

Customers continue to benchmark TR against global fastener competitors and maintain their conclusion that we are uniquely positioned to fully satisfy their increasing demands by being able to combine 'low cost/zero-defect philosophy' production via our six Asian based factories. This combines with delivery logistics to over 50 countries along with design/application engineers directly employed by TR purely to resolve assembly challenges for our customers, many of whom, despite being large multinationals, do not carry the overhead of fastener engineers on their payroll.

This 'one - stop shop' capability of TR is further bolstered by its range of TR Branded speciality fasteners for sheet metal and plastics, plus its launch post year end of a comprehensive new range of plastic fasteners, PCB spacers and cable management components.

Although each of TR's 23 location business teams operate to their own P&L targets, the TR attitude of co-operation and cross skilling results in a 'one family' approach with regard to data and inventory sharing together with mutual and enjoined objectives in relation to competitive sourcing and customer quotations. This 'think local - operate global' gives TR the benefit of being swift to market whilst having the resources of an international player.

Ø Expansion and new territories

Whilst the continent of India is an exciting area for expansion, we have been cautious in our adoption of new business and the associated investment that is required; however, in the past year we have taken on additional sales engineers to expand our capabilities at our two business offices there, as we serve our mainly US-owned multinational customers that are now firmly established.

TR Sweden has been one of our successful European teams in gaining new automotive business - despite their earlier loss of the Saab closure as a going concern. This growth has enabled them to secure larger new offices in Stockholm in order to provide adequate scope for further expansion of their business.

Our Automotive team has opened up business for the first time with Russia, and new customers for our TR Branded sheet metal fasteners have emerged in South Korea, again a first for our sales team.

Ø New licences and products

Important new global manufacturing licences have been granted to TR by Phillips Screw Co. and Acument. These licences dramatically extend our range of fastener drive and clinch applications and these will appeal to those requiring more sophisticated engineered applications such as weight reduction and high torque demands. The product licence additions add considerable 'kudos' to our engineering/design capabilities in the eyes of many of our existing customers, whilst attracting new applications from both existing and potential customers.

TR's ever growing plastics portfolio is now one of the most extensive on the market, with more products being added throughout 2013 in response to customer demand. TR's plastics range meets all industry standards and legislation and initially, our focus is on automotive and PCB hardware applications. We are confident that all these developments open up new sectors and opportunities for TR as well as for the customer streamlining production processes; where a fastener is needed to be versatile light and strong, plastic is often the optimal

solution. An example of this is our working relationship with a UK specialist high performance sports car manufacturer - as we all know, the automotive sector is constantly looking to be more economic and environmentally friendly without compromising quality and performance.

Ø Investing for the future

Investment during the year in sophisticated automation is enabling TR to adopt 'zero-defect philosophy' within product quality out of our Singapore and Malaysian factories - with Taiwan targeted for 2014. This is becoming an absolute requirement for high volume assembly customers who use automation or robotics for inserting fasteners, where a wrong dimension on a screw can bring a production line to a complete halt for anything up to an hour.

Our Taiwanese business is multi-site with two factories, one warehouse and a separate sales office. Post year-end, a cost model has been commissioned to establish a new site with an all-purpose new building to accommodate all the business functions under one roof. Any such move would deliver the double benefit of improved efficiency and more production capacity. We look forward to updating Shareholders on progress in due course.

Authorisation has been given for TR Sweden to upgrade its computer system in order to facilitate real time electronic data interchange with our automotive customers. The new upgrade is based on the same basic architecture as their existing software, and will be conducted by the same provider - thus minimising delays and disruption. This new IT system will serve as a teaching/training module for other TR business teams in order to test thoroughly prior to any subsequent upgrades on other TR Europe sites.

Management & People - 'Training & adding new skills'

Last year, as part of our operational restructuring we introduced a 'people, performance & responsibilities' programme across the Company and at all levels. As a direct result of what we term, TR's 'value assessment' model (aligned to strategy and objectives) we are utilising skills and knowledge more effectively which, in turn, is further shaping TR's on-going Senior Executive development and succession planning programmes. The first three well-deserved appointments to the TR Operating Board have been announced recently - these are in recognition of hard work and skills 'developed and channelled' effectively under the Senior Executive programme - suffice to say, all three candidates possess leadership qualities and specialisms that will drive TR business units to the next level.

Through this initiative also, we have been able to more effectively deploy resources within existing systems and structure; this streamlining and realignment of responsibilities within the business is already having an impact and formed part of 'self-help' objectives set as part of the Board's strategy plan put in place at the start of 2012.

The Apprenticeship scheme, first introduced in 2011 is going from strength to strength - we have been successful in attracting enthusiastic young school leavers keen to join TR, and we expect to gain greatly from their contribution in the future: the roll-out of the scheme across the UK businesses is also starting to gain momentum.

At Board level, we have seen change too: Seamus Murphy, having successfully completed his key strategic projects (set within the lead team's first three-year plan initiated in 2009) stepped down from the Main Board at the end of January 2013 and has since left the business. Seamus joined us in 2005 following the acquisition of Serco Ryan; the Directors acknowledge his input and service, we wish him and his family well in the future.

Post the year end, Scott Mac Meekin joined the business as an Independent Non-Executive Director. Scott brings a wealth of experience gained over a 20-year career within the US and Asian fastener industry; his additional skills complement both the current Executive and Non-Executive Directors' skills base and provide extra impetus to our expansion aspirations.

Finally, we would like to acknowledge every colleague from around the world, all of them have made a difference and worked hard together to achieve another year of solid growth; without their dedication stakeholders would not be sharing in this year's trading achievement. Jim and I together with our fellow Board colleagues look forward to working with everyone over the coming year, to continue in the success.

Celebrating 40 years

On 1 June 2013, Trifast celebrated its 40th Anniversary since being founded as TR Fastenings Ltd in 1973. TR has over the years played a major part in the transformation of how high volume/variety small lower value assembly components are delivered, creating 'just in time' & 'supply chain' management logistics programmes to its customer base initially from one office in Sussex, and then driven by multinational customer demands, going on to establish an international footprint now serving over 50 countries, delivering over 150 million components worldwide each day by a highly motivated network of TR business teams. Nearly 30% of the Group's revenue now derives from TR's own Asian manufacturing base.

A number of those that joined the business at its humble beginnings remain with us to this day including both of us - new "young blood" has since joined us along the way and together, we have all experienced and seen many developments and challenges over the years. However, through our desire to 'Innovate and Serve,' TR today is recognised as a driving force within the industry, at the cutting edge of fastener technology through its investment in the research & development, new products and services combined with the TR culture.

Objectives, strategy and opportunities

As Trifast Directors, we are particularly pleased with the jump in profitability between March 2012 and March 2013. We remain committed to the pursuit of shareholder value, and as part of this, see lots of reasons that point to further 'bottom-line' growth for the foreseeable future.

This will be achieved by, as always, a combination of activities. There will be no end to our continual pursuit of operational efficiency improvements, even though, as each year passes there will naturally be an element of diminishing materiality in the size of profit gains. This is why we are now financially in a position to consider prudent new investments in automation, faster more analytical computer systems and additional sales engineers for both automotive and electronics sectors on a global basis.

As stakeholders know, the global market for fasteners and related components for assembly is vast, and in terms of penetration, TR's revenue is barely measurable; however, even though the market remains fragmented there is an opportunity for smaller more flexible players like ourselves to be "strategic consolidators".

Existing shareholders are aware that as a team we are cautious in our approach to acquisitions, with our demand for low debt/high margin/loyal on-going local management and cash generative businesses in a highly fragmented market, where TR's business model of combining low cost manufacturing with global logistics distribution supported by design and application engineering is relatively unique. Consequently, our networking is constantly in search mode being sustained by our knowledge that, like PSEP the business acquired December 2011 (which today is fully and happily integrated into TR) target companies that meet these criteria certainly do exist.

Meanwhile, our highly effective sales and marketing teams continue to open up new revenue opportunities - both geographically and with additional products and customer sectors as they strive to meet our ever ambitious revenue and profit targets.

Trading Outlook

The Board remain very optimistic that the phrase a 'World of Opportunity' initiated last year is gathering momentum as the Group's structure and focus enables further organic growth, and when combined with new business and niche expansion opportunities, TR's operational teams feel confident in their ability to deliver strong results through 2013/14, and into the future.

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

Date: 25 June 2013

Continuing operations

Full Year 31 March

2013

Full Year 31 March

2012

% increase

Revenue

UK

£57.26m

£57.78m

(0.9%)

Asia

£38.85m

£31.12m

+24.8%

Europe

£22.91m

£21.20m

+8.1%

USA

£2.52m

£2.41m

+4.6%

Total for the year

£121.54m

£112.51m

+8.0%

Continuing operations

Full Year 31 March

2013

Full Year 31 March

2012

% increase

Underlying operating result

UK

£4.13m

£2.74m

+50.7%

Asia

£4.41m

£3.76m

+17.3%

Europe

£1.11m

£0.52m

+113.5%

USA

£0.30m

£0.10m

+200.0%

Central costs

(£1.98m)

(£1.49m)

(32.9%)

Total before financing costs

£7.97m

£5.63m

+41.6%

Net financing costs

(£0.72m)

(£0.63m)

Total after financing costs

£7.25m

£5.00m

+45.0%

Restructuring costs

(£0.39m)

Intangible amortisation

(£0.33m)

IFRS 2 charge

(£0.09m)

Total

(£0.81m)

Full Year

31 March

2013

Full Year

31 March

2012

Adjusted EBITDA

£9.23m

£6.54m

Adjusted working capital changes

(£1.36m)

(£1.97m)

Adjusted operating cash flow

£7.87m

£4.57m

Cash conversion

85.3%

69.9%

Net capital expenditure

(£0.85m)

(£0.53m)

Taxation paid

(£1.43m)

(£0.68m)

Net interest

(£0.72m)

(£0.63m)

Adjusted free cash flow

£4.87m

£2.73m

Deferred consideration / Consideration on PSEP acquisition

(£1.39m)

(£13.49m)

Proceeds from shares issued

£0.23m

£7.18m

Dividends paid (September 2012)

(£0.53m)

-

Net change in cash and cash equivalents

£3.18m

(£3.58m)

Net debt as at 1 April

(£8.41m)

(£7.14m)

Net cash acquired on PSEP acquisition

-

£2.25m

Effect of exchange rate on net debt

£0.03m

£0.06m

Net debt as at 31 March

(£5.20m)

(£8.41m)

Trifast plc

Consolidated income statement

for the year ended 31 March 2013

Note

2013

2012

£000

£000

Continuing operations

Revenue

3

121,544

112,510

Cost of sales

(89,969)

(83,680)

Gross profit

31,575

28,830

Other operating income

486

209

Distribution expenses

(2,732)

(2,220)

Administrative expenses before separately disclosed items:

2

(21,358)

(21,190)

IFRS2 charge

(91)

(227)

Intangible amortisation

(331)

(281)

Acquisition expenses

-

(391)

Restructuring (costs) / credit

(389)

656

Total administrative expenses

(22,169)

(21,433)

Operating profit

4

7,160

5,386

Financial income

45

42

Financial expenses

(763)

(669)

Net financing costs

(718)

(627)

Profit before tax

2,3

6,442

4,759

Taxation

5

(1,734)

(1,597)

Profit for the period

(attributable to equity shareholders of the Parent Company)

4,708

3,162

Earnings per share (total)

Basic

13

4.39p

3.45p

Diluted

13

4.18p

3.25p

Statements of comprehensive income

for the year ended 31 March 2013

Group

2013

2012

£000

£000

Profit for the year

4,708

3,162

Other comprehensive income:

Foreign currency translation differences

2,167

(27)

Other comprehensive income recognised directly in equity net of income tax

2,167

(27)

Total comprehensive income recognised for the year

(attributable to the equity shareholders of the Parent Company)

6,875

3,135

Trifast plc

Consolidated statement of changes in equity

for the year ended 31 March 2013

Share capital

Share premium

Translation reserve

Retained earnings

Total

equity

£000

£000

£000

£000

£000

Balance at 31 March 2012

5,343

18,263

9,804

20,078

53,488

Total comprehensive income for the year:

Profit for the year

-

-

-

4,708

4,708

Other comprehensive income

Foreign currency translation differences

-

-

2,167

-

2,167

Total other comprehensive income

-

-

2,167

4,708

6,875

Total comprehensive income recognised for the year

-

-

2,167

4,708

6,875

Transactions with owners, recorded directly in equity

Issue of share capital

69

164

-

-

233

Share based payment transactions

-

-

-

360

360

Dividends

-

-

-

(534)

(534)

Total transactions with owners

69

164

-

(174)

59

Balance at 31 March 2013

5,412

18,427

11,971

24,612

60,422

Consolidated statement of changes in equity

for the year ended 31 March 2012

Share capital

Share premium

Translation reserve

Retained earnings

Total

equity

£000

£000

£000

£000

£000

Balance at 31 March 2011

4,262

12,167

9,831

16,585

42,845

Total comprehensive income for the year

Profit for the year

-

-

-

3,162

3,162

Other comprehensive income

Foreign currency translation differences

-

-

(27)

-

(27)

Total other comprehensive income

-

-

(27)

-

(27)

Total comprehensive income recognised for the year

-

-

(27)

3,162

3,135

Transactions with owners, recorded directly in equity

Issue of share capital

1,081

6,096

-

-

7,177

Share based payment transactions

-

-

-

331

331

Total transactions with owners

1,081

6,096

-

331

7,508

Balance at 31 March 2012

5,343

18,263

9,804

20,078

53,488

Company statement of changes in equity

for the year ended 31 March 2013

Share capital

Share premium

Merger reserve

Retained earnings

Total

equity

£000

£000

£000

£000

£000

Balance at 31 March 2012

5,343

18,263

1,521

4,048

29,175

Total comprehensive income for the year:

Loss for the year

-

-

-

(674)

(674)

Total comprehensive loss recognised for the year

-

-

-

(674)

(674)

Transactions with owners, recorded directly in equity

Issue of share capital

69

164

-

-

233

Share based payment transactions

-

-

-

268

268

Dividends

-

-

-

(534)

(534)

Total transactions with owners

69

164

-

(266)

(33)

Balance at 31 March 2013

5,412

18,427

1,521

3,108

28,468

Company statement of changes in equity

for the year ended 31 March 2012

Share capital

Share premium

Merger reserve

Retained earnings

Total

equity

£000

£000

£000

£000

£000

Balance at 31 March 2011

4,262

12,167

1,521

4,532

22,482

Total comprehensive income for the year:

Loss for the year

-

-

-

(799)

(799)

Total comprehensive income recognised for the year

-

-

-

(799)

(799)

Transactions with owners, recorded directly in equity

Issue of share capital

1,081

6,096

-

-

7,177

Share based payment transactions

-

-

-

315

315

Total transactions with owners

1,081

6,096

-

315

7,492

Balance at 31 March 2012

5,343

18,263

1,521

4,048

29,175

Trifast plc

Statements of financial position

at 31 March 2013

Note

Group

 Company

2013

2012

2013

2012

£000

£000

£000

£000

Non-current assets

Property, plant and equipment

13,360

13,292

2,457

2,510

Intangible assets

18,366

17,869

-

-

Equity investments

-

-

33,551

33,551

Deferred tax assets

966

1,256

436

361

Total non-current assets

32,692

32,417

36,444

36,422

Current assets

Stocks

6

30,439

30,517

-

-

Trade and other receivables

7

27,248

26,295

1,422

1,152

Cash and cash equivalents

8

10,750

12,612

154

1,081

Total current assets

68,437

69,424

1,576

2,233

Total assets

3

101,129

101,841

38,020

38,655

Current liabilities

Bank overdraft

8

195

814

6,048

5,042

Other interest-bearing loans and borrowings

9

11,334

14,520

-

999

Trade and other payables

10

21,029

23,035

3,396

3,439

Taxation payable

1,424

1,420

-

-

Provisions

596

1,157

104

-

Total current liabilities

34,578

40,946

9,548

9,480

Non-current liabilities

Other interest-bearing loans and borrowings

9

4,418

5,688

-

-

Provisions

805

882

-

-

Deferred tax liabilities

906

837

4

-

Total non-current liabilities

6,129

7,407

4

-

Total liabilities

3

40,707

48,353

9,552

9,480

Net assets

60,422

53,488

28,468

29,175

Equity

Share capital

5,412

5,343

5,412

5,343

Share premium

18,427

18,263

18,427

18,263

Reserves

11,971

9,804

1,521

1,521

Retained earnings

24,612

20,078

3,108

4,048

Total equity

60,422

53,488

28,468

29,175

Trifast plc

Statement of cash flows

for the year ended 31 March 2013

Note

Group

Company

2013

2012

2013

2012

£000

£000

£000

£000

Cash flows from operating activities

Profit / (loss) for the year

4,708

3,162

(674)

(799)

Adjustments for:

Depreciation, amortisation and impairment

1,586

1,043

56

56

Financial income

(45)

(42)

(36)

(2)

Financial expense

763

669

50

90

Gain on sale of property, plant & equipment and investments

(14)

(14)

-

-

Dividends received

-

-

(1,619)

(874)

Equity settled share-based payment charge

91

227

76

156

Taxation

1,734

1,597

108

(33)

Operating cash inflow / (outflow) before changes in working capital and provisions

8,823

6,642

(2,039)

(1,406)

Change in trade and other receivables

(183)

600

(77)

(135)

Change in stocks

839

(1,663)

-

-

Change in trade and other payables

(969)

331

(43)

206

Change in provisions

(638)

(1,492)

104

-

Cash generated from / (used in) operations

7,872

4,418

(2,055)

(1,335)

Taxation paid

(1,427)

(678)

(178)

(87)

Net cash from / (used in) operating activities

6,445

3,740

(2,233)

(1,422)

Cash flows from investing activities

Proceeds from sale of property, plant & equipment

18

272

-

-

Interest received

45

42

36

2

Acquisition of subsidiary, net of cash acquired

(1,389)

(10,455)

-

-

Increase in subsidiary investment

-

-

-

(5,477)

Acquisition of property, plant & equipment

(869)

(653)

(3)

-

Dividends received

-

-

1,617

874

Net cash (used in) / from investing activities

(2,195)

(10,794)

1,650

(4,601)

Cash flows from financing activities

Proceeds from the issue of share capital

233

7,177

233

7,177

Proceeds from new loan

9

-

7,483

-

-

Repayment of borrowings

9

(4,707)

(2,276)

(999)

(1,334)

Payment of finance lease liabilities

9

(178)

(52)

-

-

Dividends paid

(534)

-

(534)

-

Interest paid

(763)

(669)

(50)

(90)

Net cash (used in) / from financing activities

(5,949)

11,663

(1,350)

5,753

Net change in cash and cash equivalents

(1,699)

4,609

(1,933)

(270)

Cash and cash equivalents at 1 April

8

11,798

7,140

(3,961)

(3,691)

Effect of exchange rate fluctuations on cash held

456

49

-

-

Cash and cash equivalents at 31 March

8

10,555

11,798

(5,894)

(3,961)

Trifast plc

Notes to the Financial Statements

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 2013 Report and 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 2013 Report and Accounts.

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

On 31 December 2012, the Company term loan was fully repaid. On 23 April 2013, the Company secured a three-year £5.00 million multi-currency Revolving Credit Facility. This is in addition to the Asset Based Lending facility, which was increased to a maximum £18.30 million availability. Discussions with our existing Bankers confirm that they have no reason not to continue in the ordinary course of business to provide funding facilities to the Company on the current basis. The Asian term loan of £7.50m (S$15.10m) taken out in December 2011 to facilitate the purchase of PSEP is being repaid quarterly with the final repayment in December 2016. Current forecasts show that the Group has sufficient liquidity and headroom to continue to operate within these facilities.

Considering the 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

2013

2012

£000

£000

Underlying profit before tax

7,253

5,002

Separately disclosed items within administrative expenses

IFRS2 share-based payment charge

(91)

(227)

Intangible amortisation

(331)

(281)

Acquisition expenses

-

(391)

Restructuring (costs) / credit

(389)

656

Profit from continuing operations before tax

6,442

4,759

Of the 2013 restructuring costs £0.19 million refers to redundancy payments and associated costs in relation to compensation for loss of office for Seamus Murphy following his departure from the Board on 31 January 2013. The remaining balance of £0.20 million, are further redundancies within the UK to drive the on-going efficiencies.

The 2012 acquisition expenses were predominantly legal and accountancy fees, in relation to due diligence required in the purchase of the Malaysian company Power Steel & Electro-Plating Works SDN Bhd ('PSEP') in December 2011.

The 2012 restructuring credit of £0.66 million comprised £0.84 million of provision releases in respect of onerous leases that had been surrendered with potential liabilities up to 2017. The costs in relation to this had previously been provided and separately disclosed. This was offset by £0.18 million costs incurred to close one of our sites in the US; the majority of these costs refer to redundancies and an onerous lease.

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 (the Board).

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.

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

UK

Mainland Europe:

includes Norway, Sweden, Hungary, Ireland, Holland and Poland

USA:

includes USA and Mexico

Asia:

includes Malaysia, China, Singapore, Taiwan, Thailand and India

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 four distinct geographical regions, which the Board use to monitor and assess the Group.

March 2013

UK

Mainland Europe

USA

Asia

Common costs

Total

£000

£000

£000

£000

£000

£000

Revenue

Revenue from external customers

57,258

22,912

2,519

38,855

-

121,544

Inter segment revenue

1,672

564

104

4,253

-

6,593

Total revenue

58,930

23,476

2,623

43,108

-

128,137

Underlying operating result

4,135

1,108

295

4,411

(1,978)

7,971

Net financing costs

(471)

(1)

(1)

(195)

(50)

(718)

Underlying segment result

3,664

1,107

294

4,216

(2,028)

7,253

Separately disclosed items (note 2)

(811)

Profit before tax

6,442

Specific disclosure items

Depreciation and amortisation

140

49

15

1,065

317

1,586

Assets and liabilities

Segment assets

34,071

10,448

1,362

51,401

3,847

101,129

Segment liabilities

(22,925)

(2,817)

(150)

(13,152)

(1,663)

(40,707)

March 2012

UK

Mainland Europe

USA

Asia

Common costs

Total

£000

£000

£000

£000

£000

£000

Revenue

Revenue from external customers

57,782

21,197

2,409

31,122

-

112,510

Inter segment revenue

1,489

514

35

4,052

-

6,090

Total revenue

59,271

21,711

2,444

35,174

-

118,600

Underlying operating result

2,735

522

97

3,764

(1,489)

5,629

Net financing costs

(487)

-

(1)

(51)

(88)

(627)

Underlying segment result

2,248

522

96

3,713

(1,577)

5,002

Separately disclosed items (note 2)

(243)

Profit before tax

4,759

Specific disclosure items

Depreciation and amortisation

177

38

18

645

318

1,196

Assets and liabilities

Segment assets

35,291

9,229

1,001

50,327

5,993

101,841

Segment liabilities

(26,396)

(3,072)

(255)

(16,048)

(2,582)

(48,353)

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. Of the Asian external revenue, £2.66 million (2012: £2.73 million) was sold into the American market and £5.64 million (2012: £4.81 million) sold into the European market.

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

4. Expenses and auditor's remuneration

Included in profit for the year are the following:

2013

2012

£000

£000

Depreciation

1,255

915

Amortisation of acquired intangibles

331

281

Operating lease expense

1,095

1,137

Foreign exchange loss

250

249

Auditors remuneration

Audit of these financial statements

40

39

Audit of financial statements of subsidiaries pursuant to legislation

147

140

Services in relation to the acquisition of PSEP

-

355

Other services relating to taxation

36

38

Other services supplied pursuant to such legislation

5

5

5. Taxation

2013

2012

£000

£000

Recognised in the income statement

Current UK tax expense

Current year

5

-

Double taxation relief

-

-

5

-

Current tax on foreign income for the year

1,192

1,030

Adjustments for prior years

114

(60)

1,306

970