Balance sheet and funding
At 31 March 2013, total Shareholder equity amounted to £60.42 million (2012: £53.49m), an increase of 13.0% reflecting the Group's increase in retained profit of £4.71 million during the period and £2.17 million being the translation of Group's overseas assets (predominantly in Asia).
There was no major change in the Group's property, plant and equipment, which represents 13.1% of the Group's total assets. Intangible assets increased slightly by £0.50 million to £18.37 million (2012: £17.87m) reflecting the movements in foreign exchange and a fair value adjustment of £0.10 million in respect of PSEP.
Working capital as a percentage of revenue remained fairly stable at 30%. Removing the foreign exchange effect on stock, we saw levels fall by £0.84 million which resulted in net stock weeks dropping from 21.1 in 2012 to 20.2 for 2013. Debtor days also remained fairly stable at 67 days (2012: 68). However, total bad debts were slightly higher than in previous years at £0.29 million (2012: £0.08m).
Gross debt fell by £4.46 million to £15.75 million (2012: £20.21m), which included the final repayment of £1.00 million of the Company's three year term loan taken out initially in February 2010, and the annual repayment of c.£1.50 million of TR Asia's acquisition loan for PSEP, with the balance being reduced borrowings from the UK's Asset Based Lending facility (ABL).
Group net cash balances as at 31 March 2013 were £10.55 million (2012: £11.80m) of which, £9.47 million was held in foreign currencies (2012: £8.03m). As a result, year end net debt reduced by £3.21 million to £5.20 million in March 2013 (2012: £8.41m) and gearing remained low at 8.6% (2012: 15.7%).
The Group continues to trade well within its banking covenants. In April 2013, Trifast successfully negotiated its UK banking facilities with an additional £5.00 million, three year revolving credit facility for the Company and extended its current ABL facilities total availability to £18.30 million.
Cash generation continues to be another key objective for the TR operations in order for us to be able to provide cash to reinvest back into the growing business. It is therefore very satisfying to report that operating cash flow as a percentage of EBITDA was 85.5%.
The following analysis reconciles net debt and cash flow:
|Full Year |
|Adjusted working capital changes||(£1.36m)||(£1.97m)|
|Adjusted operating cash flow||£7.87m||£4.57m|
|Net capital expenditure||(£0.85m)||(£0.53m)|
|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)|
To support future growth and increase returns in the future, capital expenditure increased to £0.87 million predominantly represented by plant and machinery for our growing Asia business (2012: £0.65m).
PSEP in Malaysia, acquired at the end of 2011, has integrated well and, under the Terms of Acquisition detailed in the Prospectus dated 16 November 2011, a final payment of £1.39 million, (previously retained for twelve months against any warranties and claims) was paid to the previous owners in December 2012.