In the year being reported on, Group revenue increased by 8.0% to £121.54 million (2012: £112.51m), reflecting in the main the addition of our Malaysian acquisition, PSEP acquired in December 2011. During the year we were also successful in replacing older, non profitable contracts with new business wins at improved margins although we did experience high attrition levels in both the UK due to customer 'end of life' builds finishing and within Asia when two major transfer contracts from Europe came to an end.

The Group's key regions can be analysed as follows:

Continuing operationsFull Year
31 March 2013
Full Year
31 March 2012
% increase
Total for the year£121.54m£112.51m+8.0%

The key driver of growth in the year was Asia due in the main to the acquisition of PSEP. Within the UK, revenue remained relatively stable despite a generally lower demand from UK customers and the transfer of some business to our Hungary operation. Europe delivered a strong performance with increased sales across all the operations in particular Holland and Sweden where we were successful in winning new automotive business. The increase in revenue from our North American operation reflects the confidence returning to the US economy.

Whilst revenue growth is important to the business, one of our key drivers remains the focus on quality of earnings and margin enhancement.

Adjusted pre-tax profit operating margins

The underlying operating (before separately disclosed items) result between the TR represented regions can be analysed as follows:-

Continuing operationsFull Year
31 March 2013
Full Year
31 March 2012
% increase
Underlying operating result
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%

"Whilst revenue growth is important to the business, one of our key drivers remains the focus on quality of earnings and margin enhancement"

Mark Belton
Group Finance Director

View information about Business Performance

The impressive 45.0% increase in underlying profitability to £7.25 million (before separately disclosed items) was achieved by increasing gross profit margins which showed a 40bps increase in the year to 26.0% (2012: 25.6%) and a reduction in the level of overheads in relation to revenue, to 19.4% (2012: 20.6%). This resulted in improved underlying net margins from 4.4% in 2012 to 6.0% thereby achieving two of our stated objectives: ongoing margin enhancement and increase profitability.

By territory, the TR UK contribution increased by 50.7% resulting from the gross profit margin enhancements and overhead and logistical efficiencies previously acknowledged. Europe more than doubled its 2012 operating profit performance to £1.11 million with strong performances being achieved particularly within the Nordic region. TR Asia benefitted from the positive addition of PSEP into the Group but conversely was impacted by the loss of business mentioned already. TR USA, from its 2011 restructuring programme is beginning to bring the region from its previous losses into profit, demonstrating a three-fold increase in profit from 2012 to £0.30 million in the year under review.

Separately disclosed items

The following items are shown separately in the Consolidated income statement and need to be taken into consideration when reviewing the underlying performance of the Group:

Restructuring costs(£0.39m)
Intangible amortisation(£0.33m)
IFRS 2 charge(£0.09m)

Of the £0.39 million restructuring costs, £0.19 million relates to Director compensation (for loss of office from the Board) and all associated costs in January 2013; the remaining balance relates to further redundancies within the UK to drive the ongoing efficiencies.

Interest and interest cover

Net financing costs increased slightly by £0.09 million to £0.72 million (2012: £0.63m) reflecting a full year's effect of the acquisition term loan taken out by TR Asia Investment Holdings Pte Ltd ('TR Asia') to part fund the PSEP acquisition in December 2011.

Net interest cover (defined as EBITDA to net interest, before one-off separately disclosed items) improved to 12.8 times (2012: 10.4 times).


Taxation in the period was £1.73 million (2012: £1.60m); this reflects an Effective Tax Rate ('ETR') of 26.9% (2012: 33.6%), whilst the Group's blended tax rate based on the geographical tax regimes was 21.3% (2012: 20.4%). Nearly all of the Group's current tax charges related to overseas operations as the UK business was able to utilise the remaining UK tax losses that it had suffered over the previous years.

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 flow

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
31 March
Full Year
31 March
Adjusted EBITDA£9.23m£6.54m
Adjusted working capital changes(£1.36m)(£1.97m)
Adjusted operating cash flow£7.87m£4.57m
Cash conversion85.3%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)

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.


Net Debt

"I would like to take this opportunity to thank the Finance teams around the globe for their hard work and dedication supporting the operational business units"

Mark Belton
Group Finance Director

View information about Managing the Business

Pictured: Jon Gibb

Pictured (left to right): Carolyn Emsley, Maria Johnson, Mark Belton and Lyndsey Case

Return on capital employed

The Group remains mindful of its objective to invest to increase Return on Capital Employed (ROCE). It is therefore pleasing to show that ROCE (being defined as EBIT/net assets + net debt) has once again improved year-on-year, from 9.1% in 2012 (11.3% adjusted for PSEP pro-rata 12 months) to 12.1% by March 2013.

Earnings per share

The adjusted diluted earnings per share ('EPS') which in the Directors' opinion best reflects the underlying performance of the Group, has increased by 25.8% to 4.73 pence (2012: 3.76p).


While the Directors' focus remains on capital growth through investment in the business and increasing ROCE, the return to a progressive dividend stream has been a priority for the Board since its formation in 2009. In October 2012, we were pleased to achieve this key objective by payment of the final dividend for 2012; to demonstrate the confidence the Management has in the future development and success of the business, the Board will be recommending a 60% increase in the final dividend of 0.80 pence (net of tax) per Ordinary share. Subject to Shareholder approval at the Annual General Meeting which is to be held on 17 September 2013, the annual dividend will be paid to shareholders on the Register at the close of business on 5 July 2013. The Ordinary shares become ex-dividend on 3 July 2013.


Once again, I would like to take this opportunity to thank the Finance teams around the globe for their hard work and dedication in supporting the operational business units and myself; I look forward to working with them over the coming year as we look to further enhance working practices across the Group to help improve operational efficiencies and add-value across the TR network.

Mark Belton
Group Finance Director

24 June 2013

Pictured: Fastener inspection machine, to achieve zero defect