Celebrating 50 years
Trifast plc
Annual Report for the year ended 31 March 2023
Focused
on the
future
Trifast plcAnnual Report for the year ended 31 March 2023
Welcome to the Trifast Annual Report
Desig n
Early involvement in design is key to
ensure that we support customers at
the inception of new products
Our vendor development process
provides a strong approved vendor
supply chain
In-house manufacturing gives us
increased capability, product knowledge
and a unique advantage over competitors
Tailored solutions provide a logistics
service that meets customers’ specifi c
requirements
Procure
Produce
Deliver
What we doKey facts
About us
33 global facilities in 18 countries
Supplying over 70 countries
7 manufacturing sites
3 technical & innovation centres
c.1,400 employees
Read more on page 2Visit www.trifast.com for more information
Contents Highlights
Strategic report 1
About us IFC
Contents 1
Group overview 2
Where we operate 3
Chair’s welcome 4
CEO review 6
Strategy 8
A global leader in attractive markets 8
Focus on growth 10
Capital allocation framework 12
Focus on sustainability 14
Delivering growth
through our business model 16
Key strategic indicators 18
Key performance indicators 20
Our sectors 22
Stakeholder engagement –
Section 172 statement 24
Focus on ESG 32
Our people 32
Environment and climate change 36
Task Force on Climate-related
Financial Disclosures (TCFD) 38
Non-financial and sustainability
reporting information statement 49
Financial review 50
Risks 58
Viability statement 64
Governance 66
Chair’s introduction togovernance 66
The Board 68
Executive Committee 70
Corporate governance report 71
Nomination Committee report 74
ESG Committee report 76
Audit & Risk Committee report 78
Directors’ remuneration report 82
Directors’ remuneration policy 104
Directors’ report 118
Statement of Directors’ responsibilities 121
Financial statements 122
Independent auditor’s report 122
Consolidated income statement 130
Consolidated statement of
comprehensive income 131
Consolidated statement
of changes in equity 132
Company statement of
changes in equity 134
Statements of financial position 136
Statement of cash flows 137
Notes to the financial statements 139
Additional information 198
Revenue growth
+11.8%
2023
£244.4m
2022
£218.6m
2021
£188.2m
Read more on page 18
Underlying ROCE
5.4%
2023
5.4%
2022
8.3%
2021
6.8%
Read more on page 19
Underlying operating profit
margin
4.9%
2023
4.9%
2022
6.7%
2021
6.4%
Read more on page 18
CO
2
e reduction (FY19 baseline)
(26.8)%
2023
(26.8)%
target
(16.8)%
2022
(27.6)%
target
(12.6)%
2021
(23.3)%
target
(8.4)%
Read more on page 19
Corporate website
Catch up with our latest news
andlearn more about Trifast on
ourcorporate website at
www.trifast.com
Sustainability Report
Read our 2023 report online
at www.trifast.com/sustainability
1
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Our purpose
To provide Trusted Reliability at every turn to our
customers, suppliers and our people, empowering them to
deliver sustainable products and solutions that add value to
society and our planet
Group overview
Trusted
The organisation and its
employees need to trust each
other – colleagues need to trust
each other – the organisation
needs to instil trust in its
stakeholders
Reliable
We do what we say we will
do when we say we will do
it – both inside and outside
ofourorganisation
Inclusive
We work together as a team
andrespect each other
Fair
We are thoughtful of every
individual and consistent in
howwe interact
Ethical
We are mindful of ourimpact
on othersand the environment
and demonstrate integrity
inallouractions
Excellent
We add value and quality
to everything we dofor
our customers and
otherstakeholders
Our values
Being inclusive
but pragmatic
andempowering
A ‘Can Do’
attitude, working
in an agile manner
to deliver practical
results
Engaging with
employees
regularly
andmeaningfully
Providing
development
opportunities
Listening Working together
as aprofessional
globalteam
Communicating
openly,positively
andregularly
Investing in the
future – people/
product/property
Saying thank you,
beingthoughtful
and kind to each
other
Celebrating
success
Cultural pillars
Our vision
Securing a sustainable future
Supporting a sustainable economy using our technical
expertise to empower customers, suppliers and our
peopleto innovate solutions that will improve the
environment and people’s lives
Our mission
To promote an environment that is safe and fair, which
motivates, develops and maximises the contribution and
potential of all employees
To be acknowledged commercially as the market leader
in industrial fastenings in terms of service, quality, design,
engineering, support, ESG (environmental, social and
governance), together with brand reputation
To continue to grow profitability, improve stakeholder
returns through organic and acquisitive growth, and by
driving continual efficiencies throughout the organisation
Read more about our stakeholders
and the Section 172 statement on
pages 24 to 31
2
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Where we operate
Key
Head office Trifast plc
TR Asia headquarters
Manufacturing &
distribution sites
Distribution sites
Technical &
innovation centres
Asia
TR Asia headquarters – Singapore
China – Shanghai & Beijing
India – Bangalore, Chennai & Pune
Malaysia – Kuala Lumpur
Philippines – Manila
Taiwan – Kaohsiung
Thailand – Bangkok
Europe
Germany – Verl
Holland – Oldenzaal
Hungary – Szigetszentmiklos
Ireland – Mallow
Italy – Fossato di Vico
Norway – Skytta
Poland – Warsaw
Spain – Barcelona
Sweden – Nacka, Tidaholm
& Gothenburg
UK
Trifast plc & Group Services head office – Uckfield
1
Belfast
Birmingham
1
East Grinstead
East Kilbride
1
Lancaster
Manchester
1
Newton Aycliffe
1
Poole
2
North America
Charlotte
Greenville
Houston
Louisville
Revenue by region
3
North America
£29.9m
UK
£83.9m
Europe
£88.4m
Asia
£60.4m
1. Part of the restructuring initiative. See financial review on pages 50 to 57
2. TR Poole location closed in January 2023 and was consolidated into the Uckfield location
3. AER including intercompany revenue
3
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Jonathan Shearman
Chair
Introduction
In this, TR’s 50th anniversary year, it is only right to express
our gratitude to ‘the Mikes’ (Timms and Roberts). We joined
with them on 4 June this year to celebrate the Company’s
‘birth’ and it is a privilege for me and the team to be
involved in the business today.
Trifast has experienced a signifi cant amount of change and
evolution since 1973. Over the last 12 months, we have once
again seen this, some of which has been encouraging and
some of which has been challenging but necessary for the
business and its future.
Simplifying and better aligning the business will provide the
foundations for a bright and rewarding future for all of our
stakeholders.
Review of FY23
Since I wrote to you last, we have seen the impact of global
infl ationary pressures across businesses and economies
as we emerged from a pandemic, were impacted by the
ongoing Ukraine confl ict, and challenges to supply chains
continued.
Over the last 50 years, many colleagues have
contributed to TR’s growth and I thank all of
them around the world for their personal and
collective contribution, including during this
challenging period. They make Trifast what it
is and they will continue to drive us forward
into our future
Chair’s welcome
TR Fastenings
distribution business
founded in Uckfi eld, UK
by Mike Timms and Mike
Roberts
Current HQ and fi rst UK
in-house manufacturing facility
in Uckfi eld, UK established and
the Hank name purchased
Introduced Vendor
Managed Inventory
(VMI) into fastenings
industry
Obtained a full listing
on the London Stock
Exchange
Acquired fi rst North
American distribution
location, TR Fastenings Inc
Acquired fi rst mainland
European distribution
location, TR Norway
1973
1976 1994 1996
19961992
years of progress
4
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Board and Senior Management changes
In November 2022, we announced that Darren
Hayes-Powell and Louis Eperjesi were both joining the
Board as Chief Financial Offi cer and Non-Executive
Director, respectively. The Company is already benefi ting
from their contributions and counsel. In addition, Dan Jack,
who joined Trifast in June 2020, was promoted to Chief
Operating Offi cer.
Scott Mac Meekin, previously a Non-executive director,
stepped in as interim Chief Executive Offi cer in February
2023, following the resignation of Mark Belton. Scott’s
pace, approach and immense sector knowledge is proving
extremely insightful, and feedback from customers,
employees and stakeholders has been positive.
In August our previous CFO, Clare Foster, also, left the
business. We take this opportunity to thank Clare and Mark
for the contributions to the Group and wish them well in
their future endeavours.
Review of FY23 continued
Despite the ever-challenging environments, we have
continued to focus on customer service and enhanced our
customer relationships. See our delivering growth through
our business model on pages 16 and 17.
As you will read within the CEO review, on pages 6 and 7,
this has been manifested in signifi cant contract wins during
FY23 (£25.6m) which will fl ow through to revenue over the
coming fi nancial periods.
Dividend
Refl ecting our confi dence in the prospects for the business,
the Board is proposing an increased fi nal dividend of 1.50p.
Our focus on growth (see pages 10 and 11) allows us to
remain committed to a progressive dividend policy that
shares the benefi t of ongoing profi table growth with our
shareholders.
Chair’s welcome continued
New business strategy
implemented to include
automotive
£200m annual turnover
achieved for the fi rst
time
Expansion of our distribution
capability in Budapest, Hungary,
opening a new purpose-built
facility
UK customer centric
logistics restructuring
with the opening of a new
National Distribution Centre
Acquired fi rst manufacturing
and distribution location in
Asia, TR Formac Singapore
Acquired fi rst European
manufacturing and distribution
location, TR VIC Italy
Expansion of our TR
Kuhlmann distribution
capability in Germany
Expansion of our TR VIC
manufacturing facility
in Italy
2009 2019 2022 2023
1997 2014 2021 2022
Annual General Meeting
The forthcoming AGM will be held on Friday 15 September,
and this will be the fi nal time I will be seeking re-election.
Together with the Board, I now feel that the baton can be
safely passed to the next Chair.
People
I acknowledge that this has been a year of change and
disruption, and it has resulted in some hard decisions
having to be made. Over the last 50 years, many colleagues
have contributed to TR’s growth and I thank all of them
around the world for their personal and collective
contribution, including during this challenging period. They
make Trifast what it is and they will continue to drive us
forward into our future.
Finally, having navigated the many challenges of the last
few years, I am encouraged that we now have a Board
and leadership structure (see pages 68 to 70) with the
experience and capabilities to support the business and
capitalise on the many opportunities that lie ahead.
Jonathan Shearman
Non-Executive Chair
5
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Introduction
When the Board asked me to step into this role in February
this year, I took the opportunity without hesitation. As
interim CEO, my role is not to fundamentally change the
corporate strategy, see pages 8 to 15 for further details, but
to align this strategy with greater focus.
I see my task as building on TR’s reputation as a trusted
and reliable partner by accelerating the pace of execution
and creating an aligned leadership team with the skills and
necessary capabilities, visions and drive to maximise 50
more years of success. See our 50 years of progress on
pages 4 and 5.
Operating background in FY23
Throughout the year we witnessed macroeconomic and
geopolitical elements impacting the business directly and
through our suppliers and customers. We encountered
extraordinary input cost increases, which combined to
pressure several of our customer segments, in particular
the health & home sector.
This ‘mixed’ environment, coupled with a host of corrective
actions, implemented throughout the year, and a full year
contribution from our Falcon acquisition, resulted in a
reasonable start to FY23 across all regions in terms of
volume.
However, during the fi rst half, this was accompanied by
challenges specifi cally at TR VIC, our Italian operation, and
the loss of a full two months trading due to Covid-19 in our
China operations, both of which impacted our margins.
During the second half of the year, the business enjoyed a
gradual return towards more normal levels of lead times,
freight costs and raw material costs, though, by Q4, several
of our businesses were further aff ected by the changing
macroenvironments.
More detail on the operating background is contained
within the CFO’s Financial review on pages 50 to 57.
My role is not to fundamentally change the
corporate strategy but to align this strategy
with greater focus. The task is building on TR’s
reputation as a trusted and reliable partner by
accelerating the pace of execution and creating
an aligned leadership team with the skills and
necessary capabilities, visions and drive to
maximise 50 more years of success
Scott Mac Meekin
Interim Chief Executive Offi cer
CEO review
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
There is plenty for us to get on with and alongside the TR
team, I am excited about what we can create and we look
forward to reporting on these as we progress.
Outlook
As we said in April’s update, the Group’s business
foundations remain strong, and there is significant potential
to be realised during the coming years. We are also mindful
that the short-term macro-economic outlook remains
challenging.
We continue to take meaningful steps across a range of
operational and financial initiatives, including an on-going
reduction in working capital, a focus of Sprint 2 being
further integration of Asia into the Group and improved
utilisation of our in-house manufacturing.
We have added further new contract wins in the year
to date, especially in our North American and European
regions, alongside an increasingly healthy pipeline. These,
together with the initial benefits from our operational
improvement programmes, support the Board’s continued
expectation in delivering an improvement in performance in
FY24, albeit weighted towards the second half of the year.
The Company looks forward to updating shareholders of
further progress over the coming year.
Scott Mac Meekin
Interim Chief Executive Officer
Our IT journey – beyond Atlas
I am happy to say that, after a long period of transformation
and learning, the Group has now proven they are able to roll
out our finance and operations solutions using Microsoft
D365 together with our standard operating procedures
(SOPs) and data templates.
The availability of key data from the completed
implementations has provided the basis for many of our
recent decisions and will continue to be a key strategic part
of our development road map.
Going forward
Following my appointment, I agreed an initial 100-day plan
with the Board, which largely flowed from the key points
instigated in the previous quarter, namely reduction of
working capital and therefore debt and the execution of a
cost reduction programme focused on the UK.
By the end of the financial period, we had introduced
quarterly sprints, with Sprint 2 having started in June.
Asignificant objective of this process is to implement a
much tighter focus allowing us to postpone or sequence
the many other, albeit important, competing tasks, allowing
for faster execution of those tasks agreed as priorities
within any sprint.
Most importantly, the people of TR
The most important part of Trifast is its people, see our
stakeholder engagement on page 26. They are renowned
worldwide for their tireless commitment to customer
service and reliability, priding themselves on delivering
excellent product, service and quality.
As part of a key driver of our future success, we intend to
enhance our training and leadership efforts. Our mission is
to implement a ‘winning team’ programme over the next 24
months consisting of three fundamental elements:
• Building a climate for action
• Competencies for success
• Commitment to results
Significant changes in FY23
Global wins
The year under review saw new highs for both revenue and
contract wins, the latter, significantly within the automotive
and energy, tech & infrastructure sectors. This momentum
included both of our North American businesses, with
Falcon making its first full 12 months contribution.
Revenue growth
In FY23 we saw revenue growth in Europe and North
America. Asia operations recorded moderate growth in
the year and was even able to overcome the impacts of the
national shutdown in China.
Dynamic pricing
During the year, several major customers’ multi-year
contracts were due for renegotiation. It is satisfying to
report that the team has, in partnership with these key
accounts, successfully renewed these contracts which
now incorporate a flexible price mechanism that will
automatically adapt for extraordinary up or downside
changes in a broad basket of input prices. This is a
significant step towards building in a more dynamic
pricing model for the business as a whole.
Customer centricity
We have recently launched a global programme designed
to help us focus our resources more acutely on a well-
defined set of market segments and key customers.
This programme is a comprehensive review of our existing
and potential customer engagements, providing our teams
across the Group with a clear and standardised lens. This
initiative will assist us in determining the optimal customers
and prospects for us to partner with, and what are the most
effective services and products for each unique customer.
Once fully implemented, we expect this initiative to allow
us to create and deliver highly specialised and valued
services tailored specifically to our ‘ideal customer profiles’
and thereby enhance our value delivered and critically our
competitive differentiation.
CEO review continued
7
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Revenue by region – FY23
1,2
(CER)
Europe | £89.0m | +10.4%
Asia | £56.8m | +2.6%
North America |
£26.6m | +50.3%
UK | £83.9m | +0.0%
£238.5m
+9.1%
Revenue by sector – FY23 (CER)
General industrial
£32.1m | +15.1%
Health & home
£43.5m | -8.0%
Light vehicle
£65.7m | +21.7%
Heavy vehicle
£13.4m | +40.6%
Distributors
£42.8m | -2.6%
Energy, tech & infrastructure
£41.0m | +13.7%
£238.5m
+9.1%
TR operates in a fragmented market. Our established
customer relationships and access to high growth/
emerging markets support strong organic and acquisitive
growth for the future
Fast-paced markets driven by environmental and
technological change create new opportunities across
sectors, products and geographies.
What sets Trifast apart
Trifast is one of only a handful of international fastenings
suppliers, setting us apart from the many national and
regional players that operate in our market. This puts us in
a prime position to support our multinational and global
customers as they continue to look to rationalise their
supplier base.
Our core focus is the supply of more complex, engineered
components complemented by the highest levels of
customer-centric commitment. In this non-commoditised
part of the market, competitive pressures can be lower and
margins higher, as customers prioritise quality, reliability
and engineering support over the lowest possible price.
Our combined manufacturing and distribution presence
provides a USP against a competitor base that
predominantly focuses on one or the other. This allows us
to offer our customers enhanced engineering capabilities
with a greater flexibility of supply and pricing.
A balanced sector portfolio and geographical coverage
provides protection from some of the more cyclical markets
in which we operate.
The long-standing relationships we hold with our global
and multinational customers are a key part of our ongoing
successful growth journey.
Change brings opportunity
The last few years have shown us that ‘change is the only
constant’. We have seen strong market demand, but also
supply chains extended, regulation increased, costs inflated
and specific product dependencies develop.
This dynamic and growing environment has revealed
the strength of our teams and the resilience of our own
manufacturing locations, together with our partner
suppliers, allowing these communities to meet the
demands of our growing customer base.
>75%
of our revenues are customer-specific products
<7. 5%
sales to any single customer
30:70
manufacturing to distribution ratio
Strategy
Read about our sectors
on pages 22 and 23
A global leader in
attractive markets
1. Revenue by regions includes internal sales
2. Organic growth: Group +7.3%, North America +28.5%
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Change brings opportunity continued
With a focused customer-centric workforce, we have
managed significant lead time increases in supply chains
by investing in our global inventory. Where appropriate,
this investment has been further complemented by our
engineering expertise, using our bespoke parts database,
allowing components to be replaced with alternatives that
meet design and quality criteria, thereby our customers
maintain production in the face of heightened product
availability challenges.
Self-service in a digital world has been augmented by the
increased content on our website, encompassing c.50,000
pages of product information including technical data
and installation animations. The enhanced technical and
engineering data within our knowledge base is designed
to support engineers, specifiers and programme managers.
We continue to invest in our web and digital capabilities
to build upon the momentum we have seen and serve the
evolving shift in working patterns.
We began to pivot our focus over the last few years to
market sectors where disruption through technology,
legislation, or both, drives the opportunity to expand our
product offering and value-add proposition. This was
achieved by deploying team members based around the
globe in an agile manner. We continue to invest in these
multi-disciplined teams to allow us to carry on creating the
most value for our customers.
Legislative compliance has required customers and
prospective customers alike to accelerate design cycles
beyond what was once considered normal.
When combining this pace of design change with a
declining knowledge of fastener engineering among
customers and with new product needs such as electricity
conduction for electric vehicles, our class-leading levels of
knowledge, partnership and value creation add significant
value to our customers.
Start-up disruptor businesses in particular have a need
to be guided through fastener design and, like many of
our customers, often the first place their engineers visit
is our website. Aiding their new designs, they can seek
technical data, downloading TR drawings, CAD files and
product animations that prove the functionality within
their applications. One positive consequence of this digital
proliferation is we have started to see TR part references
appear across global OEM platforms, driving enquiries from
brand new sources needing to use our product.
The genesis of many of these start-up companies has
been the opportunity to penetrate markets that are going
through extreme change and there is no better example of
this than in the EV market in both light and heavy vehicles,
all driven by ever-increasing sustainability goals.
We see technology and legislation come together with
environmental and social wellbeing concerns creating
needs and opportunities and, in turn, opening up the
competitive landscape to new entrants. The thread of ESG
change intertwines across our market sectors, providing
the platform to underline our value proposition.
With electrification generating around twice the
opportunity for TR than that of a combustion engine in our
light vehicle and heavy vehicle market sectors, there are
possibilities for our engineering teams to help design-in
components that support sustainable goals. In a similar
vein, the Right to Repair Regulations promotes the need
of using fastener content to help diminish the throwaway
culture that exists across many products in our health &
home market sector.
Alongside value creation and customer-centricity there has
been the need to address inflationary costs throughout the
supply chain. It is testament to the high level of customer
service delivered by our colleagues around the world, that
our price increase discussions have been supported by us
providing an undisrupted supply. With careful preparation
and a fact-based approach, customers have been engaged
to ensure that price increases are presented and processed
with the same degree of professionalism as any other
component of our customer relationship.
Strategy continued
Read about our TCFD report
on pages 38 to 48
A global leader in
attractive markets
continued
9
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Customer focus
Focusing on our ideal customer profile sits behind the
targeted deployment of our technically proficient teams,
combined with our growing manufacturing competencies.
We combine profitability criteria with focus on higher than
average CAGR companies and sectors within our global
200 customer base, alongside their peer group not yet
served by TR.
The narrowing of this sales funnel drives us to deliver
exceptional service and value to a prescribed list of
companies, with a conversion rate that is much higher than
the industrial norms.
Our customer centric principles remain and always will be
at the core of our strategic execution. Doing this through a
lens that increases positive outcomes both for TR and our
customers is an exciting next step in our journey.
Engineering-led innovation
Through Trifast’s design and application engineering
expertise we are able to offer a value-add proposition, that
opens doors and builds long-term customer relationships.
During FY24 we are looking to expand our Technical and
Innovation Centre in the West Midlands.
Future investment plans
Following approval for the investment into larger
warehousing facilities for PTS, our UK-based specialist
stainless steel distributor, we anticipate their move into new
premises during FY24, increasing warehousing capacity at
this site by c.40%.
We will continue to make targeted investments in our
people to appropriately support our growth journey and
create opportunities for the future.
Organic investment continues to be a core part of our
ongoing strategy for growth. By expanding our
manufacturing capabilities and capacities around the world,
we will be able to better balance our manufacturing and
distribution mix and improve the Group’s overall margins.
In addition, we will continue to invest in our distribution
businesses, focusing on those geographies that provide the
greatest ongoing organic growth opportunities, including
Thailand, the USA and Spain.
Targeted investment in organic and acquisitive growth
opportunities facilitates ongoing market share gains and
enhanced profitability
Investing for organic growth
Background
We continue to see focused investment as a core part
of our ongoing organic growth, not just via capital
expenditure in our warehousing and manufacturing
capabilities, but also investing in our people.
Progress in the year
During FY23, we saw the completion of the significant
€4.0m capital expenditure plan at our Italian operation,
TR VIC. This has increased our manufacturing capabilities
and European capacity by 30%.
Following on from the successful recruitment of our Global
Supply Chain Director in June 2020, we have continued
to invest in the wider supply chain team, with specific
recruitment to support our expertise in regional sourcing
for the Americas, India and Eastern Europe. A key focus of
this team will be to work closely and develop our trusted
supplier base, ensuring that we make the best use of our
global purchasing power, rationalising supply and driving
input cost efficiencies, while enabling the progression of
our near-shoring initiatives.
During Q1 of FY23 we expanded our distribution facility in
Budapest, Hungary, opening a new purpose-built building,
increasing warehousing capability by c.190%.
Strategy continued
Focus on
growth
10
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Acquisitions
As an established global fastenings brand, we continue
to have an appetite to expand our footprint. We regularly
engage with businesses and advisers operating in markets
globally and will always review any credible targets that are
presented to us.
We believe non-organic growth can provide wider
opportunities to the existing Group, with the potential to
allow us to:
• Continue our digital transition
• Localise in-house manufacturing capacity, supporting
customers’ growing demands for onshoring
• Balance our manufacturing to distribution ratio,
raising Group margins by increasing our proportion of
higher-margin manufacturing revenues
• Retain our diversification, by offsetting the strong
organic light vehicle sales momentum
North America is one of the biggest fastenings markets
in the world, and yet it forms less than 13% of the Group’s
revenue. An acquisition in this region would specifically
realign that imbalance. Our customer base has an active
presence across the USA, Canada and Mexico, and growing
demand for onshoring supports specific investment into
local manufacturing capacity.
Strategy continued
Focus on
growth
continued
Sustainability into Action: https://www.trfastenings.
com/company/newsroom-and-media/press-releases/
sustainability-into-action
TR Fastenings designs a unique push screw solution for
monitor mounting brackets: https://www.trfastenings.
com/company/newsroom-and-media/press-releases/
push-screw-case-study
ESG: A journey not a destination: https://www.
trfastenings.com/company/newsroom-and-media/
press-releases/esg-a-journey-not-a-destination
11
Trifast plc | Focused on the future
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Strategy continued
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Capital allocation
framework
Framework
It is the Board’s aim to maximise long-term returns. As such, the generation and
disciplined deployment of free cash is a core aspect of Trifast’s strategy. The
following framework and priorities have been established and these are refreshed
as part of our annual budgeting process. To allow a consistent approach across
projects of varying kinds and also between years, the Board has defined cash flow
return on investment as its measure of choice and will look to allocate capital to
projects which provide the best return as set against our cost of capital.
Organic revenue growth is an integral part of our strategy and we believe there is
scope for continued increases in market share, such that we deliver average revenue
growth in excess of global GDP (see our KSIs on pages 18 and 19). It is essential
that we have adequate working capital to deploy to secure this, therefore we view a
70-80% cash conversion of underlying EBITDA to be an appropriate target for the
medium term (see our KPIs on pages 20 and 21).
In addition to working capital requirements, there continues to be opportunities to
expand capacity, capability and our product range. Building out our manufacturing
and distribution footprint, increased digital capabilities and product launches would
be typical of this sort of capital allocation.
Alongside investment within our existing operations, non-organic growth also
forms a critical part of Trifast’s strategy. As such, the Board has a well-defined and
disciplined approach to acquisitions where our primary financial objective will be to
target returns (as an absolute minimum) in excess of our WACC, over a reasonable
time frame.
Focus on growth
Strategy continued
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Capital allocation
framework
continued
Reward
Equity ownership is a key aspect of our approach to Group-wide remuneration,
aligning employees’ interests with those of shareholders; schemes exist to facilitate
this. Given the desire to minimise earnings dilution from any such awards, the Board
plans to make ongoing use of the already established Employee Benefit Trust (EBT)
as appropriate.
The Board recognises the role of dividends in forming part of our total shareholder
return (TSR). As such, it is committed to a progressive dividend policy with a target
dividend cover of between 3x and 4x for the medium term. This approach will
ensure the Group is also able to prioritise investments which will support the Group’s
strategic development and underpin capital appreciation. Special dividends and
share buy-backs, having been considered, do not currently form part of our capital
allocation framework.
The Group has signed new banking facilities post year end to support our focus on
growth. The two agreements provide a total facility limit of £120m, split between
an RCF (£70m) and a UKEF Export Development Guarantee (EDG) (£50m). Facility
headroom (excluding accordion) at 31 March 2023 was £10.2m and this increases to
£50.2m under the new facilities. The financial covenants under the new agreements
are the same: leverage <3x and interest cover >4x.
The Board has determined that in the current macroeconomic and shareholder
environment, it is appropriate to adopt a prudent but flexible capital structure
and will seek to operate in certain circumstances e.g. non-organic investment with
leverage of up to 2.0x.
As at 31 March 2023, the Group’s adjusted leverage ratio of 2.2x sits just outside of
the target range, but still comfortably within the covenant of 3.0x.
Returns to shareholders Banking facilities and leverage/gearing
Strategy continued
Supporting a sustainable
economy using our technical
expertise to empower
customers, suppliers and our
people to innovate sustainable
solutions that will improve the
environment and people’s lives
We will create valueforour
peopleand communities,
supporting development,
diversity, equality
andintrapreneurship
We will manage environmental
issueseff ectively across
our business. We will work
to achievenet zero carbon,
ensureour business is resilient
toclimate change risks, and
seekout the opportunities
froma lowcarbon economy
We will seek to improve
the visibility of our entire
supply chain. We will work
with suppliers to improve
sustainability standards and
performance, and manage risks
and opportunities eff ectively
We will seek out innovation
opportunities to develop more
sustainable fasteners and work
with customers to support more
sustainable products
Governance
We have an ESG governance structure comprising
of committees and global working groups, which are
all encompassed by the ESG Steering Committee,
who meet regularly to discuss the day-to-day ESG
regulations, requirements and initiatives. Our fi ve-year
sustainability strategy covers the years 2022-2026.
Good ESG and governance: Annual reporting, ESG Committee, Project Atlas, risk register, clean metrics embedded into business targets, policies suite and leadership
A fair and ethical culture: Values and behaviour programme, internal engagement, workplace wellbeing and social value programmes
Our vision
Securing a sustainable future
Act on environment
andclimate change
Enable
sustainable innovation
Build a sustainable
supplychain
Create
socio-economic value
Read about our stakeholder
engagement and Section 172
statement on pages 24 to 31
More information about our
sustainability strategy can be found
in our Sustainability Report on our
website www.trifast.com
Read about our ESG Committee
on pages 76 and 77
Focus on
sustainability
Our fi ve-year sustainability strategy framework
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Strategy continued
Achievements
• During FY23 we established a
Network of Champions
• Extended our employee engagement
survey frequency and reach
• Environmental awareness training is
now included in mandatory training
for all employees
Commitments
• Implement a Network of Champions
chapter in 2022
achieved
• Publish our first socio-economic value
report by 2026
• DE&I framework – thematic survey
completed, results to be incorporated
into DE&I strategy
Key projects
• Further develop our employee
engagement campaign and surveys
• Implement sustainability learning and
development
• Expand diversity programme
• Publish community value report
• Expand STEM programme
Achievements
• Established a net-zero target aligned
to the science-based targets initiative
for our Scope 1 and 2 emissions
• Improved our CDP score
• Determined our best fit reporting
framework as the Global Reporting
Initiative (GRI)
Commitments
• Set a science-based net-zero target
for Scope 1 and 2 emissions by2023
achieved
• Expand this target to include Scope 3
emissions by 2026
Key projects
• Develop a carbon management plan
• Introduce a waste and water strategy
• Publish our TCFD and CDP reporting
achieved
Achievements
• Launched sustainable supply chain
charter
• Quality and sustainability agreement
restructured
• Engaged with 300 suppliers (80% of
spend)
Commitments
• Develop a sustainable supply chain
strategy by 2025
Key projects
• Map the sustainability impacts and
supply chain transparency for a
product
• Develop supplier sustainability risk
register
• Complete a full life cycle assessment
for two key products – external
supply and internal manufacturing
Achievements
• Commenced the life cycle analysis for
the ‘cradle-to-gate’ study specifically
looking at raw material
• Completed a sustainable packaging
study
• Working with our customers to
understand their needs as well as
educating them about our knowledge,
skills and experience
Commitments
• Develop a sustainable innovation
strategy during 2024
• Launch a sustainable
fasteningsolution with one of our
clients by 2025
Key projects
• Complete a ‘cradle-to-cradle’
feasibility study
• Complete a closed-loop
manufacturing study
• New clean-tech market products
study: creating sustainable design
framework
Create socio-economic value Act on environment
andclimatechange
Enable sustainable innovationBuild a sustainable supply chain
Focus on
sustainability
continued
Our commitments and key projects
15
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Our distinctive mix of engineering expertise, high-quality manufacturing
and adaptable, reliable global logistics support delivery of our purpose
Delivering growth through our business model
Our competitive strengths How we do it
A leading global brand
TR is a recognised and established global brand across a wide range of manufacturing sectors
We are a 24/7‘full service
provider’ off ering ‘end-to-end’
support to all ourcustomers
Our in-depth understanding of customer needs
through our dedicated account management teams
allows us to better serve them, leveraging our global
scaleona local basis
We continuously strive to develop relationships with
new global OEM/Tier 1s, identifying opportunities
forfuture routes to supply
Technical know-how and design-led engineering capabilities
Our engineering teams get involved from the start of the enquiry and design process, collaborating with our
global OEM/Tier 1 customers to make the right fastener design decisions before full scale production begins and
throughout the supply cycle
Global logistics
We have established secure and proven logistic networks across the world, off ering seamless and reliable supply
to c.70 countries. From complex Vendor Managed Inventory (VMI) and ‘Just-in-Time’ delivery to local third-party
warehousing and straightforward ex-works solutions, we are able to provide the most cost-eff ective supply logistics
to suit our customers’ needs
High-quality, multi-locational manufacturing
Our seven manufacturing plants are spread across Asia, Europe and the UK, enabling us to off er our customers
enhanced engineering capabilities and greater fl exibility of supply and pricing
Network of trusted global suppliers
Established and proven relationships across the world ensure TrustedReliability and fl exibility, all the more
important in the current challenging supply chain macroenvironment
Strong investment record
Investment into our manufacturing capabilities and our high growth distribution sites is targeted to best support our
global OEM/Tier1 customers and underpin growth. Our digital evolution has been specifi cally designed to support a
more integrated and global approach to market
Underpinned by our values and culture
Read more on page 2
16
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Delivering growth through our business model continued
How we do it continued
Design
Assemblies cannot function without fastenings. Our custom-engineered
components support the freedom and versatility of design necessary to allow
our customers to create world-class products
In addition, we provide invaluable input when engaged early in the design phase.
Our engineers’ design expertise helps solve customer application challenges
within an assembly, providing cost effi ciencies as wellas enhancing performance
Produce
Our global manufacturing plants provide reliable, timely and high-quality
product to our key customers around the world. The parts we choose to
manufacture in-house tend to require more complex manufacturing processes
and/or stricter quality requirements. This allows us to make best use of our
extensive engineering know-how to drive the greatest value add for our
customers
Procure
Two-thirds of the Group’s revenue is sourced from our established global
network of world-class external suppliers. This means we are not restricted by
geography or in-house facilities. By being a ‘one-stop’ solution for all customers’
components we are able to streamline andtailor the procurement process to
meetourcustomers’ needs
Deliver
Our established, secure and proven logistic networks across the world off er
seamless, reliable and cost-eff ective supply regardless of customer location
– being where our customers need us to be is central to ourTrusted Reliability
Creating value
For our customers
c.11 billion parts reliably supplied across the world
For our people
Remote and hybrid working has been adopted as a new
way of working across the Group
Successful implementation of global LifeWorks system
– off ering support 24/7, 365 days a year
Development of our employees through our learning and
development programme
For our suppliers
Continue to work closely with our global suppliers to
increase the number of supply partners
Enhanced communication, for improved capacity
scheduling
For our shareholders
We remain committed to a progressive dividend policy in
a range of 3.0x to 4.0x cover in the medium term
Final dividend of 2.25p, an increase of 7.1%
For our communities
£3.5m of corporation taxes paid
We continue to work with our local communities
supporting and sponsoring various events and activities
17
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Our progress in FY23
Definition
Why we measure it
Indicator (AER)
Medium-term target
Key metric
Key strategic indicators
Organic revenue growth > GDP
(%)
In excess of GDP – FY23 2.1% 10-13%
Underlying operating margin
(%)
The Group delivered 9.8% organic revenue growth, 770bps
higher than the annual global GDP 2.1%, reflecting a very
strong performance in the year
Group organic revenue growth is calculated as Group sales
less acquisitions in the current financial year, against the prior
year at actual exchange rate
Global GDP growth has been independently calculated based
on timeframe (ref: Oxford Economics)
Underlying operating profit as a percentage of sales
Our focus on growth makes revenue growth in excess
of prevailing macroeconomic conditions an important
barometer of the Group’ssuccess
Our medium-term aspiration is to become both a bigger and
more profitable company, making margin improvement a
key measure of our success. Underlying operating margin
enhancement is expected to come from operational
leverage gains, grossmargin improvements and operational
efficiencies
The positive margin impact of increased sales in the year
was offset by inflationary cost impacts in gross margin.
Underlying operating margin was further reduced by
investments in overheads relating to recruitment, Project
Atlas BAU costs as well as inflation cost impacts
2023
2022
2021(6.0)%
9.8%
13.6%
2023
2022
2021
4.9%
6.7%
6.4%
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Key strategic indicators continued
12-16%
Underlying ROCE
(%)
Underlying operating profit as a percentage of average
capital employed (net assets + gross debt)
ROCE looks beyond profit to measure how efficiently we
are able to generate a return to our investors. Enhancing
this metric continues to be a key focus for the Group. Our
strategic priorities and capital allocation criteria have been
specifically set to support this
The reduction in ROCE reflects an increased asset base
combined with reduced profits, causing a reduction of
290bps in FY23 to 5.4% (FY22: 8.3%)
2023 5.4%
2022 8.3%
2021 6.8%
>25% (26.8)%
Group revenue in North America
(%)
The North American businesses delivered extremely high
growth of 50.3% to £26.6m compared to FY22. Organic
growth has driven 28.5% of this. TR Falcon has provided
21.8% acquisition growth
2023 12.1%
2022 8.0%
2021 5.1%
2023
2022
2021
(26.8)%
(27.6)%
(23.3)%
The percentage reduction in our global Scope 1 and 2
greenhouse gas emissions
The Group is committed to maintaining high standards of
environmental management. We are aligning ourselves with
the Science-Based Target initiative (SBTi) to ensure our
measurements and targets are meaningful
We established a net zero target aligned to the
Science-Based Targets initiative for our Scope 1 and 2
emissions in line with our sustainability strategy commitment,
this target also forms part of the performance element of the
Executive bonus
CO
2
e reduction from FY19 baseline
Revenue generated by our North American region as a
percentage of Group revenue
North America is the biggest fastenings market in the world,
and yet it forms less than c.12% of the Group’s revenue. A
truly global fastenings business needs a North American
region of credible scale and reach. Our medium-term target
has been specifically set to redress that imbalance
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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2023
2022
2021
48.9%
(66.8)%
147.9%
Definition
Underlying cash generated from operations as a percentage
of underlying EBITDA
Why we measure it
Our quality of earnings is reflected in our ability to
consistently turn underlying EBITDA into cash, allowing us to
maintain a sustainable return of cash back into the business
to fund our ongoing growth journey
Our progress in FY23
We returned to a positive conversion of underlying EBITDA
into cash this year as compared to the previous year due
to reduced investments in working capital (notably stock)
compared to FY22. We expect to revert to a more normalised
level of 70-80% once the macroenvironment settles
2023
2022
2021
45.9%
46.5%
34.1%
Definition
Current assets excluding cash, less current liabilities
excluding debt-like items
Why we measure it
An efficient allocation of capital on the balance sheet drives
improved quality of earnings and reduces the additional
investment needed to support organic growth. Working capital
efficiency remains an ongoing focus, which we expect to be
further assisted by the continued roll out of Project Atlas
Our progress in FY23
The ongoing macroeconomic uncertainty and supply chain
challenges necessitated a much higher investment in stock in
FY22 which continued in HY1 FY23. Our working capital as a
percentage of revenue reduced from 49.3% as at HY1 FY23
to 45.9% as at the year end. A major focus on working capital
management continues, reducing our inventory levels further
and managing debtors
2023
2022
2021
5.13p
8.13p
6.24p
Definition
Underlying profit after tax divided by the weighted average
number of diluted ordinary shares outstanding during the year
Why we measure it
EPS is a key metric for the Group and our wider stakeholders.
Our strategy for growth is therefore focused on increasing
this ratio year-on-year
Our progress in FY23
Our EPS has decreased by 36.9% primarily due to lower
underlying profit against a reasonably static number of
shares in issue
Key performance indicators
Financial KPIs
Underlying cash conversion ratio
(%)
1
Working capital as a
percentage of revenue (%)
1
Underlying diluted earnings per share
(EPS)
1
1. Our KPIs/KSIs include a number of Alternative Performance Measures (APMs) to provide further information on the Group’s financial performance and position. Where we refer to ‘underlying’ this is defined as being before
separately disclosed items (see note 2). For further details on the APMs, seenote 32
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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2023
2022
2021
7.4
7.5
7.4
Definition
The overall rating that our employees have scored the Group
(out of ten) in our latest Group-wide ‘Happiness Index’ survey
Why we measure it
It is important that we are aware of how our employees are
feeling on a number of topics, so we can take any necessary
actions to ensure we continue to appropriately support our
people
Our progress in FY23
The latest survey was run in November 2022. Results are
made available to all Trifast employees and have been
formally reported to the Board. Our overall score of 7.4 is
considered good, however action plans are in place to ensure
we react to specific findings as appropriate
Key performance indicators continued
Non-financial KPIs
Employee engagement index
Find out more in the
sustainability section
on pages 32 to 37
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Defining the sectors has enabled us to focus in on their specific needs and
requirements in terms of product, supply chain, engineering and logistics
Our sectors
Light
vehicle
Passenger cars, SUVs, niche build and
leisurevehicles
The car market has seen increased changes as a result of the
switch to hybrid or fully electric. Changing production lines
to manufacture these vehicles created a short period of slow
down but we are now seeing volumes increasing again.
We are experiencing exciting growth with new Tier 1s
manufacturing products designed for the electric vehicle
(EV) market. The battery housing units, and the increased
use of plastic mouldings, have created the need for specialist
fasteners such as Compression Limiters, stainless fasteners
and other parts in more exotic materials.
Our engineers are increasingly involved at the inception
of a build. The interiors of EVs require many of the same
fasteners as conventional cars, including passenger airbag
components, clips and Plas-Tech® Thread Forming Screws.
Accommodating a large battery housing in the floor of the
car is changing seating designs. There is a requirement
for more electronics in the cab, IP console and seats as
technology advances, which means more fasteners and
cable management products are required. All of these are
core products to our business.
Revenue
28%
2022: 25%
Heavy
vehicle
The vehicles designed for bulk movement of people,
goods and services
Electrification of truck and van production has accelerated as
‘lastmile’ deliveries become more commonplace, particularly
in ourgreener cities. The trucking sector is forecast to grow,
asageing vehicles are removed from their fleets and replaced
by EV/hybrid models.
The focus on EV to reduce carbon emissions is also changing
theshape and model as designs becoming more ergonomic.
With no engine, the battery housings are located in the
chassis floor, requiring more diverse fastening products
such as high strength fasteners and stainless fasteners with
specific electrostatic finishes.
We are seeing an increase in robust all-terrain vehicles used
by either the emergency services or for accessing more
remote environments.
Revenue
5%
2022: 4%
Health
& home
Medical, health and domestic appliance industries
Throughout the pandemic there was an increased global
need for medical products and equipment, and we had
requests for product and design support with very short lead
times. This increased pace and activity remains at a high level
as we continue to support our customers.
Hybrid working has also contributed to the way many
people now balance their lives. With an increased desire
for the latest equipment and technology in their homes,
we have experienced demand within our manufacturing
and distribution locations. Conversely, the Right to Repair
Regulations were designed to allow customers to replace
broken or aged component parts rather than an appliance
being scrapped and going to landfill.
We have created an animation featuring the internal
workings of a washing machine, illustrating the range of
products that TR manufactures and supplies into the health
and home sector; this canbe viewed on our website.
Revenue
18%
2022: 21%
Find out more in our sectors
section of the website:
https://www.trfastenings.com/industry
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Our sectors continued
Energy, tech &
infrastructure
Power generation and distribution,
energymanagement, connected devices,
5Ginfrastructure and networks
This sector encompasses a diverse range of industries,
asillustratedin our unique Smart City animation on our
website.
This illustrates where our fasteners and Cat C parts are used
and include street enclosure cabinets, antennae masts for IT
equipment and power storage units. These are fast-paced
products with designs changing and evolvingto meet the
demands of new technologies. We have a strong reputation for
supply capability and technical support in these sectors.
Growing trends of mass urbanisation and working from home,
combined with geo-political disruption and extreme weather
patterns, to drive significant long-term investment in physical
infrastructure and communication technologies, amongst
other things. These changes are opening significant new
business opportunities across all our regions.
There is an increasing use of Plastic and Rubber Components
and a demand for cable management. We have added an
additional 1,500new parts to our Plastic and Rubber Product
portfolio, enhancing our supply capability.
Revenue
18%
2022: 16%
General
industrial
General industrial
The customers in this group are diverse and therefore the
parts supply chain is significantly more extensive.
The application range includes machine builds, stone
crushing equipment, agriculture plant and machinery and
pumps.
Our customers rely on us being close to their operations in
order tosupply them quickly with replacement products and
managing an extensive range of parts for them.
One of our sites is a specialist in supporting the machine
buildingsector and the plant equipment used in production
lines. Another site works with heavy lifting gear and forklift
producers, and manufacturers of stone crushing machines
needed for quarrying. These companies have high quality
requirements due tothe need for high strength, larger
diameter parts that work in harsh environments.
Revenue
13%
2022: 14%
Distributors
TR distribution network
We supply TR proprietary product to Distributors, in
some cases even competitors, throughout Europe. These
relationships have been established over many years and
very rarely conflict with our own customer base.
In Europe we have c.30 Master Distributors who are
extremely loyal to us, servicing their customers in countries
such as Greece, Bulgaria and Latvia where we do not have
a local TR presence. Essentially, they service areas that
we cannot easily reach, and we give them technical and
marketing support to sell our product.
As a result of the UK leaving the European Union, we opened
a Regional Distribution Centre in Germany, managed by
TR Kuhlmann. This centre holds stock and enables us to
distribute directly to our European Distributors and is proving
very successful.
We recently hosted an event for these loyal Master
Distributors at Fastener Fair Global, Stuttgart.
Revenue
18%
2022: 20%
The decision to concentrate on the six core sectors is
paying dividends.
Homing in on the specific requirements, coupled with
relevant sourcing and engineering support, has helped our
sales teams secure sizeable new wins. The focus on adding
new products to our portfolio has increased our share of
customer wallet and supply capability.
Examples would be the addition of compression limiters
and enhancing the range of Plastic and Rubber Hardware
on our website.
Electrification is the fastest paced area of focus, and
where we have secured new business with existing and
new customers in both light and heavy vehicle EV and
EVBassemblies.
The strategic decision to create a product hub in Germany
to support our Master Distributors in Europe proved a
good investment following the complexities of Brexit.
All other sectors contributed to the overall highest sales
growth that TR has experienced to date.
23
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
The Board is focused on driving the long-term sustainable
success of the Company for the benefit of all stakeholders.
We are committed to maintaining strong relationships
through regular engagement with stakeholders and
consider their views when making key business decisions.
The Board also acknowledges its responsibility to consider
the long-term impacts of the Company’s decisions on wider
society and the environment. The principles underpinning
S172 are not only considered at Board level, but are also
part of our culture and embedded in everything we do as
a Company.
Principal decisions
We define principal decisions as both those that are
material to the Group, but also those that are significant
to any of our key stakeholder groups.
In making principal decisions, the Board considers the
outcome from stakeholder engagement as well as the need
to maintain a reputation for high standards of business
conduct, corporate governance and the need to act fairly
between the members of the Company.
Restructuring
During the year, the Board and Executive Committee
carried out a wide-ranging review, with the aim to make
Trifast a stronger and more efficient business.
One aspect of the restructure has involved the decision
to establish a single National Distribution Centre for the
UK subsidiary, TRFastenings Ltd, which will allow the
business to consolidate warehouse operations and UK
manufacturing to increase efficiencies and service to
customers.
As a result of this decision, the number of UK regional
offices and facilities will reduce, which regrettably will
result in redundancies.
In early 2023, the Company engaged in both a voluntary
and latterly compulsory redundancy process where both
Company representatives and employees’ representatives
worked closely to manage employees’ expectations and,
where necessary, exits from the business. Given the number
of employees at risk of redundancy, we submitted the
appropriate documents to the relevant UK government
agency and worked with our corporate lawyers, to ensure
the process was carried out in accordance with UK law.
We recognise that this is a challenging period for those
involved but also acknowledge that maintaining strong,
good-faith employee/employer relationships is at the heart
of Section 172 engagement.
We are committed to maintaining strong relationships with all our
stakeholdersto achieve long-term sustainable success and fulfil our purpose
Stakeholder engagement
Section 172 statement
The Board acknowledges that there is a legal
requirement for the Company to report on how
the Board and its Committees have considered the
requirements of Section 172 of the Companies Act
2006 in their decision-making
Section 172(1) Companies Act 2006 ‘Duty to
promote the success of the company’
1) A director of a company must act in the way he
considers, in good faith, would be most likely to
promote the success of the company for the benefit of
its members as a whole, and in doing so have regard
(amongst other matters) to:
a) the likely consequences of any decision in the long
term
b) the interests of the company’s employees
c) the need to foster the company’s business
relationships with suppliers, customers and others
d) the impact of the company’s operations on the
community and the environment
e) the desirability of the company maintaining a
reputation for high standards of business conduct
f) the need to act fairly as between members of the
company
24
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Stakeholder engagement continued
Section 172 statement continued
Realigning after Covid-19
Exhibitions are a key area of focus, and are carefully
targeted at certain sectors to showcase our products and
services to existing and potential customers. Advanced
Engineering shows in Birmingham and Gothenburg, and
the Fastener Fair Global in Stuttgart, all exceeded our
expectations.
The CEO, CFO and COO have, between them, visited Asia,
Europe and the USA for separate customer meetings as
well as meeting investors and employees.
The Board took the opportunity when visiting TR Hungary
as part of their strategy week to visit a key global customer
in theregion in October 2022.
In addition, our Global Supply Chain Director was one of
the first individuals to gain entry into Taiwan following the
relaxation of the Taiwanese pandemic restrictions, and
took the opportunity to meet our suppliers in Taiwan in
November 2022, having not had the opportunity to visit
since 2019. The two TR SFE manufacturing facilities, which
are a key supplier to TR multinational customers, were also
visited to engage with our employees there.
Employee wellbeing
The LifeWorks employee programme continues to prove an
invaluable resource for employees, which, particularly with
today’s challenging economic environment, is a service that
offers personal, professional and financial advice.
A number of employees have moved to a hybrid working
environment. Feedback continues to indicate that this
is well received and provides employees with increased
flexibility and work-life balance. Employees have also
benefited from the increased number of internal and
external training programmes that are being offered,
ensuring that we continue to upskill employees and
retain talent.
Investors
We held our AGM in September 2022 as an in-person
meeting in Uckfield, where a number of shareholders joined
personally and a significant number joined online using
the Investor Meet Company (IMC) platform. It remains an
important opportunity for our shareholders to engage with
the Board. In addition, our CEO, CFO, COO and Committee
Chairs all had multiple interactions with institutional and
retail shareholders throughout the year. These meetings
cover a range of issues, including ESG, audit, risk,
remuneration and Company performance issues and they
regularly receive positive feedback as a result of these
engagements.
25
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Stakeholder engagement continued
Key metrics
• Employee voluntary turnover rate
• Employee engagement survey score
• Total employee pay and benefits inflation against industry
benchmark for each entity
Key topics
• Feeling valued and engaged in the business
• A safe and healthy working environment
• Learning and professional development
• Desire to have a positive impact
• Fair pay, benefits and treatment
• Diversity, equity and inclusion
Why we engage
The Company’s long-term success depends on a skilled and motivated workforce, an innovative and entrepreneurial approach, and a
safe and inclusive working environment
How we engage
• Create a supportive working environment fostering professional development and employee wellbeing, and aligning staff with
our strategic goals and culture
• Designated Non-Executive Director, Jonathan Shearman, Chair, supported by Claire Balmforth, NED, and Helen Tate, Global HR &
Sustainability Director
• Annual full culture employee survey and ad-hoc thematic surveys
• 24/7 employee voice survey
• Site visits by Board Directors and Senior Managers where open discussions are welcomed
• Internal communications, briefings and news
• Functional, Regional and compliance-based cross-functional risk reviews
Engagement during FY23
• Board member visits to our overseas subsidiaries in Hungary, North Carolina, USA, Italy, Singapore, Taiwan, Malaysia and China,
as well as to our UK sites in East Grinstead, Lancaster, West Midlands and head office in Uckfield
• Full culture survey completed during the year
• LifeWorks employee assistance programme continued
• Communications and meetings for strategic UK restructure and consultation period, with employee representatives elected by
workforce
• Regular risk reviews have commenced with our regional and functional teams, engaging with over 40 team members in FY23.
Wider engagement is planned for the coming year as our risk management framework continues to develop and mature
People
26
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Stakeholder engagement continued
Key topics
• Share price performance
• Year-on-year results improvements and medium-term
aspirations
• No prosecutions or negative press
• Sustainable business model for the future
Key metrics
• Earnings per share
• Cash conversion
• Total shareholder return
• ESG ratings
How we engage
All Independent Non-Executive Directors have the authority to meet shareholders
A structured programme is operated throughout the year where management are available to all shareholders, and includes:
• Annual General Meeting
• Presentations and roadshows through the Investor Meet Company (IMC) platform
• Distributing information through:
• Regulatory news releases
• Corporate website
• Annual Report and Sustainability Report
• Investor ESG questionnaires
• Additional meetings as required and requested
Why we engage
The Board is committed to maintaining strong relationships with our shareholders and engages regularly to provide fair, balanced
and understandable information ensuring they understand our purpose, values and strategy and how that promotes the long-term
sustainable success of the Company
Find details of substantial shareholdings of the Company on page 119
Engagement during FY23
• The Group’s website was regularly updated to ensure all stakeholders, including shareholders, were fully aware of the Group’s
activities
• Annual results presented on 26 July 2022 by the CEO and CFO via IMC
• AGM held on 7 September 2022 at head office for the first time since Covid-19
• Interim results presented 22 November 2022 by the CEO, CFO and COO via IMC
• Trading updates announced in October 2022 and February 2023
• Directorate changes announced in August 2022, November 2022 and February 2023
• Claire Balmforth, Remuneration Committee Chair, engaged with some of our largest shareholders to better understand their
views on remuneration at Trifast
• The 2023 AGM will be held at 11.30am on Friday 15 September 2023 at Peel Hunt
Investors
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Stakeholder engagement continued
Key metrics
• Orders
• Pipeline value
• Sales conversion rate
• Business reviews and feedback
• Sustainability scores – fulfilling customers’ objectives
• Number of customers by region
• Number of traded parts
Why we engage
Building effective and trusting relationships that generate mutual value helps us to understand our customers’ needs and
behaviours. It allows us to deliver relevant products and services, retain customers and attract new ones. It also identifies
opportunities for growth and market differentiation, and our ability to demonstrate how we are able to deliver on increasing
sustainability expectations and obligations
Key topics
• Being a flexible supplier in terms of our availability and
responsiveness
• Innovation and collaboration in problem solving
• Product performance and efficiency
• Safety, quality and reliability
• Competitiveness
• Our compliance including environmental and social
practices
• Agility of supply chain solutions and our range of products
How we engage
• Maintain long-standing partnerships with our customers, working closely to provide technical and logistics input, and developing
innovative solutions that meet the needs for emerging technologies and legislation
• Offer online platforms including digital marketing, social media and our websites
• Provide virtual training support to help customers understand our range of products and select the right fastener for each
application, including a video library for specific products and industries
• Complete customer questionnaires on ESG practices and performance, including the exacting requirements of SAQ.4
(automotive), JOSCAR (aerospace and defence) and the enhanced requirements of EcoVadis and CDP supply chain
questionnaires
Engagement during FY23
• Sales and logistics presentations and quarterly business reviews with major accounts
• Completion of online sustainability questionnaires within portals
• Maintaining customers’ key data requirements including financials
• Engineering workshops, ‘lunch and learn’ events and technical reviews
• Attended exhibitions to showcase our products and services to existing and potential customers
• Timeline discussions on changing legislation and new business introduction
• Product availability and offering alternative solutions
Customers
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Stakeholder engagement continued
Key metrics
• Robust vendor selection process
• Meeting commercial terms
• Supplier scorecards
• Quality and sustainability agreement acceptance
• Spend as a % of total spend for preferred supplier
grouping (AVL)
• Total number of suppliers
• Regional spend vs. imported spend
Why we engage
We actively engage with our suppliers to encourage and support them to instil our own business ethics and values within their
organisations. Building strong relationships ensures appropriate cost and quality levels of goods and services, security of supply and
speed to market. We rely on the high standards of our suppliers to ensure compliance, drive innovation and deliver improvements in
our overall sustainability performance
Key topics
• Fair treatment and on-time payments
• Quality and sustainability management
• Compliance with local legal requirements, including
modern slavery
• Responsible procurement, trust and ethics
• Shared technological advances and innovation
How we engage
• Established supplier Code of Conduct covering quality, sustainability and compliance criteria; expectations for all approved
suppliers to sign up to this Code to ensure that their ESG practices meet our expected standards
• Conduct in-person and virtual supplier meetings and conferences on specific issues, including compliance, quality and efficiency.
This includes the Modern Slavery Act, data protection and ESG as a broad subject
• We conduct performance reviews and site audits to ensure suppliers continue to meet our expected standards and to build
strong, collaborative relationships
Engagement during FY23
• Developed our supplier sustainable sourcing and procurement charter, quality and sustainability agreement and supplier
sustainability questionnaire. To date we have engaged with 300 key suppliers (80% of spend) and have received positive
feedback
• From our top 300 strategic global suppliers over 99% have signed the Modern Slavery document, which equates to 80% of the
global spend
• We continue to engage with suppliers on recent and new legislation, while building a near-shoring supply chain capacity and
competence in the Americas and Eastern Europe through face-to-face reviews, audits and the awarding of new business
• We continued to work closely with our global suppliers to increase the number of supply partners who are fully signed up to our
Modern Slavery Statement, which is available on our website www.trifast.com
Suppliers
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Stakeholder engagement continued
Key metrics
• Charitable donations
• Number of activities
Why we engage
Trifast has the capacity to create significant positive benefits within the communities we operate in but recognises our operations
can also have a negative impact. We are committed to engaging with our communities to ensure we interact responsibly and
maximise potential benefits
Key topics
• Fair treatment
• Good environmental management, especially minimising
noise and nuisance
• Support for community organisations and initiatives
• Jobs and economic benefits
How we engage
• We have good relationships with our neighbours and conduct regular reviews at each site to ensure we avoid causing nuisance
from noise, dust, light and waste control issues
• Community communication and complaints are managed by our ISO 14001 environmental management system
• Our supply chain includes a large number of small and specialist suppliers. We are keen to support small businesses in our
industry and the local economies in which we operate, and so we engage with smaller suppliers where needed to build skills and
knowledge, especially in relation to compliance, efficiency and quality
• We encourage staff to undertake fundraising to support local good causes and will be introducing an employee volunteering
policy in the coming year
Engagement during FY23
• Trifast is committed to supporting and sponsoring various events and activities within the communities local to each of our
locations
• For more information on stories that have happened in FY23, refer to our Sustainability Report
• A hardship fund has been set up to support any employee experiencing financial difficulties
• Trifast Foundation will be launching in FY24 to co-ordinate community engagement across all our sites
• TR employees from the West Midlands, UK took part in a Race For Life event in July 2022, raising £1,650 in memory of a
colleague
• Christopher Morgan, Trifast Company Secretary, participated in the London Marathon in October 2022, raising over £15,000 for
The Back Up Trust
Community
Community stories
Catch up with our latest news andlearn more
about Trifast on ourcorporate website at
www.trifast.com
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Stakeholder engagement continued
Key metrics
• Compliance performance
Why we engage
Policies and regulatory changes, including changes to the global political landscape and laws and regulations affecting terms of
trade, may provide opportunities and pose risk to our operations
Key topics
• Regulatory compliance
• Third-party audit and quality assurance
How we engage
• Through public disclosures (including the Annual Report and AGM) and specific submissions (such as those relating to packaging
and controlled materials within our products)
• Where necessary, we engage with government departments in countries where we operate
Engagement during FY23
• During the course of the year we continued to make all necessary compliance declarations and submissions. This includes market
announcements as well as compliance disclosures related to packaging materials, greenhouse gas emissions, and controlled
materials within our products (including SCIP, RoHS and REACH)
• Engagement with the Financial Conduct Authority in relation to our Task Force on Climate-related Financial Disclosures (TCFD)
• Continued trade compliance measures particularly as a result of the Ukraine conflict
• Engagement with the UK Export Finance team and incumbent banks to secure an export development grant (EDG)
Regulators/governments
31
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
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Introduction
Trifast is proud to be a people-centred business and
focused on being a responsible and responsive employer.
We promote an environment that is safe and fair, which
motivates, develops and maximises the contribution and
potential of all employees globally.
Attracting and retaining the best people for our business is
a priority. We have new talent management and succession
planning software, both of which support our commitment
to further develop and implement our learning and
development culture. The systems allow us to easily identify
skills gaps and create personal learning plans in order for
our employees to be equipped for their current roles and
for any roles they might progress to in the future.
We continue to offer our employees competitive benefits
and engage with our workforce on an ongoing basis. There
have been no controversies with regard to anti-competition,
business ethics, bribery and corruption, tax fraud,
responsible marketing, privacy or wages and working
conditions during the financial year.
The culture of our business is important to us, and we
continue to work on ways to further embed our values
within our workplaces, both in how we interact with each
other and with our wider stakeholder groups.
Policies
Our sustainability practices are governed by our
comprehensive Code of Business Conduct which sets out
our purpose, vision, mission and core values, alongside
the policies and guidance that ensure ethical business
practices.
• Anti-Bribery Statement and Policy
• Business Ethics and Responsible Behaviour Policy
• Charitable and Political Donations Policy
• Dignity at Work Policy
• Environmental Policy
• Equal Opportunities Policy
• Equal Pay Policy
• Fair Competition and Anti-Trust Policy
• Freedom of Association and Collective Bargaining Policy
• Harassment Policy
• Health and Safety at Work Policy
• Trade Compliance and Sanctions Policy
• Whistleblowing Policy
• Working Conditions and Human Rights Policy
Also included in our Code of Business Conduct:
• Modern Slavery Statement
We expect all employees to understand and comply with
these policies and the Code of Business Conduct also
helps our customers, suppliers and distributors around the
world understand our requirement for them to observe all
relevant laws and regulations.
Adherence to the policies within the Code is audited as part
of the Group HR audit process.
Employee engagement
We updated our cultural survey to include one
comprehensive annual survey with additional thematic
surveys during the year, focusing our activity in the areas
that will make a real difference to the working lives of
our employees. The results have remained encouragingly
stable. Each location and department head receives the
breakdown of the results for their team, with suggested
actions to improve any low scores.
Our ‘Employee Voice’ programme, which provides all
employees with the opportunity to contact us 24/7 365
days per year, was relaunched in February 2023. This
programme is anonymous but has been enhanced by the
inclusion of a feedback loop for employees who require a
specific response. The Employee Voice system is regularly
monitored so that we can act swiftly and appropriately.
Trifast Chair, Jonathan Shearman, is the designated
Non-Executive Director, supported by Claire Balmforth,
Non-Executive Director, and Helen Tate, Global HR &
Sustainability Director.
Our people
Focus on ESG
Read more about our employee
engagement within the Section 172
statement on pages 24 and 25
Read more about our people plan, including staff
turnover, succession planning and employee
engagement, in our Sustainability Report at
www.trifast.com
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Learning and development
Talent management is a key driver of our success, and
our learning and development programme is crucial to
upskilling our people, retaining top talent, and attracting
new candidates in an increasingly competitive marketplace.
We are totally committed to the development of all our
employees across the globe, offering them formal and
informal learning, as well as the opportunity to gain
industry-recognised qualifications.
Diversity, equity and inclusion
As a global business, we are committed to treating
everyone fairly and recognise the strengths that a diverse
workforce can bring. We make every effort to eliminate
discrimination, create equal opportunities and develop
good working relationships between our teams. Our people
represent a mix of cultures spanning 33 locations in 18
countries and this provides us with many opportunities to
understand and value those cultures.
Health, safety and wellbeing
We are committed to looking after our people and have
excellent health, safety and employee wellbeing practices
in place. This includes not only their physical health but
also their mental health. We operate an effective health and
safety management system across all our operations, with
a focus on risk management and prevention. We manage
health and safety issues alongside environmental issues
within an integrated environment, health and safety (EHS)
system.
Human and labour rights
Trifast recognises human rights as set out in the Universal
Declaration of Human Rights and enshrined in EU and UK
law through the European Convention on Human Rights
and the Human Rights Act 1998. Our workplace practices
are governed by our Code of Business Conduct, our HR
policies and our Business Ethics and Responsible Behaviour
Policy, which commits Trifast to the highest standards
in human and labour rights, employee conduct and
compliance with all applicable legislation. It also sets out
our commitment to ensuring employees have the freedom
to associate or collectively bargain without fear
of discrimination against the exercise of such freedoms.
Modern slavery
We comply with the requirements of the UK Modern
Slavery Act 2015 and the California Transparency in Supply
Chains Act 2010.
We remain committed to eradicating all forms of slavery or
human trafficking and expect the same standards from our
suppliers, customers, distributors, contractors and other
suppliers of goods and services around the world.
Bribery and corruption
We have a zero-tolerance approach to all forms of bribery
and corruption. Trifast plc is bound by the laws of the UK,
including the Bribery Act 2010, in respect of its conduct
both at home and abroad. In addition, we will uphold all
laws relevant to countering bribery and corruption in all
jurisdictions in which we operate, including the US Foreign
Corrupt Practices Act.
Whistleblowing
We have recently relaunched our campaign to ensure all
employees are aware of the global, external, independent
whistleblowing service, available to them in their own
language. This service allows employees to anonymously
report any activity or behaviour that they do not feel
is appropriate. The confidentiality of those who raise
concerns is protected and employees may come forward
without fear for their position. During the year being
reported and up to the date of this publication, one report
has been submitted to the hotline.
Focus on ESG continued
Our people continued
Read more about our learning and development,
including STEM careers, and early career support,
student opportunities and apprenticeships, in our
Sustainability Report at www.trifast.com
Read more about health, safety and
wellbeing, including our mental health
first aiders, in our Sustainability Report at
www.trifast.com
Trifast’s full statement on modern
slavery and human trafficking can be
found on the Company’s website at
www.trifast.com
Read more about diversity, equity
and inclusion in our Sustainability
Report
Read our gender pay gap report on
page 34
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
The table shows that based on a median average, our
female employees are paid 5.0% more than our male
employees. The mean average displays our male employees
as being 1.0% higher paid than our female employees. This
result represents a change in the mean average from 3.0%
in FY21 and the median average is now +5.0% compared to
+7.0% in favour of female employees from FY21.
These results compare very favourably when compared
with the national average of male employees being paid
8.3% more than female employees. Note that interpreting
average earnings data is still slightly impacted by Covid-19,
but this is now levelling off. Among full-time employees the
gender pay gap in April 2022 was 8.3%; this was 7.7% in
April 2021 and 9.0% in April 2019 (pre-coronavirus).
The bonus difference mean figure in the table shows equal
data for mean bonus payments.
Gender pay gap
The Equality Act 2010 (Gender Pay Gap Information)
Regulations 2017 brought into effect a requirement
for large UK employers, such as our largest UK trading
subsidiary, TR Fastenings Ltd, to report publicly each year
on the differences in the aggregate pay and bonuses for
men and women.
The Regulations mandate how organisations in England,
Scotland and Wales with 250 or more employees must
calculate a standard set of key metrics on their gender pay
and gender bonus gaps and the format and medium in
which they must report them.
Our gender pay reporting continues to provide reassuring
data that supports our reward and recruitment strategies.
The full gender pay gap statement for the reporting period
is included below.
In brief
The table below shows our overall median and mean
gender pay and bonus gap based on hourly rates of pay
and bonuses paid, as at the snapshot date 5 April 2022.
Pay and bonuses
(female compared to male)
Median Mean
Hourly pay +5.0% -1.0%
Bonus pay 0.0% 0.0%
Focus on ESG continued
Gender diversity
Male | 83%
Female | 17%
5
1
Male | 83%
Female | 17%
5
1
Male | 78%
Female | 22%
68
19
Male | 70%
Female | 30%
962
420
Board
Executive
Committee
Entity
Directors &
Senior
Managers
All
Our people continued
34
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Focus on ESG continued
Gender pay gap continued
Pay and bonuses continued
This is our sixth year of reporting on the gender pay gap,
and we continue to see improved results, and parity across
the UK business, TR Fastenings, as all the entities within
the Trifast Group demonstrate our absolute commitment
to all aspects of equality, fairness and equal pay in the
workplace.
Diversity on our Board
Trifast is aware that the current composition of its Board
does not comply with the new FCA proposed targets for
gender and diversity. A process is underway to address this
and anticipate this to be completed before the end of 2023.
Proportion of colleagues awarded a bonus in FY22
Received
a bonus | 96%
Did not receive
a bonus | 4%
Received
a bonus | 93%
Did not receive
a bonus | 7%
These charts illustrate that the number of men and women paid a bonus are primarily in line. As a Company we
continue to reward all our employees where applicable. The only reason the statistics do not show 100% is due to
eligibility criteria based on start and finish dates of employees.
Quartiles
The following charts illustrate the construction of each quartile.
Male | 88%
Female | 12%
Male | 52%
Female | 48%
Male | 58%
Female | 42%
Male | 68%
Female | 32%
Lower
quartile
Lower middle
quartile
Upper middle
quartile
Upper
quartile
Proportion of
males
who received
a bonus
Proportion of
females
who received
a bonus
Our people continued
35
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Trifast is committed to good environmental
management across our operations and supply
chain, and in the way we design products
We actively manage environmental issues through our
ISO14001 certifi ed environmental management system.
Our approach seeks to reduce the direct impacts from our
own operations as well as across the life cycle of our products.
We work closely with our customers to deliver innovation
that reduces environmental impact and accelerates electric
vehicles and renewable energy. We are pleased to report that
there have been no environmental incidents during FY23.
ESOS
The Company is required to comply with the Energy
Savings Opportunities Scheme (ESOS); we have had
assessments completed by competent third parties on
our business premises, to meet our ESOS requirements.
We have been following up on recommendations from our
previous energy assessments and look forward to having
new assessments completed in FY24.
Carbon emissions
Trifast is committed to acting to combat climate change
and reporting on its approach and performance. For FY23
we have continued to utilise the Carbon Trust ‘Footprint
Manager’ software. Due to some errors in invoicing and
data from FY22, we have recalculated our emissions for
FY22, which can be seen in the tables below. Our total
carbon emissions have increased from 6,163 tonnes
CO
2
e in FY22, to 6,299 tonnes CO
2
e in FY23; however, in
comparison with our turnover they have slightly reduced
from 28.19 kg CO
2
e per £1,000 turnover to 25.78 kg CO
2
e
per £1,000.
Our main area of energy use is within our manufacturing
facilities, followed by fuel use for distribution. We have
continued to monitor our Scope 3 business travel data,
and next year we look forward to sharing our Scope 3
supply chain data utilising the Greenhouse Gas Protocol
spend-based analysis methodology.
In line with our sustainability strategy we have set our
target for CO
2
e reduction. We have aligned this target with
the requirements of the Science-based Targets initiative
and, once we have completed consolidation of our Scope
3 data, will submit our letter of intent. Our target is to
reduce our Scope 1 and 2 carbon emissions by 67.2% by
FY35. Ourbase year is FY19 with a footprint of 8,160 tonnes
CO
2
e,with our end target for FY35 being 2,676 tonnes
CO
2
e. Our target for FY23 was 6,789 tonnes CO
2
e, which
wemore than achieved with our result of 5,974.66 tonnes
of CO
2
e for the year.
We have continued to respond to requests from customers
and investors on our carbon emissions and management
approach over the year. We have completed CDP (supplier
and investor) and EcoVadis submissions during FY23 and
will continue to do so annually.
FY23 FY22
Total Scope 1 emissions 1,723.20
1,963.65
Purchased fuels
1,127.39
1, 327.37
Company vehicle use
595.81
636.28
Fugitive emissions
0.00
0.00
Total Scope 2 emissions 4,251.46
3,942.73
Purchased electricity
4,251.46
3,942.73
Total Scope 3 business
travel 324.61 256.91
Air
314.90
225.11
Road
9.23
31.77
Rail
0.48
0.03
Total emissions 6,299.27
6,163.29
Environment and climate change
Focus on ESG continued
For more information on our sustainability
KSIs, KPIs, water use and carbon
emissions reduction, please see the
separate Sustainability Report 2023
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Carbon emissions continued
Environment and climate change continued
Focus on ESG continued
Manufacturing Distribution Total
6,299 tonnes
Trifast plc tonnes
(FY22: 6,163 tonnes)
9,820,509
kWh
Trifast plc kWh
(FY22: 10,974,018 kWh)
Asia manufacturing
2,435 tonnes
(FY22: 2,488 tonnes)
Europe manufacturing
1,941 tonnes
(FY22: 2,028 tonnes)
UK manufacturing
69 tonnes
(FY22: 86 tonnes)
4,126,955 kWh
(FY22: 5,166,291 kWh)
3,417, 575 kWh
(FY22: 3,772,009 kWh)
260,452 kWh
(FY22: 276,253 kWh)
UK distribution
1,133 tonnes
(FY22: 1,015 tonnes)
Asia distribution
287 tonnes
(FY22: 213 tonnes)
Europe distribution
241 tonnes
(FY22: 268 tonnes)
USA distribution
193 tonnes
(FY22: 64 tonnes)
975,176 kWh
(FY22: 911,522 kWh)
381,273 kWh
(FY22: 281,126 kWh)
404,113 kWh
(FY22: 403,488 kWh)
254,966 kWh
(FY22: 163,329 kWh)
4,445 tonnes
7,804,982 kWh
1,854 tonnes
2,015,527 kWh
kgs CO
2
e per £1k turnover
FY23
FY22 % change
Trifast plc 25.78
28.19 (8.55)
Asia
52.83
59.31 (10.9)
USA
6.52
3.66 78.1
Europe
25.56
29.26 (12.6)
UK
15.44
14.29 8.0
Note: Our emissions data includes all material emissions of the six
Kyoto gases from direct sources and from purchased electricity,
heat and steam and cooling where applicable. No direct source
material emissions have been omitted.
Figures are reported in tonnes of CO
2
e (carbon dioxide equivalent).
Reports are calculated in the following ways:
• Tonnes of CO
2
e
• Tonnes of CO
2
e per FTE (full-time equivalent)
• Tonnes of CO
2
e per SQM (square metres of floor space occupied
by the Company)
Our main source of emission factors is BEIS (2022), with other data
selected to fill gaps or because it is deemed to be more accurate.
IEA (2022) data is used for calculating emissions of non-UK,
location-based electricity. For market-based electricity, a mix of
AIB (2022), BEIS (2022) and EPA (2022) are used to calculate
emissions for the residual mix. Where there is no residual mix
factors available, the location-based factors from IEA are used.
37
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
In accordance with the requirements of Listing Rule
9.8.6R, Trifast has provided commentary or disclosures
against the 11 disclosure recommendations, and the
level of compliance can be seen in the table. Further
explanation on reasons for non-compliance, future steps,
plans and timelines to comply can be seen in the relevant
sections of this report.
Please refer to the table on page 47 that shows
signposting to other relevant areas of both the Annual
Report and Sustainability Report that further supports
our commentary and disclosure.
Trifast recognises that climate
change poses a significant risk
to people, ecosystems and
economies around the world
Task Force on Climate-related
Financial Disclosures (TCFD)
Recommended disclosure Compliance
Timeline
for compliance
Governance
a) Describe the board’s oversight of climate-related risks and opportunities
Partial FY24
Governance
b) Describe management’s role in assessing and managing climate-related risks and
opportunities
Full N/A
Strategy
a) Describe the climate-related risks and opportunities the organisation has identified over the
short, medium, and long term
Partial FY24
Strategy
b) Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy, and financial planning
Not compliant FY24
Strategy
c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate related scenarios, including a 2°C or lower scenario
Not compliant FY28
Risk management
a) Describe the organisation’s processes for identifying and assessing climate related risks
Partial FY24
Risk management
b) Describe the organisation’s processes for managing climate related risks
Not compliant FY24
Risk management
c) Describe how processes for identifying, assessing, and managing climate-related risks are
integrated into the organisation’s overall risk management
Partial FY24
Metrics and targets
a) Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process
Not compliant FY24
Metrics and targets
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions,
and the related risks
Partial FY24
Metrics and targets
c) Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets
Partial FY24
38
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Trifast recognises that climate change poses a significant
risk to people, ecosystems and economies around the world.
• Since FY21 we have been creating the foundations to
begin to understand the impacts of climate change.
We also introduced sustainability as one of our four
corporate strategy pillars
• We established an ESG Committee and ESG framework
during FY22, alongside publishing our first two
Sustainability Reports
• In FY23 we increased the members of the ESG Steering
Committee to include representation for supply chain and
innovation in line with our sustainability strategy. We set
our first climate-related target and our third Sustainability
Report was published alongside this Annual Report
• During FY24 we intend to further embed the TCFD
recommendations into our business processes
Sustainability, including the impacts of climate change,
is one of four pillars of the Group’s corporate strategy.
In turn, we consider climate change within both our
sustainability and risk management frameworks. We
continue to collaborate with suppliers and customers to
explore potential new materials, processes and innovations
to support our sustainability strategy.
As a global company, we are conscious that our local
facilities and operations could be affected by localised
climate-related changes. This is also true for our suppliers
and customers.
We are mindful of regulations that could affect us in the
future, including carbon taxes, such as the Carbon Border
Adjustment Mechanism (CBAM), a carbon tariff on carbon-
intensive products imported by the European Union. This
forms part of our consideration to on/near shore part of
our supply chain, where possible.
Governance
Disclose the organisation’s governance around
climate-related risks and opportunities
a. Describe the board’s oversight of climate-related
risks and opportunities
Compliance level – partial
due to not currently linking targets and objectives
with risks, financial planning and business model
The Board is directly responsible for climate-related issues
and is supported by the ESG Committee and Audit & Risk
Committee.
The ESG Committee is chaired by Louis Eperjesi,
Independent Non-Executive Director. Committee meetings
focus specifically on reviewing the progress of the
sustainability strategy and ongoing ESG projects, as well
as increasing the Company’s focus on matters relating to
climate-related risks and opportunities. The Committee will
work with the Board and its other Committees during FY24
to ensure climate-related issues are considered.
The ESG Steering Committee (Steering Committee) is
an operationally focused committee and membership
comprises the Global HR & Sustainability Director (Chair),
Global Sustainability Manager, Head of Governance, Global
Supply Chain Director and Director of Engineering. The
Committee meets twice a month to action day-to-day ESG
regulations, requirements and initiatives. The Group Head
of Financial Reporting and Head of Risk are also invited to
join specific Steering Committee meetings.
The Steering Committee reported back to the ESG
Committee twice during FY23, setting the agenda for
the meetings to ensure that the Board are apprised
of all operational sustainability and climate-related
developments and initiatives.
During the year our risk management and internal
controls framework was established and includes specific
climate-related risks and the potential impact on our
business. The Head of Risk attends all Audit & Risk
Committee meetings.
The Remuneration Committee discuss the importance of
linking climate-related targets to executive remuneration.
In FY23 we set a carbon emission reduction target which
is now linked specifically to the Executive Directors’ bonus
incentives.
During FY21 our Group strategy evolved to include
improved focus on sustainability. In FY24 we will review
our business model, which has not previously considered
climate-related issues specifically.
The following climate-related topics were discussed by
the Steering Committee in FY23 and brought forward for
consideration and review by the ESG Committee:
Emerging technologies
Recent changes in the markets have included focus on
electric and hybrid vehicles, increases in energy technology
and infrastructure and the recent legislation, the Right to
Repair Regulations, moving society from a throwaway to
a repair mindset. All of these create opportunities for the
Company, that will allow us to play our part in reducing
global emissions.
SBTi aligned reduction target
During FY23 we established a net-zero target aligned
to the Science-Based Targets initiative for our Scope 1
and 2 emissions in line with our sustainability strategy
commitment; this target also forms part of the performance
element of the executive bonus. At this stage we have
not yet linked this target to our risks, budgets or business
plans, but will aim to do so in FY24.
Task Force on Climate-related
Financial Disclosures (TCFD) continued
39
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Governance continued
a. Describe the board’s oversight of climate-related
risks and opportunities continued
Scope 3 business travel data
This data has now been collated in conjunction with our
external travel provider. We have discussed the potential
to offset travel GHG emissions but are aware that this
distracts from emissions reduction by the Company and,
as such, discussions are ongoing.
To increase our Scope 3 reporting
We have agreed the expansion of our Scope 3 data reporting
and in FY24 we will conduct analysis of our supplier GHG
emissions utilising the spend-based analysis method.
Life cycle calculations
Our engineering team have begun to determine their
methodology in calculating our ‘cradle to gate’ product
lifecycle and associated GHG emissions and will be working
on this initiative with our manufacturing plant in Italy during
FY24.
Energy-saving opportunities
Energy-saving analysis conducted at one of our sites
showed that simple on-site energy initiatives could provide
significant reduction in energy use. As a result of this
analysis, the Steering Committee asked our Network of ESG
Champions to implement energy-saving initiatives at their
sites and promote energy-saving to support our strategy of
reducing our Scope 1 and 2 GHG emissions.
Energy-saving initiatives
Following the installation of solar panels at our sites
in Hungary and Malaysia, the Steering Committee has
discussed various initiatives that we could implement
across the Group.
These include further solar panel projects, energy contract
reviews, EV charging points, LED lighting and de-gassing
of sites. These projects are ongoing for some of our sites;
however, in the UK, discussions have been put on hold due
to the new National Distribution Centre (NDC) plans.
Carbon monitoring software
During the year we commenced discussions for the
potential to move providers of our carbon footprinting
software to enhance our reporting capabilities. Whilst no
decisions have been confirmed, discussions are ongoing to
ensure that we have a system that is fit for purpose.
The ESG and Audit & Risk Committees will commence
working towards embedding and aligning climate-related
issues in our business, financial and risk planning during FY24.
It is our expectation that this alignment will strengthen our
processes to ensure that climate-related issues are considered
when reviewing and guiding strategy, major plans of action,
risk management policies, annual budgets and business plans,
as well as setting the organisation’s performance objectives,
monitoring implementation and performance, and overseeing
major capital expenditures, acquisitions and divestitures.
Climate related issues are ever evolving, and we look
forward to reporting our continued progress on this in our
next Annual Report.
Last year we established our sustainability strategy and
during FY23 we were pleased to set our first net zero
target, which has been aligned with the Science-Based
Targets initiative. This aims to reduce our Scope 1 and 2
GHG emissions by 67.2% by 2035 (with a rolling target of
4.2% reduction p.a.) using a baseline of 2019.
The ESG Committee were informed by the Steering
Committee in December 2022 on the reduction levels that
had been achieved and were pleased to inform that the
performance criteria have been met.
We will continue to review further targets that may be
appropriate to our business. The Board, supported by the
various committees, will continue to monitor and oversee
progress against our goals and targets for addressing
climate-related issues.
b. Describe management’s role in assessing and
managing climate-related risks and opportunities
Compliance level – full
During FY23, and following the departure of our CEO,
who was Chair of both our ESG Committee and Steering
Committee, we increased the members of the Steering
Committee with the addition of our Global Supply Chain
Director and Director of Engineering, to further align
with our sustainability strategy and commitments. Our
colleagues from the Risk and Group Finance departments
are also included regularly in meetings as appropriate.
The Steering Committee is responsible for assessing,
monitoring and managing climate-related issues and, along
with the Head of Risk, assigns ownership of climate-related
issues, risks and opportunities to management and heads
of functions.
This Committee currently reports twice a year to the
Board on its progress with the sustainability strategy,
climate-related issues and emerging requirements.
Feedback is also given by the Head of Risk through the
Audit & Risk Committee.
The Head of Risk continues to develop the Group risk
management and internal controls framework. We
recognise the challenges in embedding new risks into the
Company’s risk culture, but the management team clearly
understand the importance of climate risk and its potential
impact on our business.
Task Force on Climate-related
Financial Disclosures (TCFD) continued
40
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Governance continued
b. Describe management’s role in assessing and
managing climate-related risks and opportunities
continued
In addition to the Steering Committee meeting twice a
month, they are supported by functional and regional
management and meet regularly to review and assess
climate-related risks and opportunities through the ESG
Management Working Group (Management Working
Group).
Our ESG governance framework also includes a Network
of ESG Champions (Network of Champions), comprising
employee representation from each of our global sites.
These employees are involved in the day-to-day local
implementation of projects and initiatives.
We have reviewed the role of the Network of Champions.
We recognise their role will continue to evolve and there
are opportunities to further embed their role into our wider
governance framework.
For FY24, climate-related issues are a standing agenda
item at each level of our ESG governance framework – ESG
Committee, Steering Committee, Management Working
Group and Network of Champions. This will ensure
that every level of our ESG framework is aware of our
climate-related issues, developments and initiatives along
with required actions. In addition, the ESG Committee Chair
will meet with the ESG Steering Committee on a quarterly
basis to share strategy-related updates, climate-related
issues and appropriate actions.
Climate-related issues are also a standing agenda item at
the Audit & Risk Committee meetings.
The Global HR & Sustainability Director, Head of
Governance and Global Sustainability Manager, who are all
members of the ESG Steering Committee, attend meetings
at all levels of the ESG governance framework, as shown
on page 76. This is to ensure consistent understanding
and effective implementation of the sustainability strategy
across the business and to support effective monitoring of
climate-related issues.
Strategy
Disclose the actual and potential impacts of climate-
related risks and opportunities on the organisation’s
businesses, strategy and financial planning where such
information is material
a. Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium and long term
Compliance level – partial
due to current CDP time horizons being out of
alignment with our adopted time horizons and
climate-related risks and opportunities not yet fully
assessed or mitigation actions agreed
During FY23, the Management Working Group identified a
broad range of climate-related risks from which we carried
out a scenario mapping exercise to understand the time
horizon in which each risk or opportunity was most likely to
develop. As we completed this work, we realised that there
were a number of different time horizons in use across
the Company and a decision was made to bring these into
alignment.
The horizons we have adopted are:
Short term 0-3 years
Medium term 3-15 years
Long term 15-25+ years
We have now updated these horizons to provide consistent
reporting throughout our Enterprise Risk Management
System, considering not just climate-related risks, but the
entire risk register, and the links to our going concern and
viability statement.
During our next CDP submission in July 2023, we will
update data from this Annual Report, and align our CDP
time horizons, which were not previously aligned to TCFD.
This Annual Report will be used as our documented
evidence of the adopted time horizons.
As a business that operates globally with manufacturing
and distribution sites around the world, supplying a variety
of products into a wide range of market sectors, we have
found the unpredictable and rapidly changing nature of
climate-related risks and opportunities very challenging to
define with any certainty. This has significantly influenced
our decision to create our own scenario maps and explore
the links between aspects of climate change and business
activities, resulting in three specific scenarios:
• The impact of carbon taxes on import and export of
fasteners globally
• The impact of natural disasters on our operations sites
and supply chain models
• The impact of increased average temperature on
our operational sites and anticipated associated
developments
The Management Working Group reviewed the risks within
the scenarios, identified specific risks within each time
horizon, and identified where there could be an impact on
revenue, profit or overheads. Climate change is currently
identified as an emerging risk, and none of the emerging
risks have been considered for modelling in the viability
statement.
Task Force on Climate-related
Financial Disclosures (TCFD) continued
41
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Strategy continued
a. Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium and long term continued
In total, the Management Working Group identified 23
separate climate-related risks and eight climate-related
opportunities. Although these risks have been identified,
categorised and assigned to business owners, they have
not yet been fully assessed and mitigation actions have not
been agreed. We aim to complete this in FY24.
We reviewed the changing impact of carbon taxes using
the Network for Greening the Financial System (NGFS)
data for various climate scenarios, and as our Scope 3 data
is not yet fully developed, we have used the data that we
have as the starting point for understanding the anticipated
changes in carbon pricing.
Based on FY22 emissions data, Scope 1, 2 and 3 (for
business travel only as per the Annual Report 2022), we
have used a constant emissions total of 6,909 tonnes CO
2
e
and considered examples of the projected carbon pricing
in the short, medium and long term for each NGFS scenario.
Development of Scope 3 emissions data is critical to
understand fully the risk this poses on the business, and
this is something that we will expand during FY24. We will
be analysing our Scope 3 supply chain data using the GHG
Protocol spend-based analysis method.
We used the NGFS temperature rise predictions to
understand the variation predicted, relative to the location
of our operational sites.
We were unable to find any tangible predictions relating
to natural disasters so, for the purpose of the scenario
mapping, we assumed that the nature of any current
susceptibility (such as flooding or typhoons etc.) would
be generally constant, with higher frequency and intensity
anticipated according to the success of any global action to
limit or slow climate change.
We have identified two emerging risks relating to climate
change:
• Climate change impact
• Climate change legislation
Due to the inter-connected nature of these risks, and their
shared causes and effects, we have summarised the key
points below:
Physical risks
Increased temperature could result in natural disasters and
other acute climate change effects, there may be disruption
to our global transport infrastructure which would lead to
service disruption and increased logistics costs in the short
and medium term.
If there is a global failure to reduce the effects of climate
change, we would expect this disruption to intensify long
term and any increasing frequency of natural disasters and
severe weather would be expected to impact our sites or
assets to some degree.
Transition risks
As a result of increasing climate change legislation,
taxation (including CBAM) and requirements for financial
disclosures, there is an increased risk of reputational
damage if we fail to respond effectively to climate
change challenges in the short term, which may lead to
inappropriate strategy, metrics and targets for changing
market sectors and customer requirements.
In the medium term we anticipate changes to traditional
products due to increased market regulation and carbon
taxes which would lead to increased needs for capital and
financing to support product development and testing.
In the long term we have identified potential changes to
customer manufacturing models which may increase the
rate of change away from traditional supply chain models.
Opportunities
In the short term we have identified opportunities based
on increased customer demand for products supplied to
developing market sectors as well as opportunities to use
renewable energy within our own infrastructure.
In the medium term we see opportunities linked to
replaceable parts through the ‘right to repair’ philosophy,
new products, resource efficiencies, investment to support
onshoring of the supply chain through our own factories
and the development of automation.
Long-term opportunities are expected to include new
materials and coatings for fasteners as well as further
customer product developments and resource efficiencies.
We plan to extend the analysis of these risks further
over the next financial year, to consider the specific
geographical impact to our locations, and the impact on
our key revenue sectors.
Task Force on Climate-related
Financial Disclosures (TCFD) continued
42
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Task Force on Climate-related
Financial Disclosures (TCFD) continued
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lowerscenario
Compliance level – not compliant
due to strategy not being specifically based
on mitigation of any climate-change risks or
opportunities and the strategy has not been
evaluated against any of the Paris Accords scenarios
As we continue on our journey to better understand climate
change and the climate-related risks and opportunities
that we may face over the coming years, the work of
meaningfully assessing those risks in the context of the
Paris Accords and related average temperature scenarios
has not yet been carried out. We will start this analysis once
we have completed further work on our Scope 3 data.
Trifast is committed to securing a sustainable future.
Our sustainability strategy is helping us to play our part
in shaping a sustainable economy. We are well placed to
deliver transformational change across our operations,
with our customers and supply chain, and in the way we
design products.
As a global importer and exporter of fasteners, an agile
supply chain strategy has always been an integral part
of Trifast’s success. As customers progressively change
their strategic decision-making to accept the costs of
carbon footprint in the products they purchase, we will
be able to accelerate the implementation of our supply
chain initiatives that directly impact our carbon emissions
reduction.
For our own operations, we are building on our track
record of robust compliance, emissions reductions and
solar energy. For further information please refer to our
Sustainability Report.
FY24 will see us open our new National Distribution Centre
(NDC) in the UK. Our Global Sustainability Manager is part
of the Steering Committee for this project and following
the success of our sustainable premises in Hungary, we
are pulling this good practice through to the NDC. The
premises will include six EV charging points, energy
efficient lighting and heating, bicycle storage, increased
recycling options and separate fuel generator to ensure
continuity of supply. We will continue to assess sustainable
options available to us and promote best practice
throughout our operations.
The wider NDC project will also include the closure of some
of our existing carbon inefficient warehouses.
Part of our access to capital is to have the ability to invest
in on/near shoring, to reduce CO
2
e of logistics, energy
efficiency and regional specific investments to localise
manufacturing closer to the customer.
As part of our planning process, it is inherent to look for
cost-saving efficiencies through reduction in energy usage
across our manufacturing and distribution sites. As part
of our current business transformation roll out, we will
continue to look for opportunities to make our processes
more efficient and effective.
We currently do not have a carbon management plan
to describe our plan for transitioning to a low-carbon
economy. However, this is a key project in our strategy,
and we will aim to develop this carbon management plan
during FY24.
We have commenced an initiative with our customers to
focus more of our supply chain closer to our customers
to both reduce logistics costs and carbon footprint of the
product.
Strategy continued
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy and financial planning
Compliance level – not compliant
due to not currently having a carbon management
plan or linking specific risk impacts to strategy or
financial planning
We have performed some initial analysis of the impact
of climate-related issues on the organisation’s business
strategy and financial planning, as seen in Trifast’s CDP
disclosures; however, we have relied on a more general
awareness of climate-related risks and opportunities within
the business teams and committees to influence strategy
and financial planning.
The touch points between strategy and climate-related
risks are:
• The flexible nature of our products, across a range of
materials and all market sectors, allows us to work with
our customers to support their changing products and
the changing needs of end customers
• To create a sustainable supply chain, we need a shared
commitment with both suppliers and customers in
adhering to good environmental, social and governance
practices
As a Company we are accelerating our progression to
on/near shoring our global supply chain and focused
efforts are being made to develop supply chains closer to
the customer. This has many benefits including reducing
carbon emissions, reduction of lead times, and the
reduction of charges levied via CBAM.
During the year, an engineering university student joined us
on a year’s placement as a Junior Sustainability Analyst. He
worked on research projects including sustainable packaging
sources and CO
2
e life cycle assessment of products.
43
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Task Force on Climate-related
Financial Disclosures (TCFD) continued
b. Describe the organisation’s processes for
managing climate-related risks
Compliance level – not compliant
due to risks identified but not yet managed
In FY23 our climate-related risks and opportunities were
identified and assigned to business owners, but further
work is required to fully assess the risks and agree
appropriate mitigation actions with the business owners.
Once in place, the effectiveness of the actions taken will be
reviewed by the Risk department and reported to the Audit
& Risk Committee
c. Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management
Compliance level – partial
due to ongoing development of the risk
management framework to include climate-related
risk reporting
During FY23 we continued to develop our risk framework
and the identification, assessment and management of
climate-related risks now fall within the risk management
framework.
A detailed review of risk management is presented to the
Group Risk Committee and Audit & Risk Committee once
a year and updates are presented twice a year. From FY24
these reports and updates will include climate-related risks
and opportunities.
A review of the effectiveness of the risk management and
internal controls systems is presented to the Group Risk
Committee and Audit & Risk Committee twice a year.
Climate-related risks are a standing agenda item for
the ESG Committee and Steering Committee. The
ESG Committee will work with the Board and its other
Committees during FY24 to ensure climate-related issues
are considered.
Risk management
Disclose how the organisation identifies, assesses and
manages climate-related risks
a. Describe the organisation’s processes for
identifying and assessing climate-related risks
Compliance level – partial
due to risks identified but not fully assessed
This year the Steering Committee has worked with the
Management Working Group, and the Risk team, to identify
climate-related risks across the Company. Our risk review
schedule for the Group is based on regional, functional and
compliance groups and we also plan to review risk themes
(including climate change) as part of the developing ERM
framework.
Our risk framework taxonomy is based on HM Government
Orange Book (2020) risk classification, and we also identify
risk type (Hazard, Control, Compliance and Opportunity).
We use tools to identify and analyse risk including
brainstorming, scenario development, best and worst-
case mapping, controls-based reviews and materiality
assessments.
Once identified, all risks are categorised and assigned to
business owners. They are then assessed and scored for
impact and likelihood, and mitigation actions are agreed
and tracked to completion. Climate-related risks are
managed within the wider risk management framework.
We conduct biannual reviews of compliance with laws and
regulations. These reviews are undertaken by the Audit &
Risk Committee and will include existing climate-related
law and regulations within this process.
Strategy continued
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lowerscenario continued
We continue to evaluate our strategy against the rapidly
changing external context linked to climate change,
particularly our global supply chain strategy, in light of the
introduction of carbon taxes on the import of fasteners to
Europe.
As referenced above, we are accelerating our progression
to on/near shoring our global supply chain and focused
efforts are being made to develop supply chains closer to
the customer.
44
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
We were unable to find any tangible predictions relating
to natural disasters so, for the purpose of the scenario
mapping, we assumed that the nature of any current
susceptibility, such as flooding or typhoons etc., would
be generally constant, with higher frequency and intensity
anticipated according to the success of any global action
to limit or slow climate change.
As we continue on our journey to better understand climate
change and the climate-related risks and opportunities
that we may face over the coming years, the work of
meaningfully assessing those risks in the context of the
Paris Accords and related average temperature scenarios
has not yet been carried out. We will start this analysis once
we have completed further work on our Scope 3 data.
We continue to review potential additional metrics and
targets for assessing climate-related risks and opportunities
and will implement any that we feel are appropriate for the
Company.
We currently measure and report on our carbon emissions
for Scopes 1 and 2, as well as Scope 3 business travel.
Details can be found on pages 36 and 37 and include prior
year comparison.
For FY24 we will be increasing our Scope 3 reporting.
These metrics have been used to set carbon emission
reduction targets, which also now form part of
performance-based Executive bonus calculations.
We also measure our energy usage, water use and
discharge, and monitor our waste management routes.
We have not set targets against these monitors at this
stage but hope to set meaningful objectives in the future.
The Management Sustainability Working Group identified
three climate scenarios developed for climate change:
• Carbon tax
• Natural disasters
• Increased average temperature
We have examined the changing impact of carbon taxes
and considered projected carbon pricing in the short,
medium and long term. Data is critical to understand the
risk this poses on the business, and to determine options
for paying and passing on carbon taxes to customers which
is linked into our scenario analysis; please refer to the above
strategy section for more detail.
Task Force on Climate-related
Financial Disclosures (TCFD) continued
Metrics and targets
Disclose the metrics and targets used to assess and
manage relevant climate-related risks and opportunities
where such information is material
a. Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in
line with its strategy and risk management
Compliance level – not compliant
due to metrics not linked to measurement and
management of risks
We do not currently have metrics in place to measure and
manage climate-related risks.
Historically, we have collected data about our water, energy
and waste from our operational sites as well as tracking
and setting reduction targets for our Scope 1 and 2 GHG
emissions.
Last year we established our sustainability strategy and
during FY23 we were pleased to set our first net zero
target, which has been aligned with the Science-Based
Targets initiative. This aims to reduce our Scope 1 and 2
GHG emissions by 67.2% by 2035 (with a rolling target of
4.2% reduction p.a.) using a baseline of 2019.
The ESG Committee were informed by the Steering
Committee in December 2022 on the reduction levels that
had been achieved and were pleased to inform that the
performance criteria have been met.
At this stage we have not yet linked this target to our
climate scenarios, risks and opportunities, budgets or
business plans, but will aim to do so in FY24.
45
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Task Force on Climate-related
Financial Disclosures (TCFD) continued
This carbon emission target was set at 4.2% reduction
of our Scope 1 and 2 emissions each year until 2035. For
FY23, this target was 16.8%, we have seen a reduction of
26.8% since 2019. For detailed performance and historical
data please refer to page 34 of our Sustainability Report.
Meeting these targets will be achieved by energy and
carbon reduction within our own operations, indirect
emissions from travel and logistics and our supply chain.
The reporting boundary of this metric includes the Scope
1 and 2 emissions of all active companies within the Trifast
plc Group.
Our definition of net zero is where GHG’s from human
activity are in balance with emission reductions. Although,
those emissions are still generated, an equal amount is
removed from the atmosphere. Our intention in FY24 is to
commence an Eliminate, Reduce, Protect plan for net zero.
For our definitions and methodologies of our metric and
target please refer to Metrics and targets disclosure b.
Continuing with our sustainability strategy we will increase
our Scope 3 reporting next year and also begin to develop
Scope 3 targets.
The executive remuneration annual bonus performance
conditions now include an element relating to 5%
weighting of the maximum bonus opportunity that is
reliant on achieving the annual carbon emission reduction
target. Further information can be found in the Directors’
remuneration report on pages 82 to 103.
During the coming year we will increase our Scope 3
reporting to include a spend based analysis of our supply
chain carbon footprint in line with the GHG protocol
methodology, it is our intention to also gather historical
(Scope 3) data where possible to allow for trend analysis.
We aim to continue expanding our Scope 3 data collation
activities in the future to gain a clear picture of our full
organisation footprint.
We will continue to develop a comprehensive programme
to achieve our emissions targets and enhance our resilience
to climate related risks - further information can be found in
Risks on pages 58 to 63.
c. Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets
Compliance level – partial
due to key metrics not being fully defined and lack
of links to related risks
Last year we established our sustainability strategy and
during FY23 we were pleased to set our first net zero
target, which has been aligned with the Science-Based
Targets Initiative. This aims to reduce our Scopes 1 and 2
GHG emissions by 67.2% by 2035 (with a rolling target of
4.2% reduction p.a.) using a baseline of 2019.
Metrics and targets continued
b. Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions, and the
related risks
Compliance level – partial
due to not yet developing our full Scope 3 emissions
along with lack of links to related risks
Our carbon emissions data falls within Scopes 1 and 2 as
well as Scope 3 business travel and can be found on pages
36 and 37.
We utilise various intensity factors to assess our GHG
data including tonnes of CO
2
e per full time equivalent, per
square meters of floor space occupied by the Company and
per £1k turnover.
Our main source of emission factors is BEIS (2022), with
other data selected to fill gaps or because it is deemed to
be more accurate. IEA (2022) data is used for calculating
emissions of non-UK, location-based electricity. For
market-based electricity, a mix of AIB (2022), BEIS (2022)
and EPA (2022) are used to calculate emissions for the
residual mix. Where there is no residual mix factors
available, the location-based factors from IEA are used.
Any changes in reported emissions or changes in
methodologies or restatements, will be clearly stated on
pages 36 and 37 of the environment and climate change
section.
46
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Task Force on Climate-related
Financial Disclosures (TCFD) continued
Recommended disclosures This Annual Report
Sustainability Report
Compliance statement • Strategy – focus on sustainability – pages 14 and 15
• Where we operate – page 3
• Build a sustainable supply chain – pages 38 to 43
• Enable sustainable innovation – pages 44 to 53
Governance
a) Describe the board’s oversight of climate-related risks
and opportunities
• ESG Committee report – pages 76 and 77
• Audit & Risk Committee report – pages 78 to 81
• Risks – pages 58 to 63
• Strategy – pages 8 to 15
• Directors’ remuneration report – pages 82 to 103
• Our sectors – pages 22 and 23
• Focus on ESG – environment and climate change – pages 36
and 37
• Stakeholder engagement – Section 172 statement – pages
24 and 25
• Key strategic indicators – pages 18 and 19
• Sustainability governance – Introduction –page11
b) Describe management’s role in assessing and managing
climate-related risks and opportunities
• ESG Committee report – pages 76 and 77
• Risks – pages 58 to 63
• Sustainability governance – Introduction –page11
Strategy
a) Describe the climate-related risks and opportunities the
organisation has identifi ed over the short, medium and
longterm
• Risks – emerging risks – pages 59 to 63
• Risks – materiality defi nition – pages 58 and 59
• Viability statement – pages 64 and 65
• Strategy – focus on sustainability – pages 14 and 15
• Sustainability governance – Managing risks and
opportunities – page 14
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and fi nancial planning
• Build a sustainable supply chain – pages38 to 43
• Enable sustainable innovation – pages 44 to 53
c) Describe the resilience of the organisation’s strategy, taking
into consideration diff erent climate-related scenarios,
including a 2°C or lower scenario
• Strategy – securing a sustainable future – page 14
• Viability statement – pages 64 and 65
• Building a sustainable supply chain – pages38 to 43
47
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Recommended disclosures This Annual Report
Sustainability Report
Risk management
a) Describe the organisation’s processes for identifying
and assessing climate-related risks
• Risks – pages 58 to 63
• Audit & Risk Committee report – pages 78 to 81
b) Describe the organisation’s processes for managing
climate-related risks
• Risks – pages 58 to 63
• Audit & Risk Committee report – pages 78 to 81
c) Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management
• Risks – pages 58 to 63
• Audit & Risk Committee report – pages 78 to 81
Metrics and targets
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process
• Focus on ESG – environment and climate change – pages 36
and 37
• Risks – pages 58 to 63
b) Disclose Scope 1, Scope 2 and, if appropriate, Scope3
greenhouse gas (GHG) emissions, and the related risks
• Focus on ESG – environment and climate change – pages 36
and 37
• Risks – pages 58 to 63
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets
• Key strategic indicators – pages 18 and 19
• Directors’ remuneration report – pages 82 to 103
• Act on Environment and Climate Change – Science-based
targets initiative – page 36
Task Force on Climate-related
Financial Disclosures (TCFD) continued
48
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
We aim to comply with the non-fi nancial reporting requirements contained in Sections 414CA and 414CB of the Companies Act 2006. The table below, and the information it refers
to, is intended to help stakeholders understand our position on key non-fi nancial matters. This builds on existing reporting that we already do under the Guidance on the Strategic
Report (UK Financial Reporting Council).
Non-fi nancial and sustainability reporting
informationstatement
Non-fi nancial reportingmatter Policy/code This report Sustainability report
Environmental matters • Environmental Policy
• Climate-related fi nancial disclosures
Page 32
Pages 38 to 48
Page 15
Employees • Code of Business Conduct
• Business Ethics and Responsible Behaviour Policy
• Harassment Policy
• Whistleblowing Policy
• Health and Safety at Work Policy
• Privacy Notice
• Freedom of Association and Collective Bargaining Policy
• Equal Opportunities Policy
Page 32
Social matters • Supporting charities
• Charitable and Political Donations Policy
Pages 32 and 120
Respect for human rights • Modern Slavery Statement
• Supplier Code of Conduct
• Working Conditions and Human Rights Policy
Pages 32 and 33 Pages 15 and 27
Anti-corruption and anti-bribery matters • Anti-Bribery Statement and Policy
• Fair Competition and Anti-Trust Policy
• Whistleblowing Policy
• Trade Compliance and Sanctions Policy
Pages 32 and 33 Page 15
Policy embedding, due diligence and outcomes Page 32
Description of principal risks and impact of business activities Pages 58 to 63 Page 14
Description of business model Pages 16 and 17
Non-fi nancial key performance indicators Page 21
49
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
FY23 presented well-documented challenges for the
Group, however, our focus on our immediate priorities in
Q4 showed a positive boost. This, combined with robust
growth in the second half, enabled us to deliver revenues
up 9.1% CER to £238.5m (AER: 11.8% to £244.4m; FY22:
£218.6m). 7.3% of that growth was organic, with the
remaining 1.8% refl ecting fi ve months’ trading from TR
Falcon.
By the end of FY23, we had successfully achieved most
of our price increase programme, incorporating a fl exible
pricing mechanism with our key customers, and we are
pleased to report that in March 2023 our margins improved.
This growth refl ected persistent demand in most of our
underlying markets and was achieved through focused
sales initiatives across a number of sectors.
Gross profi t has reduced to 25.3% (AER: 25.3%; FY22:
26.7%) as the positive impact of higher revenues has
been off set by the lag in pass-through of cost factors
due to freight, higher electricity and raw material cost
deltas. During the fi nal quarter of 2023 the fl exible pricing
mechanisms with key customers were agreed to ensure
costs were fairly passed on to our end customer. Supply
chain and energy challenges are now stabilising across
most of the world allowing a normalisation of our cost
deltas we have faced in HY1, although this is still working its
way through stock holdings in the fi rst half of FY24.
After a challenging period, we are now
focused on continuing our momentum
to deliver profi table growth and our
medium-term aspirations
Darren Hayes-Powell
Chief Financial Offi cer
Financial review
Unless stated otherwise, amounts and comparisons with prior year
are calculated at constant currency (Constant Exchange Rate (CER)).
Where we refer to ‘underlying’ this is defi ned as being before separately
disclosed items (see notes 32 and 2).
50
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Underlying operating profit reduced by £3.5m to £11.2m
(AER: £12.0m; FY22: £14.7m) due to investments in
overheads relating to recruitment, Project Atlas (Microsoft
D365) BAU costs as well as inflationary cost impacts. As
a result of the increased overhead levels, we commenced
a strategic review of operations and function costs that
is anticipated during FY24 to start delivering savings in
excess of £5m per annum.
Gross inventory levels at c.£97m (AER: c.£99m; FY22:
c.£98m) are back in line with FY22, reflecting a more
balanced trade position and a significant reduction from
HY1 levels of £107m. The continued reduction in gross
stock levels will remain a key focus in FY24. The inventory
provision in FY23 was c.£8m (FY22: c.£9m).
Adjusted net debt has risen to £38.0m (HY23: £40.4m;
FY22: £23.8m) as underlying cash inflow of £11.5m has been
more than offset by a reduction in creditors (£11.7m), capex,
Atlas investments (£7.3m) and other amounts including
interest, tax, dividends and FX.
Following these cash movements, our leverage ratio,
calculated in line with the banking agreement, at
31March2023 was 2.19x (FY22: 1.27x). Whilst this is higher
than historically, it remains within our covenant range
of < 3.0x and therefore continues to provide flexibility.
Facility headroom as of 31 March 2023 was £10.2m (FY22:
c.£29.3m), as stated before an additional £40m accordion
option.
Financial review continued
Our Group performance
Underlying measures
CER
FY23
CER
change
AER
FY23
AER
change
AER
FY22
Revenue
£238.5m
9.1%
£244.4m
11.8% £218.6m
Gross profit %
25.3%
(140)bps
25.3%
(140)bps 26.7%
Underlying operating profit (UOP)
1
£11.2m
(24.1)%
£12.0m
(18.7)% £14.7m
Underlying operating profit %
1
4.7%
(200)bps
4.9%
(180)bps 6.7%
Underlying profit before tax
1
£8.6m
(37.7)%
£9.3m
(32.4)% £13.8m
Underlying diluted earnings per share
1
—
—
5.13p
(36.9)% 8.13p
Adjusted leverage ratio
1,3
—
—
2.19x
0.92x 1.27x
Adjusted net debt
1,2
—
—
£(38.0)m
£(14.2)m £(23.8)m
Return on capital employed (ROCE)
1
—
—
5.4%
(290)bps 8.3%
GAAP measures
Operating (loss)/profit
—
—
£(0.0)m
(100.1)% £11.6m
Operating (loss)/profit %
—
—
(0.0)%
(530)bps 5.3%
(Loss)/profit before tax
—
—
£(2.7)m
(125.4)% £10.6m
Diluted (loss)/earnings per share
—
—
(2.12)p
(132.3)% 6.56p
1. Before separately disclosed items (see notes 2 and 32)
2. Adjusted net debt is stated excluding the impact of IFRS 16 Leases. Including right-of-use lease liabilities, net debt increases by £(15.8)m to £(53.8)m (FY22: net debt increases by £(13.7)m to £(37.5)m)
3. Adjusted leverage ratio is calculated using adjusted net debt against adjusted underlying EBITDA (see note 32)
51
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Five-year dividend cover
2019
3.0x
7.2x
3.9x
3.9x
2.3x
2020
2021
2022
2023
Financial review continued
Dividend policy
As a Board we are proposing to raise the final dividend in
FY23 to 1.50p (FY22: 1.40p). This, together with the interim
dividend of 0.75p (paid on 14 April 2023), brings the total
for the year to 2.25p per share, an increase of 7.1% on the
prior year (FY22: 2.10p). The final dividend, subject to
shareholder approval at the AGM, will be paid on
13 October 2023 to shareholders on the register at the close
of business on 29 September 2023. The ordinary shares will
become ex-dividend on 28 September 2023.
The dividend cover is currently 2.3x, however the Board
continues to consider that an appropriate future level of
dividend cover is in the range of 3.0x to 4.0x.
Dividend progression
1.
2019
Interim Final Total
1
1.20p
1.20p
1.60p
1.40p
0.75p
1.50p
0.70p
3.05p
202020212022
2023
In FY20 and FY21, one dividend payment was made, rather than
an interim and final, due to the impact of Covid-19
FX effects on revenue (£m)
FY23
238.5
244.4
223.3
218.6
FY22
188.2
188.1
FY21
CER AER
FX effects on underlying operating profit (£m)
FY23
11.2
12.0
15.2
14.7
FY22
12.1
12.0
FY21
CER AER
52
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Revenue
We have seen a mixed performance across the region with
Europe and North America showing strong growth whilst the
UK remains flat and Asia has shown small growth. Across our
key market sectors, the majority have seen strong growth,
most notably in light vehicle, with only distributors and
health & home showing reductions year-on-year.
Europe has seen a 10.4% increase to £89.0m (AER: 9.8% to
£88.4m; FY22: £80.6m). This was driven by strong growth
across the heavy vehicle sector, predominantly in our
Swedish operation, as well as robust growth in light vehicle
driven by our entities in Holland and Spain. Germany
continues to grow strongly in the general industrial sector
supported by transfer of business from the UK in the
distributors sector. TR VIC, Italy, has seen a reduction
in revenue year-on-year, mostly from the health & home
sector due to the downturn in customer sentiment and the
indirect impact the Ukraine conflict is having on some of
our customers.
In Asia, we have seen a revenue increase of 2.6% to £56.8m
(AER: 9.1% to £60.4m; FY22: £55.4m). Growth in the region
was hampered by China imposing Covid-19 lockdowns at
the start of FY23, impacting our operations in Shanghai,
a key health & home customer in our Singaporean entity
undertaking a significant de-stocking exercise which
resulted in a flat year-on-year position for the sector.
The light vehicle sector has shown a significant uplift in
business in Malaysia and Thailand.
Trading levels in the UK businesses have been impacted
differently, with light vehicle showing strong growth, offset
by a reduction in distributors due to the transfer of business
to TR Kuhlmann, Germany. In our biggest trading entity,
TR Fastenings, UK, we have seen strong growth in energy,
tech & infrastructure and general industrial offset by a fall
in health & home.
We have seen the highest growth from our North American
business, 50.3% to £26.6m (AER: 68.8% to £29.9m; FY22:
£17.7m) with investment in new leadership quickly helping
to co-ordinate our legacy and acquired businesses. Organic
growth has driven 28.5% of this as new platform builds
in the light vehicle sector come online and energy, tech
& infrastructure sales gain momentum. TR Falcon has
provided 21.8% acquisition growth to the region. It has also
performed well organically in the period, with revenues
running ahead of expectation. Whilst this has started from
a low base, the ability to now take advantage of global
customers has enabled this business to perform.
2023 (CER)
£11.2m
Total UOP
*
4.7%
Europe | £3.0m | 3.4%
Asia | £8.8m | 15.5%
North America |
£1.0m | 3.9%
UK | £5.5m | 6.6%
2022
Europe | £3.9m | 4.8%
Asia | £7.1m | 12.9%
North America |
£(0.1)m | (0.4)%
UK | £8.1m | 9.7%
£14.7m
Total UOP
*
6.7%
1. Revenue by regions include intercompany sales
2. After deducting central costs
Financial review continued
Revenue by region FY23 (CER) and growth %
1
Europe | £89.0m |
+10.4%
Asia | £56.8m | +2.6%
North America |
£26.6m | +50.3%
UK | £83.9m | +0.0%
£238.5m
Total revenue
+9.1%
Revenue by sector FY23 (CER) and
growth % vs FY22
General industrial
£32.1m | +15.1%
Health & home
£43.5m | -8.0%
Light vehicle
£65.7m | +21.7%
Heavy vehicle
£13.4m | +40.6%
Distributors
£42.8m | -2.6%
Energy, tech & infrastructure
£41.0m | +13.7%
£238.5m
Total revenue
Underlying operating profit
53
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Underlying operating profit
Underlying operating margins reduced by 200bps, to 4.7%
(FY22: 6.7%) resulting in operating profit of £11.2m (AER:
£12.0m; FY22: £14.7m).
As a Group we have been impacted by the macroeconomic
environment, most notably raw material, freight and energy
deltas, but as we finished FY23 the positive impact of
stronger sales and aligned pricing gives us a good base
moving forward. Key investments include Project Atlas
business-as-usual costs now roll-out is underway (including
amortisation of £0.5m), further investments into our Group
functions and targeted recruitment into our commercial
and compliance teams.
Towards the end of FY23 we commenced a strategic review
of operations and functions to identify specific measures
that could support profitability without adversely impacting
our growth momentum or customer service levels.
The output of this review shows expected savings during
FY24 rising to an annualised saving in excess of c.£5m.
In North America we have seen an improvement in
year-on-year margins from a negative position of (0.4)%
in FY22 to a positive margin of 3.9% (AER: 4.2%), as very
strong sales growth has driven operational gearing gains,
and following the acquisition of TR Falcon in August 2021.
Financial review continued
Our European region has fallen, recording a reduction of
140bps to 3.4% margin (AER: 3.3%; FY22: 4.8%), as sales
growth gains are more than offset by gross margin pressures
due to the delays in the pass-through of inflationary cost
pressures, most notably energy. Cost increases have
impacted underlying operating profits across all regions and
are now stabilising as pricing negotiations are becoming an
everyday and key part of doing business.
The UK businesses fell by 310bps to 6.6% margin (FY22:
9.7%) as it has been impacted greatly by the macroeconomic
slowdown combined with stock write downs and the transfer
of distribution business to Germany. As the inventory is
coming back to lower levels, we do not expect this to
continue. We anticipate the margin recovering towards the
medium term target as costs reduce due to operational
improvement programme.
All of our regions are showing underlying operating profits,
with Asia continuing to bring in the highest returns at 15.5%
(AER: 15.7%; FY22: 12.9%). The majority of this improvement
has come from trading and efficiencies in our distribution
and contract business.
Operating profit (at AER)
At a Group level, operating profit reduced by £11.6m to
a loss of <£0.1m (FY22: £11.6m). Outside of the factors
mentioned in underlying operating profit (£2.7m), the
reduction is caused by the recognition of a restructuring
and related charges (£4.2m), the impairment of goodwill in
TR VIC (£2.9m), settlement for loss of office (£1.1m) and an
increase in Project Atlas costs (£0.7m).
The restructuring and related charges relates to the
centralisation of multi-site distribution centres into a
national distribution centre (NDC) in the Midlands and the
closure of our UK manufacturing site in Uckfield, for TR
Fastenings, our largest subsidiary. Costs within the figure of
£4.2m include redundancy costs in respect of a downsizing
of personnel and impairment of non-current assets due
to the closure of certain offices and warehouses. This was
approved by the Board in March 2023 and is expected to be
completed by March 2024. We have excluded these costs
from our underlying results, to reflect the size and one-off
nature of this project.
For further details on the other separately disclosed items,
see note 2.
54
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Net financing costs (at AER)
Net interest costs have increased to £2.7m (FY22: £1.0m)
as average gross debt (including IFRS 16) has increased
to £80.9m (FY22: average £44.4m). Net marginal interest
rates (net of commitment fees) have increased. Post
year-end the Group has signed a new revolving credit
facility (RCF) agreement, supported by a UK export finance
– export development guarantee (UKEF – EDG) agreement
to allow the Group flexibility on future cash investments.
This combined facility limit of £120m, with the same
lenders, provides strength and support to enable the Group
to meet its future strategic growth plans. Interest margins
have increased in line with market conditions and will now
be within a range of 2.10-3.60% compared to 1.10-2.20%
under the previous RCF.
Taxation (at AER)
The underlying effective tax rate (ETR) is higher at 25.6%
(FY22: underlying effective tax rate: 19.1%). The main reason
for this is an increase in the amount of tax on dividends.
Despite recording a loss before tax at statutory level, there
still remains a tax charge as some significant accounting
entries in the year (e.g. TR VIC impairment of goodwill and
aborted acquisition costs) have no tax credit associated
to them. Removing these one-off accounting entries, the
effective tax rate is 35.7%, which is still high due to the low
profit before tax relative to the increase in the amount of tax
on dividends.
Subject to future tax changes and excluding prior year
adjustments, our normalised underlying ETR is expected to
remain in the range of c.20-25% going forward.
Financial review continued
GAAP measures: Operating profit by region (AER)
1
FY23 FY22
Profit/(loss)
£m
Margin
%
Profit/(loss)
£m
Margin
%
UK
1.5 1.8%
7.7 9.1%
Europe
(1.2) (1.3)%
2.8 3.5%
Asia
9.4 15.5%
7.1 12.8%
North America
0.9 2.9%
(0.3) (1.6)%
Central costs
(10.6) N/A
(5.7) N/A
0.0 0.0%
11.6 5.3%
1. After allocating separately disclosed items
55
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Financial review continued
Underlying diluted earnings per share (AER)
Reflecting the challenging performance as explained above,
our underlying PBT at AER is down 32.4% to £9.3m (FY22:
£13.8m). This, coupled with the increase in our underlying
effective tax rate, has resulted in a reduction in underlying
diluted earnings per share (EPS) of 36.9% to 5.13p at AER
(FY22: 8.13p).
Net debt (AER)
The Group’s adjusted net debt has increased by £14.2m to
£38.0m (FY22: £23.8m).
An increase in working capital contributed to £7.2m of this
as a decrease in creditors, due to ongoing stock reductions,
was only partially offset by other working capital
movements. A major focus will remain on working capital
management, reducing the inventory levels and managing
debtors accordingly.
Capital expenditure in the period amounted to £7.3m
(FY22: £6.3m), including £3.0m in relation to increasing
capacity at our Italian operations as well as £2.6m on
Project Atlas.
Including the impact of IFRS 16 Leases, the Group’s net
debt position was £53.8m (FY22: £37.5m).
£38.0m
Adjusted
net debt
FY22
1
Adjusted
net debt
FY23
1
CreditorsStockOperating
cash
inflow
Other
working
capital
Ta x Dividend Other
2
InterestCapex and
Atlas
£23.8m
£11.7m
£(4.4)m
£7.3m
£2.3m
£3.5m
£2.8m
£2.7m
£(11.5)m
£(0.2)m
1. Adjusted net debt is stated excluding the impact of IFRS16 Leases. Including right-of-use lease liabilities, net debt increases by £15.8m to
£53.8m (FY22: net debt increases by £13.7m to £37.5m) and operating cash inflow before changes in working capital increases by £4.2m
(FY22: £3.0m)
2. Mainly relating to FX
Adjusted net debt bridge
56
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Our price increase programme for some of our key
customers ensures price mechanisms are in place to
manage future key cost drivers as our ongoing way of
doing business. This, combined with our focused drive on
working capital, especially inventory management, ensures
we manage our customer expectations at controlled and
appropriate levels. Our target for FY24 is to achieve a
balanced inventory level with a continued focus to reduce
further through innovative tools.
We have prepared for the future by renegotiating debt
facilities, which will allow us to grow through organic
and acquisition investments. This is in two forms: first,
renegotiation of our RCF to £70m; and second, with a new
UKEF-EDG supported debt facility of £50m. This combined
facility will allow us the flexibility to invest and grow the
business in the key sectors on a global basis.
In support of our ongoing growth journey and developing
the foundations for the future we are targeting our capex
on sustainable opportunities combined with short financial
payback periods. FY24 is key to complete the revised
roll-out for our business transformation D365 project by
the end of the year.
As a result of this we are confident in the medium term that
we can return to our KSI targets for both UOP% and ROCE.
Return on capital employed (at AER)
As at 31 March 2023, the Group’s shareholders’ equity
decreased to £135.9m (FY22: £139.1m). The £(3.2)m
reduction reflects a decrease in retained earnings of
£(6.1)m, a movement on own shares held reserve of
£0.5m, and a foreign exchange reserve gain of £2.4m.
With this reduced asset base and lower profits, our
ROCE has reduced by 290bps to 5.4% (FY22: 8.3%).
At 31 March 2023, the number of ordinary shares held by
the Employee Benefit Trust (EBT) to honour future equity
award commitments was 1,896,098 shares (FY22: 2,194,470
shares).
Outlook
There can be no doubt that this has been a very challenging
year, particularly with macro-level supply chain issues
and inflationary cost pressures. However, the recent
performance, together with renewed focus, starts to give us
confidence on achieving our plans in FY24.
In Q4 FY23, the Group achieved its key immediate
priorities together with robust future orders received.
Ourrecord-breaking order book of £25.6m together with
a focused, customer engagement programme allows us to
work towards our medium-term objectives.
There can be no doubt that the macroeconomic, finance
markets and geopolitical environment continue to present
challenges in the short term. Notwithstanding this, we are
confident with the fundamentals of the business and our
position across the globe to deal with macro-level issues,
while continuing to invest for growth for the medium term.
Consequently, the Board remains committed to the Group’s
strategic journey and medium-term profitable growth
aspirations.
Darren Hayes-Powell
Chief Financial Officer
Our established customer relationships, expertise in engineering and innovation,
and our strategies for growth put us in a great position to make the most of the organic
and acquisition opportunities to achieve our medium-term objectives
Financial review continued
57
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Impact
Low Medium High
Likelihood
Low High
Risk management
In FY23 we continued to develop our risk management and
internal controls framework. We recognise it takes time to
embed a risk culture in a company but we are committed
to empowering our teams to develop their understanding
of risk by setting the tone from the top, and by engaging
with stakeholders throughout the Group. Following the
detailed review of risks across the Group last year, we
have implemented key mitigation actions reducing our
residual risk significantly in some areas, and through
cross-functional review and risk analysis we have identified
emerging risks and incorporated them in our enterprise risk
management (ERM) system.
Risk management and controls framework
Our risk management and controls framework is based
on a system of ERM which considers all the different
types of risk across the business and how those risks are
interconnected. Our framework has been designed to meet
our corporate requirements and the requirements of the
business assurance standards against which we are certified
(ISO9001, IATF16949, EN9120, ISO14001 and ISO27001).
How the Board monitors risk
The Board has overall responsibility for risk, and reviews
the effectiveness of risk management and internal controls
systems through the Audit & Risk Committee. A detailed
review of risk is carried out, and the principal risks and the
effectiveness of the framework are monitored throughout
the year.
This year, as part of the framework development, we
have established a Group Risk Committee to support
risk assessment and risk reporting activities. The current
members of this committee are: Head of Risk and Internal
Audit, CFO, Company Secretary and CEO. The Group Risk
Committee is responsible for ensuring that risk assessment
and risk reporting is proportionate, aligned, comprehensive,
embedded, and dynamic (PACED).
Risks
O
p
p
o
r
t
u
n
i
t
y
C
o
n
t
r
o
l
C
o
m
p
l
i
a
n
c
e
H
a
z
a
r
d
8
1
3
4
2
6
7
5
9
Principal risks
1
Controls effectiveness
2
Global economic
environment
3
Product failure
4
Inventory
5
Geopolitical risks
6
Supply chain
7
Business transformation
8
Acquisitions
9
Cyber security
Materiality
Low Medium High
Trend
Arrow direction indicates
change in likelihood from
previous year
58
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Climate change
impact (existing
risk, new context)
There is a risk that the rate of
change in climate change transition
requirements may exceed the rate at
which our supply chain structures, and
cost models, can adapt to change
Climate change
legislation (new
risk, new context)
There is a risk that the impact of
new and changing climate change
legislation is underestimated
Compliance
and controls
infrastructure (new
risk, new context)
Changes to the Corporate Governance
Code may impact our internal timeline
for controls mapping as part of our
D365 implementation journey
Leadership and
internal culture
(existing risk, new
context)
Significant changes in the leadership
team and planned restructuring
exercises, where employee retention
has previously been significantly above
average, may negatively impact the
organisational culture
Data
(new risk, new
context)
The impact of geopolitical tensions on
data governance, and the emergence of
AI, may bring changes to the way data
is shared and stored around the Group
Liquidity and debt
covenants
There is a risk of breach of covenants
(predominantly interest cover) due to
increasing base rates for SONIA, SOFR
and EURIBOR
Climate risk
We recognise the importance of climate risk and its
potential impact on our business, and we identify and
monitor both direct and indirect risks within our framework.
Direct risks include the effect of temperature rise on
product storage, the effect of drought on transport
infrastructure, and the risk of flooding and wildfires on our
operations, as well as our own carbon footprint.
Indirect risks include the increase in taxes and duties linked
to climate change, the risk of electricity blackouts linked to
increased temperatures and the increase in energy prices
linked to fossil fuels.
Key risk management activities that have taken place in FY23:
• Set-up and configuration of the risk management
information system (RMIS) and migration of legacy risk
data into the system
• Development of the Group risk register
• Group Risk Committee established to support the Audit
& Risk Committee
• Deep dive reviews carried out to support business
activities e.g. stock, whistleblowing, supply chain, trade
compliance
• Publication of the risk management handbook
• Introduction of three lines of defence model for risk
reporting
Development and continuous improvement plan
forFY24
• Development of risk reporting dashboards using our
RMIS
• Extended stakeholder engagement in risk reviews across
our functional, regional and compliance teams
• Development of our risk appetite model linked to
scenarios and key indicators
• Continued in-depth review of controls
• Introduction of a risk materiality scale linked to revenue,
profit and overhead value
Emerging risks
We use a risk life cycle model that helps us define the
context of new risks, carry out risk theme reviews with
cross-functional teams, as well as horizon scanning to
identify emerging risks and opportunities and we categorise
emerging risks on the basis of new or existing context.
How the Board monitors risk continued
Risk reviews are carried out with business owners and
stakeholders throughout the year based on a schedule
covering five key risk groups:
Risks continued
Due to the enterprise nature of our risk framework, we can
see linked and associated risks across the Group, which
informs our scoring of risk and supports prioritisation of
mitigation plans.
Through the development of the framework, we have
refined our risk scoring and classification, and we have also
extended our risk scoring to include inherent and residual
scores (where ‘inherent score’ refers to risk score prior to
risk treatment, and ‘residual score’ refers to risk score after
risk treatment). These changes, along with best and worst
scenario mapping, are helping us to develop our risk culture
and appetite.
We use an extended ‘bow-tie’ analysis format to review
our principal risks and their associated controls, this allows
us to identify preventive and corrective type controls and
provides a detailed view of causes and effects of risk within
our business. As part of our ongoing development of the
framework, In FY24 we will carry out an in-depth review of
our controls based on our significant and principal risks.
The Board is responsible for setting the risk appetite and
this is also an area that we plan to develop further in FY24.
1. Regional
2. Functional
3. Compliance and governance
4. Risk themes
5. Principal risks
59
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Risks continued
Principal risk Risk trend Key mitigation + owner Comments
Controls effectiveness
Due to a lack of internal audit
function, there is a risk that we
may not be able to fully assess
our controls effectiveness
• Review of legacy health check criteria across all functions
• Review of current functional compliance assessment
activities linked to controls
• Mapping of controls to principal and significant risks
• Review of independent internal audit implementation
options
• Development of controls and risk understanding within the
business
Owner: Chief Financial Officer
This risk was exacerbated by pandemic-related travel
restrictions, which prevented some of the previously
relied upon visits to locations by the Group Finance team
A new internal audit function has been established and
audits will commence in July 2023 following Audit &
Risk Committee approval of the audit framework and
development plan
As we continue on our journey of D365
implementation, we will further develop our controls
mapping, and in due course the team will be extended
as part of our shared services network
Global economic environment
There is a risk that the unsettled
global economic environment
may extend beyond the
medium term
• Manage our key global customers on a regional basis
• Identify and implement business tools to enhance/
automate dynamic forecasting and scenario planning
capabilities
• Introduction of negotiated pricing mechanisms to recover
increased costs in line with competition
• Top customer support for specific inventory on-hand,
goods in transit or purchase orders, given lead times
Owner: Chief Operating Officer
This risk continues to challenge the business in terms
of existing customer behaviour in a slowdown period,
or recession. It is also the risk that provides the most
significant opportunities both externally in a changing
market and internally to address unprofitable business
and challenge legacy structures and cost models
In an prolonged unsettled period, joint ventures
and acquisitions may not be as attractive as initially
perceived
Key to risks: Increase from 2022 No change Decrease from 2022
60
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Principal risk Risk trend Key mitigation + owner Comments
Product failure
There is a risk of product failure
in the field due to unclear
product specifications
• Data cleanse and validation prior to migration ontoD365
• Introduction of ‘Coastguard’ monitoring for live product
data integrity
• Centralised repository for new product requests
• End-to-end process reviews
• Engineering support and website resources for product
specifications
Owner: Chief Operating Officer
Our product risk reflects not only the quality of
the product itself, but also the way in which it is
incorporated into an application by our customers
Inventory
There is a risk of increased
exposure to customer-specific
obsolete stock (inventory)
• Targets for reducing high stock levels back to historic
norms
• Enforcement of customer contractual obligations to
purchase stock
• Robust internal controls to manage stock ordering
• Continued focus to reduce inventory further through
innovative tools
Owner: Chief Operating Officer
Inventory was a major focus in FY23 which reinstated
effective management control at entity level. This
ensures management of appropriate inventory levels
to meet customer requirements
Risks continued
Key to risks: Increase from 2022 No change Decrease from 2022
61
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Risks continued
Principal risk Risk trend Key mitigation + owner Comments
Geopolitical risks
There is a risk that regional
conflict and dispute escalation
could disrupt the supply chain
• Supply chain diversification based on geography and
product type
• Explore on-shoring and near-shoring activities to support
sustainability initiatives and increase supply chain resilience
Owner: Chief Operating Officer
Throughout FY23 there has been continued and
increased global geopolitical tensions, and last year
we experienced an effective export blockage from
Taiwan. We continue to monitor the various global
situations and evaluate any possible impact on the
fastener industry
Supply chain
There is a risk that the current
supply chain is not sufficiently
diversified to support the
growth strategy and changing
market expectations
• Identify opportunities to move towards a regional supply
chain model
• Diversify the supply chain for more near/onshoring,
addressing an over-dependency in a single territory
• Development of KSIs/KPIs to drive internal behaviour change
Owner: Global Supply Chain Director
We continue to work with our customers to identify
opportunities to improve the diversity, efficiency and
effectiveness of the supply chain
Business transformation
There is a risk that the business
transformation benefits case
may not be fully achieved
• Wide-ranging Board review
• Project-based business transformation activities
• D365 implementation
• Strategic review of operations and functions
Owner: Global Business Transformation Director
Our business transformation model was originally
established to support the roll out of D365; this
provides a basis for implementing the planned
restructuring activities in the UK
Key to risks: Increase from 2022 No change Decrease from 2022
62
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Risks continued
Principal risk Risk trend Key mitigation + owner Comments
Acquisitions
There is a risk that a future
acquisition opportunity may
be lost due to a reduction in
available funds
• Better cash management across all regions
• Review acquisition ambition and strategy
Owner: Chief Financial Officer
The risk that is considered here is specifically related
to future acquisition risk and our ability to act in an
agile manner when there is a reduction in available
funds, however the ability to maximise opportunities
when additional funding becomes available is also
expected to become important
Cyber security
There is a risk of cyber intrusion
into our network
• Group-wide cyber security training and internal
communications
• Cyber Essentials and Cyber Essentials+ certification
• Office 365 connections blocked from rogue territories and
anonymous proxy servers blocked from accessing Trifast
Office 365 environment
• Flow down of Cyber security information to suppliers via
the supply chain team
• Regular penetration tests across our sites globally
• Group IT policies
Owner: Chief Financial Officer
Our resilience to cyber intrusion relies on good user
training, constant vigilance and adherence to our
Group policies and procedures
Key to risks: Increase from 2022 No change Decrease from 2022
63
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
In line with Provision 31 of the Code, the Directors have
assessed the prospects of the Company, taking into
account the current position and principal risks, to
determine whether there is a reasonable expectation that
the Group will be able to meet its liabilities as they fall
due over a specified period of time. The Group’s business
activities and strategy are central to assessing its future
prospects. These, together with factors likely to affect its
future development, performance and position, are set
out in the strategic report on pages 1 to 65. The financial
position of the Group, its cash flows and liquidity are
highlighted in the financial review on pages 50 to 57, the
Group’s assessment on going concern is detailed on page
139 and the Group’s principal risks are detailed on pages
58to 63.
The assessment period
The Directors have carried out this viability assessment
over a period of three years as this aligns with the Group’s
forecasts, the term of the RCF and availability period of
the UKEF – EDG facility (see banking facilities section).
Three years is considered an appropriate period of time for
the Group given the recent Board changes, along with it
striking the right balance between the need to plan for the
long term whilst considering the uncertainty that arises in
relation to assumptions the further you look ahead. These
financial projections are based on a bottom-up budgeting
exercise for FY24 which has been approved by the Board
and a more top-down view aligned to the Group’s strategic
objectives for FY25 and FY26.
Banking facilities
In assessing the prospects of the Group over the three-year
period, the Directors have also considered the Group’s
current financial position, as well as its financial projections
in the context of the Group’s cash and debt facilities and
associated covenants.
The Group manages its financing by maintaining adequate
facilities with appropriate maturities and sufficient levels
of standby liquidity to support its ongoing viability and
growth (see capital allocation on pages 12 and 13). The
Group’s main £80m revolving credit facility has been
refinanced and a new agreement signed on 1 June 2023.
The facility limit reduces to £70m and is for a term of three
years with annual extensions thereafter for up to two years.
In addition to this, a new £50m UKEF – EDG facility was
signed on 1 June 2023 with a five-year term and three-year
availability period. Repayment of the facility starts 3.5
years after signing (i.e. outside of the assessment period).
The Group’s base projections indicate that the current cash
and debt facilities and expected future facility headroom
remain more than adequate to support the Group over the
next three years.
The Group’s financial covenants, tested on a quarterly
basis, for its banking facility are:
• Leverage: net debt to Adjusted EBITDA, excluding
IFRS16, of less than 3.0x
• Interest cover: Adjusted EBITDA to interest (excluding
IFRS 16) greater than 4.0x
At 31 March 2023, the Group had adjusted net debt of
£38.0m, with leverage of 2.19x and interest cover of 7.8x.
Facility headroom was £10.2m, which increased to c.£50m
on 1 June 2023 after signing the new facilities agreement.
The covenant that we are most sensitive to looking forward
into FY24 is interest cover, as interest rates continue to rise.
For further details on their calculation, see note 32.
Principal risks and uncertainties
In conducting the assessment, the Directors have
considered the principal risks outlined to determine the
impact on the financial position and performance of the
Group. These risks have been identified by the Board,
and are actively monitored on an ongoing basis, the most
significant of which are considered in more detail below.
To understand mitigations for these principal risks, see
pages 58 to 63.
1) Global economic environment
There is a risk that the unsettled global economic
environment may extend beyond the medium term which
could impact negatively on our ability to continue to grow
and invest as a business. In addition, increased trading
levels and uncertain market conditions could lead to higher
debtor balances, raising our exposure to customer failure
and bad debt write downs
2) Geopolitical risks
Any risk of increased tension in Asia (or elsewhere) could
escalate and impact trade across this region, resulting in
reduced trading levels at our own facilities and also wider
supply chain issues
3) Supply chain
The Group sources products both internally and externally
for customers around the world. If we were unable to
supply a customer in line with their ongoing manufacturing
requirements the risk, both to our reputation and in terms
of potential stoppage penalties, could be substantial. Our
customers’ manufacturing volumes are also dependent
on the uninterrupted supply of other component parts,
e.g. semi-conductors, meaning that trading levels can be
impacted by factors outside of our control. Ongoing supply
shortages are also creating inflationary pressures, which
risk reducing the Group’s profitability if we are not able to
appropriately pass these through to customers
4) Inventory
There is a risk of increased exposure to customer-specific
obsolete stock (inventory) which could lead to significant
one-off write downs of stock values
5) Cyber risk
A significant cyber attack, or data security breach, could
incur penalties and have a serious impact on the Group’s
ability to trade in the short term, with longer-term negative
implications to our reputation in the marketplace and
therefore our ability to meet our growth targets in the
medium term
Viability statement
64
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Viability statement continued
Downside sensitivities
The viability base case has been subjected to downside
sensitivity analysis involving flexing several of the
underlying main assumptions and sensitivities, considering
the principal risks and uncertainties set out on page 64.
These scenarios above are hypothetical and intentionally
more severe for the purpose of creating outcomes that
have the ability to threaten the viability of the Group. It is
considered severe but plausible, that the crystallisation
of a single risk would test the future viability of the
Group. However, as with many companies, it is possible to
construct scenarios where either multiple occurrences of
the same risk, or single occurrences of different risks, could
put pressure on the Group’s ability to meet its financial
covenants. In the case of these scenarios arising, various
options are available to the Group in order to maintain
liquidity so as to continue in operation, such as accessing
new external funding early, more radical short-term cost
reduction actions and reducing capital expenditure. In line
with the reverse stress testing below, we have assumed no
bonus payments/pay rises in these scenarios. No further
actions are assumed in our current scenario modelling.
Scenarios
Scenario Related principal risk
Reduced volume/loss of a key
customer (33% reduction of a
specific revenue stream)
Global economic environment
Geopolitical risks
Reduction in trading levels
across Asia of 20% and higher
Group stock holdings as a result
of supply chain issues
Geopolitical risks
Supply chain
Inventory
Reduced margins in the
automotive sector
Global economic environment
Significant one-off expenditure
(line stop and obsolete stock)
Inventory
Cyber risk
Increase in working capital by
ten working days for all sectors
(due to supply chain issues)
Global economic environment
Supply chain
Inventory
None of the above scenarios resulted in a breach in
either our leverage or interest cover covenant, however
a combination of any of the above would put significant
strain on our financial position
Reverse stress testing
Reverse testing has been applied to our viability base case
which helps determine the level of downside that would be
required before the Group would be at risk of breaching
its debt covenants. The reverse stress test was focused on
31 March 2024 as that is where the key sensitivity is with
rising interest rates (given interest cover is calculated on a
rolling 12-month basis). It was conducted on the basis that
some of the mitigating actions that could be undertaken
would be undertaken to reduce overheads (i.e. no bonus
payments/pay rises) during the period as sales and/or
margin declined. On this basis, a fall of c.9.0% in revenue
or a fall in underlying operating profit to below 5% would
be required before a breach in the interest cover covenant
at 31 March 2024. Our FY23 underlying operating margin
requires improvement and is being positively impacted
by the actions already agreed and are in the process of
being implemented. These should provide the necessary
improvement.
The Board considers the possibility of such a scenario
to be severe but plausible. Further mitigation, such as
recruitment freezes, travel bans, headcount reductions,
reduction in planned capital expenditure, suspension
of dividend payments and more radical working capital
reductions could be available if future trading conditions
indicated that such an outcome were possible. However,
this scenario does not consider any further interest rate
rises. If the EURIBOR, SONIA & SOFR continue to increase,
it increases the sensitivity within our reverse stress testing
model and require stronger financial performance to avoid
a covenant breach.
Conclusion
After considering the risks identified and based on the
assessments completed, the Directors believe that there is
a reasonable expectation that the Company will be able to
continue to operate and meet its liabilities as they fall due
over the next three years and it is appropriate to continue
to adopt the going concern basis in preparing the Group
financial statements.
The strategic report was approved by the Board of
Directors on 10 July 2023 and signed on its behalf by:
Jonathan Shearman
Non-Executive Chair
Trifast House, Bellbrook Park, Uckfield, East Sussex
TN22 1QW
Company registration number: 01919797
65
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
I remain confi dent that our corporate
governance framework will continue to
support the Group in delivering value for
allstakeholders
On behalf of the Board, I am pleased to present the
Company’s corporate governance report for the year ended
31 March 2023.
Governance continues to be at the forefront of everything
the Company does and, as I have stated previously, good
governance is the bedrock to the success of a strong
business.
The Board recognises the continuing focus given to all
aspects of governance from our stakeholders, including
regulatory, audit and risk and ESG. It is also important
to ensure that corporate governance and regulation are
balanced and aligned with the size, nature and complexity
of the Company. It remains critical we ensure our corporate
governance related actions and communications are
transparent and understood by all stakeholders. We
continue to work hard through stakeholder meetings,
engagement and communications to ensure the reasons
and purpose of key governance decisions demonstrate this.
The UK Corporate Governance Code 2018 remains
our governance baseline. As a member of the Quoted
Companies Alliance, we also receive excellent guidance
and support, both in terms of policy, best practice and
corporate governance, that aligns with the size of our
business.
I remain confi dent that our corporate governance
framework will continue to support the Group in delivering
value for all stakeholders. Our AGM will be held on
15 September 2023 in London, and I hope that as a
shareholder in Trifast plc, you will be able to attend and
meet with the Board and staff to discuss matters you feel
are important to the continued success and development of
the Group.
Chair’s introduction to governance
Jonathan Shearman
Chair
66
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Compliance with the UK Corporate Governance Code 2018
Throughout the year ended 31 March 2023, the Company complied with the UK Corporate Governance Code 2018 (the ‘Code’), with the exception of provision 10. The Board
recognises that Jonathan Shearman has been an independent Director since July 2009 and Chair since April 2020. The Board applies a stringent test in assessing each Director’s
independence and still considers that Jonathan remains independent despite his tenure. As a result of the CEO change in February 2023, the Board requested that Jonathan provide
additional support to the Company and management during this transition. This has been reflected in his remuneration fee and further details are set out on page 95. The forthcoming
AGM on 15 September 2023 is the final time Jonathan Shearman will be seeking re-election.
The Company’s auditor, BDO, is required to review whether this statement reflects the Company’s compliance with those provisions of the Code specified for their review by the
Financial Conduct Authority’s Listing Rules and to report if it does not reflect such compliance. No such report has been made.
Section Compliance Read more
Board leadership and Company purpose The Board has established a clear purpose, set of values and strategy and through its governance framework
ensures these and the Company’s culture are aligned
Pages 66 to 70
Division of responsibilities The structure of the Board and its Committees brings balance, expertise and a comprehensive understanding
of the business at all levels
Pages 71 to 73
and 76 to 77
Composition, succession andevaluation The Board is sufficiently well equipped to ensure that the Group continues to be governed by suitably
qualified people with a combination of skills, experience and knowledge to effectively lead the business
Pages 74 and 75
Audit, risk and internalcontrol The Board has established clear policies and procedures to ensure the integrity and compliance of the
financial and narrative information. Our established risk management and internal controls framework
continues to be developed and we have implemented key mitigation actions lowering our residual risk
significantly in some areas
Pages 58 to 63
Remuneration There is a clear policy on executive remuneration that is aligned to the Company’s strategy and includes
measures on the Company’s ESG targets
Pages 82 to 103
Chair’s introduction to governance continued
67
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Length of service
3 years; appointed to the Board on
30July2020
Key areas of expertise
Chartered accountant with extensive
experience in industry both in the UK and
internationally. Retired in 2019 as Group
Finance Director at Spectris plc
Other directorships
Senior Independent Non-Executive Director
at Breedon Group plc (Audit & Risk Chair),
Non-Executive Director at discoverIE Group
plc (Audit & Risk Chair) and Kier Group plc
(Audit & Risk Chair)
Length of service
Appointed to the Board on 1 December 2022
Key areas of expertise
Darren joined the Company in December 2022
after a successful career with Rolls-Royce and
Goodyear Tire & Rubber. Darren has a track
record in transformation and successfully
established the Global Shared Service Centre
in Manila and new factory developments in
China and Mexico. Darren has significant
international financial experience
Other directorships
None
Length of service
10 years; appointed interim CEO on
20February 2023
Formerly Independent Non-Executive Director
from 25 April 2013 to 19 February 2023
Key areas of expertise
Over 30-year career in both commercial
and corporate sectors with focus on
investment, build, turnaround and
restructuring. Experienced in logistics and
high-quality industrial supply solutions, from
manufacturing to distribution, finance, M&A
and technology
Other directorships
None
Length of service
14 years; appointed to the Board in 2009 and
as Chair on 1 April 2020
Formerly Independent Non-Executive Director
and Chair of the Remuneration Committee
(2009-2020)
Key areas of expertise
M&A, strategic planning and forecasting,
with a focus in smaller companies fund
management, stockbroking and investment
banking. Jonathan understands the Trifast
culture at Board and operational level
Other directorships
Independent Non-Executive Director at The
Character Group plc (appointed June 2022)
Committee memberships
Nomination Committee
Audit & Risk Committee
Remuneration Committee
ESG Committee
C
Committee Chair
C
Jonathan Shearman
Independent
Non-Executive Chair
Scott Mac Meekin
Interim Chief
Executive Officer
Darren Hayes-Powell
Chief Financial
Officer
C
Clive Watson
Senior Independent
Non-Executive Director
The Board
Mark Belton resigned as Chief Executive Officer
on18February 2023
Clare Foster left as Chief Financial Officer on
30August 2022
Chair | 17%
Executive | 33%
Independent
NED | 50%
1
2
3
<3 years | 50%
3-9 years | 17%
9+ years | 33%
1
3
2
Board
composition
as at year end
Board
tenure
as at year end
Average Board tenure
as at year end: five years
68
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Length of service
Appointed to the Board on 3 January 2023
Key areas of expertise
Louis has had an executive career within
the building industry both in the UK and
internationally. He has signifi cant commercial
knowledge of manufacturing and supply,
strategic planning and M&A. Louis was
previously CEO at Tyman plc (2010-2019), and
prior to that held senior management roles
with Kingspan Group plc, Baxi Group Ltd,
Lafarge SA and Caradon plc
Other directorships
Non-Executive Director at Accys Technologies
plc, Ibstock plc and Howden Joinery Group plc
(appointed June 2023)
Length of service
3 years; appointed to the Board on
1April2020
Key areas of expertise
Extensive experience and knowledge of
leadership, customer-focused cultures
and human resources including employee
engagement, having worked in FTSE 250
companies within the retail, B2B and fi nancial
services sectors
Other directorships
British Heart Foundation (member of the
People and Remuneration, and Retail
Committees), FRPAdvisory Group plc
(Remuneration Committee Chair)
Length of service
1 year; appointed as Company Secretary on
4April 2022
Key areas of expertise
Christopher is a Fellow of the Chartered
Governance Institute and a solicitor. He has
held senior governance, legal and compliance
roles at FTSE listed/equivalent companies in
Europe and Asia, working across sectors in
energy, engineering and automotive
Compliance
The Board recognises the importance of its
composition and diversity and remains committed
to good corporate governance. We believe that
a wide range of knowledge, skills and experience
are among the essential drivers of Board
eff ectiveness
Trifast believes the structure of the Board
and its Committees brings balance and deep
understanding of the business at both Board and
operational levels
Christopher Morgan
Company Secretary
C
Claire Balmforth
Independent
Non-Executive Director
C
Louis Eperjesi
Independent
Non-Executive Director
The Board continued
Board skills and attributes (updated April 2023)
The Board skills and attributes matrix, as detailed below, is reviewed by the Nomination
Committee annually, taking into account the future requirements of the Board.
Jonathan
Shearman
Scott
Mac Meekin
Darren
Hayes-Powell
Clive
Watson
Claire
Balmforth
Louis
Eperjesi
Christopher
Morgan
(CoSec)
Independence
Industrial/
engineering
Distribution
operating
model
ESG
Banking &
fi nance
Audit & risk
International
Leadership
Remuneration
People/HR
Strategy/
business
transformation
& change
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Annual Report for the year ended 31 March 2023
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Executive Committee
Length of service
31 years; appointed to the Executive Board
on1 December 2022
Key areas of expertise
Stevie has procurement and supply chain
experience. He was UK Operations Director
and Managing Director of Hungary for ten
years and became the Project Atlas Lead as
a result of his understanding of the global
business processes
Length of service
13 years; appointed to the Executive Board
on1December 2022
Key areas of expertise
Helen has experience in the management and
strategic development of human resources
functions. She has worked in the public,
private and voluntary sectors as well as
running her own HR consultancy business
Helen also has experience in the development
and execution of HR strategy, dispute
resolution, training, development, employee
relations and legal compliance
Length of service
3 years; appointed to the Executive Board
on1December 2022
Key areas of expertise
Dan has gained experience in P&L ownership,
commercial supply chain management,
engineering, sales & marketing, and business
development. Having worked within the UK,
Europe and Asia in senior management roles,
he has also developed skills and knowledge
in strategic and fi nancial planning, M&A and
project management
Dan Jack
Chief Operating Offi cer
Helen Tate
Global HR &
Sustainability Director
Stevie Meiklem
Global Business
Transformation Director
Scott Mac Meekin
Interim Chief
Executive Offi cer
Christopher Morgan
Company
Secretary
Darren Hayes-Powell
Chief Financial
O ffi c e r
Scott Mac Meekin (as Chair), Darren Hayes-Powell and Christopher Morgan all sit on the Executive Committee.
To read their biographies see pages 68 and 69
Members
• Scott Mac Meekin (Chair)
• Darren Hayes-Powell
1
• Christopher Morgan
• Dan Jack
• Helen Tate
• Stevie Meiklem
To support the Executive Directors,
the Company has established an
Executive Committee. This team’s
focus includes:
• Implementing the strategy as set
out/agreed by the Board
• Overseeing all commercial
operations of the Group, ensuring
good and eff ective communication
in key areas and alignment
of business objectives to the
strategic direction at Group level
• Assessment of growth
opportunities, both organic
and potential acquisition
opportunities
• Talent management and
succession planning
• Product quality
• Health and safety
• Financial control and systems,
including IT infrastructure and
development
• Risk management, compliance
and governance
1. Appointed 1 December 2022
70
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Annual Report for the year ended 31 March 2023
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Corporate governance report
The Board
One of the Board’s principal responsibilities is the creation
and delivery of sustainable shareholder value by promoting
the long-term success of the Company and ensuring robust
corporate governance.
The Board also determines the strategic direction of the
Group along with their continued review of financial and
operational matters. The Board has a formal schedule of
matters specifically reserved for it which includes:
• Development and approval of the Group’s strategic aims
and objectives
• Approval of annual operating and capital expenditure
budgets
• Oversight of the Group’s operations
• Approval of the Group’s announcements and financial
statements
• Approval of new bank facilities or significant changes to
existing facilities
• Declaration and recommendation of dividends
• Approval of major acquisitions, disposals and capital
expenditure
• Succession planning and appointments to the Board and
its Committees
• Review of the Group’s corporate governance
arrangements and reviewing the performance of the
Board and Committees
• Maintenance of internal control and risk management
systems
• Approval of the division of responsibilities between the
Chair, Chief Executive and other Executive Directors and
the terms of reference of the Board Committees
Chair
Jonathan Shearman is Chair of the Board. The Chair sets
the Board’s agenda and promotes a strong culture of
engagement, challenge and debate. Jonathan plays an
important role in investor relations and regularly liaises
with shareholders.
The Chair’s terms of reference are:
• Chairing Board meetings, setting agendas in
consultation with the Chief Executive Officer and
encouraging the Directors to participate actively in
Board discussions
• Leading the performance evaluation of the Board, its
Committees, and individual Directors
• Promoting high standards of corporate governance
• Ensuring timely and accurate distribution of information
to the Directors
• Ensuring effective communication with shareholders
• Periodically holding meetings with fellow Non-Executive
Directors without the Executive Directors being present
• Establishing an effective working relationship with the
Chief Executive Officer by providing support and advice
whilst respecting executive responsibility
Chief Executive Officer
Scott Mac Meekin is responsible for the day-to-day
management of all the Group’s activities and the
implementation and delivery of the Board’s strategic
objectives. He promotes strong cultural values and
standards and maintains good relationships and
communications with investors and other stakeholders.
Company Secretary
Christopher Morgan is the Company Secretary and, as
such, is responsible for governance, regulatory and legal
compliance as well as assisting the Chair in preparation
for, and the effective running of, Board and Committee
meetings.
Senior Independent Director
Clive Watson, as the Senior Independent Director and Chair
of the Audit & Risk Committee, acts as a conduit for all
Directors, providing support, advice and guidance when
required.
Board composition
The Board comprises an independent Non-Executive Chair,
two Executive Directors and three other Non-Executive
Directors. Details of the Directors’ remuneration and terms
of appointment are set out in the Directors’ remuneration
report on pages 82 to 103.
Biographical details of the Directors are included on
pages68 and 69.
The Executive Directorships are full-time positions. The role
of Chair requires a commitment of approximately eight days
per month (this was increased from four days per month
in February 2023), and Non-Executive Directors commit
two days per month. All the Non-Executive Directors have
confirmed their ability to meet such commitment. Each
Non-Executive Director is required to inform the Board of
any changes to their other appointments.
71
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Board meetings
There were nine formal Board meetings during the year. Allmeetings were attended by all eligible Directors.
Formal meetings are supplemented, when circumstances dictate, by other meetings, often making use of secure online
facilities. In addition, the Chair and Non-Executive Directors have met during the year without the Executive Directors.
Apr
22
May
22
Jun
22
Jul
22
Sep
22
Oct
22
Nov
22
Dec
22
Jan
23
Feb
23
Mar
23 Attendance
1
Jonathan Shearman 100%
Mark Belton
2
100%
Scott Mac Meekin
100%
Clare Foster
3
100%
Darren Hayes-Powell
4
100%
Clive Watson
100%
Claire Balmforth
100%
Louis Eperjesi
5
100%
1. Attendance percentage of meetings attended whilst serving on the Board
2. Mark Belton resigned on 18 February 2023
3. Clare Foster left on 30 August 2022
4. Darren Hayes-Powell was appointed on 1 December 2022
5. Louis Eperjesi was appointed on 3 January 2023
Board composition continued
The contracts of appointment of Non-Executive Directors
are available for inspection on request to the Company
Secretary.
The Company acknowledge that Jonathan Shearman has
been on the Board since 2009, initially as a Non-Executive
Director, and since April 2020, as Non-Executive Chair.
The Board continues to review this situation and determines
that Jonathan remains independent and performs his duties
effectively and with integrity, as well as having significant
depth of understanding of the business. Jonathan has
informed the Board that he will not seek re-election to the
Board at the 2024 AGM. The Board recognises his critical
role during this period of the Company’s transition, both
in terms of operations and senior management, and are
aligned with this approach.
In our FY22 Annual Report, we acknowledged that Scott
Mac Meekin had served as an Independent Non-Executive
Director for nine years in April 2022. Given his invaluable
industry expertise, Scott agreed to serve for the remainder
of FY23, with his retirement set for 31 March 2023. However,
following the resignation of Mark Belton in February 2023,
Scott moved to Executive Director and stepped in as
interim CEO.
Corporate governance report continued
72
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Corporate governance report continued
Re-election
All Directors of the Board are subject to election by the
shareholders at the first AGM following their appointment
by the Board and all Directors will also stand for re-election
annually at the AGM.
Committee responsibilities
The Board formally delegates responsibility to four
Committees: the Audit & Risk, Remuneration, Nomination,
and the ESG Committees. Full terms of reference for each
Committee can be found on our website.
Status reports from each of these Committees are found
later in this report.
Board appointments
The appointment, replacement and powers of the Directors
are governed by the Company’s Articles of Association,
the UK Corporate Governance Code, the Companies Act,
prevailing legislation and resolutions passed at the Annual
General Meeting (AGM) or other general meetings of the
Company.
The Company has separate posts for Chair and Chief
Executive. The Chair leads the Board and the Chief
Executive is responsible for the management of the
Company, implementing policies and strategies determined
by the Board.
Each Director’s availability and time commitment to the
Company is essential in performing their role effectively.
Prior to any new appointment, the Board would review
other demands on a Director’s time to ensure they have
sufficient capacity to commit to the role. A Director must
seek Board approval prior to undertaking any additional
external appointments.
Appropriate and relevant training is provided to the
Executive Directors as and when required. Non-Executive
Directors are responsible for their own relevant learning
and development activity and inform the Nomination
Committee Chair and Company Secretary of any training
undertaken.
The contracts of appointment of Non-Executive Directors
are available for inspection on request to the Company
Secretary.
The Chair (Jonathan Shearman) and Senior Independent
Non-Executive Director (Clive Watson) confirm that,
following formal performance evaluation, the individuals
seeking re-election continue to be effective in contributing
to the long-term success of the Group and demonstrate
commitment to the role.
Internal audit and risk management
The Board, via the Audit & Risk Committee, formally
considers the requirement for internal audit on an annual
basis as part of its terms of reference. A formalised internal
business review process known as a ‘health-check’ has
been in operation for some years.
These reviews are carried out at each entity using a scoping
and frequency schedule with different cycle times based on
size and risk profile. Whilst the Board recognises that this
process does not constitute a fully independent internal
audit, it believes that given the size of the Group, this
provides appropriate comfort as to the operational and
financial controls in place. However, the Board and Audit
& Risk Committee agreed to formally establish an internal
audit function for the business, and this was set up in
May2023.
Following the formation of the Risk department in 2022,
wehave continued to further develop our risk management
and controls framework to support our risk appetite and
culture. Working with the operational owners of risk, we
have continued to build on the comprehensive risk review
that was carried out in January 2022, to ensure mitigation
actions are effective, and we continue to undertake this
review going forward to include our functional, regional
and compliance teams.
Going concern and viability
After making enquiries, the Directors have reasonable
expectations that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Further information is given on the basis of preparation,
note 1, and the viability statement on pages 64 and 65.
For this reason, the Company continues to adopt the going
concern basis in preparing the financial statements.
By order of the Board
Christopher Morgan
Company Secretary
10 July 2023
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Annual Report for the year ended 31 March 2023
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73
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Nomination Committee report
This Committee is responsible for ensuring that the Group
continues to be governed by suitably qualifi ed people with
the breadth and depth of experience required to eff ectively
lead the business.
The Committee recommends and reviews nominees for the
appointments of new Directors to the Board and ensures
that there is due process used in selecting candidates.
Membership of the Committee complies with the UK
Corporate Governance Code 2018, as all members are
Independent Non-Executive Directors.
Jonathan Shearman
Chair of the
Nomination Committee
Members
• Jonathan Shearman
(Chair)
• Claire Balmforth
• Clive Watson
• Louis Eperjesi
2
Female | 17%
Male | 83%
1
5
51-55 | 33%
56-60 | 17%
61-65 | 50%
1
2
3
Board
gender
as at year end
Board
age
as at year end
Average Board age
as at year end: 59
Nomination Committee composition and attendance
Jun
22
Aug
22
Oct
22
Nov
22
Dec
22
Jan
23
6 Feb
23
23 Feb
23 Attendance
Jonathan Shearman
100%
Clive Watson
100%
Claire Balmforth
100%
Scott Mac Meekin
1
71%
Louis Eperjesi
2
100%
1. Scott Mac Meekin was unable to attend the meetings in November and December 2022 due to prior
personal commitments. Scott was not a member of the Committee from 20 February 2023 when he
became interim CEO
2. Louis Eperjesi was appointed as a Non-Executive Director on 3 January 2023
74
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In addition, the training needs of Directors are discussed
with the Company Secretary and appropriate arrangements
put in place where required.
The Chair is responsible for ensuring that each Director is
supplied with timely and relevant information of a quality,
and in a form, which enables them to discharge their duties.
There is a policy in place by which a Director may obtain
independent professional advice at the Group’s expense
where their duties so require.
Diversity, equity and inclusion
The Board is committed to treating everyone fairly and
recognises the strengths that a diverse workforce can
bring. Attracting and retaining the best people to fulfil our
strategic aspirations is a priority. Our culture recognises the
need for thought diversity arising from a wide spectrum of
factors including experience, skills and potential, ethnicity,
disability, sexual orientation and gender.
Appointment and advancement are based on merit.
We recognise that further strengthening our diversity as
and when opportunities arise is important to our future
wellbeing as a global company. The Committee remains
focused on continuing to appoint the best people with
the right skills and potential, and that all employees have
an equal chance of not only being included, but have the
opportunity to develop and realise their full potential.
As I mentioned in last year’s report, we had commenced a
process to replace Scott, and we concluded that process
with the appointment to the Board of Louis Eperjesi in
January 2023. Louis brings both operational and sector
experience and further strengthens our skills matrix (see
page 69).
A recruitment process is underway with regard to our
search for a Chief Executive and Chair Designate and we
expect to be able to update on these later during 2023. The
Company have instructed Russell Reynolds Associates to
support on these appointments.
Board effectiveness and evaluation
The Board undertakes an annual evaluation of its
performance and that of its Committees, the Chair,
individual Directors and external auditors. It is critical that
the Board works efficiently and effectively.
This year’s evaluation was supported by an external
company, which provided valuable independent feedback
and benchmarking. The evaluation highlighted strengths
in the agility of the Board in making tough decisions,
the honest and open debate environment, engendered
by the Chair, and the professional company secretarial
function. Areas for further development this year include
strategy execution and a greater engagement with Senior
Management across all locations.
The Committee collectively agree on the value of the
independent evaluation, which will allow the Company to
maintain the focus on key areas.
Knowledge and learning
Each newly appointed Director is provided with an
induction programme given by the Company Secretary.
The induction comprises visits to Group locations, meetings
with key personnel and introductions to the Group’s
advisers. Care is taken to ensure each new Director has a
good understanding with regard to the Group’s strategy,
risks, challenges and control and governance procedures.
During FY23, the Nomination Committee discussed
succession planning at both Board and Senior Management
levels, diversity and inclusion in the context of the
Company’s culture, and reviewed the feedback from the
Board evaluation, which was supported by an external
company for the first time.
Trifast is aware that the recent changes to the composition
of its Board and Committees creates a temporary gender
imbalance. A process is underway to address this and
we anticipate this to be completed before the end of
2023. In addition, the Committee is well advanced with a
recruitment process that will allow the incumbent Chair to
be replaced in a timely and appropriate manner (see Board
composition and process of recruitment section below).
Board composition and process of recruitment
There were a number of changes to the Board and
Committee composition during the year. Darren
Hayes-Powell joined us in December 2022 as Chief
Financial Officer, with Clare Foster leaving the Company
in August. We also had the benefit of a very experienced
interim CFO during the three-month period before Darren
joined us.
Dan Jack, who joined us in 2020 as Global Sales &
Commercial Director, was appointed as Chief Operating
Officer in November 2022. This allows him to increase his
impact across sales, procurement, marketing and overall
customer relationships.
Scott Mac Meekin was due to retire from the Board at the
end of FY23, but given the resignation of Mark Belton in
February 2023, we were incredibly fortunate that Scott,
with his wealth of fastener experience, was able to step in
as interim Chief Executive immediately. This has proved to
be an excellent interim appointment and Scott’s pace and
customer-facing expertise have immediately started to
demonstrate positive returns.
Nomination Committee report continued
See our gender pay gap
report on page 34
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
ESG Committee report
The role of the ESG Committee is to ensure the
understanding and eff ective implementation of the
sustainability strategy and how it relates to the broader
corporate purpose, vision and mission as well as forming
part of the Group’s culture. The Committee also works
and liaises with other Board Committees to integrate
sustainability in everything we do.
• Audit & Risk Committee – to oversee risk management
and opportunity and to ensure the sustainability strategy
connects with the corporate risk register
• Nomination Committee – ensuring good succession
planning taking into consideration diversity, equity and
inclusion
• Remuneration Committee – ensuring executive
remuneration and incentives link specifi cally to the
Company’s sustainability targets
The Committee believes that improving sustainability
performance enhances the drivers of long-term value
creation. Through stakeholder engagement and
communications, the Company promotes the vision of the
sustainability strategy to all interested parties.
Performance and progress against sustainability strategy
targets are regularly reviewed with commitment to any
changes needed.
Louis Eperjesi
Chair of the
ESG Committee
Members
• Louis Eperjesi
(Chair)
1
• Jonathan Shearman
• Scott Mac Meekin
• Darren Hayes‑Powell
2
• Clive Watson
• Claire Balmforth
Read more about our achievements,
commitments and key projects in our
Sustainability Report
ESG Committee composition and attendance
Jun
22
Dec
22 Attendance
1
Mark Belton (former Chair)
2
100%
Louis Eperjesi (Chair for FY24)
3
N/A
Jonathan Shearman
100%
Scott Mac Meekin
4
50%
Darren Hayes-Powell
5
100%
Clare Foster
6
100%
Clive Watson
100%
Claire Balmforth
100%
1. Attendance percentage of meetings attended whilst serving on
the Board
2. Mark Belton resigned on 18 February 2023
3. Louis Eperjesi was appointed as a Non-Executive Director on
3January 2023 and as ESG Committee Chair in May 2023
4. Scott Mac Meekin was unable to attend the December 2022
meeting due to a prior personal commitment
5. Darren Hayes-Powell was appointed as Chief Financial Offi cer on
1 December 2022
6. Clare Foster left on 30 August 2022
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ESG Committee report continued
To support the Committee, we have a robust sustainability
governance framework of committees and global networks.
Led by the ESG Steering Committee, we have also
established a Management ESG Working Group and a
Network of ESG Champions, with representatives from
across the Group.
The ESG Steering Committee, comprising senior managers
from human resources, sustainability, governance, supply
chain and innovation, meet frequently to discuss the
day-to-day ESG regulations, requirements and initiatives.
In addition, the Steering Committee facilitate regular
meetings with the Management Working Group and
Network of Champions to drive forward initiatives and best
practice.
The ESG Steering Committee attend meetings with the
Board ESG Committee twice a year to update on progress,
agree funding and resource requirements.
Board ESG Committee
Management ESG
Working Group
Network of
ESG Champions
ESG Steering Committee
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The Committee consists of three Independent
Non-Executive Directors. The external auditor, Board
Chair, Chief Executive Offi cer, Chief Financial Offi cer,
Group Financial Controller, Head of Risk and the Company
Secretary are also invited to attend meetings. The Audit &
Risk Committee meets formally three times a year with the
Group’s auditor and as otherwise required. In addition to
this, and in accordance with best practice, the Committee
Chair meets separately with the Audit Engagement Leader
to provide an opportunity for any issues or concerns to be
raised directly with him.
The duties of the Committee are to:
• Monitor the integrity of the fi nancial statements
• Review the quality and eff ectiveness of the Group’s
internal controls, ethical standards and risk management
systems
• Review the Group’s procedures for detecting and
preventing bribery and fraud, corruption, sanctions and
whistleblowing
• Ensure that the fi nancial performance of the Group
is properly reported on and monitored, including
reviews of the annual and interim accounts, results
announcements and accounting policies
• Oversee the relationship with the Group’s external auditor
During the year, the Audit & Risk Committee discharged its
responsibilities by:
• Reviewing the Group’s draft fi nancial statements,
preliminary announcements and interim results
statement prior to Board approval and reviewing the
external auditor’s reports thereon
• Reviewing the external auditor’s plan for the audit of
the Group fi nancial statements, confi rmations of auditor
independence and proposed audit fee and approving
terms of engagement for the audit
• Considering the eff ectiveness and independence of the
external auditor and recommending to the Board the
re-appointment of BDO as external auditor
Audit & Risk Committee report
Clive Watson
Chair of the
Audit & Risk Committee
Members
• Clive Watson (Chair)
• Claire Balmforth
• Louis Eperjesi
2
Audit & Risk Committee composition
andattendance
Jun
22
Nov
22
Jan
23 Attendance
Clive Watson
100%
Scott Mac Meekin
1
67%
Claire Balmforth
100%
Louis Eperjesi
2
100%
1. Scott Mac Meekin was unable to attend the November 2022
meeting due to a prior personal commitment
2. Louis Eperjesi was appointed as a Non-Executive Director on
3January2023
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Audit & Risk Committee report continued
Key matters considered and activities during
theyear
The Committee received reports from the external auditors
for the financial year and reviewed the major findings of
their work.
It also considered the results of the internal review process
(‘health checks’) conducted as part of the cycle (more
details of this process are given in the section ‘internal
audit’ on page 81).
The Committee has continued to focus on the integrity,
completeness and clarity of financial reporting, the areas
where judgements and estimates are required in the
financial statements and the quality and effectiveness of
audit processes to complement the other risk management
activities.
The Committee conducts in-depth reviews of the Group’s
risk management and internal control framework.
This process has further developed the Group’s risk
management framework and resources, with an initial focus
on enhanced identification, documentation and mitigation
of the Group’s principal risks and uncertainties.
The Committee regularly reports to the Board on how it has
discharged its responsibilities.
The prime areas of focus were:
• The integrity, completeness and consistency of financial
reporting and disclosures
• The areas where significant judgements and estimates
are required in the financial statements (during the year
end, at and post the balance sheet date)
• The materiality level to apply to the audit
• Whether the going concern basis of accounting should
continue to apply in the preparation of the annual
financial statements
• The appropriateness of the bases of disclosure in the
Company’s viability statement
• The appropriateness of transactions separately identified
and disclosed to highlight the underlying performance
for the periods presented in the financial statements
• The appropriateness of transactions presented in
Alternative Performance Measures (APMs) to compare
relevant results for the periods presented in the financial
statements
• The key assumptions, judgements and estimates as
detailed in note 30 to the financial statements
External auditor
The Annual Report has been audited independently by
BDO LLP, who were appointed as auditor in November
2019. James Fearon replaced Anna Draper as the Group
Audit Partner in December 2022. The appointment of BDO
LLP is subject to ongoing review.
The Committee robustly assesses the effectiveness of
the external auditor and makes a recommendation to the
Board in relation to the appointment, re-appointment or
removal of the external auditor. Following the Committee’s
assessment this year, both the Committee and Board have
concluded that BDO provide an effective audit and have
recommended their re-appointment at the 2023 AGM.
The external audit is a continuous process, and each year
BDO present their audit strategy, identifying their assessment
of the key audit matters for the purposes of the audit and
scope of their work. In FY23, these risks were recoverability of
customer-specific inventory and goodwill impairment.
Viability statement, going concern and
principalrisks
Our viability statement, set out on pages 64 and 65, details
how we have assessed the prospects of the Group over
a three-year period and why we consider that period is
appropriate. After considering the risks identified and on
the basis of the assessments completed, the Board and the
Committee believe that there is a reasonable expectation
that the Company will be able to continue to operate and
meet its liabilities as they fall due over the next three years.
• Considering the review of material business risks
• Monitoring of reporting and follow-up of items reported
by employees
• Considering the significant risks and issues in relation
to the financial statements and how these were
addressed, including: revenue recognition; impairment of
inventory; impairment reviews of goodwill; impairment
of investments and intercompany receivables; going
concern; and tax
• Considering the adequacy of accounting resource and
the development of appropriate systems and control
• Engaging with external providers to assist with certain
aspects of accounting disclosure
• Review of progress in introducing best practice systems
and procedures Group-wide
• Considering policies on non-audit engagements for the
Company’s auditor
Committee competence and governance
The Committee operates within its terms of reference,
which define the requisite experience and requirements of
the Committee. The terms of reference are reviewed on an
annual basis by the Committee and can be viewed on the
Company’s website.
The Board and Committee have a continued focused on
the governance requirements and guidance issued by
regulators and stakeholders throughout the year.
The Committee considers that the FY23 Annual Report is fair,
balanced and understandable, with appropriate and required
references being made throughout the various sections.
The Board is also satisfied that the members of the
Committee have both recent and relevant breadth of
financial knowledge and experience to effectively fulfil
their responsibilities. This is assessed as part of the Board
evaluation process, where areas for further development
are also highlighted.
All Committee meetings are held to coincide with key
financial reporting and audit cycle dates. As Committee
Chair, I also meet with the Chief Financial Officer regularly
and wider management on an ad-hoc basis.
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Audit & Risk Committee report continued
Goodwill impairment
Goodwill in the Group balance sheet is significant and
subject to an annual impairment test and ongoing reviews
to identify indicators of impairment. The recoverability
of goodwill is dependent on estimating both cash flows
and appropriate discount rates to apply in a value in use
calculation. Given the size of the goodwill balance, and
the complexity of estimating both cash flows and discount
rates, the Committee considers goodwill impairment to be
an area of material estimation. Hence there is a risk that the
valuation of goodwill is inappropriate. The Committee has
reviewed the projected cash flows and discount rates used
in the valuation model and the disclosures provided in note
13 of the financial statements. The Committee is satisfied
that, following the impairment of £2.9m recognised in
the year as a result of rising discount rates, the year end
goodwill balance is appropriately valued.
Non-audit services provided by auditor
To ensure the independence and objectivity of the external
auditor, the Committee has a policy which provides clear
definitions of services that the external auditor can and
cannot provide. The policy also establishes a formal
authorisation process, including either the tendering for
non-audit services or pre-approval by the Committee, for
allowable non-audit work. The fees in relation to non-audit
services are found in note 5 of the Annual Report.
The Group retains the services of another professional services
firm to advise on tax compliance and advisory services.
Annual evaluation of the Audit & Risk Committee
and the external auditor
As part of its annual Board effectiveness review, an
evaluation of both the Audit & Risk Committee and external
auditor was conducted during FY23.
For the external auditor, the review process was conducted
primarily by way of a questionnaire and was completed by
the Committee members and other Senior Management
who are engaged in the audit process. As a result of this
process, the Committee and the Board have concluded
that BDO LLP provide an effective audit and have
recommended their re-appointment at the 2023 AGM.
The evaluation of the Audit & Risk Committee was
independently conducted by an external party via an
online questionnaire, completed by all Board members
and a number of those interacting with the Committee.
The review was well received and immensely helpful and
indicated that the Committee is operating effectively and
that the Board is satisfied that, as Chair of the Committee,
I hold the relevant financial experience and that the
Committee as a whole has strong competences relevant to
the sector in which the Group operates.
Internal controls and risk management
The Committee is responsible for the Group’s system of
internal control. However, such a system is designed to
manage, rather than eliminate, the risk of failures to achieve
business objectives and can provide only reasonable and
not absolute assurance against misstatement or loss.
The key elements within the Group’s system of internal
control are as follows:
• Regular Board and Audit & Risk Committee meetings to
consider matters reserved for Directors’ consideration
• Regular management reporting
• Regular Board reviews of corporate strategy, including
a review of material risks and uncertainties facing the
business
• Established organisational structure with clearly defined
lines of responsibility and levels of authority
• Documented policies and procedures
• Regular review by the Board of financial budgets,
forecasts and covenants with performance reported to
the Board monthly
• Detailed investment process for major projects,
including capital investment analysis
Viability statement, going concern and
principalrisks continued
The assessment of going concern involves a number of
subjective estimates including forecast revenues and
profitability, changes in working capital and the impact of
inflationary pressures and supply chain challenges. The
Committee has been actively involved in the review and
approval of these forecasts and as a result of that work,
is satisfied that the going concern basis of preparation
remains appropriate for the Group and the Company.
TCFD, which considers the risks and opportunities as a result
of climate change, is an area of importance for the Committee
and climate risks and wider ESG financial and risk-related
matters are now a standing item at each Committee meeting.
More information concerning the viability and going
concern statements, and the TCFD reporting, can be found
on pages 64 to 65, 73 and 38 to 49 respectively and within
the principal and emerging risks on pages 59 to 63.
The Committee assessed that there was a continuing
need to focus on two of the principal risks arising from
the financial statements which would require further
consideration during the year:
Recoverability of customer‑specific inventory
The Group has bespoke customer-specific products for
which there is a risk over recoverability if any contractual
obligations to acquire outstanding stock are waived for
commercial reasons or the customer experiences financial
distress. Given the size of the customer-specific inventory
balance, and the complexity involved in estimating
customers’ changes in future demand, there is a risk that
the valuation of the inventory provision is inappropriate.
The Committee is satisfied that sufficient focus is
given to this whole area and that provisions made for
customer-specific inventory are adequate.
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Audit & Risk Committee report continued
Fair, balanced and understandable
One of the key governance requirements of the Committee
is for the Annual Report, taken as a whole, to be fair,
balanced and understandable. The Group has established
a formal process for ensuring that this is the case, with
clearly defined and delineated areas of responsibility for
the various sections in the Annual Report recognising the
distinctive roles of the preparers and the reviewers. The
Directors acknowledge their responsibility for preparing
the FY23 Annual Report and confirm that they consider
this document, taken as a whole, to be fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Group’s position and
performance, business model and strategy.
Committee focus for FY24
The Committee’s focus for the next 12 months will be on
four specific areas.
• Continue to develop and embed the risk management
function across the Group and continue wider
discussions at Board level about risk appetite of the
Group
• Support and assess the newly appointed internal auditor,
both in terms of her function, audit reporting and review,
and recruiting to the team as business needs require
• Elevate the review and scrutiny of climate change and
ESG related risks across the Group, ensuring these are
‘connected’ into the business model and Group strategy
• Ensuring the Company is ready to adopt revisions made
to the UK Corporate Governance Code (currently in
consultation) and legislative changes following the UK
Government’s May 2022 White Paper on Restoring Trust
in Audit and Corporate Governance
Clive Watson
Chair of the Audit & Risk Committee
10 July 2023
The key elements of the Group’s ongoing processes are:
• A review of the business risks undertaken as part of the
ongoing day-to-day procedures of the business
• An organisational structure with clearly defined lines of
responsibility and delegation of authority
• That Group policies for financial reporting, accounting,
financial risk management, information security, capital
expenditure appraisal and corporate governance are
documented and well understood
• That detailed annual budgets and rolling forecasts
are reported for all operating units and reviewed and
approved by the Board
• That performance is monitored closely against budget
and material variances reported to the Board
• That the Committee is to deal with any significant
control issues raised by the auditor
• That a formal schedule of matters specifically reserved
for decisions by the Board is maintained
• That capital expenditure is controlled by the budgetary
process with authorisation levels in place
There were no significant control deficiencies identified
during the year.
Internal audit
Throughout the year, the Company carries out an internal
review process on selected business areas. These ‘health
checks’ are made on a rotational basis, and performed
by senior Group Finance and Head Office staff, who are
unconnected from the operational activities subject to
the review. All health checks are presented by the Chief
Financial Officer to the Committee and remedial actions
agreed where required.
The Company has continuously assessed the need for
an internal audit function, and following on from the
commitment made in last year’s Annual Report, appointed
a Head of Internal Audit in May 2023, with the intention
to grow this function as the business needs require.
This position reports to the Audit & Risk Committee and
administratively to the CFO.
Internal controls and risk management continued
The UK Corporate Governance Code, along with the FRC’s
guidance on risk management, internal control, and financial
and business reporting, requires that the Board monitors
the Company’s risk management and internal control
systems and, at least annually, undertakes a review of
their effectiveness which should cover all material controls
including financial, operational and compliance controls.
Having done so, the Committee is of the view that the
ongoing process for identifying, evaluating and managing
significant risks is appropriate.
Having now had the benefit of our Head of Risk focused
on this area for 12 months, the Committee has benefited
from her detailed reviews and analysis. This has enabled the
Committee to undertake an in-depth review of the Group’s
risk management and internal controls framework. The
review focused primarily on:
• Review of existing risk management and internal control
activities, identifying gaps and establishing mitigation
actions
• Enhancements to the risk management processes and
reporting
• Comprehensive review of principal risks and
uncertainties
• Increased interaction/ownership of risk with key
stakeholders across all business functions
• Identification of key activities for ongoing framework
development and continued best practice
The Committee acknowledges that this is an evolving area
within the Group, but also feels confident that the work is
focusing on the right areas and will continue to develop to
enhance the risk framework across the Company.
Operating policies and controls are in place and are
regularly reviewed. These cover financial reporting, capital
expenditure, information technology, business continuity
and management of employees. Detailed policies ensure
the accuracy and reliability of financial reporting and
the preparation of financial statements, including the
consolidation process.
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Introduction
On behalf of the Remuneration Committee (the
‘Committee’), I am pleased to present the Directors’
remuneration report for the year ended 31 March 2023.
Thesections contained in this report are:
• The annual statement from the Chair of the
Remuneration Committee
• The annual report on remuneration
• The proposed New Policy
As set out in the Annual Report, this has been a year
of change for Trifast which has signifi cantly impacted
the Committee’s implementation of the Directors’
Remuneration Policy (the ‘Policy’). Therefore, this report
sets out the key decisions taken by the Committee in the
year ended 31 March 2023, including those relating to the
directorate changes. In addition, given that the current
Policy will expire at the 2023 AGM, the Committee is
required to present an updated Policy (the ‘New Policy’) for
shareholder approval at this meeting.
Given the recent Board changes, current levels of corporate
performance and noting that the Company’s strategy
remains unchanged, the Remuneration Committee
determined that it was not the right time to perform a
detailed review of the Policy and is therefore seeking to
extend the current Policy for an additional three years with
only a handful of changes.
Directors’ remuneration report
Claire Balmforth
Chair of the
Remuneration Committee
Remuneration Committee composition and attendance
Jun
22
Aug
22
Nov
22
Jan
23
Feb
23
Mar
23
Attendance
Claire Balmforth
100%
Scott Mac Meekin
1
75%
Clive Watson
100%
Louis Eperjesi
2
100%
1. Scott Mac Meekin became interim CEO on 20 February 2023, previously Non-Executive Director.
Scott was unable to attend the November 2022 meeting due to a prior personal commitment
2. Louis Eperjesi was appointed as a Non-Executive Director on 3 January 2023
Members
• Claire Balmforth (Chair)
• Clive Watson
• Louis Eperjesi
2
The Company’s achievements
would not have been possible
without the fl exibility and
dedication demonstrated by our
employees during the past year
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Directorate changes
Chief Executive Officer role
Mark Belton resigned on 18 February 2023 and stepped
down from the Board. Scott Mac Meekin assumed the role
of interim Chief Executive Officer on 20 February2023,
relinquishing his NED responsibilities, including
membership of the Remuneration Committee.
In line with the Policy regarding loss of office payments,
the Remuneration Committee determined that Mark
would receive 12 months’ fixed pay in respect of his notice
period and appropriate additional payments. There will be
no entitlement to a FY23 annual bonus payment and all
in-flight LTIP awards lapse. See page 100 for further details.
In relation to Scott, the Committee determined his
remuneration package in line with Policy as follows:
• Six months’ notice period from both parties
• Salary of £400,000
• Benefits in line with Policy
• 150% of salary maximum FY24 annual bonus opportunity
with any bonus above 100% of salary deferred into
shares for three years
• Relocation allowance of £10,000, in line with Policy on
recruitment
Given the interim nature of the role, the Committee
determined that Scott will not participate in the LTIP.
Jonathan Shearman will also spend additional time
supporting Scott during this period. Therefore, to ensure
Jonathan is fairly remunerated for this, his annual fee will
be increased to £270,000 during this period.
Chief Financial Officer role
Clare Foster stepped down as Chief Financial Officer on
30August 2022 and was replaced by Darren Hayes-Powell
on 1 December 2022.
In line with the 2020 Remuneration Policy regarding loss of
office payments, the Remuneration Committee determined
that Clare be treated as a good leaver. She received:
• 12 months of fixed pay in respect of her notice period
and additional payments in line with Policy
• Annual bonus pro-rated for time served during FY23,
subject to the achievement of performance targets
• In-flight 2020 and 2021 LTIP awards pro-rated for
time served during the vesting period, subject to the
achievement of performance targets
See page 100 for further details.
In line with our recruitment policy, the Committee
determined that Darren’s starting salary would be broadly
in line with that received by his predecessor at £300,000.
The Committee approved that Darren’s annual bonus and
LTIP opportunity would each be set at 125% of salary, which
is below the maximum allowed under the current Policy.
Shareholder engagement
At our 2022 AGM, the Committee was disappointed
that the Directors’ remuneration report was passed with
only 68% support from shareholders. Given this level of
support, soon after the AGM I engaged with some of our
largest shareholders to better understand their views on
remuneration at Trifast. The key themes that emerged from
these discussions were as follows:
1. Approach to increasing the salaries of the Executive
Directors: While shareholders were broadly comfortable
with the need to pay the Executive Directors a more
competitive salary, there was a strong preference to
stagger the increases over a longer time frame
2. Approach to long-term incentives: There were differing
views in relation to the most appropriate long-term
incentive arrangement to align the interests of
shareholders and executives
The Remuneration Committee is still of the opinion that
the rebalancing of the Executive Director remuneration
packages for FY23 was the right thing to do.
This report has been prepared by the Committee in
accordance with the relevant legal and accounting
regulations and has been approved by the Board.
Role and activities of the Committee
The primary role of the Committee is unchanged, which is
to provide our Executive Directors with remuneration that
motivates and aligns them with delivery of our strategy
and creates shareholder value in a sustainable manner.
In addition, it is our duty to ensure that the remuneration
received by the Executive Directors is proportionate to
the performance achieved and the returns received by
shareholders. The main activities of the Committee were
asfollows:
• Engaging with major shareholders given the 2022 AGM
voting outcome
• Determination of implementation of Policy in light of
directorate changes
• Determination of the final remuneration outcomes for
the year to 31 March 2023
• Determining the appropriate annual bonus targets and
LTIP measures for FY24
• Oversight of the remuneration aspects of Senior
Management and wider workforce pay and policies
• Consideration of our gender pay reporting summary
• Review the Remuneration Committee’s terms of
reference
Directors’ remuneration report continued
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Directors’ remuneration report continued
In line with Policy, the awards have a three-year vesting
period and are subject to a two-year post-vesting holding
period. The performance conditions attached to the awards
were underlying diluted EPS growth (70% weighting) and
relative TSR (30% weighting). The Committee will have
overriding discretion to change the formulaic outcome
(both downwards and upwards) if it is out of line with
the underlying performance of the Company and this will
include an assessment of whether any windfall gains have
been made.
The EPS growth target at threshold performance is 9% p.a.
and 29% p.a. at maximum performance with straight-line
vesting between these points. The relative TSR targets
remain unchanged. The Committee is comfortable that
the performance measures remain appropriate and that
the targets are challenging given the current economic
conditions. Full details of the performance targets can be
found in the annual report on remuneration on page 108.
The award lapsed on Mark Belton’s resignation in
February2023.
Overall
The Committee is comfortable that the current Policy
operated as intended and that the overall FY23
remuneration paid to Executive Directors was appropriate.
Therefore, the Committee did not exercise any discretion.
Wider workforce considerations
In terms of wider workforce salary increases for FY24, given
the current business performance the Board determined
to postpone the review until later in the year. However, to
protect our lower-paid colleagues we are increasing salaries
for those individuals to ensure that they are above minimum
wage legislation in each appropriate jurisdiction.
The current focus in relation to engagement has continued
to centre around communicating regularly with our
employees and conducting employee surveys. Our surveys
focus on our culture and the wellbeing of employees.
FY23 remuneration outcomes
Annual bonus
Given the difficulties set out above, threshold performance
was not achieved against the underlying organic operating
profit or cash conversion rate targets. In line with Policy,
the Committee was unable to consider payment of any
bonus from the strategic and operational element as
threshold performance was not met for the profit-based
metric. Therefore, no FY23 annual bonus is payable to
the Executive Directors. Although disappointing, the
Committee felt comfortable that the formulaic bonus
outcome reflected overall Company performance during
FY23 and, as a result, determined that no overriding
discretion should be applied.
Long‑Term Incentive Plan (LTIP)
Vesting
The three-year performance period of LTIP awards
granted to Clare Foster on 25 November 2020 ended on
31March 2023 (Mark Belton’s award lapsed on resignation).
Performance was below the threshold level against the EPS
(70% weighting) and relative TSR (30% weighting) targets,
resulting in nil vesting. The Committee noted that the 2020
LTIP awards vesting outcome was aligned with Company
performance as well as shareholders’ experience. Full
details of Trifast’s performance against the LTIP targets is
provided on page 98.
Grant
In line with the remuneration package rebalance
implemented during FY23, the Committee granted a
reduced LTIP award equivalent to 150% of salary to Mark
Belton on 6 September 2022.
Role and activities of the Committee continued
As noted above, Scott Mac Meekin relinquished his
membership of the Remuneration Committee on
20February 2023. Louis Eperjesi became a member of the
Committee on 3 January 2023 on joining Trifast.
Company performance
Due to global uncertainties surrounding industrial markets
and macroeconomic conditions contributing to volatility
in demand patterns, FY23 proved challenging for Trifast.
During the year, the Board was focused on taking steps
to improve performance through a mix of price increases,
cost efficiencies and working capital (primarily inventory)
improvements. Whilst progress has been made, the
benefits to operating profit were unfortunately offset by
significant destocking from one of our Asian manufacturing
customers. Gross inventory levels at CER (£97m) reduced
during the second half of the year, and we achieved the
targeted reduction by 31 March 2023. Consequently, whilst
adjusted net debt is reducing, it currently stands at an
elevated level of around £38m.
As a result, the Group’s financial performance was
significantly below budget and the market’s original
expectations for the year ending 31 March 2023 with an
underlying PBT of £9.3m. Despite this, there were a number
of positive highlights during the year that are worth noting:
• Trifast secured new contract wins totalling £25.6m
• In January 2023, we concluded negotiations with
significant customers resulting in contractual pricing
uplifts
• Revenue overall increased year on year by 11.8% to
£244.4m led by our European and North American
businesses
Whilst the short-term shortfall in the Group’s performance
is disappointing, given ongoing contract wins, pricing
increases, and the roll out of key initiatives, the Board
continues to believe in the medium-term potential of the
Group.
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Directors’ remuneration report continued
The performance measures for the FY24 LTIP will be 75%
based on relative TSR targets versus the FTSE Small Cap
index (excluding Investment Trusts) with the remaining
25% based on underlying operating margin targets.
The calibration of the operating margin performance
targets has been delayed given the difficulty of setting
robust targets at the current time. These targets will be
determined closer to the grant date and disclosed in the
RNS on the grant of the award.
Non‑Executive Director fees
As set out above, the Chairman’s fee will be temporarily
increased to £270,000 p.a. as he will be spending
additional time supporting the interim CEO during FY24. In
line with the approach for the Executive Directors, there will
be no increase to all other Non-Executive Director fees for
FY24.
Looking ahead
The Committee is comfortable that the operation of
the Policy in FY23 and the implementation of Policy for
FY24 are in line with the best interests of the Group and
will incentivise and retain those team members who are
critical to executing our business strategy and driving
the long-term creation of value for shareholders. We look
forward to your support for the advisory vote on the annual
report on remuneration and the binding vote on the New
Policy at the forthcoming AGM.
Finally, I want to recognise that the Company’s
achievements would not have been possible without the
flexibility and dedication demonstrated by our employees
during the past year. To all colleagues – thank you for your
hard work and commitment to the business, and support
given to colleagues and customers, which is making Trifast
the robust business it is today.
Claire Balmforth
Chair of the Remuneration Committee
10 July 2023
Salary
Given FY23 financial performance, the Committee has
determined that the CFO will not receive an increase in
base salary for FY24. The interim CEO will receive a salary
of £400,000 as set out above.
Pension
The pension contribution for FY24 for the CFO will continue
to be 5% of salary, in line with the rate available to the
majority of the workforce. The interim CEO will not receive
a pension contribution.
Annual bonus
The Committee determined to maintain the maximum annual
bonus opportunity at 150% of salary for the interim CEO
and 125% of salary for the CFO. In line with standard market
practice, the New Policy has been updated such that the
Committee has the flexibility to determine the appropriate
bonus measures, weightings and targets each year. The
performance measures for the FY24 annual bonus will be
70% based on underlying profit before tax (UPBT) targets,
20% on average working capital percentage targets and 10%
based on strategic and operational targets (5% weighting
will be based on a carbon emissions reduction target
aligned with the Company’s ESG strategy). Additionally,
no bonus payment can be made under the average
working capital % element or the strategic and operational
element unless threshold UPBT performance has been
achieved. Performance targets set by the Committee will be
challenging but with an appropriate probability of payout
and disclosed in detail in next year’s remuneration report.
Any bonus payable above 100% of salary will be deferred
into shares for three years.
LTIP
As set out above, the interim CEO will not participate in the
LTIP, whereas the CFO will receive an award equivalentto
125% of salary. The New Policy has been updated such
that the Committee has the flexibility to determine the
appropriate LTIP measures, weightings and targets
eachyear.
Wider workforce considerations continued
I am pleased to report that our approach to engagement
has allowed our employees, through both surveys and
personal visits by our NEDs, to discuss a wide range of
subjects including leadership, capacity, communication,
work/life balance and hybrid/flexible working policies,
strategic direction, learning and development, culture and
values. In addition, we carry out a regular benchmarking
exercise to ensure pay remains fair for all. Read more about
our employee engagement on page 32.
We also published our sixth gender pay gap report in
March 2023 (relating to the report for April 2022). We were
encouraged to see that our median gender pay gap of +5%
(i.e. our female employees are paid 5% more than our male
employees) and the median bonus gap of nil demonstrates
that Trifast is an equal opportunities organisation. We are
proud that we have bonus schemes covering all employees.
Our gender pay gap report can be found on our corporate
website at www.trfastenings.com
We continue to be committed to creating an inclusive
working environment and to rewarding all our employees
in a fair manner and believe they should be able to share in
the success of the Company. To facilitate this, we operate a
popular Save As You Earn (SAYE) share plan which is open
to all UK employees and are delighted that so many of our
UK employees are currently enrolled.
Wider share ownership also aligns with our remuneration
principles by rewarding our employees for the successful
execution of strategy. Our long-term equity scheme now
has c.140 participants and I am pleased to report that we
made a further grant of awards in September 2022, which
is subject to the same EPS performance condition as the
Executive Director LTIP awards.
Implementation for FY24
We set out the implementation of Policy for FY24 opposite:
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Directors’ remuneration report continued
How the Committee is informed on wider
workforcepay
To build the Remuneration Committee’s understanding of
reward arrangements applicable to the wider workforce,
the Committee is provided with data on the remuneration
structure for management level tiers below the Executive
Directors and pay outcomes for these roles. The Committee
has developed a process whereby it will be provided
with feedback from the Company’s various engagement
tools, such that it has access to further context in making
decisions on future pay outcomes. This information is
combined with the insights gained by Jonathan Shearman,
who is the designated Non-Executive Director for staff
engagement. The Committee uses this information to
ensure consistency and fairness of approach throughout
the Company in relation to remuneration.
Pay at Trifast
To attract and retain high-calibre individuals, we aspire
to become an employer of choice within our sector,
maintaining a competitive reward package that balances
fairness to our colleagues as well as responsible use of
shareholders’ funds. Our pay principles are as follows:
• Support the recruitment and retention of high-quality
colleagues
• Enable us to recognise and reward colleagues
appropriately for their contribution
• Help to ensure that decisions on pay are managed in a
fair, just and transparent way
• Create a direct alignment between our Company culture
and our reward strategy
Through the application of these principles, the Company
has continued to attract industry specialists with global
experience at senior levels.
Annual report on remuneration
This section of the remuneration report contains details
as to how the Company’s current remuneration policy was
implemented during FY23. The Committee is satisfied
that the Policy operated as intended in FY23 and its
implementation did not deviate from the approved Policy.
It also covers how the New Policy will be implemented in
FY24 on the basis it is approved by shareholders at the
2023 AGM. In the first part of this report, we have also set
out information with regard to our wider workforce and pay
fairness.
Summary of the proposed Directors’ Remuneration Policy
The key elements from the Directors’ Remuneration Policy which will be put forward for shareholder approval at the 15 September 2023 AGM, and how it will be implemented for FY24,
are summarised below. The Committee does not intend to deviate from the New Policy in FY24.
The full New Policy is set out on pages 104 to 117.
Element Policy summary Implementation for FY24
Base salary Base salary is reviewed annually by the Committee and determined on 1 April
each year. The Committee will target median salaries within FTSE Small Cap
Index companies. Salary increases for Executive Directors will not normally
exceed the average increase which applies across the wider Trifast UK employee
population
Larger increases may be awarded in certain circumstances, including where
strategic imperatives have progressed, a material change in the role and
responsibilities and when an Executive Director has been appointed either
internally or externally at below the market level to reflect experience
The Committee also considers the impact of any base salary increase on the total
remuneration package
Given FY23 financial performance, the Committee has determined that the CFO
will not receive an increase in base salary for FY24.
FY24 salaries are therefore as follows:
• Scott Mac Meekin (interim CEO): £400,000
• Darren Hayes-Powell (CFO): £300,000
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Element Policy summary Implementation for FY24
Pension and benefits Executive Directors will receive a pension contribution, in line with the rate
available to the majority of the workforce
The Company will provide market-competitive benefits to Executive Directors
and reimburse any necessary and reasonable business expenses
The pension contribution for FY24 for the CFO will be 5% of salary, in line with the
rate available to the majority of the workforce. The interim CEO will not receive a
pension contribution
No change to benefit provision
Annual bonus Maximum opportunity of 150% of salary. Any bonus in excess of 100% of salary
will be paid in shares deferred for three years
Performance measures, weightings and targets will be set by the Committee
each year
Payout for threshold performance at 25% of maximum, and payout for on-target
performance at 50% of maximum
The Committee has overriding discretion to change the formulaic outcome (both
downwards and upwards) if it is out of line with underlying performance of the
Company
The Committee awarded a FY24 bonus with a maximum opportunity of 150% and
125% of salary to the interim CEO and CFO respectively
The Committee determined that the performance measures and weightings will
be as follows:
• 70% based on underlying profit before tax (UPBT) targets
• 20% based on average working capital % targets
• 10% based on strategic and operational targets (5% weighting will be based on
a carbon emissions reduction target aligned with the Company’s sustainability
strategy)
• Additionally, no bonus payment can be made under the average working
capital % element or the strategic and operational element unless threshold
UPBT performance has been achieved
Targets are deemed commercially sensitive and will be disclosed in the FY24
Annual Report
In line with Policy, payout for threshold performance is 25% of maximum, and
payout for on-target performance is 50% of maximum
Annual report on remuneration continued
Summary of the proposed Directors’ Remuneration Policy continued
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Element Policy summary Implementation for FY24
Long-Term Incentive Plan
(LTIP)
Maximum opportunity of 175% of salary
Three-year vesting period plus two-year holding period
Malus and clawback provisions apply
Performance measures, weightings and targets will be set by the Committee each
year
25% of the award vests for threshold performance and 100% for maximum
performance
Overriding discretion in line with annual bonus
125% of salary awards for the CFO. The interim CEO will not participate in the LTIP
The Committee determined that the performance measures, weightings and
targets will be as follows:
• 75% based on relative TSR vs. FTSE Small Cap Index (excluding investment
trusts)
• 25% based on underlying operating margin
The calibration of the underlying operating margin performance targets has been
delayed given the difficulty of setting robust targets at the current time. These
targets will be set closer to the grant date and disclosed in the RNS on award
The relative TSR target at threshold level is performance equal to the FTSE Small
Cap Index (excluding investment trusts) and 8% p.a. in excess of the index for full
vesting, with straight-line vesting in between
Minimum shareholding
requirement
Shareholding requirement of 250% of salary over five years from policy adoption
while in employment and requirement to continue to hold shares equivalent
to the minimum of actual shareholding on cessation of employment and
in-employment shareholding requirement for a period of two years following
termination of employment
Shares beneficially owned and any in-flight LTIP awards at the date of adoption of
the 2020 Policy will be exempt from the post-employment requirement
The shareholding requirement in FY24 will be 250% of salary
Post-employment shareholding requirement will also apply
Non-Executive Director
fees
It is anticipated that increases to Chair and NED fee levels will typically be in
line with market levels of fee inflation and the increase awarded to the wider
workforce. Larger increases above this may be awarded in certain circumstances,
for example a material change in the time commitment or responsibilities of the
Non-Executive Director. Additional fees may be payable in instances where work
performed is outside of the scope of the individual’s role and responsibilities.
The Company targets FTSE Small Cap median fees
With the exception of the Chair’s fee, there are no increases to fees in FY24, such
that from 1 April 2023 fees are as follows:
• Chair: £270,000, including fee for additional responsibilities
• SID: £6,000
• NED: £45,000
• Committee Chair fee: £8,000
• Committee membership fee: £5,000/£8,000
Executive Directors are also entitled to participate in the Company’s all-employee share plan (SAYE) operated in the UK.
Annual report on remuneration continued
Summary of the proposed Directors’ Remuneration Policy continued
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Linking our remuneration policy with our business strategy
Our current Policy was designed to align with the Group strategy and is being effectively rolled over into the New Policy. Below we have set out how each performance measure
withinour incentive structure links back to our key objectives.
Directors’ remuneration report continued
A global leader in
attractive markets
Capital allocation
framework
Focus on
growth
Focus on
sustainability
Our key objectives
KSIs
Organic revenue growth > GDP
Underlying operating margin
Underlying ROCE
Group revenue in North America
CO
2
e reduction from FY19 baseline
KPIs
Underlying cash conversion ratio
Working capital as a percentage of revenue
Underlying earnings per share (EPS)
Employee engagement Index
Annual bonus
• Focus on organic growth
• Focus on sustainable
investment
• Focus on on inventory
improvements
• Focus on cash flow
management
• Focus on organic growth
• Focus on innovation
• Focus on people/talent
• Focus on sustainability
• Focus on acquisition
Underlying
PBT
Average
working
capital
percentage
Strategic/
operational
Measure Link to strategy
LTIP
• Aligns with medium-term
aspiration to become
both a bigger and more
profitable company
• Focus on operational
leverage gains, gross
margin improvements
and operational
efficiencies
• Linked to shareholder
value
• Focus on outperformance
• Linked to
shareholder value
Underlying
operating
margin
Relative
TSR
Shareholding
guidelines
Measure Link to strategy
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How the Company addressed factors in Provision 40 of the 2018 UK Corporate Governance Code
The Code requires the Committee to determine the policy and practices for Executive Directors in line with several factors set out in Provision 40. The following table sets out how our
Policy aligns with Provision 40 of the Code, the objective of which is to ensure the remuneration operated by the Company is aligned to all stakeholder interests, including those of
shareholders.
Remuneration factors How the Committee has addressed this in the remuneration policy
Clarity – remuneration arrangements should be transparent
and promote effective engagement with shareholders and the
workforce
The Company’s performance-based remuneration is based on supporting the implementation of the Company’s strategy as measured
through its core KPIs. There is transparency over the performance metrics in place for both annual bonus and the LTIP and there is a
clear link between long-term value creation and the provision of reward to Executive Directors and Senior Management
Simplicity – remuneration structures should avoid complexity
and their rationale and operation should be easy to understand
The market standard annual bonus and LTIP structures are well understood by shareholders and participants alike
Risk – remuneration arrangements should ensure reputational
and other risks from excessive rewards, and behavioural risks
that can arise from target-based incentive plans, are identified,
and mitigated
Identified risks have been mitigated as follows:
• Deferring bonus into shares and a two-year holding period on the LTIP helps ensure that the performance earning awards was
sustainable and thereby discouraging short-term behaviours
• Aligning any reward to the agreed strategy of the Company
• Reducing the awards or cancelling them if the behaviours giving rise to the awards are inappropriate, through malus and clawback
• Reducing annual bonus or LTIP awards or cancelling them, if it appears that the criteria on which the award was based does not
reflect the underlying performance of the Company
Predictability – the range of possible values of rewards to
individual directors and any other limits or discretions should
be identified and explained at the time of approving the policy
The Remuneration Committee has good line of sight and control over the potential performance outcomes, and the actual and
perceived value of the incentives
The Policy sets out the potential remuneration available in several performance scenarios
Proportionality – the link between individual awards, the
delivery of strategy and the long-term performance of the
company should be clear. Outcomes should not reward poor
performance
One of the key strengths of the current approach of the Company to remuneration is the direct link between the returns strategy and
the value received by Executives
The schematic on page 89 sets out in detail the link between Company strategy and a broadened range of performance measures in
the incentive arrangements
Alignment to culture – incentive schemes should drive
behaviours consistent with company purpose, values and
strategy
The LTIP rewards long-term sustainable performance. This focus on long-term sustainable value is a key tenet of the Company’s
strategy
The inclusion of an ESG-based measure in the FY23 and FY24 annual bonus demonstrates the Board’s determination to drive
behaviours in this key area of Company strategy
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Alignment between wider workforce pay and Directors’ Remuneration Policy
Trifast aims to provide a remuneration package for all employees which is market competitive and operates a similar structure as for the Executive Directors. The Company’s remuneration
philosophy for all employees from the Executive Directors downwards is that they should have a meaningful element of performance-based pay. For Executive Directors, the LTIP and part of
the annual bonus is provided in shares to ensure a focus on long-term sustainable value creation and to align their experience with that of shareholders. The Company’s LTIP extends to selected
Senior Management within the Company, with the number of employees eligible to participate being c.140 from across 16 countries. For all employees, Trifast operates a performance-based
discretionary bonus scheme. The Company also has a Save As You Earn scheme (SAYE) for all UK employees in order to increase levels of share-ownership throughout the Company and allow
employees to share in its success.
The table below illustrates the cascade of our reward structure from Executive Directors to the wider employee population.
Fixed
remuneration
Annual
bonus – cash
Annual
bonus – deferral LTIP
UK employee
share scheme
(SAYE)
Executive Directors Y Y Y Y Y
Senior Management Y Y N Y Y
Wider workforce Y Y N N Y
The Committee is satisfied that the approach to remuneration across the Company is consistent with the Company’s principles of remuneration. In the Committee’s opinion, the
approach to executive remuneration aligns with the wider Company pay policy and there are no anomalies specific to the Executive Directors.
CEO pay ratio
The table below sets out the ratios of the CEO single total figure of remuneration to the equivalent pay for the lower quartile, median and upper quartile of UK employees.
Pay ratio
Year Method
25th
percentile
50th
percentile
75th
percentile
FY23 Option A 19:1 15:1 10:1
FY22 Option A 24:1 19:1 13:1
FY21 Option A 17:1 14:1 9:1
FY20 Option A 18:1 14:1 10:1
The CEO remuneration figure is as shown in the single total figure for Executive Directors’ remuneration table on page 96 being the total for the two individuals that held the role during
FY23. The remuneration figures for the employee at each quartile were determined as of 31 March 2023. Each employee’s pay and benefits were calculated using each element of
employee remuneration, consistent with the CEO, on a full-time equivalent basis. No adjustments (other than to achieve full-time equivalent rates through simple proration) were made
and no components of pay, except SAYE awards, have been omitted.
Bonus payments included in total pay and benefits for below Board employees are those paid in the year to 31March 2023 rather than those earned in the same period.
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• A significant proportion of our CEO’s pay is provided
in shares, and their value reflects the movement in
share price over the three years prior to vesting. This
can add significant volatility to the CEO’s pay and may
be reflected in the ratio if the Company meets the
respective targets
The FY23 CEO pay ratios at the 25th, 50th and 75th
percentiles are lower than the equivalent FY22 ratios. This
is primarily a result of the previous CEO and interim CEO
not receiving any incentive payments in respect of FY23.
Gender pay gap reporting
Trifast is committed to the principle of equal opportunities
and equal treatment for all colleagues, regardless of sex,
race, religion or belief, age, marriage or civil partnership,
pregnancy/maternity, sexual orientation, gender
reassignment or disability. The Company has concluded
that the single most important factor is to identify, recruit
and develop people based on skills and merit. We have
a clear policy of paying employees equally for the same
or equivalent work, regardless of their sex (or any other
characteristic set out above).
Trifast is therefore confident that our gender pay gap does
not stem from paying men and women differently for the
same or equivalent work but is instead the result of the
roles in which men and women work within the organisation
and the salaries that these roles attract.
Our median gender pay, calculated for TR Fastenings
UK, was 5% in favour of women. We are pleased that this
remains significantly below the UK average. Our gender pay
gap report can be found on our corporate website at www.
trfastenings.com
Annual report on remuneration continued
CEO pay ratio continued
The salary and total pay and benefits for the employee at
each of the 25th, 50th and 75th percentiles are as shown in
the table below:
Pay data
Base salary
£000
Total pay
and benefits
£000
CEO 400 445
Employee at 25th
percentile
21 24
Employee at 50th
percentile
26 29
Employee at 75th
percentile
38 46
We have chosen methodology option A for the calculation,
to identify the three UK employees at each of the quartiles
as at 31 March 2023. In line with the regulations, all
employees across our four UK subsidiaries were used in the
calculation. This method was chosen given its robustness
in determining these three UK employees. The Committee
is comfortable that the median ratio is consistent with the
Company’s pay and progression policies.
The ratios will be used as part of the Committee’s
remuneration decision-making process regarding broader
employee pay policies as well as remuneration policies
for the Executive Directors. They reflect the difference in
remuneration arrangements as responsibility increases for
more senior roles within the Company. There may therefore
be significant volatility in this ratio, caused by the following:
• Our CEO pay is made up of a higher proportion of
incentive pay than that of our employees, in line with the
expectations of our shareholders, which introduces a
higher degree of variability in their pay each year versus
that of our employees
0
25
50
75
100
Base
salary
Scott Mac Meekin
(interim CEO)
Percentile
Darren Hayes-Powell
(CFO)
Total
target
remuneration
Base
salary
Total
target
remuneration
22%
7%
36%
44%
External benchmarking
The chart below shows the relative positioning of Trifast’s
interim CEO and CFO remuneration in relation to the
percentiles of the FTSE Small Cap Index. The chart is based
on the Executive Directors’ FY24 remuneration opportunity
under the New Policy.
We note that the interim CEO will not participate in the LTIP.
Remuneration justification
The Committee is comfortable that the internal and
external pay relativity reference points set out above
provide justification that the remuneration arrangements
for Executive Directors are appropriate and illustrate the
suitability of the changes being made to the New Policy.
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How executive remuneration is communicated with stakeholders – shareholders and employees
Given the disappointing level of support for the Directors’ remuneration report, soon after the 2022 AGM the Committee Chair engaged with some of our largest shareholders to better
understand their views on remuneration at Trifast. The key themes that emerged from these discussions are set out in the Committee Chair’s statement. The Committee is grateful for
the time that shareholders have taken to consider proposals and provide feedback during FY23.
The Company’s approach to engagement has also allowed our employees to discuss a wide range of subjects, as detailed on page 26 with our designated people NED, Jonathan
Shearman, supported by Non-Executive Director, Claire Balmforth and Global HR & Sustainability Director, Helen Tate. The feedback gathered as part of this engagement with
employees was considered by the Committee. In particular, it helped the Company to review resource capacity and to develop a strategy for improving communication. See page 32
for further information on employee engagement.
CEO and all-employee pay
Total shareholder return
The graph below sets out the total shareholder return performance of the Company compared to the FTSE Small Cap Index and FTSE All-Share Industrial Engineering Index over
a ten-year period from 31 March 2013. The Remuneration Committee believes it is appropriate to monitor the Company’s performance against these indices as the Company is a
constituent of both.
Ten-year TSR graph
2013
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
0
100
200
300
400
500
600
700
Trifast FTSE Small Cap IndexFTSE All-Share Industrial Engineering Index
TSR rebased to 100 on 31 March 2013
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Performance and pay
The table below shows the single figure of remuneration and levels of bonus and equity payouts for the Group CEO during the past ten years:
Financial year
Total single
figure of
remuneration
£000
Annual cash
bonus
payout
against
maximum
Equity
award
payout
against
maximum
2023 445
2
0% 0%
2022 505 23.7% 0%
2021 366 n/a 0%
2020 383 0% 0%
2019 367 0% n/a
2018 629 70% n/a
2017 811 100% 100%
3
2016 641
1
50% 100%
3
2015 766 100% 100%
3
2014 643 80% 100%
3
1. Includes a full year of CEO remuneration; including remuneration paid to JC Barker for 1 April 2015 to 30 September 2015 and remuneration for MR Belton from 1 October 2015 to 31 March 2016
2. Includes a full year of CEO remuneration; including remuneration paid to Mark Belton from 1 April 2022 to 18 February 2023 and remuneration for Scott Mac Meekin (interim CEO) from 20 February 2023 to 31 March 2023
3. This is the vesting of the deferred equity awards under a previous policy
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Percentage change in Directors’ remuneration compared to employees
The table below compares the percentage increase in each Director’s pay with the average pay of the Company’s colleagues in the listed entity on a full-time equivalent basis.
Please note that given the significant changes in Executive Directorships during FY23 there are a number of significant increases/decreases as a result of this, which are fully explained
in-the notes below.
% change from 2022 to 2023 % change from 2021 to 2022 % change from 2020 to 2021
Salary/
fees
Taxable
benefits
Annual
bonus
11
Salary/
fees
9
Taxable
benefits
Annual
bonus
11
Salary/
fees
9
Taxable
benefits
Annual
bonus
Scott Mac Meekin (interim CEO,
previously NED)
1
82.4% n/a n/a
6.3% n/a n/a (4.6)% n/a n/a
Mark Belton (previous CEO)
2
11.4% (5)% n/a
7.1% 33.0% n/a (4.6)% 0% n/a
Darren Hayes-Powell (CFO)
3
n/a n/a n/a
n/a n/a n/a n/a n/a n/a
Clare Foster (previous CFO)
4
(47.3)% (47.6)% n/a
7.1% 33.0% n/a (4.6)% 0% n/a
Jonathan Shearman (NED and Chair)
5
14.1% n/a n/a
7.1% n/a n/a 216.0% n/a n/a
Clive Watson (Senior Independent
NED)
6
3.2% n/a n/a
55.0% n/a n/a n/a n/a n/a
Claire Balmforth (NED)
7
3.6% n/a n/a
5.7% n/a n/a n/a n/a n/a
Louis Eperjesi (NED)
8
n/a n/a n/a
n/a n/a n/a n/a n/a n/a
Average employee
10
17. 9% 35.0% 396.5%
(5.6)% 12.0% (39.5)% 27.1% 43.3% (37.2)%
1. Scott Mac Meekin was appointed interim CEO on 20 February 2023. NED fees only paid to 20 February 2023. Therefore, change from 2022 to 2023 reflects change in role
2. Mark Belton resigned from the Board on 18 February 2023
3. Darren Hayes-Powell was appointed to the Board on 1 December 2022
4. Clare Foster stepped down from the Board on 30 August 2022
5. Jonathan Shearman was appointed as Chair of the Board on 1 April 2020. Therefore, the increase in fees between 2020 and 2021 set out above reflects the change from his previous role as NED and Remuneration
Committee Chair. The increase in fees between 2022 and 2023 is due to the Chair fee being temporarily increased while spending additional time supporting the interim CEO, as set out above
6. Clive Watson was appointed to the Board on 30 July 2020. The increase from 2021 to 2022 reflects the fact that he only served for eight months as a Director during FY21
7. Claire Balmforth was appointed to the Board on 1 April 2020
8. Louis Eperjesi was appointed to the Board on 3 January 2023
9. Salary/fees for Directors who remained in the same role for FY20 and FY21 showed a 4.6% decrease between 2020 and 2021 as a result of the 20% reduction in pay taken by the Board in Q1 of FY21. Therefore, the increases
between 2021 to 2022 are higher than the FY22 salary and fee increases awarded given the temporary reduction in FY21 pay
10. In line with the regulations, the average employee percentage changes only include employees of Trifast plc, excluding Directors (26 employees as at 31 March 2023). The annual bonus increase has been calculated based
on bonus paid in the year rather than those earned in the same period
11. Annual bonus increase is n/a for 2021 to 2022 due to £nil comparator in FY21 and FY22
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Relative importance of spend on pay
The following table shows the relative spend on pay during the past two financial years when compared to other disbursements from profit:
Year to
31 March
2023
Year to
31 March
2022 Change
Dividend distributions
£3.02m
£2.81m 7.5%
Group spend on pay (including Directors)
£41.57m
£35.66m 16.6%
Other pay
£7.69m
£8.69m (11.6)%
Total remuneration
1,2
£49.26m
£44.36m (11.1)%
1. The costs above are shown gross of income from government support schemes, totalling £nil (FY22: £0.1m)
2. Total remuneration excludes IFRS 2 Share-based payments of <£0.1m (FY22: £0.8m). Including this, total remuneration would be £49.3m (FY22: £45.1m)
The following section, until page 101, is auditable.
Executive Director remuneration for the year ended 31 March 2023
Executive Director single figure of remuneration
Annual bonus
5
Salary/fees
£000
Taxable
benefits
3
£000
Pensions
4
£000
Total
fixed
£000
Cash
£000
Shares
£000
LTI P
6
£000
Other
£000
Total
variable
£000
Total
£000
Scott Mac Meekin
1
93 2 — 95 — — — 10 10 105
Prior year 51 — — 51 — — — — — 51
Mark Belton
7
353 19 16 388 — — — — — 388
Prior year 317 20 55 392 113 — — — 113 505
Darren Hayes-Powell
2
100 7 5 112 — — — 5 5 117
Prior year N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Clare Foster
8
128 11 20 159 — — — — — 159
Prior year 243 21 42 306 86 — — — 86 392
Totals 674 39 41 754 — — — 15 15 769
Prior year totals 560 41 97 698 199 — — — 199 897
Directors’ remuneration report continued
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Executive Director remuneration for the year ended 31 March 2023 continued
Executive Director single figure of remuneration continued
1. Scott Mac Meekin was appointed to the role of interim CEO on 20 February 2023. His salary/fees in FY22 and FY23 include his fees for services when he was a Non-Executive Director. 90% of Scott Mac Meekin’s salary was
paid in Singaporean $ and 10% in GBP, in line with his service contract
2. Darren Hayes-Powell was appointed to the role of CFO on 1 December 2022
3. Taxable benefits consisted of the cost of providing a company car (or car allowance), private medical insurance and critical illness cover
4. Mark Belton, Darren Hayes-Powell and Clare Foster were members of the Company’s non-contributory pension plan in FY23. This is an HMRC-approved defined contribution scheme. From 1 April 2022 the rate of Company
contribution to this scheme was reduced to 5% of base salary from 20% of base salary in FY22. From 1 April 2016, the Executives were provided the option to take pension payments in the form of a cash allowance, after a
deduction for Employer’s National Insurance. In FY23, Mark Belton and Clare Foster chose to take a proportion of their pension as a cash allowance
5. No annual bonus was earned for FY23. See additional details in relation to the annual bonus element of remuneration below
6. The performance period of the LTIP award granted on 25 November 2020 ended on 31 March 2023 and therefore its value (nil) is included in the LTIP column for FY23. See additional details on the performance outcomes of
the 2020 LTIP and the LTIP award granted in the year below on page 98
7. Mark Belton resigned as CEO on 18 February 2023
8. Clare Foster stepped down as CFO on 30 August 2022
Additional details for variable pay element of remuneration
(i) Annual bonus for year ended 31 March 2023
As set out in the Chair’s statement, Mark Belton had a maximum annual bonus opportunity of 150% of salary (on resignation his entitlement to any payment lapsed). Clare Foster also had
a maximum annual bonus opportunity of 150% of salary which was pro-rated for time served in the year in line with her status as a good leaver. On joining, Darren Hayes-Powell had a
maximum annual bonus opportunity of 125% of salary which was pro-rated for time served in the year.
The annual bonus measures were based 70% on underlying organic operating profit, 20% on cash conversion rate and 10% on strategic/operational targets. In line with policy, the
strategic and operational measures will only pay out if the threshold underlying organic operating profit performance target has been achieved, to ensure alignment between the annual
bonus outturn and underlying corporate performance. The table below provides information on the targets for each measure, actual performance and resulting bonus payments:
Performance required Actual performance Darren Hayes-Powell Clare Foster
Measure Weighting Threshold On target Maximum Actual
% of element
payable
Achievement
as % salary
Bonus value
£000
Achievement
as % salary
Bonus value
£000
Underlying organic
operating profit
70% £17.5m £20.0m £22.5m £11.8m 0% 0% 0 0% 0
Underlying cash
conversion rate
20% 80% 100% 120% 48.9% 0% 0% 0 0% 0
Strategic/operational
targets
10% Objectives based on strategic/operational See below 0% 0% 0 0% 0
Total bonus achieved
in FY23
0% 0 0% 0
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Directors’ remuneration report continued
Annual report on remuneration continued
Additional details for variable pay element of remuneration continued
(i) Annual bonus for year ended 31 March 2023 continued
2023 annual bonus outcomes: strategic/operational objectives
Given that the threshold target under the underlying organic operating profit measure was not achieved, the payout from the strategic and operational measures is automatically set at
nil, such that the Remuneration Committee was not required to test their achievement for FY23. However, in line with our commitment to provide transparency in relation to the strategic
and operational bonus element we set out below a summary of these measures and their achievement for FY23.
Objective FY23 achievements
ESG – GHG emissions 26.8% carbon emission reduction since 2019 against a target of 16.8%
Overall, there is no FY23 annual bonus payable for any Executive Director. The Committee determined that it should not exercise its discretion to adjust the formulaic bonus outturn as it
was aligned with the underlying performance of the Company.
(ii) LTIP performance period ending in the year ended 31 March 2023
2020 LTIP awards were granted to Mark Belton and Clare Foster on 25 November 2020. Mark Belton’s award lapsed on his resignation and the awards granted to Clare Foster will vest on
25 November 2023 on a pro-rata basis in line with her good leaver status. The three-year performance period for these awards ended on 31 March 2023 and they were granted subject to
the achievement of certain EPS (70% weighting) and relative TSR (30% weighting) targets. We set out the targets and outcomes in the table below:
Underlying diluted EPS (70% weighting)
TSR growth
1
vs FTSE Small Cap excl. IT Index
(30% weighting)
Trifast
underlying
diluted EPS
2
EPS
required for
EPS
required for
100% vesting
Vesting
Trifast
TSR
growth
Index growth
required for
25% vesting
Index growth + 8%
p.a.
required for
100% vesting
Vesting
Overall
vesting
25% vesting
5.48p 10.55p 13.28p nil% (49.1)% 25.2% 49.2% nil%
nil%
1. TSR growth for Trifast and the FTSE Small Cap Index (excluding investment trusts) was measured using a three-month average prior to the start and the end of the three-year performance period
2. FY23 underlying diluted EPS before IFRS 2 Share-based Payments and related costs reclassification (5.48p) was used to be consistent with the FY20 underlying diluted EPS from which the targets were calibrated
The following table presents the number of 2020 LTIP awards that will vest on 25 November 2023 based on the assessment of the performance conditions and the resulting value of
awards using the average Q4 FY23 share price:
Number of
2020 LTIP
awards
granted
Number of
2020 LTIP
awards
(pro-rated)
Number of
2020 LTIP
awards
vesting on
25 November
2023
Value of
vested
awards
Value of
vested
awards
attributable
to share
price growth
Clare Foster 291,666 194,444 nil nil nil
The Committee acknowledged that the 2020 LTIP outcome was aligned with Company performance as well as shareholders’ experience and as a result did not apply any overriding discretion.
The Committee is comfortable that the current policy operated as intended.
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Annual report on remuneration continued
Additional details for variable pay element of remuneration continued
(iii) LTIP awards granted in the year ended 31 March 2023
An LTIP award was granted to Mark Belton on 6 September 2022 (the awards lapsed on his resignation). Clare Foster stepped down from her role as CFO before the LTIP grants were
made, therefore she was not eligible to receive an award during the year. However, it should be noted that this award has lapsed and the terms are included for completeness only.
The normal vesting date of the LTIP awards will be the third anniversary of their award date and, once vested, shares will be subject to a two-year holding period. No consideration was
paid for the awards, which were structured as a nil-cost option.
The table below sets out further details of the LTIP awards granted in the year to 31 March 2023 where vesting will be determined according to the achievement of appropriate
performance measures.
Date of grant
Type of
award
Award as
% of base
salary
Face value
of award
Face value
of award at
threshold
vesting
No. of
shares
1
Vesting
period
Mark Belton 6 September 2022 Nil-cost option 150% £600,000 £150,000 623,960 3 years
1. For Mark Belton, this was calculated using a share price of £0.9616, being the average share price for the five days up to and including 5 September 2022 (the last business day prior to the grant). The awards lapsed on his
resignation
The awards will vest subject to achieving the following targets:
Measure Performance period Performance level
Vesting
(% of award)
1
Underlying diluted EPS (70% weighting)
2
3 financial years from 1 April 2022
Below 9% p.a. growth nil
9% p.a. growth (threshold) 25%
29% p.a. growth (maximum) and above 100%
Relative TSR
3
vs FTSE Small Cap Index (excluding
investment trusts) (30% weighting)
3 financial years from 1 April 2022
Below index return nil
Equal to index return (threshold) 25%
8% p.a. in excess of index return (maximum) 100%
1. For the EPS measure, 25% vests for 9% p.a. growth and 100% vests for 29% p.a. growth, with vesting on a straight-line basis between these points. Vesting between threshold and maximum for the relative TSR measure is on
a straight-line basis
2. Underlying diluted EPS will be calculated after IFRS 2 Share-based payment charges and related costs, in line with the published FY22 base year underlying diluted EPS from which these targets were calibrated
3. TSR growth for Trifast and the FTSE Small Cap Index (excluding investment trusts) will be measured using a three-month average prior to the start and the end of the three-year performance period
The Committee will have overriding discretion to change the formulaic outcome (both downwards and upwards) if it is out of line with the underlying performance of the Company and
this will include an assessment of whether any windfall gains have been made.
Payments to past Directors
There were no payments to past Directors in FY23.
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Payment for loss of office
Mark Belton resigned on 18 February 2023 and stepped down from the Board. In line with current Policy regarding loss of office payments, the Remuneration Committee determined
that Mark would receive the following:
• 12 months of fixed pay in respect of his notice period (£400,000 base salary, pension contribution of £20,000 less Employer’s NIC, £33,240 in relation to benefits and a payment for
1.5 days of accrued holiday entitlement)
• In line with Policy, an additional payment of £93,878
• There will be no entitlement to a FY23 annual bonus payment and all in-flight LTIP awards lapsed on resignation
Clare Foster stepped down as Chief Financial Officer on 30 August 2022. In line with the 2020 Remuneration Policy regarding loss of office payments, the Remuneration Committee
determined that Clare be treated as a good leaver. Therefore, she will receive:
• 12 months of fixed pay in respect of her notice period (£308,000 base salary, pension contribution of £15,400 less Employer’s NIC, £34,000 in relation to benefits and a payment for
four days of accrued holiday entitlement)
• Annual bonus pro-rated for time served during FY23, subject to the achievement of performance targets (as set out above, Clare Foster’s FY23 annual bonus was £nil)
• In-flight 2020 and 2021 LTIP awards pro-rated for time served during the vesting period and vesting on their normal dates subject to the achievement of performance targets (as set
out above, there was nil vesting under the 2020 LTIP)
• In line with Policy, an additional payment of £99,588
Non-Executive Director single figure of remuneration
Base fee
£000
Chairing of
Audit or Rem
Committee
£000
Committee
membership
£000
Senior
Independent
Director
£000
Total
£000
Jonathan Shearman
1
146 — — — 146
Prior year 128 — — — 128
Clive Watson 45 8 5 6 64
Prior year 43 8 5 6 62
Claire Balmforth 45 8 5 — 58
Prior year 43 8 5 — 56
Louis Eperjesi
2
11 — 2 — 13
Prior year — — — — —
Totals 247 16 12 6 281
Prior year totals 257 16 18 6 297
1. Jonathan Shearman’s Chair fee temporarily increased in March 2023 while spending additional time supporting the interim CEO during FY24
2. Louis Eperjesi was appointed to the Board on 3 January 2023
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Annual report on remuneration continued
Statement of Directors’ shareholdings
Shareholding
requirement
1
Current
beneficial
holding
2
Vested but
unexercised
options
Executive Directors
Scott Mac Meekin 1,285,347 14,388 n/a
Mark Belton (as at 18 February 2023)
6
n/a 442,736 310,536
Darren Hayes-Powell 964,010 11,158 n/a
Clare Foster (as at 31 August 2022)
5
n/a 108,352 n/a
Non-Executive Directors
Jonathan Shearman n/a 23,571 n/a
Clive Watson n/a 58,625 n/a
Claire Balmforth n/a n/a n/a
Louis Eperjesi n/a n/a n/a
LTIP awards
subject to
performance
conditions
3
SAYE
options
Total of all
interests
on 31 March
2023
Current shares
which count
toward
shareholding
requirements
4
Shareholding
requirement
met?
1
Executive Directors
Scott Mac Meekin n/a n/a 14,388 14,388 No
Mark Belton (as at 18 February 2023)
5
n/a n/a 753,272 n/a n/a
Darren Hayes-Powell n/a n/a 11,158 11,158 No
Clare Foster (as at 31 August 2022)
6
319,224 n/a 427,576 n/a n/a
Non-Executive Directors
Jonathan Shearman n/a n/a 23,571 n/a n/a
Clive Watson n/a n/a 58,625 n/a n/a
Claire Balmforth n/a n/a n/a n/a n/a
Louis Eperjesi n/a n/a n/a n/a n/a
1. Under the existing policy, there is a 250% of salary shareholding requirement for Executive Directors. This is to be built up over five years from 22 September 2020, the date the current remuneration policy was approved by
shareholders or date of joining if later. The number of shares shown is based on the 31 March 2023 share price of £0.778
2. Includes options exercised in the year. Mark Belton exercised a nil-cost option over 192,233 shares which had a total value of £97,270 as at the date of exercise. No other Executive Director exercised nil-cost options during the year
3. The LTIP awards subject to performance conditions column includes the 2020 LTIPs which will lapse on 25 November 2023 because of not achieving the attaching performance conditions
4. Total of current beneficial holding, SAYE options, and vested but unexercised options on a net-of-tax basis
5. In line with the 2020 Policy, Mark Belton is subject to a two-year post-employment shareholding requirement
6. In line with the 2020 Policy, Clare Foster is subject to a two-year post-employment shareholding requirement
Between 31 March 2023 and 10 July 2023 there were no further movements in the Directors’ shareholdings from those disclosed in the table above.
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Service contracts for Executive Directors
The service contract for Darren Hayes-Powell is not fixed term. The service contract for Scott Mac Meekin is fixed for 12 months with the option to extend for a further 12 months. The
service contracts terminable by either the Company or the Director on the following bases:
Notice
period
Date of
signing
Scott Mac Meekin 6 months 20 February 2023
Darren Hayes-Powell
1
12 months 9 November 2022
1. Although signing his contract prior to appointment, Darren Hayes-Powell was appointed as Chief Financial Officer on 1 December 2022
The Directors’ contracts are kept and can be viewed at the Company’s registered office.
Non-Executive Directors’ letters of appointment
The Non-Executive Directors do not have service contracts but are appointed under letters of appointment. Claire Balmforth and Clive Watson were appointed for an initial three-year
term in 2020. Louis Eperjesi was appointed for an initial three-year term on 3 January 2023. All Non-Executive Directors are subject to annual re-election at the Company’s AGM.
The table below sets out the date that each Non-Executive Director signed their current letter of appointment and the notice period by which their appointment may be terminated early
by either party. For new appointments, the notice period is three months and in line with the existing Non-Executive Directors’ arrangements, set out in the 2014 Directors’ Remuneration
Policy, this will be extended to 12 months on a change of control. The Directors’ letters of appointment are kept and can be viewed at the Company’s registered office.
Non-Executive Director
Notice
period
Date of
signing
Jonathan Shearman
1
3 months 2 July 2020
Claire Balmforth
2
3 months 26 March 2020
Clive Watson
2
3 months 20 April 2020
Louis Eperjesi
2
3 months 22 November 2022
1. Jonathan Shearman was appointed as a Non-Executive Director on 17 June 2009 and as Chair on 1 April 2020
2. Although signing appointment letters prior to the appointment, Claire Balmforth was appointed as a Non-Executive Director on 1 April 2020, Clive Watson on 30 July 2020, and Louis Eperjesi on 3 January 2023
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Functioning of Remuneration Committee
The role of the Committee is to ensure that the remuneration arrangements for Executive Directors provide them with the motivation to deliver our strategy and create shareholder
value in a sustainable manner. In addition, it is our task to ensure that the remuneration received by the Executive Directors is proportionate to the performance achieved and the returns
received by you as shareholders.
The Committee is composed entirely of Non-Executive Directors. Members have no day-to-day involvement in the running of the business. No Executive Director sits on the Committee.
The Remuneration Committee is formally constituted with written terms of reference. A copy of the terms of reference is available to shareholders on the website www.trifast.com or by
writing to the Company Secretary, whose details are set out on page 203 of this publication.
Alongside numerous conference calls and meetings with advisers, the Committee had six formal meetings during the year. All Committee meetings were fully attended by members in
appointment at the time of the meeting, with the exception of Scott Mac Meekin, who was unable to attend the November 2022 meeting due to a prior personal commitment.
On most occasions, the CEO and CFO were invited to attend to ensure the Committee was in possession of all the relevant facts. The key activities the Committee undertook during the
year can be seen on page 79.
During the year, the Committee received independent advice from PwC in relation to general remuneration matters. PwC was appointed by the Committee and the fees paid by the
Company to PwC for all services provided during the financial year were £156,650 (excluding VAT). The Group also retains PwC regarding taxation services and consulting services in the
ordinary course of business of Trifast. The Committee believes that this does not create a conflict of interest and the advice they receive is independent and objective. PwC is a signatory to
the Remuneration Consultants’ Code of Conduct which requires its advice to be objective and impartial. PwC does not have any other connections with the Company or its Directors.
The Committee consults with the Company Secretary and Global HR & Sustainability Director regarding remuneration and corporate governance issues. With regard to the Senior
Management in the Company (excluding Board Directors), the Committee also takes advice from the Executive Board.
Statement of AGM voting
The table below shows the actual voting on the 2022 remuneration report at the AGM held on 7 September 2022 and the 2020 remuneration policy at the AGM held on 22 September
2020:
Votes
for %
Votes
against %
Votes
withheld
2022 remuneration report 67,166,808 67.6 32,224,505 32.4 9,553
2020 remuneration policy 95,468,167 89.3 11,410,502 10.7 27,8 85
Given the disappointing level of support for the 2022 Directors’ remuneration report, soon after the AGM the Committee Chair engaged with some of our largest shareholders to better
understand their views on remuneration at Trifast. The key themes that emerged from these discussions are set out in the Committee Chair’s statement and in light of the feedback, the
Committee will consider the Company’s long-term incentive arrangements as part of a fundamental review of Policy that will commence when a permanent CEO is appointed.
The Committee is grateful for the time that shareholders have taken to provide feedback.
This report was approved by the Board of Directors and signed on its behalf by:
Claire Balmforth
Chair of Remuneration Committee
10 July 2023
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Directors’ remuneration policy
This section of the remuneration report contains details
of the Directors’ Remuneration Policy (the ‘Policy’) which
is being proposed at the AGM on 15 September 2023 and,
ifapproved, will be effective from thatdate.
Given the recent Board changes, current levels of corporate
performance and noting that the Company’s strategy
remains unchanged, the Remuneration Committee (the
‘Committee’) determined that it was not the right time to
perform a detailed review of the Policy and is therefore
seeking to extend the current Policy for an additional
threeyears with only a handful of changes. The Committee
took advice from PwC, its external advisers, in relation
tothePolicy.
Therefore, the Policy will continue on the basis that:
• Overall, the Policy continues to support the Company’s
strategy and has been constructed such that
management are well rewarded if significant value is
delivered for shareholders, but payouts are limited if
Company performance is belowexpectations
• It ensures that key components of remuneration
arecompetitive against themarket
• It aligns with latest corporate governance best
practiceprinciples
• It reinforces pay fairness throughout the Company
e.g.consistent fixed paypositioning
The Committee is of the opinion that these principles
continue to remain appropriate, noting that external
eventswill impact how it is implemented by the
Committeeeach year and that the Committee will
be sensitive to theexternal environment in making
suchdecisions.
As set out above, the Committee determined to make
thefollowing minor changes to the Policy asfollows.
Summary of changes to policy versus 2020policy:
Element Changes to 2020 Policy
Executive Directors
Benefits Minor change to provide the Committee with flexibility in line with standard market practice
Pension Executive Director pension contribution rates were reduced to the wider workforce rate of 5%of
salary from 1 April 2022. The Policy has been amended such that it is clear that Executive Directors
will receive this level of pension contribution
Annual bonus In line with standard market practice, the Committee will have the flexibility to determine
theappropriate bonus measures, weightings and targets each year
Long-Term Incentive Plan
(LTIP)
In line with standard market practice, the Committee will have the flexibility to determine
theappropriate LTIP measures, weightings and targets each year
Non-Executive Directors
Fees Explicitly states that fees for additional work outside a Non-Executive’s normal role can be paid
No other changes
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1) Policy tables – Executives
Purpose Operation Maximum opportunity
Base salary
To provide competitive
salary levels recognising
the market value of the
role and individual’s
skills, experience and
performance as well as
their contribution and
enable the recruitment and
retention of high-calibre
Executives
Base salary is set annually on 1 April. Base salary levels are reviewed annually by the
Committee, taking account of Company performance, individual performance, and
levels of increase for the broader Trifast UK employee population. TheCommittee
will target median salaries within FTSE Small Cap index companies
The Committee also considers the impact of any base salary increase on the
total remuneration package. Increases awarded each year will be set out in the
statement of implementation of Policy
The maximum annual salary increase will not normally exceed the average
increase which applies across the wider Trifast UK employee population
Larger increase may be awarded subject to performance in the following
circumstances:
I. A material change in the role and responsibilities of the Executive Director
II. Strategic progress and key milestones have been achieved; however, an
Executive Director’s salary remains below the median of the FTSE Small Cap
Index or
III. An Executive Director has been appointed either internally or externally at
below the market level to reflect experience
Benefits
To provide a competitive
level of benefits and
encourage the wellbeing
and engagement of
employees
The key benefits provided to the Executive Directors include:
• Company car (or car allowance)
• Private medical insurance
• Critical illness cover and life cover
• Income protection insurance
In addition, the Company pays additional benefits when specific business
circumstances require it. Accordingly, the Committee would expect to be able
to adopt benefits such as relocation expenses, tax equalisation and support in
meeting specific costs incurred by Executive Directors to ensure the Company and
the individuals comply with their obligations in the reporting of remuneration
Where the Company offers a flexible benefits approach (where the value of one
benefit may be exchanged for another) to employees, generally an Executive
Director would have the option to participate. Other benefits (in line with
those received by the general workforce) may be offered at the discretion of
theCommittee
The Company reimburses all necessary and reasonable business expenses
Capped at the cost of providing the benefits
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Purpose Operation Maximum opportunity
Pension
To provide a standard UK
market level of retirement
funding to enable the
Company to recruit and
retain Directors with the
experience and expertise
to deliver the Group’s
strategy
Executive Directors participate in defined contribution pension arrangements.
Executive Directors may request a pension allowance to be paid in cash, after
deducting employer National Insurance costs, in place of defined contribution
arrangements
Executive Directors will receive a pension contribution in line with the rate
available to the majority of the workforce (currently 5% of salary)
All-employee share plan (SAYE)
Facilitate equity
involvement for Executives
and UK-based employees
The Trifast Savings Related Share Option Scheme is HMRC approved. The scheme
offers three and five-year savings contracts which provide an option to purchase
shares after maturity at a discount to the share price on the date the contract is
taken out (the maximum discount is 20%)
Annual savings limit in line with HMRC limit
Purpose Operation Maximum opportunity
Annual bonus
To encourage and reward
delivery and execution of
short-term financial and
non-financial performance
in line with shareholder
interests
Executive Directors are eligible to participate in the annual bonus. Each year the
Committee selects the performance measures, assessed over the financial year,
which it considers appropriate to support the Company’s strategic priorities and
the delivery of value to shareholders. The weighting and targets for each measure
will also be set annually by the Committee
Targets deemed commercially sensitive by the Board will be reported
retrospectively in the following year’s remuneration report
The Committee will have overriding discretion to change formulaic outcomes (both
downwards and upwards) if they are out of line with the underlying performance
of the Company. In addition, the Committee has the discretion to adjust targets or
performance conditions for any exceptional events that may occur during the year
Malus will apply during the bonus year and the share deferral vesting period and
clawback will apply for a period of two years post bonus payment and deferred
share vesting
The annual bonus will be in the form of cash with a deferred share component
The maximum annual award level is 150% of base salary
The maximum amount that can be paid in cash is 100% of base salary.
Anyannual bonus earned above 100% of salary will be deferred into shares for a
period of threeyears
The percentage of bonus earned for differing levels of performance is:
I. Threshold: 25% of maximum opportunity
II. Target: 50% of maximum opportunity
III. Stretch: 100% of maximum opportunity
1) Policy tables – Executives continued
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Purpose Operation Maximum opportunity
Long-Term Incentive Plan
To incentivise the delivery
of the Group’s long-term
business strategy and
sustainable value for
shareholders
The Committee may make an annual award of shares to each Executive Director in
the form of nil-cost options under the Long-Term Incentive Plan (LTIP)
LTIP awards will have a vesting period of three years followed by a holding period
of two years. During the holding period, vested awards cannot be sold, except to
meet tax liabilities on the exercise of an option
The Committee selects performance measures on an annual basis considering
the Company’s long-term business strategy. The weighting and targets for each
measure will also be set annually by the Committee
Where possible, the performance measures, weightings and targets for the
following year’s LTIP award will be disclosed prospectively in the implementation
of Policy section of the annual report on remuneration
Malus will apply during the vesting period and clawback will apply during the
holding period
The Committee will have overriding discretion to change formulaic outcomes of
LTIP awards (both downwards and upwards) if they are out of line with underlying
performance of the Company
The maximum annual award level for Executive Directors is 175% of base salary
On recruitment this limit may be increased to 250% of salary, but only in
exceptional circumstances
25% of the LTIP award will vest for threshold performance, increasing to 100%
for maximum performance
Operation Post-employment requirement
Shareholding requirement
A 250% of salary shareholding requirement for all Executive Directors. This is to be built up over
five years from the approval of this Policy for existing Executive Directors and from the date of
joining for new Executive Directors
Shares beneficially owned, the post-tax value of any vested but unexercised LTIP awards and the
post-tax value of any annual bonus deferral shares will count towards the requirement
The Committee will annually review the progress against achievement of these guidelines
Post-employment, an Executive Director shall continue to hold shares equivalent to the minimum
of their actual shareholding on cessation of employment and their in-employment shareholding
requirement for a period of two years following termination of employment
For the avoidance of doubt, shares beneficially owned and any in-flight LTIP awards at the date of
adoption of the 2020 Policy will be exempt from this post-employment requirement
1) Policy tables – Executives continued
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1) Policy tables – Executives continued
Legacy incentive awards
Executive Directors are eligible to receive payments under any award made prior to the approval and implementation of the Remuneration Policy set out above under existing incentive
arrangements. For the avoidance of doubt, it is noted that the Company will honour any commitments entered that have been disclosed previously to shareholders.
Performance measures and targets
The table below sets out the performance measures chosen in respect of the annual bonus and LTIP in respect of the financial year ending 31 March 2024.
Performance measures and weightings Performance targets Why targets were chosen How targets are set
Annual bonus
• 70% based on underlying profit before tax
(UPBT) targets
• 20% based on average working capital %
targets
• 10% based on strategic and operational
targets (5% weighting will be based on
a carbon emissions reduction target
aligned with the Company’s sustainability
strategy)
• Additionally, no bonus payment can be
made under the average working capital
% element or the strategic and operational
element unless threshold UPBT
performance has been achieved
The Board deems the annual bonus targets
to be commercially sensitive. Full details of
the FY24 targets and their achievement will
be disclosed retrospectively in the FY24
Directors’ remuneration report
The performance measures that have
been selected, in the Committee’s view,
most appropriately reflect the Company’s
strategyto:
• Focus on generating strong and
sustainable profits for the benefit of
shareholders
• Focus on operational efficiency
• Focus on delivering challenging specific
strategic and operational targets which aid
in long-term value creation
The performance targets are calibrated by
the Committee considering the Company’s
business plan, strategic and operational
imperatives, market conditions and external
forecasts
LTIP
• 25% based on underlying operating margin
• 75% based on relative TSR vs. FTSE Small
Cap Index (excluding investmenttrusts)
The calibration of the underlying operating
margin performance targets has been
delayed given the difficulty of setting robust
targets at the current time. These targets will
be set closer to the grant date and disclosed
in the RNS on award
The relative TSR target at threshold level is
performance equal to the FTSE Small Cap
Index (excluding investment trusts) and 8%
p.a. in excess of the index for full vesting, with
straight-line vesting inbetween
The underlying operating margin and relative
TSR measures have been selected to reward
senior executives for driving margin in line
with our aspiration to become both a bigger
and more profitable company and the
delivery of long-term sustainable value for the
benefit of shareholders
The relative TSR targets have been set, in line
with standard practice, such that threshold
vesting is achieved for performance in line
with an appropriate index, with full vesting for
significant out-performance of the index
The underlying operating margin targets will
be calibrated considering the Company’s
business plan, market conditions and external
forecasts
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1) Policy tables – Executives continued
Differences between Executive Directors’ and employees’ remuneration
The following differences exist between the Company’s policy for the remuneration of Executive Directors as set out in the Policy table above and its approach to the payment of
employees generally:
• Executive Directors may opt to receive a cash supplement in lieu of pension (reduced for Employer’s NI contribution)
• All employees are eligible for a performance-based discretionary bonus scheme. A lower level of maximum annual bonus opportunity applies to employees when compared to the
Executive Directors and no employee other than the Executive Directors is required to defer part of their bonus into shares
• Executive Directors participate in the LTIP. Currently c.140 employees within our Senior Management levels are invited to participate in the LTIP at the Remuneration Committee’s
discretion. All UK employees are eligible to participate in the Company’s SAYE scheme
In general, these differences arise from the development of remuneration arrangements that are market competitive for the various categories of individuals. They also reflect the
greater emphasis placed on performance-related pay for Executive Directors.
2) Policy table – Non-Executive Directors
Non-Executive Director remuneration is not performance related and is not pensionable. The only other payments made to Non-Executive Directors are mileage allowances at HMRC
rates and expenses for items incurred during the fulfilment of their roles. An explanation of the Policy with regard to Non-Executive Directors is set out in the table below:
Objective Operation Maximum opportunity
Non-Executive Directors
To attract and retain individuals with the
requisite skills and experience to perform
the role
Set annually on 1 April
The Company will target median fees within FTSE Small Cap index
companies
Non-Executive Directors are paid a base fee and additional fees
for Committee membership and chairmanship. An additional fee is
also payable to the Senior Independent Director
The Chair’s fee will be determined by the Committee, whilst the
other Non-Executive Director fees will be determined by the Chair
and Executive Directors
It is anticipated that increases to Chair and NED fee levels will typically be in
line with market levels of fee inflation and the increase awarded to the wider UK
workforce
Larger increases above this may be awarded in certain circumstances,
for example in the event of a material change in the time commitment or
responsibilities of the Non-Executive Director
Additional fees may be payable in instances where work performed is outside of
the scope of the individual’s role and responsibilities
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Scenario Fixed Annual variable (annual bonus) Multiple reporting periods (LTIP)
Minimum Base salary: As at 1 April 2023
Pension: 5% of base salary for CFO only
Benefits: In line with those paid in year ending
31 March 2023
Nil Nil
On-target 50% of maximum 60% vesting
Maximum 100% of maximum 100% vesting
Maximum with LTIP share price growth of
50% over three years
100% of maximum 100% vesting with 50% share price growth
Notes
• The interim CEO does not receive pension contributions and will not participate in the LTIP
• SAYE not included
Directors’ remuneration policy continued
3) Illustration of Remuneration Policy
The following chart provides an illustration of the FY24 reward package for the Executive Directors under four different performance scenarios: ‘minimum’, ‘on-target’, ‘maximum’
and ‘maximum with LTIP share price growth of 50% over three years’. The illustrations are based on the implementation of the proposed Policy for the year ending 31 March 2024.
The assumptions used in determining the remuneration illustrations are set out in the table below the chart.
Performance scenario chart
0
£1,400,000
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
Minimum
Scott Mac Meekin (interim CEO) Darren Hayes-Powell (CFO)
Maximum with
LTIP growth
1
MaximumOn-target Minimum Maximum with
LTIP
growth
1
MaximumOn-target
100%
£402,000
£702,000
57%
43%
£1,002,000
40%
60%
£1,002,000
40%
60%
£322,000
100%
£734,500
44%
26%
30%
£1,072,000
30%
35%
35%
£1,259,500
26%
30%
44%
Fixed Annual variable Multiple reporting periods
1. Share price growth of 50% over three years
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Directors’ remuneration policy continued
4) Policy on recruitment arrangements
The Committee’s approach to Executive Director recruitment remuneration is to pay no more than is necessary to attract candidates of the appropriate calibre and experience needed
for the role. The remuneration package for any new recruit would be assessed following the same principles as for the current Executive Directors, as set out in the remuneration
Policytable.
Remuneration element Treatment under Policy
Base salary, pension and
other benefits
The salary level will be set considering a number of factors including: market practice; the individual’s experience and responsibilities; and other pay structures within
Trifast. The salary level set will be consistent with the salary Policy for existing Executive Directors
Individuals who are recruited or promoted to the Board may, on occasion, have their salaries set below the targeted policy level until they become established in their
role. In such cases, subsequent increases in salary may be higher than the general rise for UK employees until the target positioning is achieved
The Executive Director shall be eligible to receive pension contributions and benefits in line with Trifast’s Policy for current Executive Directors as set out in the Policy
table above
Annual bonus and LTIP The Executive Director will be eligible to participate in the annual bonus and LTIP as set out in the Policy table above. The maximum level of variable remuneration that
may be offered is 325% of base salary (annual bonus of 150% and LTIP of 175% of salary) consistent with that of existing Executive Directors
The exceptional award limit in the LTIP allows total variable remuneration to be increased to 400% of base salary in the year of recruitment (where the increased LTIP
award of 250% of salary is above the normal LTIP maximum of 175% of salary)
Share buy-outs and
replacement awards
The Committee’s policy is not to provide replacement awards as a matter of course. However, should the Committee determine that the individual circumstances of
recruitment justify the provision of a replacement award, the value of any incentives that will be forfeited on cessation of a Director’s previous employment will be
calculated taking into account the following:
• The proportion of the performance period completed on the date of the Director’s cessation of employment
• The performance conditions attached to the vesting of these incentives and the likelihood of them being satisfied
• Any other terms and conditions having a material effect on their value (‘lapsed value’)
The Committee may then grant a replacement award up to the equivalent value as the lapsed value where possible under the Company’s incentives plans. Where the
circumstances are such that this is not possible, a bespoke arrangement may be used including in accordance with Rule 9.4.2(R) of the Listing Rules
Relocation policies In instances where the new Executive Director is required to relocate or spend significant time away from his/her normal residence, the Company may provide one-off
compensation to reflect the cost of relocation for the Executive Director. The level of the relocation package will be assessed on a case-by-case basis but will take into
consideration any cost of living differences/housing allowance, disturbance allowances and schooling
Internal promotions Where an existing employee is promoted to the Board, the Policy would apply from the date of promotion but there would be no retrospective application of the Policy in
relation to subsisting incentive awards or remuneration arrangements. Accordingly, prevailing elements of the remuneration package for an existing employee would be
honoured and form part of the ongoing remuneration of the employee. These would be disclosed to shareholders in the following year’s annual report on remuneration
The Company’s policy when setting fees for the appointment of new Non-Executive Directors is to apply the Policy which applies to current Non-Executive Directors, which is set out on
page 104 to 117.
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Directors’ remuneration policy continued
5) Policy on payment for loss of office – cessation of employment and change of control
When determining any loss of office payment for a departing Director, the Committee will always seek to minimise the cost to the Company whilst complying with the contractual terms
and seeking to reflect the circumstances in place at the time. The Committee reserves the right to make additional payments where such payments are made in good faith in discharge
of an existing legal obligation (or by way of damages for breach of such an obligation), or by way of settlement or compromise of any claim arising in connection with the termination of
an Executive Director’s office or employment.
The following tables show how the Committee would expect to treat Executive Directors on cessation of employment or upon a change of control.
Cessation of employment
Remuneration element Approach
Notice periods The notice period for Executive Directors is 12 months or less
Circumstances of
departure of Executive
Directors
A ‘good leaver’ is a person whose cessation of employment is for one of the following reasons:
• Death
• Ill-health
• Injury or disability
• Redundancy
• Retirement
• Employing company ceasing to be a Group company
• Transfer of employment to a company which is not a Group company
• Where the person is designated a good leaver at the discretion of the Committee
A participant who is not a ‘good leaver’ is a ‘bad leaver’
Base salary, pension and
other benefits
Base salary, pension and benefits are paid in lieu of notice. Neither notice nor a payment in lieu of notice will be given in the event of gross misconduct
112
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Directors’ remuneration policy continued
Remuneration element Approach
Annual bonus The treatment under the annual bonus is as follows:
Good leavers
• Unless the Remuneration Committee determines otherwise, any bonus payable in respect of the year of cessation will be pro-rated for time, and performance will be
tested at the normal date. The bonus will normally be paid in cash on the normal bonus payment date
• Unvested deferred share bonus awards will vest on their original vesting date
Bad leavers
• Anyone who is not a good leaver will be a bad leaver
• Bad leavers will forfeit any bonus in respect of the year of cessation and any unvested deferred share awards will lapse
The Remuneration Committee has the following elements of discretion:
• In circumstances where the bonus earned in the year of cessation is greater than 100% of salary, the Committee has discretion to defer the portion of the bonus above
100% of salary into shares for three years
• To allow the determination and payment of bonus as at the date of cessation. The Remuneration Committee will make this determination depending on the type of
good leaver reason resulting in the cessation
• To allow unvested deferred shares to vest on the date of cessation. The Remuneration Committee will make this determination depending on the type of good leaver
reason resulting in the cessation
LTI P The treatment under the LTIP is as follows:
Good leavers
• Any unvested awards will normally vest on the original vesting date subject to performance over the original performance period and will be pro-rated for time
• Vested awards will remain subject to the holding period as stated in the Policy
Bad leavers
• Anyone who is not a good leaver will be a bad leaver
• Bad leavers will forfeit all unvested awards and vested awards will remain subject to the holding period as stated in the Policy
The Remuneration Committee has the following elements of discretion:
• To measure performance over the original performance period or at the date of cessation. The Remuneration Committee will make this determination depending on
the type of good leaver reason resulting in the cessation
• To vest the LTIP award on the normal vesting date or at the date of cessation. The Remuneration Committee will make this determination depending on the type of
good leaver reason resulting in the cessation
• To determine whether to pro-rate the maximum number of shares to the time from the date of grant to the date of cessation. The Remuneration Committee’s normal
policy is that it will pro-rate the awards for time. It is the Remuneration Committee’s intention to use discretion to not pro-rate in circumstances where there is an
appropriate business case which will be explained in full to shareholders
Buy-out award Where cessation of employment occurs in relation to an Executive Director who has been granted a buy-out award, the treatment would be in line with the terms of the
buy-out award
5) Policy on payment for loss of office – cessation of employment and change of control continued
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Directors’ remuneration policy continued
Remuneration element Approach
Other contractual
obligations
There are no other contractual provisions other than those set out above that could impact the quantum of the payment
Change of control
Remuneration element Approach
Annual bonus • Cash bonus for the year in which a change of control event occurs will be pro-rated for time and performance
• At the Remuneration Committee’s discretion, it may consider whether to dis-apply pro-rating for time
• Unvested deferred share awards will vest on change of control
• In the event of an internal corporate reorganisation, the Remuneration Committee may decide to replace unvested deferred share awards with equivalent new awards
over shares in the acquiring company
LTI P • Unvested awards will vest early subject to (i) the extent that any applicable performance targets have been satisfied at that time and (ii) pro-rating to reflect the
reduced period of time between grant and early vesting as a proportion of the vesting period that has then elapsed
• At the Remuneration Committee’s discretion, it may consider whether to dis-apply pro-rating for time
• In the event of an internal corporate reorganisation, the Remuneration Committee may decide to replace unvested awards with equivalent new awards over shares in
the acquiring company
Buy-out award Where change of control occurs in relation to an Executive Director who has been granted a buy-out award, the treatment would be in line with the terms of the
buy-outaward
5) Policy on payment for loss of office – cessation of employment and change of control continued
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Directors’ remuneration policy continued
6) Policy on malus and clawback
Malus provisions apply to the annual bonus and the LTIP. Malus is the adjustment of the annual bonus in the year it is earned, unvested deferred bonus shares or unvested LTIP awards
because of the occurrence of one or more circumstances. The adjustment may result in the value being reduced to nil.
Clawback is the recovery of cash payments made or vested deferred shares under the annual bonus or vested LTIP awards as a result of the occurrence of one or more circumstances.
Clawback may apply to all or part of a participant’s payment under the annual bonus or LTIP awards.
Element Policy
Annual bonus – cash • Malus will apply up to the time of payment and clawback will apply for a period of two years post-payment
Annual bonus – deferred
shares
• Malus will apply during the vesting period and clawback will apply for a period of two years post-vesting
LTI P • Malus will apply during the vesting period and clawback will apply for the two year post-vesting holding period
The circumstances in which malus and clawback could apply are as follows:
• Discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group company
• The assessment of any performance condition or condition in respect of an annual bonus or LTIP award that was based on error, or inaccurate or misleading information
• The discovery that any information used to determine a cash bonus or the number of shares subject to a bonus share deferral or LTIP award was based on error, or inaccurate or
misleading information
• Action or conduct of a participant which, in the reasonable opinion of the Committee, amounts to fraud or gross misconduct
• Actions that result in a material failure of risk management of the Company, a Group company or a business unit of the Group
• The Company or any Group company or business of the Group becomes insolvent or otherwise suffers a corporate failure so that the value of shares is materially reduced, provided
that the Board determines following an appropriate review of accountability that the participant should be held responsible (in whole or in part) for that insolvency or corporate
failure
• Events or the behaviour of a participant have led to the censure of a Group company by a regulatory authority or have had a significant detrimental impact on the reputation of any
Group company provided that the Board is satisfied that the relevant participant was responsible for the censure or reputational damage and that the censure or reputational damage
is attributable to them
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Directors’ remuneration policy continued
7) Discretions retained by the Remuneration
Committee
The Committee retains discretion, consistent with market
practice, in a number of regards to the operation and
administration of the annual bonus and LTIP (the LTIP being
operated in general terms according to the rules to be
approved by shareholders).
The areas where discretion is retained includes, but is not
limited to, the following:
• The participants
• The timing of an award
• The size of an award
• The determination of vesting and/or payout
• Discretion required when dealing with a change of
control or restructuring of the Group
• Determination of the treatment of leavers based on the
rules of the plan and the appropriate treatment chosen
• Adjustments required in certain circumstances
(e.g.rights issues, corporate restructuring events and
special dividends)
These discretions, which in certain circumstances can be
operated in both an upward and downward manner, are
consistent with market practice and are necessary for the
proper and fair operation of the plans so that they achieve
their original purpose.
The Committee has discretion in several areas of policy
as set out in this report. In particular, the Committee will
have overriding discretion to change formulaic outcomes
(both downwards and upwards) if they are out of line with
underlying performance of the Company. In addition, the
Committee has the discretion to amend the Policy with
regard to minor or administrative matters where it would
be, in the opinion of the Committee, disproportionate to
seek or await shareholder approval.
8) External directorships
The Board allows Executive Directors to accept one
appropriate outside commercial Non-Executive Director
appointment provided the aggregate commitment is
compatible with their duties as Executive Directors.
TheExecutive Director concerned may retain fees paid for
these services, which will be subject to approval by the
Board before accepting. The Executive Directors currently
hold no external directorships.
9) Service contracts for Executive Directors
The service contract for Darren Hayes-Powell is not fixed
term. The service contract for Scott Mac Meekin is fixed for
12 months with the option to extend for a further 12 months.
Contracts are terminable by either the Company or the
Director on the following bases:
Executive Director Notice period
Date of signing
current service
contract
SW Mac Meekin 6 months 20 February
2023
D Hayes-Powell
1
12 months 9 November
2022
1. Although his contract was signed prior to appointment,
DarrenHayes-Powell was appointed as Chief Financial Officer on
1December 2022
When setting notice periods, the Committee has regard for
market practice and corporate governance best practice. For
new appointments, the notice period for Executive Directors
will be set at 12 months. Executive Directors are subject to
annual re-election at the Company’s AGM. The Directors’
contracts are kept at the Company’s registered office.
10) Non-Executive Directors letters of appointment
The Company’s policy is to appoint Non-Executive
Directors to the Board with a breadth of skills and
experience that is relevant to its business. Appointments
are made by the Board upon the recommendations and
advice from the Nomination Committee (read more
about the Nomination Committee on pages 74 and 75).
TheNon-Executive Directors do not have service contracts
but are appointed under letters of appointment.
The Non-Executive Directors were appointed for an initial
three-year term and their appointment continues subject to
annual re-election at the Company’s AGM.
The table below sets out the date that each Non-Executive
Director was first appointed (date of signing first letter
of appointment) and the notice period by which their
appointment may be terminated early by either party.
Fornew appointments, the notice period is three months
and in line with existing Non-Executives’ arrangements, set
out in the 2014 Directors’ Remuneration Policy, this will be
extended to 12 months on a change of control. The Directors’
contracts are kept at the Company’s registered office.
Non-Executive Director Notice period
Date of signing
JPD Shearman 3 months 26 July 2012
C Balmforth
1
3 months 26 March 2020
C Watson
1
3 months 20 April 2020
L Eperjesi
1
3 months 22 November
2022
1. Although letters were signed prior to appointment, Claire Balmforth
was appointed as a Non-Executive Director on 1 April 2020, Clive
Watson on 30 July 2020, and Louis Eperjesi on 3 January 2023
116
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Annual Report for the year ended 31 March 2023
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Directors’ remuneration policy continued
Employee engagement
The Company’s approach to engagement has also allowed
our employees to discuss a wide range of subjects, as
detailed on page 26, with our designated people NED,
Jonathan Shearman, supported by Non-Executive Director,
Claire Balmforth, and Global HR & Sustainability Director,
Helen Tate. This engagement has helped the Company to
review resource capacity, develop a strategy for improving
communication and feedback gathered was considered by
the Committee.
See page 32 for further information on employee
engagement.
12) Statement of shareholder views
At our 2022 AGM, the Committee was disappointed that
the Directors’ remuneration report was passed with only
68% support from shareholders. Given this level of support,
soon after the AGM the Committee Chair engaged with
some of our largest shareholders to better understand
their views on remuneration at Trifast. The key themes that
emerged from these discussions were as follows:
1) Approach to increasing the salaries of the Executive
Directors: While shareholders were broadly comfortable
with the need to pay the Executive Directors a more
competitive salary, there was a strong preference to
stagger the increases over a longer time frame.
2) Approach to long-term incentives: There were differing
views in relation to the most appropriate long-term
incentive arrangement to align the interests of
shareholders and executives.
The Remuneration Committee is still of the opinion that
the rebalancing of the Executive Director remuneration
packages for FY23 was the right thing to do. However,
these views will be taken into account when the Committee
undertakes its next review of Policy.
The Committee would like to thank shareholders who took
part in this engagement.
11) Consideration of conditions elsewhere in
theGroup
The remuneration policy throughout the Company is based
on ensuring that we can attract and retain the most suitable
people. This principle is consistent with that applied to
the development of our remuneration Policy for Executive
Directors. Employee views were not specifically sought
in determining this Policy and no comparison metrics
wereused.
As part of our commitment to fairness across the business,
and in line with requirements under the Corporate
Governance Code, we have set out in the annual report
on remuneration information on the pay and conditions of
the wider workforce and comparisons with the Executive
Directors. We are committed to transparency internally and
externally in relation to developments on these important
issues and will continue to consider how our disclosures
can be enhanced going forward.
Pay structures across the Group
In making decisions on executive pay, the Committee
considers wider workforce remuneration and conditions.
We recognise the central importance of all of our teams
in delivering success and aim to provide a remuneration
package for our employees which is aligned to our
values and remuneration principles across the Group.
Our remuneration for employees is market competitive
and operates the same core structure as for Executive
Directors, including employee share and variable pay plans,
with pension provision for all Directors and employees.
Prior to reviewing the remuneration outcomes,
the Committee will consider a report covering key
information such as base pay levels, pension and share
schemeparticipation.
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Results and proposed dividend
Total Group revenue from continuing operations was
£244.4m (FY22: £218.6m) and the loss for the year before
taxation was £(2.7)m (FY22: profit for the year before tax
£10.6m). Underlying profit before tax for the Group was
£9.3m (FY22: £13.8m); seenote 2 for breakdown.
The Directors recommend a final dividend of 1.50p (FY22:
1.40p) per ordinary share to be paid on 13 October 2023
to shareholders registered at the close of business on
29September 2023. This, together with the interim
dividend of 0.75p (paid on 13 April 2023) (FY22: 0.70p),
brings the total for the year to 2.25p (FY22: 2.10p). The
2023 proposed final dividend has not been included within
creditors as it was not approved before the year end. The
2023 interim dividend is also unrecognised as it was paid
post year end.
The strategic report provides a detailed analysis of
the results in the year and an indication of future
developments.
Annual General Meeting
The Annual General Meeting will be held at 11.30am on
15September 2023 at Peel Hunt LLP. Further details
canbefound in the Notice of Meeting.
Director insurance
The Company maintains an appropriate level of Directors’
and Officer’s insurance in respect of legal action against
Directors as permitted under the Company’s Articles of
Association and the Companies Act 2006.
No insurance cover would be provided in the event that a
Director is proven to have acted dishonestly or fraudulently.
Directors and Directors’ interests
The Directors’ remuneration and their interests in share
capital are shown in the remuneration report on page 101.
All Directors are subject to annual re-election; details can
be found in the corporate governance report on page 73.
Biographical details can be found on pages 68 and 69.
The Directors who held office during the year were as
follows:
Chair
JPD Shearman
Non-Executive Director
Chair of Nomination Committee
Executive Directors
MR Belton
Chief Executive Officer
Resigned 18 February 2023
SW Mac Meekin
Interim Chief Executive Officer
Appointed 20 February 2023
Formerly Independent Non-Executive Director from
25 April 2013 to 19 February 2023
CL Foster
Chief Financial Officer
Left 30 August 2022
DM Hayes‑Powell
Chief Financial Officer
Appointed 1 December 2022
Independent Directors (Non‑Executive)
C Watson
Senior Independent Director
Chair of Audit & Risk Committee
C Balmforth
Chair of Remuneration Committee
LLA Eperjesi
Chair of ESG Committee
Appointed 3 January 2023
Directors’ report
The Directors present their Annual Report on the affairs
oftheGroup,together with the financial statements
andauditor’sreport, for the year ended 31 March 2023
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Substantial shareholdings
Details of the share structure of the Company are disclosed in note 24.
The Company was aware of the following material interests, representing 3% or more of the issued share capital of the Company.
As at 31 March 2023
No. of
shares held
% of
shareholding
Slater Investments Ltd 18,149,422 13.33
Schroder Investment Management Ltd 15,334,370 11.27
Huntington Management LLC 10,848,069 7.97
Hargreave Hale Ltd 9,301,000 6.83
DBAY Advisors Ltd 8,076,824 5.93
Michael Timms 7,000,000 5.14
Threadneedle Asset Management Ltd 5,343,629 3.93
As at 30 June 2023
No. of
shares held
% of
shareholding
Slater Investments Ltd 18,149,422 13.33
Schroder Investment Management Ltd 16,101,594 11.83
Huntington Management LLC 10,929,101 8.03
DBAY Advisors Ltd 9,446,824 6.94
Canaccord Genuity Asset Management Ltd 7,800,000 5.73
Threadneedle Asset Management Ltd 7,1 00,626 5.22
Michael Timms 7,000,000 5.14
No Director holds >5% shares in the Company.
Directors’ report continued
Employee Benefit Trust (EBT)
The number of Trifast 5p ordinary shares held by the
Trifast EBT (as funded by the Group) at 31 March 2023
was 1,896,098 (FY22: 2,194,470) which represented 1.4%
of the fully paid up share capital of the Company as at
31March 2023 (FY22: 1.6%). During the year, 298,372 shares
were transferred out to meet employee share obligations
(FY22: 90,337) and no further shares were acquired (FY22:
1,955,720). These shares are shown in the own shares held
reserve within equity on the balance sheet.
Financial instruments
Information in respect of the Group’s policies on financial
risk management objectives, including policies to manage
credit risk, liquidity risk and foreign currency risk, along
with the capital structure of the Group, are given in note 26
to the financial statements.
Corporate governance
The corporate governance statement on pages 71 to 73
should be read as forming part of the Directors’ report.
119
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Directors’ report continued
Donations
The Group made no political donations in the year (FY22:
£nil). The Group made £4k of charitable donations in the
year (FY22: £3k).
Research and development
The Group had a spend of £90.4K on research and
development in the year (FY22: £70.0k).
Employees
The Group has a policy of offering equal opportunities
to employees at all levels in respect of the conditions of
work. Throughout the Group it is the Board’s intention to
provide possible employment opportunities and training
for disabled people and to care for employees who become
disabled having regard to aptitude and abilities. Our ESG
statement can be found on our website www.trifast.com
and further details are provided in the strategic report of
this Annual Report and within the Sustainability Report.
Regular consultation and meetings, formal, virtual or
otherwise, are held with all levels of employees to discuss
problems and opportunities. Information on matters of
concern to employees is presented in the in-house letters
and publications.
For more information on employee engagement see page
32.
Subsequent events
The Group signed new banking facilities on 1 June 2023
and signed a material lease agreement for the new National
Distribution Centre on 4 July 2023, see note 29 for further
details. Other than this, there are no material adjusting or
non-adjusting events subsequent to the balance sheet date.
Disclosure of information to auditor
Each of the Directors who held office at the date of
approval of this Directors’ report confirm that, so far as
they are each aware, there is no relevant audit information
of which the Company’s auditor is unaware; and each
Director has taken all the steps that they ought to have
taken as a Director to make themselves aware of any
relevant audit information and to establish that the
Company’s auditor is aware of that information.
By order of the Board
Jonathan Shearman
Chair
10 July 2023
Trifast House
Bellbrook Park
Uckfield
East Sussex
TN22 1QW
Company registration number: 01919797
Takeover Directive
Where not provided elsewhere in the Directors’ report, the
following provides the additional information required to be
disclosed because of the implementation of the Takeover
Directive.
There are no restrictions on the transfer of ordinary
shares in the capital of the Company other than certain
restrictions which may from time to time be imposed
by law (for example, insider trading law). In accordance
with the Listing Rules of the Financial Conduct Authority,
certain employees are required to seek the approval of the
Company to deal in its shares.
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfer
of shares or on voting rights.
No person has any special rights of control over the
Company’s share capital and all its shares are fully paid.
The rules governing the appointment and replacement of
Directors are set out in the corporate governance section of
the Directors’ report on page 73.
The Company’s Articles of Association may only be
amended by a special resolution at a general meeting of
shareholders.
The Company is party to banking agreements that, upon a
change of control of the Company, could be terminable by
the bank concerned.
Outside of the extension of certain Directors’ rolling
contract periods and notice periods, there are no
agreements between the Company and its Directors
or employees which provide for compensation for loss
of office or employment (whether through resignation,
purported redundancy or otherwise) that occurs because
of a takeover bid.
The Company is not aware of any contractual or other
agreements which are essential to its business which ought
to be disclosed in the Directors’ report.
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Responsibility statement of the Directors in respect
of the annual financial report
We confirm that to the best of our knowledge:
• The financial statements have been prepared in
accordance with the applicable set of accounting
standards, give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
Group and Company
• The Annual Report includes a fair review of the
development and performance of the business and the
financial position of the Group and Company, together
with a description of the principal risks and uncertainties
that they face
We consider the Annual Report and the financial
statements, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for shareholders to assess the Group’s position and
performance, business model and strategy.
On behalf of the Board
Scott Mac Meekin
Interim Chief Executive Officer
Darren Hayes-Powell
Chief Financial Officer
10 July 2023
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with UK
adopted international accounting standards and applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors are required to prepare the Group financial
statements and have elected to prepare the Company
financial statements in accordance with UK-adopted
international accounting standards.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss for the Group for
that period. In preparing these financial statements, the
Directors are required to:
• Select suitable accounting policies and then apply them
consistently
• Make judgements and accounting estimates that are
reasonable and prudent
• State whether they have been prepared in accordance
with UK-adopted international accounting standards,
subject to any material departures disclosed and
explained in the financial statements
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and the Company will continue in business
• Prepare a Directors’ report, a strategic report and
Directors’ remuneration report which comply with the
requirements of the Companies Act 2006
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual
Report and the financial statements, taken as a whole,
are fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s performance, business model and strategy.
The Directors are responsible for ensuring the Annual
Report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary
from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website
is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Statement of Directors’ responsibilities
in respect of the Annual Report and the financial statements
121
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 March 2023 and of the Group’s loss for the year then
ended;
• the Group financial statements have been properly prepared in accordance with UK
adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance
with UK adopted international accounting standards and as applied in accordance with
the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements of Trifast plc (the ‘Parent Company’) and
its subsidiaries (the ‘Group’) for the year ended 31 March 2023 which comprise the
Consolidated income statement, Consolidated statement of comprehensive income,
Consolidated and Company statement of changes in equity, Statements of financial
position, Statements of cash flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and UK adopted international
accounting standards and as regards the Parent Company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(ISAs (UK)) and applicable law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the board
on 3 December 2019 to audit the financial statements for the year ended 31 March 2020
and subsequent financial periods. The period of total uninterrupted engagement including
retenders and reappointments is 4 years, covering the years ended 31 March 2020 to
31March 2023.
We remain independent of the Group and the Parent Company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. The
non-audit services prohibited by that standard were not provided to the Group or the
Parent Company.
Services that were provided by BDO LLP in addition to the audit were restricted to the
interimreview.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the
going concern basis of accounting in the preparation of the financial statements is
appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
• We reviewed the Directors’ assessment of going concern, their model’s computational
accuracy and challenged the key assumptions used in the forecasts by benchmarking
against historic forecasting accuracy at a subsidiary level
• We reviewed and tested forecast compliance with quarterly interest cover and adjusted
leverage covenants in place
• We calculated to what extend the key inputs would need to deteriorate in order to
break the Group’s liquidity and then considered the likelihood of this occurring
• We compared the Directors’ forecast against post year end management accounts to
assess the accuracy of management’s forecasts to date
• We reviewed the adequacy of the disclosure on going concern in the Group financial
statements
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant
doubt on the Group and the Parent Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for
issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern
are described in the relevant sections of this report.
Independent auditor’s report
to the members of Trifast plc
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Overview
Coverage 96% (2022: 97%) of Group profit before tax
100% (2022: 100%) of Group revenue
100% (2022: 95%) of Group total assets
Key audit matters Recoverability of customer specific
inventory
Goodwill impairment
2023 2022
✓ ✓
✓ ✓
Materiality Group financial statements as a whole
£970,000 (2022: £660,000) based on 0.4% of group revenue
(2022: 5% of adjusted group profit before tax).
The basis was changed from adjusted group profit before tax
to group revenue as adjusted profit before tax was no longer
considered a stable measure given the performance of the group
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group’s system of internal control, and assessing the risks
of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence
of bias by the Directors that may have represented a risk of material misstatement.
Of the Group’s 25 reporting components (2022: 25), 5 (2022: 5) including the Parent
Company were identified as significant and material with full scope audit procedures
being performed for Group reporting purposes and 15 (2022: 14) were identified as
non-significant but material where specific balances and risks were identified as being
in scope for audit purposes. The group engagement team conducted analytical review
procedures for a further 5 (2022: 6) non-significant or immaterial components.
0% 20% 40% 60% 80% 100%
Adjusted
PBT
Revenue
Total
assets
The group engagement team performed procedures over 2 (2022: 3) components
including 1 (2022: 1) significant component and 1 (2022: 2) non-significant but material
component. BDO LLP component teams performed procedures over 5 (2022: 3)
components including 1 (2022: 2) significant and material component and 4 (2022: 1)
non-significant but material components. The remaining audit procedures were performed
by overseas BDO network member firms.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement
needed in order to be able to conclude whether sufficient appropriate audit evidence has
been obtained as a basis for our opinion on the Group financial statements as a whole. Our
involvement with component auditors included the following:
The Group audit team controlled and directed the work of the component audit teams.
This included providing detailed audit instructions and setting of component materiality.
A planned visit to two UK entities and one Singaporean entity were completed in person,
of which all entities were significant components, other interactions were completed on a
remote basis. The Group audit team held video calls in order to attend component team
planning and completion meetings together with open dialogue maintained throughout
the audit. We also performed reviews of selected working papers on the component audit
teams audit files.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s
operations and financial statements included:
• Enquiries and challenge of management to understand the actions they have taken to
identify climate-related risks and their potential impacts on the financial statements
and adequately disclose climate-related risks within the annual report
• Our own qualitative risk assessment taking into consideration the sector in which the
Group operates and how climate change affects this particular sector; and
• Review of the minutes of Board and Audit Committee meeting and ESG Committee and
other papers related to climate change and performed a risk assessment as to how the
impact of the Group’s commitment as set out in the Focus on ESG section may affect
the financial statements and our audit
We challenged the extent to which climate-related considerations, including the expected
cash flows from the initiatives and commitments have been reflected, where appropriate, in
the Director’s going concern assessment and viability assessment.
We also assessed the consistency of managements disclosures included as ‘Statutory
Other Information’ on page 127 with the financial statements and with our knowledge
obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit
Matters materially impacted by climate-related risks.
Independent auditor’s report continued
to the members of Trifast plc
Significant and
material components
Not significant
but material
Not significant or
material components
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Annual Report for the year ended 31 March 2023
An overview of the scope of our audit continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Recoverability of
customer‑specific inventory
Refer to the Accounting Policies
of the Group on pages 139 to 145
for further detail on the policies
impacting inventory provision
valuation together with Note 30
detailing the estimation uncertainty
over provisions for customer
specific inventory and Note 18 for
the financial disclosure of inventory.
The Group has bespoke customer-specific
products for which there is a risk over
recoverability if any contractual obligations
to acquire outstanding stock are waived for
commercial reasons or the customer’s product
line is discontinued, and component parts are
not being carried forward to new product lines.
Given the size of the customer-specific inventory
balance, and the complexity involved in
estimating customers changes in future demand
there is a risk that the valuation of the inventory
provision is inappropriate. We therefore
determined this to be a key audit matter.
We have:
• Tested the application of the provision methodology through sample testing the
classification of inventory between customer specific or standard inventory, the ageing
of inventory and the arithmetical accuracy of application of the methodology as relevant
to each component;
• Challenged management’s customer specific inventory provision estimate by
considering movements in inventory balances and stock provisions;
• Made enquiries of management over the status of any discontinued or delayed products
and their assessment of the recoverability of existing parts;
• Compared sell through of stock lines in the year to the year-end inventory to identify
potential slow moving items and for a sample of items obtained evidence to support
future sales demand; where data on sale by inventory code was not available, a sample
of items was selected as relevant to the component and evidence obtained to support
the inventory valuation; and
• On a sample basis, tested the net realisable value of inventory by agreeing to sales
documentation, including post year end sales documentation where available.
Key observations:
We did not identify any indicators to suggest that the estimates made in determining the
customer specific inventory provision were inappropriate.
Independent auditor’s report continued
to the members of Trifast plc
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Strategic report Governance Financial statements Additional information
Key audit matter How the scope of our audit addressed the key audit matter
Goodwill impairment
Refer to the Accounting Policies
of the Group on pages 139 to 145
for further detail on the policies
impacting goodwill valuation
together with Note 30 detailing
the estimation uncertainty over
goodwill impairment and Note 13 for
the financial disclosure of goodwill.
Goodwill is a significant balance in the
Consolidated Statement of financial position and
is subject to an annual impairment review.
The recoverability of goodwill is dependent on
management’s identification and allocation of
cash generating units, estimating both cashflows
and appropriate discount rates to apply in the
value in use calculation.
Given the size of the goodwill balance, and the
complexity of estimating both cashflows and
discount rates we consider goodwill impairment
to be an area of material estimation. Hence
there is a risk that the valuation of goodwill is
inappropriate. Due to the judgements involved
we consider this to be a key audit matter.
We have:
• Assessed management’s impairment model for compliance with applicable accounting
standards and tested its computational accuracy;
• Assessed management’s identification and allocation of cash generating units.
• Considered the historical accuracy of management’s forecasting as a starting point for
sensitising management’s current year forecast;
• With the assistance of our internal valuation experts we tested the discount rate
assumptions to assess their reasonableness through corroboration to external sources;
• Performed sensitivity analysis over the key assumptions and checking the Group
considered reasonably possible adverse effects that could arise as a result of a decrease
in sales and margins relevant to the cash generating unit; and
• Obtained supporting evidence to verify price increase assumptions.
Key observations:
We did not identify any indicators to suggest that the estimates made by the Directors in
the calculation of the goodwill impairment assessment were inappropriate.
Independent auditor’s report continued
to the members of Trifast plc
An overview of the scope of our audit continued
Key audit matters continued
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Strategic report Governance Financial statements Additional information
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the
extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements Parent company financial statements
2023 2022 2023 2022
Materiality
£970k £660k £150k £140k
Basis for determining
materiality
0.4% of revenue 5% of adjusted profit before tax 15% (2022: 21%) of Group
materiality.
Rationale for the benchmark
applied
Considered the most stable
performance measure of the
group
We considered adjusted profit to
be a key performance measure for
users of the financial statements.
Based on our assessment of the components aggregation risk.
Performance materiality
£630k £325k £97k £65k
Basis for determining
performance materiality
65% of group materiality 65% of parent company materiality
Rationale for the percentage
applied for performance
materiality
Set taking account various factors including: the expected total value
of known and likely misstatements, brought forward misstatements,
management’s attitude towards adjustments, the number of material
estimates, and how homogeneous processes are within the group.
Set taking account various factors including: the expected total value
of known and likely misstatements, brought forward misstatements,
management’s attitude towards adjustments, the number of material
estimates, and how homogeneous processes are within the parent
company.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, based on a percentage of between 15% and 90% (2022: 21% and 87% ) of
Group materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £150k to £875k (2022: £140k
to £575k). In the audit of each component, we further applied performance materiality levels of 65% (2022: 65%) of the component materiality to our testing to ensure that the risk of
errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £50k (2022: £50k) with those between £19k – £50k (2021: £13k – £50k)
being reported in aggregate. We also agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.
Independent auditor’s report continued
to the members of Trifast plc
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Strategic report Governance Financial statements Additional information
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course
of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on
certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the
audit:
• the information given in the Strategic report and the Directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group
and Parent Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Matters on
which we
are required
to report by
exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Parent Company financial statements and the part of
the Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Other information
The directors are responsible for the other information. The other information comprises
the information included in the annual report other than the financial statements and
our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate Governance Statement
relating to the parent company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the Corporate Governance Statement is materially consistent with
the financial statements or our knowledge obtained during the audit.
Going
concern and
longer-term
viability
• The Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 73
• The Directors’ explanation as to their assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate set out on pages 64 to 65.
Other Code
provisions
• Directors’ statement on fair, balanced and understandable set
out on page 81;
• Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on pages 58 to 63;
• The section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on pages 80 and 81; and
• The section describing the work of the audit committee set out
on pages 78 to 81.
Independent auditor’s report continued
to the members of Trifast plc
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Strategic report Governance Financial statements Additional information
The Group is also subject to laws and regulations where the consequence of
non-compliance could have a material effect on the amount or disclosures in the
financialstatements, for example through the imposition of fines or litigations. We
identified such laws and regulations to be health, safety and environmental laws as well
asUK Bribery Act.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of
non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-
compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement,
including fraud. Our risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or
suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in
the financial statements;
• Involvement of forensic specialists at the planning stage as part of the risk
identification process;
• Performing analytical procedures to identify any unusual or unexpected relationships
that may indicate risks of material misstatement due to fraud; and
• Considering remuneration incentive schemes and performance targets and the related
financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be
inventory, revenue recognition and management override of controls.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are
responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the
Group’s and the Parent Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
Non‑compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining and understanding of the Group’s policies and procedures regarding
compliance with laws and regulations, we considered the significant laws and
regulations to be the applicable accounting standards, Companies Act 2006, the UK
Listing Rules and certain requirements from the UK and overseas tax legislation.
Independent auditor’s report continued
to the members of Trifast plc
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Strategic report Governance Financial statements Additional information
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Parent Company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
James Fearon (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Gatwick, UK
10 July 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered
number OC305127).
Independent auditor’s report continued
to the members of Trifast plc
Auditor’s responsibilities for the audit of the financial statements continued
Extent to which the audit was capable of detecting irregularities, including
fraud continued
Fraud continued
Our procedures in respect of the above included:
• Involvement of forensic specialists at the planning stage as part of the risk
identification process;
• Assessing significant estimates made by management for bias (see key audit matters);
and
• Addressing the risk of management override of internal controls, including testing of
journals exhibiting unusual pairings over revenue and inventory, value or descriptions
to supporting documentation and evaluating whether there was evidence of bias
in estimates (i.e. inventory provisions, forecast cashflows used in impairment and
going concern assessments) or judgements by the Directors that represented a risk
of material misstatement due to fraud. To address the risk of fraud due to revenue
recognition through our journals testing we agreed material manual journal entries
to revenue to supporting documentation. Other testing of fraud due to revenue
recognition included the testing of cut-off revenue and group adjustments to
supporting documentation.
We also communicated relevant identified laws and regulations and potential fraud risks
to all engagement team members including component engagement teams who were
all deemed to have appropriate competence and capabilities and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit.
For component engagement teams, we also reviewed the result of their work performed
in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the
financial statements, recognising that the risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
129
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
Consolidated income statement
for the year ended 31 March 2023
Note
2023
£000
2022
£000
Continuing operations
Revenue 3, 35 24 4 , 3 91 218,618
Cost of sales (1 82 , 462 ) (1 6 0 ,1 8 9 )
Gross profit 61,9 29 58 , 429
Other operating income 4 510 565
Distribution expenses (6 ,7 27 ) (5, 2 9 6 )
Administrative expenses before separately disclosed items (43,72 8 ) (3 8 ,9 52 )
Acquired intangible amortisation 2, 13 (1,7 98 ) (1, 593 )
Project Atlas 2 (1,7 22 ) (1 ,0 41 )
Restructuring and related charges 2 (4 , 2 3 5 ) —
Impairment of goodwill 2, 13 (2 ,9 26 ) —
Settlement for loss of office 2 (1,0 50 ) —
Aborted acquisition costs 2 (261 ) —
Acquisition costs 2, 36 — (5 08 )
Total administrative expenses (5 5 ,7 2 0 ) (4 2 , 0 9 4 )
Operating (loss)/profit 5, 6, 7 (8 ) 11,60 4
Financial income 8 15 8 31
Financial expenses 8 (2 , 8 42 ) (1 ,01 8 )
Net financing costs (2 , 6 8 4 ) (9 87 )
(Loss)/profit before taxation 3 (2, 692 ) 10, 617
Taxation 9 (1 74 ) (1 ,6 4 0 )
(Loss)/profit for the year
(attributable to equity shareholders of the Parent Company) (2 , 86 6 ) 8 , 97 7
(Loss)/earnings per share
Basic 25 (2 .12 )p 6.6 1 p
Diluted 25 (2 .12 )p 6.56 p
The notes on pages 139 to 197 form part of these financial statements.
130
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
130
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Consolidated statement of comprehensive income
for the year ended 31 March 2023
2023
£000
2022
£000
(Loss)/profit for the year (2 , 86 6 ) 8 ,97 7
Other comprehensive income for the year:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 4,053 2 , 9 07
Loss on a hedge of a net investment taken to equity (1,65 5 ) (1 47 )
Other comprehensive income recognised directly in equity 2,39 8 2, 760
Total comprehensive (expense)/income recognised for the year
(attributable to the equity shareholders of the Parent Company) (4 6 8 ) 1 1 ,73 7
131
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
131
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Consolidated statement of changes in equity
for the year ended 31 March 2023
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Own
shares held
£000
Translation
reserve
£000
Retained
earnings
£000
Total
equity
£000
Balance at 31 March 2022 6,804 22 , 512 16,328 (3, 487 ) 12 , 28 4 8 4, 704 139,145
Total comprehensive expense for the year:
Loss for the year — — — — — (2 , 86 6 ) (2 ,8 6 6 )
Other comprehensive income for the year — — — — 2,398 — 2,398
Total comprehensive expense recognised for the year — — — — 2,398 (2 , 8 66 ) (4 6 8 )
Issue of share capital (note 24) 1 18 — — — — 19
Share-based payment transactions (net of tax) (note 22) — — — — — 5 5
Movement in own shares held (note 24) — — — 470 — (47 0 ) —
Dividends (note 24) — — — — — (2, 812 ) (2, 81 2 )
Total transactions with owners 1 18 — 470 — (3, 277 ) (2 ,78 8 )
Balance at 31 March 2023 6,805 22 , 530 16,328 (3,0 17 ) 14,6 82 78 , 561 135 ,8 89
132
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
132
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Consolidated statement of changes in equity continued
for the year ended 31 March 2022
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Own
shares held
£000
Translation
reserve
£000
Retained
earnings
£000
Total
equity
£000
Balance at 31 March 2021 6, 8 02 2 2,46 1 16 ,328 (595 ) 9 , 5 24 7 7, 2 8 4 13 1, 80 4
Total comprehensive income for the year:
Profit for the year — — — — — 8 , 97 7 8 , 97 7
Other comprehensive income for the year — — — — 2 ,76 0 — 2 ,76 0
Total comprehensive income recognised for the year — — — — 2 ,76 0 8 ,97 7 11 ,7 37
Issue of share capital (note 24) 2 51 — — — — 53
Share-based payment transactions (net of tax) (note 22) — — — — — 74 2 74 2
Movement in own shares held (note 24) — — — (2 , 8 92 ) — (143 ) (3,035 )
Dividends (note 24) — — — — — (2,156 ) (2, 156 )
Total transactions with owners 2 51 — (2, 8 9 2 ) — (1, 557 ) (4 , 3 9 6 )
Balance at 31 March 2022 6,804 22,5 12 16 ,32 8 (3, 4 87 ) 12, 284 8 4 ,70 4 139,145
133
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
133
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Company statement of changes in equity
for the year ended 31 March 2023
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Own
shares held
£000
Retained
earnings
£000
Total
equity
£000
Balance at 31 March 2022 6,804 22,512 16,328 (3,487) 26,866 69,023
Total comprehensive expense for the year:
Loss for the year — — — — (4,325) (4,325)
Total comprehensive expense recognised for the year — — — — (4,325) (4,325)
Issue of share capital (note 24) 1 18 — — — 19
Share-based payment transactions (net of tax) (note 22) — — — — 5 5
Movement in own shares held (note 24) — — — 470 (470) —
Dividends (note 24) — — — — (2,812) (2,812)
Total transactions with owners 1 18 — 470 (3,277) (2,788)
Balance at 31 March 2023 6,805 22,530 16,328 (3,017) 19,264 61,910
134
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
134
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Company statement of changes in equity continued
for the year ended 31 March 2022
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Own
shares held
£000
Retained
earnings
£000
Total
equity
£000
Balance at 31 March 2021 6,802 22,461 16,328 (595) 32,508 7 7,504
Total comprehensive expense for the year:
Loss for the year — — — — (4,106) (4,10 6)
Total comprehensive expense recognised for the year — — — — (4,106) (4,10 6)
Issue of share capital (note 24) 2 51 — — — 53
Share-based payment transactions (net of tax) (note 22) — — — — 763 763
Movement in own shares held (note 24) — — — (2,892) (143) (3,035)
Dividends (note 24) — — — — (2,156) (2,156)
Total transactions with owners 2 51 — (2,892) (1,536) (4,375)
Balance at 31 March 2022 6,804 22,512 16,328 (3,487) 26,866 69,023
135
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
135
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Statements of financial position
at 31 March 2023
Group Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
Non-current liabilities
Other interest-bearing
loans and borrowings 20, 26 69,825 50,507 69,825 50,507
Right-of-use
liabilities 12, 20, 26 1 2,315 10,6 83 17 23
Provisions 23 1 ,443 1 ,0 88 — —
Deferred tax liabilities 16, 17 1, 663 2,86 1 — —
Total non-current
liabilities 85,246 65 ,1 39 69,842 50,530
Total liabilities 3 129,445 1 15 , 87 1 72,654 52,118
Net assets 135, 88 9 139,145 61,910 69,023
Equity
Share capital 6,805 6, 804 6,805 6,804
Share premium 22 , 530 2 2, 512 22,530 22,512
Merger reserve 16,328 1 6, 328 16,328 16,328
Own shares held (3 ,017 ) (3 ,4 87 ) (3,017) (3,487)
Reserves 14,6 82 12 ,28 4 — —
Retained earnings 78, 5 61 8 4 ,70 4 19,264 26,866
Total equity 135 ,8 89 139,145 61,910 69,023
The loss after tax for the Company is £4.3m (FY22: £4.1m).
The notes on pages 139 to 197 form part of these financial statements.
These financial statements were approved by the Board of Directors on 10 July 2023 and
were signed on its behalf by:
Scott Mac Meekin Darren Hayes-Powell
Director Director
Group Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
Non-current assets
Property, plant and
equipment 10, 11 19 ,41 7 2 0, 297 6 2,216
Right-of-use assets 12 14,395 12 ,757 36 40
Intangible assets 13, 14 40,451 42, 9 8 1 7,8 54 7,027
Equity investments 15 — — 42,298 42,298
Non-current trade and
other receivables 19 — — 76,848 66,344
Deferred tax assets 16, 17 4, 289 2 ,787 998 724
Total non-current assets 78 , 552 78,8 22 128,040 118,649
Current assets
Inventories 18 9 0, 948 8 8, 933 — —
Trade and other
receivables 19 6 1,906 60, 520 3,754 1,888
Assets classified as held
for sale 10, 11 2 ,13 0 — 2,130 —
Cash and cash equivalents 26 31 ,79 8 2 6 , 74 1 640 604
Total current assets 1 86 ,782 1 76, 194 6,524 2,492
Total assets 3 265, 334 255 ,016 134,564 121,141
Current liabilities
Trade and other payables 21 35 , 332 4 5 , 249 2,395 1,569
Right-of-use
liabilities 12, 20, 26 3,498 3,028 21 19
Provisions 23 2, 809 — 396 —
Tax payable 2, 560 2,455 — —
Total current liabilities 4 4 ,19 9 50,732 2,812 1,588
136
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
136
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Statements of cash flows
for the year ended 31 March 2023
Group Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
Cash flows from operating activities
(Loss)/profit for the year (2 , 86 6 ) 8 ,97 7 (4,325) (4,106)
Adjustments for:
Depreciation and amortisation 10, 11, 13, 14 5 , 47 1 4 ,12 5 638 84
Right-of-use asset depreciation 12 3 ,640 3,13 1 23 19
Unrealised foreign currency gain (5 0 ) (3 4 ) (43) (45)
Financial income 8 (15 8 ) (3 1 ) (1,268) (155)
Financial expense (excluding right-of-use liabilities) 8 2 ,41 2 692 2,383 683
Right-of-use liabilities’ financial expense 8, 12 430 326 1 —
Loss on sale of property, plant and equipment, intangibles and investments 149 6 9 145
Dividends received — — (7,434) (3,358)
Equity settled share-based payment charge 24 7 72 (398) 325
Impairment of goodwill 2,13 2 ,926 — — —
Impairment of right-of-use assets and property, plant and equipment on restructuring 2, 10, 11, 12 1 ,426 — — —
Taxation expense/(income) 9 1 74 1,640 (300) (13)
Operating cash inflow/(outflow) before changes in working capital and provisions 13, 578 19, 604 (10,714) (6,421)
Change in trade and other receivables 1,644 (5 , 9 5 0 ) (536) 916
Change in inventories 215 (3 1 ,7 1 6 ) — —
Change in trade and other payables (11, 739 ) 2,92 2 661 299
Change in provisions 2 ,792 — 396 —
Cash generated from/(used in) operations 6,49 0 (1 5 ,1 4 0 ) (10,193) (5,206)
Tax paid (3 , 52 9 ) (2,75 7 ) — —
Net cash generated from/(used in) operating activities 2,961 (17 ,897 ) (10,193) (5,206)
137
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
137
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Statements of cash flows continued
for the year ended 31 March 2023
Group Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 27 36 — —
Interest received 138 31 366 196
Acquisition of property, plant and equipment and intangibles 10, 11, 13, 14 (5,6 25 ) (5 , 24 8 ) (1,394) (1,481)
Acquisition of subsidiary, net of cash acquired — (5,84 7 ) — —
Lending to subsidiary undertakings — — (9,897) (21,638)
Repayment by subsidiary undertakings — — 2,125 —
Dividends received — — 7,434 3,358
Net cash used in investing activities (5 , 46 0 ) (1 1 ,02 8 ) (1,366) (19,565)
Cash flows from financing activities
Purchase of own shares 24 — (3,035 ) — (3,035)
Proceeds from the issue of share capital 24 19 53 19 53
Proceeds from new loan 16,423 32, 98 0 16,423 32,980
Repayment of loans from subsidiaries — — — (4,24 8)
Repayment of right-of-use liabilities 12 (3 ,792 ) (2, 97 7 ) (24) (19)
Dividends paid 24 (2, 8 12 ) (2, 156 ) (2,812) (2,156)
Interest paid (2 ,47 7 ) (8 05 ) (2,011) (456)
Net cash generated from financing activities 7, 3 6 1 24 , 0 6 0 11,595 23,119
Net change in cash and cash equivalents 4, 862 (4 , 8 6 5 ) 36 (1,652)
Cash and cash equivalents at 1 April 2 6 , 74 1 30, 265 604 2,256
Effect of exchange rate fluctuations on cash held 195 1,341 — —
Cash and cash equivalents at 31 March 31 ,798 2 6 , 74 1 640 604
138
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
138
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements
for the year ended 31 March 2023
139
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
139
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
1 Accounting policies continued
140
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
140
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
1 Accounting policies continued
f) Property, plant and equipment continued
iii) Right‑of‑use leases continued
141
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
141
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
1 Accounting policies continued
142
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
142
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
1 Accounting policies continued
j) Impairment continued
Notes to the financial statements continued
for the year ended 31 March 2023
143
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
143
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
1 Accounting policies continued
144
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
144
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
1 Accounting policies continued
Notes to the financial statements continued
for the year ended 31 March 2023
145
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
145
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
146
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
2 Underlying profit before tax and separately disclosed items continued
Notes to the financial statements continued
for the year ended 31 March 2023
147
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
147
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
3 Operating segmental analysis continued
Geographical operating segments continued
148
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
148
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
3 Operating segmental analysis continued
Geographical operating segments continued
Notes to the financial statements continued
for the year ended 31 March 2023
149
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
149
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
150
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
150
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
151
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
151
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
9 Taxation continued
152
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
152
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
153
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
153
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
10 Property, plant and equipment – Group continued
11 Property, plant and equipment – Company
Land and
buildings
£000
Plant and
machinery
£000
Fixtures and
fittings
£000
Total
£000
Cost
Balance at 1 April 2022 3,905 — 579 4,484
Additions — — — —
Disposals — — — —
Balance at 31 March 2022 3,905 — 579 4,484
Balance at 1 April 2022 3,905 — 579 4,484
Additions — 13 — 13
Assets classified as held
for sale (3,905) — — (3,905)
Balance at 31 March 2023 — 13 579 592
Land and
buildings
£000
Plant and
machinery
£000
Fixtures and
fittings
£000
Total
£000
Depreciation and
impairment
Balance at 1 April 2021 1,614 — 570 2,184
Depreciation charge for
the year 81 — 3 84
Balance at 31 March 2022 1,695 — 573 2,268
Balance at 1 April 2022 1,695 — 573 2,268
Depreciation charge for
the year 80 9 4 93
Assets classified as held
for sale (1,775) — — (1,775)
Balance at 31 March 2023 — 9 577 586
Net book value
At 1 April 2021 2,291 — 9 2,300
At 31 March 2022 2,209 — 7 2,216
At 31 March 2023 — 4 2 6
Included in the net book value of land and buildings is £nil (FY22: £2.2m) of freehold land
and buildings.
For assets classified as held for sale see note 10 above.
154
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
154
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
155
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
155
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
12 IFRS 16 – Group continued
Notes to the financial statements continued
for the year ended 31 March 2023
156
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
156
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
12 IFRS 16 – Group continued
Notes to the financial statements continued
for the year ended 31 March 2023
157
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
157
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
158
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
158
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
13 Intangible assets – Group continued
Notes to the financial statements continued
for the year ended 31 March 2023
159
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
159
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
13 Intangible assets – Group continued
Notes to the financial statements continued
for the year ended 31 March 2023
160
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
160
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
13 Intangible assets – Group continued
Notes to the financial statements continued
for the year ended 31 March 2023
161
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
161
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
14 Intangible assets – Company
Assets under
course of
construction
£000
Software
£000
Other
£000
Total
£000
Cost
Balance at 1 April 2021 5,691 — 62 5,753
Additions 1,481 — — 1,481
Disposals (145) — — (145)
Balance at 31 March 2022 7,027 — 62 7,089
Balance at 1 April 2022 7,027 — 62 7,089
Additions 1,381 — — 1,381
Disposals (9) — — (9)
Transfers (6,560) 6,560 — —
Balance at 31 March 2023 1,839 6,560 62 8,461
Amortisation and impairment
Balance at 1 April 2021, 31 March 2022 and 1 April 2022 — — 62 62
Amortisation for the year — 545 — 545
Balance at 31 March 2023 — 545 62 607
Net book value
At 1 April 2021 5,691 — — 5,691
At 31 March 2022 7,027 — — 7,027
At 31 March 2023 1,839 6,015 — 7,8 54
The addition in assets under the course of construction in the year includes Project Atlas additions of £0.9m (FY22: £1.1m).
162
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Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
162
Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
15 Equity investments – Company
Investments in subsidiaries
Total
£000
Cost
Balance at 1 April 2021 43,465
Disposals (22)
Balance at 31 March 2022 and 31 March 2023 43,443
Provision
Balance at 1 April 2021, 31 March 2022, 1 April 2022 and 31 March 2023 1,145
Net book value
Balance at 1 April 2021 42,320
Balance at 31 March 2022 and 31 March 2023 42,298
Details of principal subsidiary undertakings, country of registration and principal activity are included in note 31.
All subsidiaries have a reporting date concurrent with Trifast plc, except TR Formac (Shanghai) Pte Ltd which has a reporting date of 31 December due to local regulatory requirements.
Following the acquisition of Serco Ryan Ltd in September 2005, the trade and assets of Serco Ryan were transferred to fellow subsidiary TR Fastenings Ltd at book value. This
resulted in an apparent overvaluation of the Serco Ryan Ltd investment as held in the Company’s books, although there was no overall loss to the Group. Schedule 1 of SI 2008/410
of the Companies Act 2006 requires that, where such overvaluation is expected to be permanent, the investment should be written down accordingly. The Directors consider that as
the substance of the transaction was merely to reorganise the Group’s operations, such a treatment would fail to give a true and fair view. Therefore, the diminution in value of the
investment in Serco Ryan Ltd has instead been re-allocated to the Company’s investment in Trifast Overseas Holdings Ltd, being the immediate Parent Company of TR Fastenings
Limited and directly owned by the Company.
Notes to the financial statements continued
for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
16 Deferred tax assets and liabilities – Group continued
17 Deferred tax assets and liabilities – Company
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
2023
£000
2022
£000
2023
£000
2022
£000
2023
£000
2022
£000
Property, plant and equipment — — 141 153 141 153
Provisions/accruals (16) (3) — — (16) (3)
IFRS 2 Share-based Payments (136) (426) — — (136) (426)
Tax losses (987) (44 8) — — (987) (4 48)
Tax (assets)/liabilities (1,139) (877) 141 153 (998) (724)
Tax set-off 141 153 (141) (153) — —
Net tax assets (998) (724) — — (998) (724)
A potential £3.0m (FY22: £2.2m) deferred tax asset relating to the Company’s trapped management losses was not recognised on the grounds that recovery of these losses is highly
unlikely.
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17 Deferred tax assets and liabilities – Company continued
Movement in deferred tax during the year
1 April
2022
£000
Recognised
in income
£000
Recognised
in equity
£000
31 March
2023
£000
Property, plant and equipment 153 (12) — 141
Provisions/accruals (3) (13) — (16)
IFRS 2 Share-based Payments (426) 264 26 (136)
Tax losses (448) (539) — (987)
(724) (300) 26 (998)
Movement in deferred tax during the prior year
1 April
2021
£000
Recognised
in income
£000
Recognised
in equity
£000
31 March
2022
£000
Property, plant and equipment 125 28 — 153
Provisions/accruals (3) — — (3)
IFRS 2 Share-based Payments (329) (107) 10 (426)
Tax losses (514) 66 — (448)
(721) (13) 10 (724)
Notes to the financial statements continued
for the year ended 31 March 2023
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for the year ended 31 March 2023
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for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
22 Employee benefits continued
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22 Employee benefits continued
Senior Manager (SM) and Operational Executive Board LTIP shares continued
Notes to the financial statements continued
for the year ended 31 March 2023
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for the year ended 31 March 2023
22 Employee benefits continued
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for the year ended 31 March 2023
22 Employee benefits continued
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Notes to the financial statements continued
for the year ended 31 March 2023
22 Employee benefits continued
Board LTIP shares continued
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for the year ended 31 March 2023
23 Provisions continued
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24 Capital and reserves continued
Notes to the financial statements continued
for the year ended 31 March 2023
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25 Earnings per share continued
Weighted average number of ordinary shares (diluted) continued
Notes to the financial statements continued
for the year ended 31 March 2023
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26 Financial instruments continued
(b) Financial instruments risks continued
Notes to the financial statements continued
for the year ended 31 March 2023
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26 Financial instruments continued
(b) Financial instruments risks continued
(ii) Liquidity and interest risk continued
Notes to the financial statements continued
for the year ended 31 March 2023
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26 Financial instruments continued
(b) Financial instruments risks continued
(ii) Liquidity and interest risk continued
Notes to the financial statements continued
for the year ended 31 March 2023
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26 Financial instruments continued
(b) Financial instruments risks continued
(ii) Liquidity and interest risk continued
Notes to the financial statements continued
for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
26 Financial instruments continued
(b) Financial instruments risks continued
(iii) Foreign currency risk continued
Monetary assets/liabilities continued
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27 Financial guarantee contracts
Company
The Company has cross guarantees on its UK banking facilities with its three UK subsidiaries. The amount outstanding at the end of the year was £nil (FY22: £nil).
The Company has a guarantee with HSBC, involving the UK trading subsidiaries, for a Group Class Guarantee facility of £2.0m (FY22: £1.1m).
Notes to the financial statements continued
for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
28 Related parties continued
Related party transactions continued
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28 Related parties continued
Related party transactions continued
Notes to the financial statements continued
for the year ended 31 March 2023
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Annual Report for the year ended 31 March 2023
Notes to the financial statements continued
for the year ended 31 March 2023
28 Related parties continued
Related party transactions continued
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for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
30 Accounting estimates and judgements continued
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for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
31 Trifast plc subsidiaries continued
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Notes to the financial statements continued
for the year ended 31 March 2023
31 Trifast plc subsidiaries continued
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for the year ended 31 March 2023
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32 Alternative Performance Measures continued
Notes to the financial statements continued
for the year ended 31 March 2023
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for the year ended 31 March 2023
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for the year ended 31 March 2023
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for the year ended 31 March 2023
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Notes to the financial statements continued
for the year ended 31 March 2023
36 Acquisition of Falcon Fasteners Solutions Inc (‘Falcon’) continued
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Glossary of terms
AER
Actual Exchange Rate.
Assets
Anything owned by the Company having a monetary value; e.g. fixed assets such as
buildings, plant and machinery, vehicles (these are not assets if rented and not owned)
and potentially including intangibles such as trademarks and brand names, and current
assets, such as inventory, debtors and cash.
Average capital employed
Averaged using month-end balances and opening capital employed. Capital employed is
the sum of net assets and gross debt.
Balance sheet (or statements of financial position)
These provide a ‘snapshot’ at a date in time of who owns what in the Company, and what
assets and debts represent the value of the Company.
The balance sheet is where to look for information about short-term and long-term debts,
gearing (the ratio of debt to equity), reserves, inventory values (materials and finished
goods), capital assets, cash and the value of shareholders’ funds. The balance sheet
equation is:
Capital + Liabilities (where the money came from)
= Assets (where the money is now)
Book build
Book building is the process by which an underwriter attempts to determine the price at
which an initial public offering (IPO) or Placing of equity will be offered.
Broker option
The broker option has been issued to facilitate the participation by existing shareholders
of the Company, being shareholders of the Company who hold shares in the Company.
CAGR
Compounded Annual Growth Rate.
Cash flow
The movement of cash in and out of a business from day-to-day direct trading and other
non-trading effects, such as capital expenditure, tax and dividend payments.
Category ‘C’ components
Low-value components that are wrapped up into our supply proposition for a customer.
CER
Constant Exchange Rate.
Current assets
Cash and anything that is expected to be converted into cash within 12 months of the
balance sheet date. For example, debtors or inventory.
Current liabilities
Money owed by the business that is generally due for payment within 12 months of
balance sheet date. For example: creditors, bank overdrafts or tax.
Depreciation
The proportion of cost relating to a capital item, over an agreed period, (based on the
useful life of the asset); for example, a piece of equipment costing £10,000 having a life of
five years might be depreciated over five years at a cost of £2,000 per year.
This would be shown in the income statement as a depreciation cost of £2,000 per year;
the balance sheet would show an asset value of £8,000 at the end of year one, reducing
by £2,000 per year; and the cash flow statement would show all £10,000 being used to
pay for it in year one.
Dividend
A dividend is a payment made per share to a company’s shareholders and is based on
the profits of the year, but not necessarily all the profits. Normally a half-year dividend is
recommended by a company board whilst the final dividend for the year is proposed by
the Board of Directors and shareholders consider and vote on this at the Annual General
Meeting.
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Glossary of terms continued
Dividend cover
Underlying diluted earnings per share over proposed dividend per share in the year.
Earnings before
There are several ‘Earnings before….’ ratios. The key ones being:
• PBT Profit/earnings before taxes
• EBIT Earnings before interest and taxes
• EBITDA Earnings before interest, taxes, depreciation and amortisation
• Underlying profit before separately disclosed items (see note 2)
Earnings relate to operating and non-operating profits (e.g. interest, dividends received
from other investments).
GAAP
Generally Accepted Accounting Practice.
GDPR
The General Data Protection Regulation is a regulation by which the European Parliament,
the Council of the European Union and the European Commission intend to strengthen
and unify data protection for all individuals within the European Union. It also addresses
the export of personal data outside the EU.
Gearing
The ratio of debt to equity, usually the relationship between long-term borrowings and
shareholders’ funds.
Goodwill
Any surplus money paid to acquire a company that exceeds its net assets fair value.
ICAEW
Institute of Chartered Accountants in England & Wales.
Intellectual property (IP)
This is an intangible asset such as a copyright or patent.
Copyright is the exclusive right to produce copies and to control an original work and is
granted by law for a specified number of years.
A patent is a government grant to an inventor, assuring the inventor the sole right to make,
use and sell an invention for a limited period.
Legal entity identifier (LEI)
An LEI is a unique identifier for persons that are legal entities or structures including
companies, charities and trusts. The obligation for legal entities or structures to obtain
an LEI was endorsed by the G20 (the leaders of the 20 largest economies). Further
information on LEIs, including answers to frequently asked questions, can be found at
https://www.lei-worldwide.com/lei-code-faq.html
MiFID
MiFID applied in the UK from 2007, and was revised by MiFID II, in January 2018,
to improve the functioning of financial markets in light of the financial crisis and to
strengthen investor protection. MiFID II extended the MiFID requirements in a number of
areas – new market structure requirements, including:
• New and extended requirements in relation to transparency
• New rules on research and inducements
• New product governance requirements for manufacturers and distributors of MiFID
‘products’
• Introduction of a harmonised commodity position limits regime
For more, visit www.fca.org.uk/markets/mifid-ii
Multinational OEMs
We use this term to include all Original Equipment Manufacturers (OEMs), Tier 1 suppliers
in the automotive sector and relevant key sub-contractors in the other sectors we service.
Non-pre-emptive rights
This term refers to an issue or sale of any equity securities by a company to which
pre-emptive rights do not apply.
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OEM
Original equipment manufacturers.
PDMR
This term stands for Persons Discharging Managerial Responsibility. These relate to people
who are Board Directors or Senior Management, who have access to price-sensitive
information on a regular basis. As a result, if they buy or sell shares at any time this must be
declared in a PDMR notice which is released by the company via the London Stock Exchange
News Service (RNS). PDMRs may not deal in the company’s shares in a close period.
P/E ratio (price per earnings)
The P/E ratio is an important indicator as to how the investing market views the health,
performance, prospects and investment risk of a plc. The P/E ratio is arrived at by dividing
the share price by the underlying diluted earnings per share.
Placing
A Placing (called a placement in the USA) is the issue of new securities, which are sold
directly to holders, usually institutional investors. Unlike a rights issue, a Placing of shares
is not an offer to existing shareholders; simply to any suitable buyers who can be found.
The advantage of a Placing is that it is a cheaper and simpler method of raising funds for
the business.
PPE
PPE stands for Personal Protective Equipment and includes items such as masks, helmets,
gloves, eye protection and high-visibility clothing and is designed to keep people safe.
Pre-emptive rights
Pre-emptive rights are a clause in an option, security or merger agreement that gives the
investor the right to maintain his or her percentage ownership of a company by buying a
proportionate number of shares of any future issue of the security.
Profit
The surplus remaining after total costs are deducted from total revenue.
Profit and loss account (P&L) (or income statement)
The P&L shows how well the company has performed in its trading activities and would
cover a trading account for a period.
The P&L shows profit performance and typically shows sales revenue, cost of sales/cost of
goods sold, generally a gross profit margin, fixed overheads and/or operating expenses,
and then a profit before tax figure (PBT).
Project Atlas
A Microsoft D365 implementation programme.
Reserves
The accumulated and retained difference between profits and losses year-on-year since
the company’s formation.
Retained profit/earnings
Business profit which is after tax and dividend payments to shareholders; retained by the
business and used for reinvestment.
Return on capital employed (ROCE)
A fundamental financial performance measure. A percentage figure representing earnings
before interest and tax against the money that is invested in the business.
Underlying EBIT ÷ average capital employed (net assets + gross debt) × 100 = ROCE.
Glossary of terms continued
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Rights issue
A rights issue is the term for when a company offers more of its ordinary shares to current
shareholders, usually to raise extra capital for the business.
Share capital
The balance sheet nominal value paid into the company by shareholders at the time(s)
shares were issued.
Shareholders’ funds
A measure of the shareholders’ total interest in the company, represented by the total
share capital plus reserves.
Statements of cash flow
The statements of cash flow show the movement and availability of cash through and
to the business over a given period. For any business ‘cash is king’ and essential to meet
payments, for example to suppliers, staff and other creditors.
Stock code
A stock code is used to find a listing on the regulatory market such as the London Stock
Exchange. Trifast’s stock code is TRI.
Third-party logistics (3PL)
3PL in logistics and supply chain management is an organisation’s use of third-party
businesses to outsource elements of its distribution, warehousing and fulfilment services.
Tier 1
A subcontractor to the OEM.
Trademark
The name or a symbol used by a manufacturer or dealer to distinguish its products from
those of competitors. A registered trademark is one that is officially registered and legally
protected.
Working capital
Current assets excluding cash, less current liabilities excluding debt-like items
representing the required investment, continually circulating, to finance inventory, debtors
and work in progress.
Glossary of terms continued
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2019 2020 2021 2022 2023
Revenue £209.0m £200.2m £188.2m £218.6m £244.4m
GP margin
2
30.0% 27.5% 26.5% 26.7% 25.3%
Underlying operating profit
1,2
£21.6m £15.8m £12.0m £14.7m £12.0m
Underlying operating profit margin
1,2
10.4% 7.9 % 6.4% 6.7% 4.9%
Operating profit/(loss)
2
£17.1m £4.1m £8.8m £11.6m £(8.0)k
Operating profit/(loss) margin
2
8.2% 2.0% 4.7% 5.3% 0.0%
Underlying EBITDA
1,2
£23.9m £21.2m £17.6m £20.4m £19.3m
Underlying PBT
1,2
£21.0m £14.7m £11.0m £13.8m £9.3m
PBT/(LBT)
2
£16.4m £3.0m £7.8m £10.6m £(2.7)m
ROCE %
1,2
13.9% 8.8% 6.8% 8.3% 5.4%
Total dividend per share 4.25p 1.20p 1.60p 2.10p 2.25p
Dividend increase % 10.4%
(71.8)% 33.3% 31.3% 7.1%
Dividend cover 3.0x 7. 2x 3.9x 3.9x 2.3x
Underlying diluted EPS
1,2
12.79p 8.64p 6.24p 8.13p 5.13p
Diluted EPS/(LPS)
2
9.90p (0.19)p 4.31p 6.56p (2.12)p
Adjusted net debt/(cash)
3
£14.2m £15.2m £(13.3)m £23.8m £38.0m
Cash conversion % of underlying EBITDA
1,2
71.4% 105.1% 147.9 % (66.8)% 48.9%
Share price at 31 March 193p 95p 150p 115p 78p
1. Before separately disclosed items, see note 2.
2. Presented after adoption of IFRS 16 Leases from FY20.
3. Adjusted net debt/(cash) is excluding the impact of IFRS 16 Leases.
Five year history
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Company
Incorporated in the United Kingdom
Registered number: 01919797
LSE Premium Listing
Ticker: TRI
LEI REFERENCE: 213800WFIVE6RWK3CR22
Head office and registered office
Telephone: +44 (0)1825 747366
Committee memberships as at 1 April 2023
Audit & Risk Committee
Clive Watson (Chair)
Claire Balmforth
Louis Eperjesi
Remuneration Committee
Claire Balmforth (Chair)
Clive Watson
Louis Eperjesi
Nomination Committee
Jonathan Shearman (Chair)
Claire Balmforth
Clive Watson
Louis Eperjesi
ESG Committee
Louis Eperjesi (Chair)
Jonathan Shearman
Scott Mac Meekin
Darren Hayes-Powell
Clive Watson
Claire Balmforth
Company Secretary
Christopher Morgan
Email: [email protected]
Advisers
Registered auditor
BDO LLP
2 City Place, Beehive Ring Road
Gatwick
West Sussex RH6 0PA
Corporate stockbroker
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
Solicitor
CMS LLP
78 Cannon Street
London EC4 N 6AF
Registrar
Computershare Investor Services plc
The Pavilions, Bridgwater Road
Bristol BS13 8AE
Financial PR
TooleyStreet Communications Limited
15 Colmore Row
Birmingham B3 2BH
Company and advisers
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Financial calendar
AGM 11.30am, 15 September 2023
Half-yearly results November 2023
1
Trading update February 2024
1
Financial year end 31 March 2024
1
Pre-close trading update April 2024
1
Preliminary results June 2024
1
1. Dates are provisional and subject to change.
Details of the Company’s up-to-date financial reporting calendar can be found on our
website at www.trifast.com/investors/financial-information/financial-calendar
Dividend calendar
Proposed final dividend 1.50p
Ex-dividend date 28 September 2023
Final dividend record date 29 September 2023
Final dividend payment date 13 October 2023
Annual General Meeting (AGM)
The Annual General Meeting will be held at 11.30am on Friday 15 September 2023
atPeelHunt LLP, 100 Liverpool Street, London, EC2M 2AT.
The Notice of Meeting, which includes special business to be transacted at the AGM
together with an explanation of the resolutions to be considered at the meeting, is made
available on the Company website and communicated directly to shareholders.
Registrar
Trifast’s Registrar is Computershare Investor Services. They can be contacted for any
matters relating to your shareholding, including notification of change in name and
address; enquiries about dividend payments; and submission of proxy form for voting at
the Annual General Meeting.
Shareholders who receive duplicate sets of Company mailings because they have
multiple accounts should contact Computershare to have their accounts amalgamated.
Computershare offers a facility whereby shareholders can access their shareholdings in
Trifast via their website.
Please have your Shareholder Reference Number to hand whenever you contact the
Registrar www.computershare.com/uk
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Trifast plc | Focused on the future
Annual Report for the year ended 31 March 2023
Strategic report Governance Financial statements Additional information
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Celebrating 50 years
Trifast plcAnnual Report for the year ended 31 March 2023
Trifast plcAnnual Report for the year ended 31 March 2023