Malcolm Diamond

Malcolm Diamond MBE |
Executive Chairman

As always, my never ending appreciation and thanks go to all our managers and staff spread around our Group for their constant skill, effort and loyalty – without which we would just be a very ordinary company"

Dear shareholder

Welcome to your publication of our Trifast plc 2015/16 Report and Accounts from which you will learn of yet another year's structural and financial progress across the entire Group.

In fact, it is particularly significant that we have summarised the past year with the strap line: 'Investing for growth'

It is often said within the business world that the only constant is change, and so an organisation's ability to respond quickly and decisively to market conditions is paramount for prosperity.

Seven years ago, less than 15% of our Group revenue derived from the automotive sector, whilst telecoms/electronics, our driver for growth in the nineties, was in relative decline and dragging TR with it. By 2015, automotive Tier 1 demand for our expertise had become global and today accounts for over 30% of Group revenue, whilst electronics has since proven to have delivered organic growth over that same five-year period of our 'renaissance'. Our acquisition of VIC in Italy in 2014 instantly grew our domestic appliances revenue from 8% to 23% of Group revenue, thus finalising a trio of key international fastener demand sectors totalling over 60% of our business.

The growing demand from our automotive and domestic appliances sectors has driven substantial new capital investment in the year in our Italian, Malaysian and Taiwanese factories, the details of which are explained further into this publication.

As reported previously, our core business model of focusing on multinational high volume assemblers continues at a dynamic pace. The model is based on introducing our unique combination of low cost/zero defect, high quality manufacturing resources and component logistics direct to assembly lines, and customised design/application engineering support to the senior decision makers of global companies. This leads to detailed audits (spanning several days) of our relevant manufacturing sites, which in turn confers global Preferred Vendor status upon TR which is our entry ticket to approach their individual assembly plants and to sell what we can offer as benefits to their local production and engineering management.

Many of these global Original Equipment Manufacturers ('OEMs') have over 100 plants spread around the world, and often the same product is duplicated to serve their local markets. Once TR is specified for a customised component, then there is often a roll-out of the same component across several plants. There is an increasingly strong adoption by these customers of consistent designs and specifications, quality levels and in place cost that gives TR a multiplier effect on volume from the original enquiry from the initiating plant. This is particularly evident within the automotive sector where the same basic vehicle platform spans several brands and is assembled in different countries.

It is highly reassuring that around 60% of our business now comes from 50 of our global OEM customers, thus reinforcing our belief that our strategy is not only delivering consistent growth but with less than an average of 25% penetration, we still have many years of momentum ahead of us.

In addition, each year we win new multi-plant internationally spread OEM customers, giving us increasing growth opportunities.

Crucial as our growing revenue is, our profit growth record owes substantial acknowledgement to our ever improving operational and vendor management performance, which my colleagues explain in detail later into this report.

I must now also acknowledge my close colleague and CEO Jim Barker's retirement at the end of September 2015. I thank him for being the key architect of our recovery strategy back in early 2009 when, at that time, tough decisions and urgent actions were paramount.

The turnaround period, followed by the acquisitions of Power Steel & Electro-Plating Works ('PSEP') in Malaysia and Viterie Italia Centrale ('VIC') in Italy required the full involvement of our then CFO Mark Belton, who, as Jim stepped down, was by far the best candidate to take over as our CEO. Clare Foster (who joined us in January 2015) took over from Mark as CFO. Despite the perceived worries surrounding succession planning in any organisation, I must congratulate Mark and Clare, with the support of Geoff, Glenda and the wider senior team for achieving such a smooth handover during the past six months.

Finally, we welcome our wonderful German colleagues from Kuhlmann who joined the Group last October, and we congratulate them on the results they have achieved since then.

As always, my never ending appreciation and thanks go to all our managers and staff spread around our Group for their constant skill, effort and loyalty – without which we would just be a very ordinary company.

Yours gratefully

Malcolm Diamond MBE
13 June 2016

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Having in-house manufacturing coupled with a local presence in 16 countries on three continents is a winning combination.

TR Houston works closely with many Tier 1's in North America; they have the full support of our manufacturing teams in Power Steel & Electro-Plating Works ('PSEP') in Malaysia and Special Fasteners Engineering ('SFE') in Taiwan which has enabled them to win substantial new contracts. The most recent and largest involved a close co-operation between a Tier 1 seat manufacturer, our Houston team and PSEP engineers.

We have invested heavily in 6 die/6 blow forging machines. These have created further capacity to produce very complex parts for the automotive industry (see picture below). The latest we have commissioned is a state-of-the-art Japanese machine that is now fully operational. This is currently producing engine components and safety critical parts for braking systems. Initially, we produced the parts in plastic on the in-house 3D printer to get a clear visual which was close to fit-for-function, and provided these to our customers' engineers and purchasing teams. Several modifications to the designs were made, and our technical teams in North America and Malaysia worked together to further refine the final complex part.

This contract could have easily gone to an American manufacturer . . . so why did they choose TR  Commercially, of course, there could be a benefit to manufacturing in a lower cost region. We believe, however, that it was the good reputation that we had already built up in Europe with that Tier 1, a local passion in North America to support the customer and be responsive to their needs, and the technical support we have demonstrated with our team in PSEP. A winning combination!

PSEP machine
3d model