As always, I enthusiastically acknowledge and thank our shareholders for their support. As indeed I also do to our staff, customers, suppliers and all our stakeholders for playing your part in making our growth organisation the success it is
Malcolm Diamond MBE
I am delighted to confirm another year of outstanding performance which firmly consolidates our transition from what was once considered a recovery situation to one of delivering consistent improvement and growth. This presents shareholders with the double attraction of good potential capital growth linked to a progressive dividend policy that is now delivering a tangible positive track record.
The core dynamics of our Group are founded on:
- a proven business strategy that allows for a long term roll out on a truly global basis
- highly motivated, loyal and skilled business teams that drive our objectives in the 16 countries in which we operate
- relevant and challenging KPI's that continually 'raise the bar'
Our foundation business model focuses on providing multinational OEMs with a high quality 'one stop shop' component supply resource whether their site assembly operations are in Europe, Asia or the USA.
Over the past five years, it has become clearly evident that these large corporations are increasingly consolidating their supplier base to a select number of providers who can offer the capacity and global footprint sufficient to meet their service and quality needs. This trend is being further accelerated by the cost advantages of extending standardisation of their products wherever they are made. Automotive car platforms are a prime example, where different models assembled in different countries utilise a common platform. One example of this is that we achieved a component supply approval in the USA, which was then specified for a different model from the manufacturer in Europe and then repeated into Asia. This multiplier effect is beginning to be a tangible contributor to the build-up of our future pipeline.
'Preferred supplier' status has now been awarded to TR by over 40 multinational OEMs which currently account for more than 60% of Group revenue. Yet our sales penetration into the total number of potential customer sites is a quarter of what is available to us, thus representing clearly achievable ongoing growth opportunities.
There is an obvious reason for these key multinational customers appointing Trifast as a 'preferred supplier' and that is our ability to provide high quality/zero-defect, low cost manufacturing and logistics resource across over 60 countries. Furthermore this is coupled with on-site assembly application and design expertise that our network of specialist engineers provide, especially in relation to new product development.
Our 'selective acquisition' strategy was rewarded on 30 May 2014 when we added VIC to our Group. VIC, based in Italy, is the European market leader in the design and manufacture of specialist fastener assemblies for the domestic appliances sector. As a direct result of the acquisition, this market sector has grown to become a major contributor to our business representing 19% of Group revenue in 2015 (2014: 8%).
I must also take this opportunity to acknowledge the consistent continuous improvement momentum being sustained by our operational colleagues that is so essential to underpinning our margin improvement for yet another year. This 'work smarter not harder' culture touches every aspect of our business — sourcing, warehousing, logistics, IT systems, finance, manufacturing, quality control and staff development and training. All of this is enshrined in highly focused sales and marketing objectives, giving the Group its unique dynamics, motivation and optimism.
As shareholders you are aware of the importance the Board places on progression and succession at the top level of the Group as well as through the teams. Over the past two years the Board has been carefully examining and refining its future plans and requirements so as to ensure we continue to drive performance and that this is both aligned to the interests of all stakeholders and the further development of our commercial business.
The outcome of this is as follows:
Firstly, I would like to thank Neil Chapman for his six years of wise counsel and support as Senior Independent Non-Executive Director and Chairman of the Audit and Nominations Committees as he retires on 16 June 2015. We welcome Neil Warner as his successor. Neil was CFO of Chloride PLC for many years, as well as Senior Independent Non-Executive Director and Audit Committee Chairman of Dechra Pharmaceuticals PLC, before he retired after 10 years' service in 2013. His current directorships are Non-Executive Chairman of Enteq Upstream plc and Independent Non-Executive Director and Audit Committee Chairman of Vectura Group plc, where he is also a member of the Remuneration and Nominations Committees.
Secondly, Jim Barker, Chief Executive Officer, will step down as CEO on 30 September 2015, remaining in a consultancy role with TR until 30 June 2016. With effect from 1 October 2015, Mark Belton, the current Group Finance Director, will take up the role of CEO and Clare Foster, who joined as Group Financial Controller in the year, will be appointed to the Board as Chief Financial Officer.
I would like to wish Jim and his family a long and enjoyable impending retirement and congratulate Mark and Clare on their respective promotions.
As always, I enthusiastically acknowledge and thank our shareholders for their support. As indeed I also do to our staff, customers, suppliers and all our stakeholders for playing your part in making our growth organisation the success it is.
Finally, I hope that you enjoy reading this Annual Report and Accounts. If you have any questions please feel free to contact us. We look forward to seeing many of you at our AGM in September, which will also give you the opportunity to meet a number of my colleagues from around the business and visit our operations in Uckfield.
Malcolm Diamond MBE
15 June 2015