Trifast plc (TRI) Earnings Call Transcript & Summary

Good afternoon, everybody. Before we start the formal business, there are no planned fire drills today. So should the fire alarm sound, please make your way down the stairs and out of the main doors. Meeting place is to the left of the doors in the car park. Welcome to this year's AGM. I'm Jonathan Shearman, Chair of Trifast. With me today from left to right are Claire Balmforth, Clive Watson, Mark Belton, Clare Foster and Scott Mac Meekin. I am pledged with declaring the meeting open. And unless anyone objects, I propose that the notice convening the meeting be taken as read. This year, we're holding our AGM as a hybrid meeting. This ensures the AGM is accessible to as many shareholders as possible. If any person attending the meeting online is having difficulties with using the platform, there is a user guide that you can access through the platform on the Information tab that should address any questions you might have. All agenda items are fully explained in the letter, which accompany the notice of meeting. The notice was published on the company's website and was also sent or made available to shareholders in accordance with their instructions. I, therefore, propose to take it as read. The resolutions are listed in the Form of Proxy, but I will summarize them during the meeting. We will be conducting the voting by way of a poll, and this is now open. I will take a few moments to explain today's voting procedure. If you're attending on the virtual platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen along with the for, against and withhold voting options. Select one of these options to cast your vote. If you change your mind, simply select another option. You can change your vote as many times as you wish until the close of the call. Your vote will have been submitted when the voting option icon changes color having selected it, and the vote received message appears. There is no final submit button as the voting is live. You can vote at any time during the proceedings until I declare the voting closed. I will close the voting after all resolutions have been considered. I'll give you a clear prompt later in the meeting to warn you of the close in voting. If you're attending in person, the company's registrar, Computershare Investor Services PLC have been appointed to act as scrutineer for the poll. The poll will close once all the resolutions have been proposed and considered. A poll card was enclosed with the Form of Proxy sent together with the notice to all shareholders, proxies and corporate representatives who are entitled to receive it. Poll boxes are available for completed and signed poll cards. You don't need to complete a poll card if you've already submitted your vote by proxy, unless you want to change how you voted. If you have lost your poll card, please raise your hand and a representative of Computershare will provide you with a replacement. Please note that only shareholders, proxy holders or shareholder representatives may vote. After the voting is closed, we will also take the opportunity to answer questions that you may have about the annual report in general or any of the resolutions in particular. You can start submitting questions now using the online meeting platform. [Operator Instructions] Those of you here in person will also have the ability to ask questions. If you are here in person, before you ask a question, please introduce yourself and say if you represent an organization or are acting as a proxy. Before we move to the resolutions, I'm going to hand over to Mark, who's going to run us through and update us on our strategic objectives.

Thank you, Jonathan. And I hope you can all see the screen attached. Obviously I'll keep this at a very high level. I think, as you know, we have been investing over the years with the ambition to be a much bigger, more profitable company. Those 4 boxes there really represent our strategic objectives. We can look at, firstly, investing in organic growth. We have been expanding our distribution and manufacturing capacity over the years, and are continuing to do so. For example, later in this year, with the growth that certainly our Hungarian operation have seen, we will be moving into larger premises in that region. So again, it's about finding the right time and getting the best returns on the investments that we can be making. You will have also known that we have made specific, strategic hires during the year, particularly within our own industry. And all of those will absolutely hit the ground running. Then obviously, as all of us know, we have Atlas. This is actually going really well, despite the travel restrictions that we are facing. And as you've been pleased to know if you've read the quarterly account, we are still able to achieve a 25% return on that investment this full year. Moving on to acquisitions. This obviously is a key driver for us as well. We recruited an M&A adviser in autumn last year. And since then, that momentum has just been building. The key focus, and it's no secret for us is, to have a balanced, more regional spread, and we've been trying to get more into North America. And because a lot of our global customers are situated there, and -- as a result of that, I would like to think, certainly by the end of this financial year, we would like to be able to say that we've acquired something. I think moving on to the innovation box. This is absolutely key for winning and adding value to our new and our existing customers. Particularly as you know, we've got a new, disruptive technology now, which is out there and certainly a greater focus on the environment and looking at things, such as electric vehicles is a good example that we're working on. And I would like to think that there's a lot of positivity coming out of that engineering, which is looking good for the future. Finally, if you're looking at the sustainability or ESG, this is embedded within the business and underpins with the previous strategic pillars. I actually believe we punched above our weight on sustainability and ESG, and that's been recognized in, certainly, some of the research papers that have been published last year almost, where I think if you're looking at MSCI, we scored AA. EcoVadis, we've got silver rating. That said, there is still a lot to do in that area. And we have recruited an ESG consultant to help and support us on that. And we do hope to have our first stand-alone sustainability report ready by the -- certainly by the end of November this year. For those who can't wait until then, there is a lot in the annual reports, 200-something pages, I think. A lot of information in there regarding sustainability and ESG, which we will continue to review. All of this is really to enhance the growth and enhance margins. We all know at this moment of the supply chain challenges and the inflation pressures that is not just unique to us, but pretty much global industrial environment. We are managing that. But what is really exciting is that medium-term prospect. It's the things that we are putting in place really make Trifast an exciting prospect in the medium term. So thank you.

Thank you, Mark. The following statement was released via the London Stock Exchange this morning. Copies are available in the room and also on the website. We write, "There can be no doubt that the year to 31st of March 2021 was a challenging one. I am proud of what we achieved during these 12 months and remain grateful to our workforce and their families for showing much resolve. In trading terms, we saw a resilient performance last year, with revenues down only 6% year-on-year and very strong cash conversion, which, alongside the equity raise, leaves us with a balance sheet that facilitates organic growth, investment for the future and acquisitions. Turning to the current financial year, the global macroeconomic environment, whilst uncertain has improved at least. It is pleasing to report that quarter one revenues rebounded strongly, being in excess of 50% higher year-on-year and showing growth on a comparative period in FY 2020. This is emanating from both existing customers, new contract wins and further supported by a very healthy pipeline. The rollout of Project Atlas continues apace, with Spain and Holland both have recently gone live. We are actively targeting acquisition opportunities in line with our long-term growth strategy. In the short term, there continue to be macro-level challenges to manage, most notably, regarding freight costs as well as some constraints and inflation more broadly in the supply chain. We're working closely with customers and suppliers to mitigate the ongoing impact of these and to ensure that higher prices for raw materials and transport can be appropriately passed on. Given the strong momentum as well as our effective management of supply chain headwinds, the Board is confident in the group's outlook with its full year FY 2022 expectations unchanged. Considering the medium term, as we said in the annual report, the foundations are largely in place and Trifast stands on the cusp of an extended period of strong growth." On to the formal business of the AGM. I will read the resolutions while shareholders are voting. Unless there are any questions that need answering now in order to vote, I will begin. I'm told I need to now pause for about 40 seconds. So while it's quiet, you don't have a tech glitch. We just need to allow the broadcast to catch up and anybody online to type a question. There don't appear to be any questions. So moving on to the resolutions. Resolution 1, to consider the company's annual report and financial statements and the report to the directors and auditors for the year ended 31 March 2021. Resolution 2 is to receive and approve the Directors' Remuneration Report as contained in the annual report. Resolution 3, to approve a final dividend of 1.6p. Resolutions to elect -- to reelect the directors, I'll hand over to Mark for resolution 4.

So resolution 4 is to reelect Jonathan Shearman as director.

Thanks, Mark. The following 5 resolutions are to reelect the directors. Resolution 5 is to reelect Mark Belton as a director; resolution 6, Clare Foster; resolution 7, Clive Watson; resolution 8, Scott Mac Meekin; and resolution 9, Claire Balmforth. Resolution 10 is to reappoint BDO as auditor of the company; and resolution 11 alongside that to authorize the directors to fix the remuneration of the auditor. Resolution 12 allows the directors -- gives -- sorry, allows directors authority to allot shares. Moving to the special resolutions. Resolution 13 is to allow the directors authority for disapplication of preemption rights. Resolution 14 is to allow the directors authority for disapplication of preemption rights for an acquisition or capital investment. Resolution 15 is to authorize the company to make market purchases of its own shares. We're now moving to the final 2 resolutions, and after that, the voting will close. So resolution 16, that the general meeting other than an Annual General Meeting, may be called on not less than 14 clear days' notice. And finally, and further ordinary resolution, resolution 17 is to adopt the amended employee share plan. That concludes the formal business of our meeting. Ladies and gentlemen, the poll is now closed. The poll results will be published on the company's website and on the RNS service as soon as reasonably practical. I'm going to move on to a time for questions and answers. We would be happy to answer questions. I'm going to hand over to Mark and Clare for this section.

Give it a few more moments. [ George ] do you have some questions, sir?

No, I haven't got any questions.

That's absolutely fine.

First time I've ever been to an AGM, Mark. Here's one.

You are the brave one and you've been apprised.

First one and last one.

And certainly, [ very vetted ] at your headquarters with one shareholder.

It's just the unknown.

I think we can [ move on ].

Okay. So if there are no questions in the room, on the phone and via the platform. So thank you for joining us today. And who knows, maybe next year, we can see you in person. Thank you very much.