Trifast (LSE:TRI) — Annual General Meeting

0:01 Good afternoon, ladies and gentlemen, and welcome to the TRIFAST PLC Annual General Meeting. Throughout this recorded meeting, attendees online will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting today. However, the company review all questions submitted online and provide responses where it's appropriate to do so. I'd now like to hand over to company secretary, Christopher Morgan. Good afternoon, sir. Thank you very much, Mark, and good afternoon, everyone. Thank you very much for coming along to our twenty twenty two annual general meeting. Let me just briefly introduce myself. I'm Christopher Morgan. I'm the company secretary, and I joined in April of this year.

0:47 So before we go to the formal business of the AGM, if I can just remind everyone some housekeeping. I think some of you have already picked up on it already. But hold by phone, please, to silence, if you may. No planned fire drills within the building. So if there is an alarm sounds, there's a fire alarm, please make your way through the door and behind you and turn left and throw the exit to the external door. That's super, and the meeting place will be in the car park outside at the far side. So we have a full board in attendance today. And if I can please introduce them for you, our chair, Jonathan Sherman, at the end, our chief executive officer, Mark Belton, and our three independent nonexecutive directors, Clive Watson, Scott McMeekin, and Claire Bamforth.

1:46 If I can now hand over to Mark, our chief executive, for a short update presentation from Mark, ahead of the formal business of the Annual General Meeting. Thank you. Thank you, Mark. Thanks, Christopher, and good afternoon everybody. Before, as Christopher said, we get into the formal proceedings, I would just like to run through a slide from our recent year end presentation. Firstly, if we look at our purpose, to provide trusted reliability to our customers, suppliers, and our people. And this really has been at the core of what we've been doing since Mike Tims and Mike Roberts founded the business, which, can you believe it, is gonna be fifty years next year.

2:35 And never ever has that trusted reliability been as so important as it is today. Throughout all of the global supply chain chaos, the conflicts, the material shortages, and the inflationary pressures, we have not let customers down, which has enabled us through that period to take market share. But none of this would be at all possible without the dedication and loyalty of all the teams around the world who constantly amaze me, coping with all of it on a daily basis. It's been incredible. And secondly, if we look at the investment cases now, I love this strapline.

3:22 Our fasteners enable the innovation today to build a better tomorrow tomorrow. This really encapsulates the disruptive technologies within our market, enabling our engineers to work with customers, solving their problems, and in turn, growing our business. This nicely leads on to our ambitious growth strategy, which is to become a much bigger and more profitable company than we are today by increasing capacity into the business, taking market share and increasing margins. And this can be achieved by the four strategic pillars as you can see on the right.

4:02 Engineering led innovation, which I've just spoken about, investing in organic growth, whether that be by CapEx or stock or resource to support the growth that we are seeing, project Atlas and the benefits and the margin enhancements that that will bring, and obviously, selected

4:21 strategic acquisitions. To support this, we have clear capital allocation policies ensuring that we provide fair and balanced approach between risk, growth, and returns for all. And above all, we're focusing on the group's long term sustainability, whether that is through environmental commitments, our social investments, or the strengthening within our corporate governance. What does all of this mean? TRI will hopefully be around in another fifty years' time. With that, thank you very much. Thank you very much, Mark. And in order to start formal process at annual general meeting, if I can pass over to our chair, Jonathan Chairman. Thank you.

5:13 Thank you, Christopher. Thank you, Mark, and let me add my welcome. This is this year's AGM, so I can see people in person, for the first time in a few. I have pleasure in declaring the meeting open. Unless anyone objects, I propose that the notice convening the meeting be taken as read. This year, we're delighted to return to holding a physical meeting. In addition, we are live streaming the AGM via the investor meat company platform in order that the AGM is accessible to as many shareholders as possible. Now to the formal business of the AGM. I will read each resolution for shareholders in the room to vote. In the absence of polling cards, we will be doing votes by show of hands. I'm gonna rattle through as quickly as I dare, which will be a very quick for and against. If you can wick it up and down at the right point, that would help me massively.

6:05 That's what happens when there's no script and I add to add to it. Unless anybody has any specific questions about the resolutions themselves, I propose that we have a time for questions at the end. So on to the resolutions. Resolution one is to consider the company's annual report, financial statements, and the reports of the directors and auditors for the year ended 03/31/2022. If I can have votes four, please, And then votes against. Resolution two, to approve the director's remuneration report as contained in the annual report. If I can have votes for, please. And anything against. Resolution three, to approve a final dividend of 1.4 p. If I can have votes for, please.

6:55 Votes against. For slide four, I will hand over to Clive. Resolution four is to reelect Jonathan Sherman as a director. Those four? Those against? Thank you. Thank you. I will carry on with resolutions five to nine, Lisa, to reelect the directors. Resolution five is to reelect Mark Belton as director. Votes four, please. Any votes against? Resolution seven is to reelect Clive Watson. Votes four, please. Any votes against? Resolution eight, would have Scott Mamiekin continue with us for a little while longer. Votes for, please. Votes against. And resolution nine is to reelect Claire Bonforth as a director. Votes for, please.

7:44 Votes against. Great. Resolution 10, to reappoint BDO as auditor of the company. Votes for, please. Anybody to vote against. Resolution 11, to authorize the directors to fit fix the remuneration of the auditor. Votes for, please. Votes against.

8:03 Resolution 12, to allow directors authority to allot shares. Votes for, please. Votes against. Final few, moving to the special resolutions. Resolution 13 allows the directors to authority for this application of preemption rights. Votes for, please. Any votes against? Resolution 14 allows the directors authority for this application of preemption rights for an acquisition or capital investment. Votes for, please. Votes against. Resolution 15, to authorize the company to make market purchases of its own shares. Votes for, please. Votes against. And finally, resolution 16, that the general meeting other than an annual general meeting may be called on not less than fourteen clear days notice.

8:51 Votes four, please. Votes again.

8:56 For your information, the result of the proxy votes received in advance of today's meetings are shown here on the slide on the screen. The final results of the meeting will be available on our website later today. That concludes formal business of our annual general meeting, and I thank you. Thank you very much, Jonathan. So having concluded the part of the annual general meeting, it's really now an opportunity for quest q and a with the board, and the board are very happy to answer questions. We had no questions submitted in advance of the meeting. We do have some questions online as well. But if if we can take questions from the room first if there are any questions.

9:45 You. Yeah. Like all UK based industrials, we've been hammered on the price. Has the board considered a defense policy in case of an approach for acquisition? Yeah. One of the standing policies that we have is a defense policy, which has a series of of metrics and responses to things. We have a couple of people who would help us with the rule three defense, and both of those guys give us regular briefings, including what would be fair value on a a number of different metrics. Mhmm. We last saw those numbers six weeks ago on our request that somebody does those off for us. So yeah.

10:32 Occupational hazard of being listed, you're for sale every day. Mhmm. And, yeah, you know, it's part of our duties to be able to respond to that if it came up. Styles are out of fashion. Yeah. Yes. Thanks, John.

10:48 Yes, please. When I read this, I actually wrote Mr Chairman, which shows you're an old fart. I am. I suppose I should say chair. Want to Or more address it to Mark. He's in most questions. I'm also well aware that I'm old and things change in the business world. Before I ask a question, may I perhaps be permitted in observation from, should we say, a shareholder touchline? For those who don't know, I'm David Tree. I've been a shareholder for decades. When I'm considering an investment in a company I don't know, I always consult its annual report to learn about its activities, its products, its management, its finances.

11:34 I've read every TRIFAST report for decades. Sadly, I've now fallen out of love with doing so. Our company's annual report was once upon a time interesting and informative. It had lots of enlightening reports from and pictures of our global management and personnel to whom indeed marked patriot Eternia. It had references to what we do and where we do it with pictures of our amazingly diverse range of products. This document has none of these. There is an invitation on page one of the annual report from our chair. It is my pleasure to invite you to read more about the ongoing journey of delivering the potential that lies within TRIFAST.

12:22 There it is, inside cover. I challenge anyone to get an understanding of our group and its activities from this document. We have legal responsibilities. I know there's 24 pages on sustainability, 21 pages on board remuneration, Just eight pages of financial review and just four pages of CEO's review. It's virtually impossible to determine what we do where. The map on page 17 is the only real guide as to which countries we operate in, but nowhere is there any indication of what we make or distribute or how well we're doing it. We're not the NHS or the BBC, thank god, But when I read and I stress this is no criticism of those individuals that we now have a head of governance, a head of risk, a global director of quality,

13:22 I am beginning to wonder about our direction. In this whole document, there are just two minuscule pictures of products that this company makes and distributes. Two, and they're minuscule. I promise you. And the front page is one. Apart from various members of the board, there are no pictures at all of any of our personnel or their activities. This company has been built around nurturing its great people. But now I fear what we get is a kilogram. Yes. Over two pounds of wasted opportunity.

14:04 I stress I do realize we have legal responsibilities to publish some of this crass corporate wokeism. But can we please humanize it and help people understand exactly what we do and why we're good at it? A while ago, and there was something very similar in the thing that Bart put up. I mean, there was a phrase that occurred in one of our presentations holding the world together or words something like that. Mhmm. And that is something that gave people the impression of what we do. You actually struggle to find the word fast names in this thing. You really struggle. People will not people who come to this company from afresh will think, what the hell does this company do?

14:57 I actually pitch it in poor general. It has to write for this. Perhaps I exaggerate to make my point, but I I do hope some of my observation hits home. Thank you. I I think there is a lot of truth in that, David. It really is. The corporate governance is getting increasingly more stringent. Absolutely.

15:22 But yeah. And and unfortunately, you have to follow many things such as the sustainability, such as corporate governance. But I think I'd like to have a copy of your script, if I may, at the end of it. Because one of the things that we you've met Stuart, for example, our internal comms, we are looking at I think we're all getting frustrated with the amount of pages we have to do to be a PLC

15:55 company. And I think it's you know, we do need to start strip thinning things back. I'm sorry that you felt that there wasn't enough on people or products in there. I think people can sometimes just get too focused on doing what need is what is required, and we'll take on board what you said. So I'd be very pleased to have your script and your observations. Thanks a lot. No. No. No. Absolutely. Because, you know, we want people to know that we are a people company still. Yeah. Yeah. And we do make fasteners, by the way. Okay. Well, he says something. Sorry. If I could just add up, I think this does the job. I think it's absolutely fantastic. It is, of course, coupled with a very up to date smashing website, which is very easy to get on, and then you learn everything about the products.

16:47 Thank you, mate. Just thought I'd say that. Yeah. Because the two go together. Thank you. Sorry. This is just a comment, not a question. I totally agree with the onslaught of corporate governance. It's now a big industry on its own. I will be retiring out of Discovery at the end of October, my last PLC role. I intend to try and start some sort of crusade against this man. That Discovery, well known institutional investor, said they would not be voting for my reinstatement because our gender balance was only 27% on the board, but it should be 33. And I'm thinking, I can't say the word. But, anyway, basically, what I'm saying is at the end the day.

17:38 I actually wondering whether this was in our defense mechanism to throw. Any any potential thought? Can I ask if there's any other questions from the floor? Yes, please. A practical one. In the light of all the pressure we have on utilities, what steps are you taking, you know, in the No. Capturing side and the distribution side? No. Absolutely.

18:03 We had put in a few solar powers and solar panels into obviously, we had them in Italy. We've recently put them into PCEP, you know, a Malaysian acquisition.

18:19 So that is some of the practical aspects. We also sign up to Energy ESOS, which gives us practical saving initiatives as well, which we're rolling out across all of the locations to which can be tailor made individually to them. I think one of the things also

18:39 is very much around we are passing those prices on as well. And that's that's whether that's through a price increase or through surcharges, and their conversations we're having with customers as we speak. Some, obviously, can be passed on immediately. Others need negotiations with the the customers, but that is certainly something that we're doing. Thank you. Any other questions? Yes. Yes. I two questions, which I can happily roll into one. I'm very conscious that we can't operate in every part of the world. One of the biggest and most rapidly growing markets in the world is India. I know there are three dots on the map in India, but it'd be a hard push to find out anything about what we're doing there. I wonder if you could elaborate on our activities and plans for India.

19:30 And the second question is similar in a similar vein. As China hits ever growing problems, Vietnam is grabbing endless opportunities to pick up business from companies moving out of China. Perhaps you could enlighten us as to how, if at all, we trade in Vietnam. Yep. So India is a big market for us. It is a big market. We trade predominantly to Singapore produced parts, and it's then pushed into India. There's two aspects to India. Obviously, one is customers, and we are seeing an increase in business being transferred from The UK into India as well as from some variation sites into India. And as you know, we are very good at transferring business around the world. That is what makes us flexible and agile. We are able to go if the customer wants to move to India or out to Mongolia or wherever, we can do that and help them follow. Perhaps not out to Mongolia just yet, but we do follow, and that is something we're in the process of doing at the moment. So customers are moving more so into India, and we are following them. What I'd also add, there's two two prongs to this. You've got your customers, you've also got your suppliers.

20:50 We are also expanding our supply base in India partly because of some of the reliance on China and Taiwan. So we are moving supply base to India, which is closer to home. And this is part of the onshoring and nearshoring and cuts out some of the freight costs and the lead times quicker as well. So it's not on everything. I mean, Taiwan is still a major hub for the fastening world, but it is something that we are looking at to support the future, basically. And with China China, our our sales is less than 5%, and it's not a huge market for us regarding supply.

21:35 Taiwan is is more where we we get the fasteners from. Vietnam? Oh, Vietnam. That's right. Just coming back on that. We, again, have supply base there. Absolutely. That's been particularly in one of our subsidiaries, Lancaster Fasteners in Morecambe. And, again, that is where we're also looking at further suppliers in Vietnam because it is a an up and coming market. Absolutely. Yeah. Mark, I can continue. There's there's two questions that have come online of a similar theme that I think you could probably answer as well. First one is how are things progressing with the expansion into the North American market? Yeah. And aligned with that, what are our thoughts in the current market of making further acquisitions?

22:26 And I wondered if you could perhaps pick up these two questions. So firstly, in America, organically, we are seeing strong demand. It's the largest fastener market in the world. And as you guys know, our core strategy is working with global fasteners sorry, global customers and being able to get into sites and then being able to get into more of their sites around the world. The US is massive for us and certainly from if we look at our Houston operation, there are plenty of global customers there that are transferring into that region, particularly in the automotive and particularly in the electric vehicle sector as well. We are supporting through tier ones the likes of Tesla, and that is going from strength to strength.

23:25 And and, you know, it's it's also, we're looking at the battery technology, and we're working with several of the large battery companies that are going into the EV sector as well. And, that's a further prompt to us driving the business forward there. If you're looking at, TR Falcon now, again, that has gone from strength to strength. That is everything we thought it would be and continues to be. And again, so we are being able to put our global customers into TRIFAST and it's a great opportunity for us to be able to get into that Carolina space. Likewise, they have customers there that we can take on board. There's a really good example where when we were negotiating on TRIFAST one of their largest customers came on. And we had to do it for due diligence purposes because you don't wanna buy a company and one of their largest customers walks away tomorrow.

24:27 So we sat down and I was speaking to the procurement director of this company, and and he was saying, well, we wanted we wanted Falcon to be a global global supplier to us, basically, around the world. And Giovanni, BMD, was looking at me with a smirk, and because he had said he knew in about two or three weeks' time, excuse me, hopefully, this acquisition would have gone through. And now we have the ability to work with that customer to be able to not only supply in America, but also elsewhere in the world where they want us. So that's just an example of what we can do in America. From an acquisition point of view, we have advisers out there helping us find selective acquisitions.

25:14 As I said, it's the largest fastener market in the world. And, yeah, the opportunities are there for us to to continue along that that path. Absolutely. Thank you. Well, thank you very much. I think there's no more formal further questions online, Jonathan. So if I could pass back to you. Can indeed, Christopher. Thank you. So thank you to everybody for joining us today. That's the end of the semi formal business. We hope to see you again next year. And please don't feel you need to rush away. There's food and drink for as many as you would like to stay and have a chat. That's great, Jonathan. And to the board of TRIFAST, thank you very much indeed for updating attendees online today. Could I please ask attendees online not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the board can better understand your views and expectations.

26:06 This will only take a few moments to complete, but I'm sure will be greatly appreciated by the company. On behalf of the board of TRIFAST PLC, we'd like to thank you for attending today's annual general meeting, and I wish you all a very pleasant afternoon.