TR Fastenings Nuts and Bolts

Trifast plc (‘Trifast’, TR, or the ‘Group’) Trading Update and Notice of Annual Results

“Despite the more challenging macro-economic environment, following another six months of solid growth and record profit, the Board remains optimistic for the future.”

London, Thursday, 18 April 2019: Trifast plc (Main market LSE Symbol: TRI) issues the following unaudited Trading Update covering the Group’s financial year ended 31 March 2019 ahead of the announcement of its preliminary financial results.


Highlights

  • Revenue growth recorded across all regions
  • A solid finish to the year, leaves Group underlying profit slightly ahead of management expectations
  • PTS acquired in 2018, has integrated well with strong year-on-year growth
  • Recent contract wins and a solid pipeline across the business bodes well for the future
  • Globally, the automotive sector continues to present Trifast with significant opportunities for organic growth as we continue to gain market share outside of the UK
  • Project Atlas, our Group-wide investment programme to build the Trifast of tomorrow continues to progress well
  • TR receives another industry award recognising innovation & productivity
  • New £80m Group banking facilities provide significant additional headroom to support our organic and M&A investment driven growth strategy

Group Trading

Europe has been a key driver for organic growth; with double-digit revenue increases across five of our seven entities including Holland, Hungary and Germany. As previously reported, reduced domestic appliance volumes, as the result of more normalised trading conditions in our Italian operations, have offset some of these increases. However, we are also very proud to report that ahead of budget, our newest greenfield site TR Espana, successfully secured its first £1m of annual sales in the year.
 
In Asia, year-on-year growth has been solid across the region with strong domestic appliance sector increases in Singapore being offset by a fall in demand in China. As previously reported, this decrease is in part the result of a local factory closure of one of our Multinational OEM customers, as well as the knock-on effect of additional US tariffs to a small number of our Multinational customers operating in the region. Looking ahead, the Asia region remains a strong growth opportunity and this will be further supplemented by the additional investments we are making into our Taiwanese manufacturing to build capacity and support ongoing revenue growth at this key location.
 
As at the half-year, our smallest region in the USA has continued to perform very strongly with year-on-year growth rates of over 30%. In line with our core strategy, this has largely been driven out of market share gains at our existing Multinational Tier 1 and OEM customers in both the automotive and electronics sectors.
 
Overall the UK is our region of strongest growth, reflecting the successful acquisition of Precision Technology Supplies (PTS) in April 2018. PTS has already integrated well, achieving double-digit growth in their first full year with us. As previously reported, organically we have seen a slight reduction in overall trading levels, due to the much-publicised downturn in UK automotive manufacturing volumes in FY2019. These are largely being driven out of ‘dieselgate’ issues, as production builds have shifted to reflect global reductions in demand for this engine type.

Globally, the automotive sector continues to present Trifast with significant opportunities for organic growth through a mix of cross-selling, new technologies as a result of the on-going evolution to electric vehicles and the collaboration of both local and international TR capabilities. Outside of our more established presence in the UK automotive market, we continue to successfully expand our market share largely via new platform build wins and a further penetration into our Multinational Tier 1 automotive customer base. Other key sectors continue to perform in line with our expectations and also remain areas of opportunity for the Group.

Underlying Profit Before Tax

On both an AER and CER basis, the Board is pleased to report an encouraging finish to the financial year ended 31 March 2019 with Group underlying profit before tax slightly ahead of management expectations. All our Regions (excluding Europe where investment levels have been highest) have delivered growth in profits with each location contributing positively to the Group's trading results.

New Banking Facilities

We are very pleased to announce that on the 16 April 2019 the Group signed new four-year £80m Revolving Credit Facilities with a consortium of three banks. With these new facilities successfully in place, the business now has approximately £40m of headroom for our organic and M&A investment strategies. Full details will be provided in the FY19 Annual Report and Accounts.

Industry Award

We pride ourselves on our skills and talent innovation, so last month we were delighted to receive within our industry, the ‘Route to Fastener Innovation 2019’ award in recognition of our self-extruding EPW fastener. The development of the EPW screw is a culmination of the hard work and talent of our design team, as well as the significant investment we have made within our Italian operation. Designed, manufactured and patented at TR VIC in Italy, we are proud that we have delivered a product which allows our customers to make significant improvements to their manufacturing processes, reducing production times and increasing cost-effectiveness.

Summary and Outlook

There can be no doubt that the macroeconomic environment has become more challenging over recent years. With the uncertainty of Brexit potentially weighing on the UK economy, the continuing trade tensions between the US and China and the heightened risk of a Eurozone recession.
 
Despite this backdrop, our business is in good shape; the current trading levels, our investments and our existing pipeline still make this an exciting time for the Group. As ever, we continue to search out acquisition opportunities to add further value to our customer offering and global footprint, a task that is now firmly supported by the new banking facilities.
 

“Trifast is a global business serving a broad and balanced range of sectors and geographies and generating c.70% of revenues and profits outside of the UK. We are a full-service provider to our Multinational customers, delivering reliable product engineering, quality and supply, via flexible global logistics solutions. It is these core skills that continue to allow us to increase market share across a wide customer base and put us in a good position to keep moving forward and delivering on our future aspirations even in a less certain world."


Notice of Annual Results

The Company will release its preliminary results for the year ended 31 March 2019, on Tuesday, 11 June 2019.

Enquiries


Trifast plc

Malcolm Diamond MBE, Non-Executive Chairman
Mark Belton, Chief Executive Officer
Clare Foster, Chief Financial Officer
Office: +44 (0) 1825 747630
Email: corporate.enquiries@trifast.com

Peel Hunt LLP

Stockbroker & financial adviser
Mike Bell
Tel: +44 (0) 20 7418 8900

TooleyStreet Communications

IR & media relations
Fiona Tooley
Tel : +44 (0)7785 703523
Email: fiona@tooleystreet.com
 
Published 18.04.19

For further information on Trifast plc please visit our investors website: www.trifast.com