REG - Trifast PLC - Trading update

TrifastAnnouncement

26/04/2023 07:00

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RNS Number : 4517X  Trifast PLC  26 April 2023

 

Trifast plc

("Trifast" or "Group" or "Company")

 

Trading Update

 

London, Wednesday, 26 April 2023: Trifast (LSE: Main Market symbol: TRI)
provides the following trading update for the financial year ended 31 March
2023 ("FY23") ahead of its Annual results scheduled to be announced in
mid-July 2023.

 

Highlights

 ·      Q4 FY23 performance enabled delivery of short-term profit and
 cash objectives:

 o  Adjusted profit before tax marginally ahead of the February 2023 guidance;

 o  Inventory decrease in line with expectations; and

 o  Net debt (before IFRS16) reduced to £38m, within both facility headroom
 and covenant levels
 ·      Growth momentum sustained through the final quarter, contributing
 to record level of contract wins for the year (£25.6m)
 ·      UK operational review leading to organisational improvements
 ·      More resilient business entering FY24 and expect increasing
 benefits from commercial and cost initiatives

 

Trading performance

Revenue for the 12 months ended 31 March 2023 is expected to be c.£245m (FY22
£218.6m).  Organic growth, at constant currency, was c.7% with the
performance from our US operations being a particular highlight at in excess
of 25%.

 

As a result of this and pricing actions, the Group expects adjusted profit
before tax for the year marginally ahead of the adjusted PBT guidance of
£9.0m provided in February.

 

Reflecting its confidence in the prospects for the business, the Board intends
to propose an increased final dividend of 1.50p.

 

Update on immediate priorities

As part of a broader review, the February update confirmed three immediate
priorities to drive recovery in the Group's financial performance.

 

The Board updates on recent progress across these, as follows:

 1. Effective pricing - pass through of inflationary cost increases completed
 during January.  TR VIC returned to profit, with continued focus on improving
 gross margins across the Group
 2. Inventory reduction - stock levels reduced by more than £10m during Q4
 FY23, with year-end inventory of c.£97m (CER), flat year-on-year
 3. Development of a comprehensive margin improvement plan - operational review
 ongoing with initial focus on right-sizing Group functions and the UK region

 ·      Integration of UK and European leadership

 ·      Consolidation of UK footprint, National Distribution Centre (NDC)
 to be established, site identified

 ·      Cost savings expected to commence during Q4 FY24
 4. Annualised savings during FY25 now expected to be at least £5m, based on a
 restructuring cost of c.£5m (c.£3m cash)

 

Plan for FY24

It is clear that Trifast's business foundations remain strong, with
significant potential to be realised during the coming year by:

 Ø Establishing a clear customer value proposition
 Ø Better accessibility and utilisation of data
 Ø Fixing or exiting unprofitable customer transactions
 Ø Embedding a revised organisational structure that aligns to business needs
 Ø Managing a further reduction in inventory levels, whilst continuing to
 support successful mobilization of new contract wins

 

Prospects

Whilst FY23 has been disappointing, the new leadership team has been able to
take significant steps across a range of operational and financial initiatives
in a short space of time and the initial results from the priorities outlined
in February have been encouraging.  Further scrutiny of the business in the
intervening weeks underpins the Board's belief in its previously stated KSIs
(Key Strategic Indicators), including a return to double digit EBIT margins
(range 10-13%) in the medium-term.

 

We are only a few weeks into the new financial year and whilst the destocking
experienced from an Asian customer in the latter part of FY23 has abated, we
remain mindful that the short-term macroeconomic outlook remains challenging.
 However, we have entered the new year with a backdrop of new contract wins
and a healthy pipeline.  These, together with the benefits from our
operational improvement programmes, support the Board's continued expectation
in delivering a marked improvement in performance in FY24.

 

The Company looks forward to updating shareholders further at the time of the
Annual results announcement.

 

 

 

 Further enquiries please contact:
 Trifast plc
 Jonathan Shearman, Non-Executive Chair
 Scott Mac Meekin, Interim CEO
 Darren Hayes-Powell, CFO
 Christopher Morgan, Company Secretary

 Tel: +44 (0) 1825 747630
 Email: corporate.enquiries@trifast.com
 (mailto:corporate.enquiries@trifast.com)
 Shareholders: Companysecretariat@trifast.com
 (mailto:Companysecretariat@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

 or Email:fiona@tooleystreet.com (mailto:fiona@tooleystreet.com)

 

 Editors' notes
 About Trifast plc

 Trifast (TR) is a leading international specialist in the design, engineering,
 manufacture, and distribution of high-quality industrial fastenings and
 Category 'C' components principally to major global assembly industries.

 The Group supply to customers in c.75 countries across a wide range of
 industries, including Light vehicle, Heavy vehicle, Health & Home, Energy,
 Tech, and Infrastructure (ET&I), General industrial and Distributors.  As
 a full-service provider to multinational OEMs and Tier 1 companies spanning
 several sectors, TR delivers comprehensive support to its customers from
 concept design through to technical engineering consultancy, manufacturing,
 supply management and global logistics.   We operate through 34 business
 locations within the UK, Asia, Europe, and the USA including seven
 high-volume, high-quality, and cost-effective manufacturing sites and three
 technical & innovation centres across the world.

 For more information, visit:

 TRIFAST PLC TRI Stock | London Stock Exchange
 (https://www.londonstockexchange.com/stock/TRI/trifast-plc/company-page)

 Our website: www.trifast.com (http://www.trifast.com)

 LinkedIn: www.linkedin.com/company/tr-fastenings
 (http://www.linkedin.com/company/tr-fastenings)

 Twitter: www.twitter.com/trfastenings (http://www.twitter.com/trfastenings)

 Facebook: www.facebook.com/trfastenings (http://www.facebook.com/trfastenings)

 Note

 Trifast, TR and TR Fastenings are registered trademarks of the Company.

 LEI number: 213800WFIVE6RUK3CR22

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.  Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

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