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 |
| Shareholders: 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 |
| 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 Our website: www.trifast.com LinkedIn: www.linkedin.com/company/tr-fastenings Twitter: www.twitter.com/trfastenings Facebook: 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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