TIDMTRI
RNS Number : 9356B
Trifast PLC
26 September 2018
Wednesday, 26 September 2018
Trifast plc
(Trifast, Group or Company)
Leading international specialists in the engineering,
manufacturing and distribution
of high quality, industrial fastenings to major global assembly
industries
45 years of service to industry
"HOLDING THE WORLD TOGETHER"
TRADING UPDATE
"This remains an exciting time for Trifast as a business
- the Group is financially well positioned to pursue its 'invest
and grow' strategy"
Trifast plc (LSE: Main market: TRI), provides the following
trading update ahead of the Capital Markets Day operational visit
taking place at its Italian operation, TR VIC on the 27-28
September 2018; no other financial information will be released
during the visit.
HIGHLIGHTS
* Solid revenue growth in the first five months across
all our regions
* Increased electric vehicle production provides
opportunities for ongoing growth
* Over 90% of our automotive supply remains outside of
the combustion engine and power train,
mainly in the seating, console, dashboard and lighting systems
* PTS, acquired in April, integrating and growing well
* Investment in manufacturing capacity and capabilities
ongoing, with our mezzanine expansion in Singapore
on track to be fully operational in HY2
* Project Atlas, our significant multi-year investment
in our systems, policies and procedures is
progressing well
* Pipeline of opportunities and new business remains
very encouraging across the Group
* Solid balance sheet, and healthy cash generation
* Current financial year's trading performance in line
with management expectations
OUR BUSINESS
Trading
The Group has continued to perform well across all its regions,
with sales to multinational OEMs remaining TR's largest source of
growth and contributing c.70% to annualised sales.
Within the key sectors we serve, domestic and international
demand remains reassuring across both Asia and Europe. Although
relatively small, our US region is growing exceptionally well this
year from a mix of increasing electronics and automotive sales. In
the UK we have seen a solid performance across our major markets,
with the only exception being UK automotive, where volumes are
being temporarily hampered as we mentioned in July, by diesel-led
transitory reductions and changes to product cycles and model
builds.
Globally automotive continues to be our strongest sector for
organic growth as we continue to increase our market share and site
penetration with our multinational Tier 1 and OEM customers. The
increase in electric vehicle production is a further significant
growth opportunity for us providing additional access points as
many more new platforms come on line, battery technology develops
and the demand for charging stations accelerates.
As previously guided, the current solid revenue growth is not
yet being reflected in our underlying operating margins as we
continue to invest for the future. But our quality of earnings
continues to be shown in our ability to consistently turn
underlying EBITDA in to underlying cash, whilst our clear strategy
for growth remains focused on increasing our EPS ratio
year-on-year.
The Board remains committed to a progressive dividend policy
based on the Group's overall performance whilst also balancing its
investments for future growth. Our balance sheet is in good shape,
with a degree of flexibility to debt finance future acquisitions
and investments. To supplement this, discussions are already
ongoing with a number of financial institutions, to secure access
to additional funds to support our ongoing growth plans. Combine
this with the people, skill set and the flexibility to keep moving
forward and the Board remains confident of delivering on its
expectations for the year ahead.
Investing for the future
On the back of exciting new business coming on stream and an
array of pipeline prospects in development, we continue to invest
in our business locations and in our workforce. Capital investments
in Singapore, Italy and Taiwan are building our capacity and
capabilities in these locations. While our recent warehouse
expansions in the USA, Holland and Shanghai support the strong
growth we have seen across these sites. In Spain, TR Espana, our
newest and rapidly growing greenfield site continues to
successfully drive opportunities not just locally, but also for the
wider Group.
As well as investing in the Group's manufacturing and
distribution footprint, shareholders will recall that we added PTS
to our portfolio five months ago. It is pleasing to report that
this operation has settled well into the Trifast Group. Not only
does PTS widen our customer base, it extends our presence in the
stainless-steel fastener arena (holding one of the widest product
ranges of any supplier in Europe), boosting our core OEM customer
offering and supporting ongoing distributor sales growth. PTS
remains on target to be earnings enhancing in the year ending March
2019.
Our multi-year investment programme, Project Atlas is running to
plan. Our teams are very excited about the prospects of this
programme which will create the Trifast of tomorrow as well as
delivering the ever-evolving needs of our growing multinational OEM
customer base. With the Project Atlas investment, Trifast will
transcend from being a leading international company into a truly
world-class global industrial player.
External market factors
As anticipated in our full year expected gross margins, within
the UK business we have seen the impact of input cost inflation in
the period as a result of the weak pound. Outside of this we
believe that the operational and financial impact of any Brexit
scenario will be manageable. We have had a cross-functional Brexit
team in place for the last two years and are fully on track to
carry out our contingency plans to help mitigate the risks attached
to a potential no-deal Brexit scenario.
We are also closely monitoring the escalating trade tensions
between the USA, Europe and China. Although due to our diversified
supply chain structure, to date we do not expect the impact of this
to be material to the Group.
Despite this backdrop we continue to have confidence in our
model. As an international business with c.70% of revenues and
profits being generated outside the UK, we recognise the global
opportunities that lie ahead in providing good product, skills and
services to industry. We have these, coupled with the foresight and
flexibility around the Group to keep moving forward and delivering
on our future aspirations.
SUMMARY
Overall, our business is in good shape and the current trading
levels, our ongoing investments and our strong pipeline 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. The Group remains on target to
deliver results for the year ending March 2019 in line with
management expectations.
The Directors look forward to providing the next update at the
time of the Group's Half-year results, which will be released on
Tuesday, 13 November 2018.
Further enquiries please contact:
Trifast plc
Malcolm Diamond MBE, Non-Executive Chairman
Mark Belton, Chief Executive Officer
Clare Foster, Chief Financial Officer
Tel: +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
TRIFAST PLC
LSE Premium Listing: Ticker: TRI
About us: Trifast is a leading international specialist in the
engineering, manufacturing and distribution of high quality industrial
fastenings to major global assembly industries. We are a 24/7 'full
service provider' offering 'end-to-end' support to all our customers.
Our success and ongoing growth is based on a unique mix of high
quality manufacturing, sourcing know-how and adaptable, reliable
global logistics. At March 2018, key sectors served by TR are:
automotive (33%), domestic appliances (22%), electronics (16%)
and distributors (10%) with the balance from a mix of sectors (19%).
The Group employs c.1,300 staff across 31 global locations across
the UK, Europe, Asia and the USA.
For more information, please visit
Group website: www.trifast.com
LinkedIn: www.linkedin.com/company/tr-fastenings
Twitter: www.twitter.com/trfastenings
Facebook: www.facebook.com/trfastenings
Registered trademarks are shown in italic
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END
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