Trading Update and Directorate Change

RNS Number : 3653Q

Trifast PLC

20 February 2023

 

Trading Update and Directorate Change

London, Monday, 20 February 2023 : Trifast (LSE: Main Market symbol: TRI) provides the following update on the trading performance for the financial year ending 31 March 2023 ("FY23") and notification of a Directorate change.

Trading update

Since the half year results in November 2022, the Group has recorded further year on year revenue growth, led by the European and North American businesses.  In addition, Trifast has secured a further £10m of new contract wins since 30 September 2022, increasing the year-to-date total to £22m. During January, we also concluded negotiations with significant customers resulting in contractual pricing uplifts which were in line with our expectations. However, we have continued to see macro-economic conditions contribute to some volatility in demand patterns, and in particular have, more recently, been impacted by significant destocking from one of our Asian manufacturing customers.

As set out in November, part of the Board's focus for the second half was to drive an improvement in the Group's operating margin through a combination of the pricing, and cost saving actions.  Whilst progress has been made in both areas, the benefits to operating profit (before the negative impact of FX), have been more than offset by the effects of the destocking in Asia.

Gross inventory levels at CER (£103.6m) have reduced during the second half, and we remain on track for the targeted reduction by 31 March 2023. Consequently, whilst net debt is reducing, it currently stands at an elevated level of around £44m.  This is within both facility headroom and covenant levels but is likely to result in the Group incurring higher net interest charges for the year than previously expected.

As a consequence, the Group will be significantly below current market expectations for the year ending 31 March 2023*.  For FY2023, the Company is expected to report, revenue of c.£243m and adjusted PBT of c.£9.0m.

Strategy update

As set out above, the Board has been focused on taking steps to improve the performance of the Group through a mix of price increases, cost efficiencies and working capital (primarily inventory) improvements.  In Q4 2022, a strategic review of operations and functions was initiated to identify specific measures that could support profitability without adversely impacting our growth momentum or customer service levels.  The initial output of this review shows expected savings during FY24 rising to an annualised saving of c.£5m.

Directorate change

Mark Belton , CEO resigned on 18 February 2023 and stepped down from the Board, leaving the Company with immediate effect.  Mark has been with the Group for 23 years and was appointed to the Board in 2010 as Group Finance Director, before taking up the CEO role in 2015. We would like to thank Mark for his tireless commitment to the business and wish him and his family well for the future.

With immediate effect, Scott Mac Meekin will relinquish his NED responsibilities and will assume the role of Interim Chief Executive Officer.

Scott, a Singapore national, has a successful career spanning over 30 years in both commercial and corporate environments from an investment, buy & build and restructuring perspective.  Working internationally, Scott has extensive experience in the fastener industry, manufacturing and industrial supply solutions.  This will be invaluable in supporting with the immediate business challenges as well as bringing the necessary leadership to the team.

Commenting on the change, Jonathan Shearman, Non-Executive Chair said:

"Mark has played an important role over the last 13 years as a Board member and before that as a dedicated member of the Trifast team.  I would both personally and on behalf of the Board, want to express my gratitude for the loyalty and dedication to the Company and wish him well with his future plans.

"As a Board, we are fortunate to have the experience and industry knowledge that Scott can afford Trifast.  His support will ensure the right balance between business continuity and change, alongside the necessary development of the Group."

The Board will keep shareholders updated on the process to appoint a permanent CEO in due course.

Outlook

Whilst the short-term shortfall in the Group's performance is disappointing, given ongoing contract wins, pricing increases and the roll out of key initiatives, the Board continues to believe in the medium-term potential of the Group and continuing to update shareholders on progress.

The next scheduled Trading update is expected in late April ahead of FY2023 Annual results scheduled for release in July 2023.

Note:

* Company compiled consensus FY23, prior to this announcement and based on five analysts was:

Revenue	£242m
Adj. PBT	£14.3m
EPS	8.1p

Disclosures for Scott Mac Meekin

Scott Mac Meekin (age 65)
Current appointments	Former appointments within the last 5 years
Interim CEO Trifast plc	Trifast plc (NED) 2013-2023
	CEO, Dearman Engine Company
	CEO Circular Computing and A2C Services
	Portfolio Director, Navis Capital Partners, Singapore
	COO, Tes-Envirocorp (Navis owned)

Except for those contained in this announcement, there are no other details that require disclosure in respect of Scott Mac Meekin's appointment pursuant to Rule 9.6.13 of the UK Listing Rules.

Further enquiries please contact:

Trifast plc

Jonathan Shearman, Chair

Clive Watson, Senior Independent Non-Executive Director

Christopher Morgan, Company Secretary

Tel: [phone]

Email: [e-mail]

Shareholders: [e-mail]

Peel Hunt LLP (Stockbroker & financial adviser)

Mike Bell

Tel: [phone]

TooleyStreet Communications, (IR & media relations)

Fiona Tooley

Tel: [phone] or Email: [e-mail]

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. We supply to c. 5,000 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. The Group employs c.1,300 people across 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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