Engineering group Trifast (TRI) has just reported the "best six months' profit in the company's history," according to chief executive Jim Barker. Cutting costs boosted margins, while the VIC business - an Italian maker of fastening systems acquired in May - has integrated well. Profit forecasts for the full year have been upgraded, too, on the back of a healthy order book.
The group's 13 per cent sales growth was largely down to VIC, which contributed £7.5m to the result. Strip that out and sales rose 2 per cent. But that understates the health of the business: at constant exchange rates top-line growth would have been 7 per cent, with growth across all regions. Adjusted operating profit jumped 46 per cent to £7.07m, boosted by a £1.6m contribution from VIC.
Meanwhile, better sourcing, operational gearing and warehouse efficiencies drove a 130 basis point improvement in the gross margin. Mr Barker said the self-help programme started back in 2011 "keeps on giving". He also said that demand from Trifast's key customers in the automotive, electronics and telecom, domestic appliance and distributor sectors showed no sign of easing - whatever one might read about macroeconomic misery. The group is therefore investing in new manufacturing plants and recruiting additional engineers.
N+1 Singer is forecasting adjusted pre-tax profit of £13.2m for the full year, giving EPS of 8p, up from £9.2m and 6p.
| TRIFAST (TRI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107p | MARKET VALUE: | £121m | |
| TOUCH: | 105-108p | 12-MONTH HIGH: | 134p | LOW: 73p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 26% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 65.3 | 4.3 | 3.1 | 0.4 |
| 2014 | 74.0 | 4.9 | 3.1 | 0.6 |
| % change | +13 | +14 | +1 | +50 |
Ex-div: 19 Mar Payment: 17 Apr *Includes intangible assets of £31.9m, or 28p a share | ||||
