Trifast is engineered for success

Since rejoining in 2009, chairman Malcolm Diamond and chief executive Jim Barker have done a sterling job of turning around the engineer's prospects. Back then an overdependency on sales to electronics manufacturers and their distributors saw the company hit a brick wall, yet Trifast has since diversified and grown much stronger.

Aside from entering new markets such as cars and domestic appliances, a key component of its recent success stems from a strategic focus on multinational original equipment manufacturers, which now account for about two-fifths of revenues. High demand from these companies helped Trifast post its strongest ever order pipeline in November, with customers all over the world crying out for fasteners across its end markets.

That demand shouldn't come under too much threat from any economic downturn, either. That's because, despite the cyclical nature of its markets, Trifast is also tapped into a structural growth opportunity as one of the few companies catering to the supply chain consolidation trend. Tough trading conditions have boosted the number of clients demanding delivery and support of standardised products at a global level, which is something Trifast can provide.

The company is also benefiting from cross-selling opportunities, which were boosted by last May's acquisition of VIC. The addition of revenues from the Italian maker of fasteners for domestic appliances accounted for the majority of Trifast's sales growth in the six months to 30 September, and the business also helped to increase the number of the company's lucrative multinational customers over 40.

Bringing the likes of Whirlpool, Electrolux and Siemens on board has not only added to its list of big-name clients but also increased Trifast's exposure to the higher-margin domestic appliances sector. Indeed, with VIC's help the company's overall gross margins climbed 130 basis points to 29 per cent in the first half, although several years of cost-cutting means margins have been boosted across its other businesses, too. And despite acquisitions, at £17.5m net debt has been kept under control, leaving the company with plenty more firepower for purchases.

There are some bright prospects in Trifast's end markets, despite the boarder narrative of slower economic growth. That looks particularly true for Trifast's automotive division. About one-third of revenue comes from the sale of parts used to hold cars together, and with car sales in Europe on the rise, and at 10-year highs in the UK, demand should continue to soar.

Elsewhere, the company also looks well-placed to profit from the effects of a falling oil price on consumer spending. Indeed, products used to piece popular electronic appliances together is a market that could flourish even further should cheaper fuel prices translate into growing disposable incomes.