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Satisfactory results from Trifast

Created:
26 November 2007
Written by:
Nigel Bolitho

Trifast made the right move in switching its industrial fastener manufacturing from the UK to the Asia. It has three factories in Taiwan, two in Malaysia and plants in Singapore and China. Trifast has also ditched some low margin automotive and domestic appliance customers - hence the fall in turnover in the half-year to end-September 2007 – and is starting to benefit from price increases as price deflation ends. At a pre-tax level the one third rise in profits drops to 13 per cent before taking into account goodwill amortisation, share option charges and excluding the 2006 costs of integrating 2005’s fastener acquisition Serco Ryan.

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The importance of Asia is shown in the segmental analysis. Here sales were little changed at £13.52m but pre-interest profits jumped from £2.76m to £3.67m. In contrast Europe/US sales fell £6.22m (UK sales were down £5.15m as customers migrated to the Far East) to £48.55m and profits declined from £2.92m to £2.39m.

For the full year broker Brewin Dolphin is sticking with its forecast of sales of £126m and profits before adjustments up from £8.6m to £9.5m, producing EPS of 7.9p. The dividend rises from 2.4p to 2.8p.

TRIFAST (TRI)
ORD PRICE: 62.5p MARKET VALUE: £ 52.7m
TOUCH: 61-64p 12-MONTH HIGH: 88.5p LOW: 62p
DIVIDEND YIELD: 4.1% PE RATIO: 11
NET ASSET VALUE:  60p NET DEBT: 26%

Half-year to 30 Sept Revenue (£m) Pre-tax profit (£m) Earnings per share (p) Net div per share (p)
2006 67.8 3.38 2.96 0.77
2007 62.1 4.46 3.96 0.93
% change -8 +32 +34 +21
Ex-div:
28 Nov
Payment:
17 Jan

Click here for a guide to the terms used in IC results tables

TIP UPDATE

Buy

The shares are modestly rated and remaina buy.

Last IC view: Buy, 86p, 22 June 200722 June 2007

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