Shares in industrial fastenings company Trifast (TRI) slumped by 46 per cent in early trading after it issued a profit warning and said its chief executive had stepped down, effective immediately.
The company said that although it had recorded “further year-on-year growth” in revenue, driven by its European and North American arms, it has suffered from volatility in demand and a “significant destocking” by one of its customers in Asia.
Although revenue for the year to March 31 is likely to be in line with expectations at £243mn, adjusted pre-tax profit will be much lower than current consensus forecasts as pricing and efficiency improvements were more than offset by the lower sales in Asia. It expects to make an adjusted profit of around £9mn, compared with consensus forecasts of £14.3mn.
Chief executive Mark Belton, who has been with the company for 23 years and on the board for the past 13, stepped down “with immediate effect” over the weekend. Non-executive director Scott Mac Meekin has been appointed on an interim basis. An update on a permanent CEO will be given “in due course”.
Trifast is already in the process of a strategic review, which has identified potential savings of around £5mn. However, broker Shore Capital warned that the company “may be vulnerable to a bid” if its share price fell significantly.
The slump to 50p a share has cut its market capitalisation to just £68mn, or just 7-times house broker Peel Hunt’s forecast earnings for its March 2024 year-end.
