Intuitively you would imagine that the performance of a supplier of industrial fasteners – ie, industrial inputs – would be closely correlated to the peer average. But Trifast’s (TRI) adjusted beta ratio of 0.57 suggests it’s theoretically less volatile than other suppliers, a point highlighted by broker Peel Hunt, which notes that the group’s continuing penetration of the automotive market has been achieved "in spite of what the wider sector is doing".
A third of Trifast’s revenues are generated in the automotive sector, but over 90 per cent of its supply "remains outside of the combustion engine". So, even though the industry is now subject to diesel-led disruption, the accelerating roll-out of electric and hybrid technologies represents an ongoing commercial opportunity. This seeming ability to swim against the tide is also reflected in an 8 per cent rise in half-year cash profits to £13m at constant currencies.
Trifast supplies its products to a growing number of OEMs (original equipment manufacturers) and is therefore caught up in a multitude of supply chains. Faced with the obvious question, management insists the "shorter term operational and financial impact of any Brexit scenario will be manageable" and is ready to initiate "contingency plans to help mitigate the risks attached to a potential no-deal Brexit scenario".
Peel Hunt gives adjusted profits of £23.2m and and EPS of 14.1p for the March 2019 year-end, against £22.2m and 13.8p in FY2018.
| TRIFAST (TRI) | ||||
| ORD PRICE: | 192p | MARKET VALUE: | £233m | |
| TOUCH: | 191-192.5p | 12-MONTH HIGH: | 277p | LOW: 185p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 12% | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 97.8 | 9.1 | 6.72 | 1.1 |
| 2018 | 105 | 8.0 | 4.93 | 1.2 |
| % change | +7 | -12 | -27 | +9 |
| Ex-div: | 14 Mar | |||
| Payment: | 11 Apr | |||
| *Includes intangible assets of £45.1m, or 37p a share | ||||
