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Trifast holds fast despite cost pressures

The industrial fasteners specialist is in an expansive mood
June 12, 2018

Trifast (TRI) just keeps on delivering year after year, demonstrated by a 5 per cent increase in underlying cash profit to £24.7m, a “robust pipeline in place” on the sales front, and a gross margin 50 basis points above the target rate of 30 per cent.

IC TIP: Hold at 265p

The industrial fasteners specialist noted that although unit profitability held up in its UK and Asian markets, an unfavourable sales mix in the US and purchase cost increases in Italy constricted profitability. Management makes the point that the “long held, but only recently achieved” margin target was under additional pressure from a planned increase in fixed production costs in Italy, as the group invests in manufacturing capacity “to support future growth”. That forms part of a wider narrative, as Trifast is also expanding production capacity at its Singaporean site, while warehousing and distribution channels are being optimised in Shanghai and Northern Ireland.

Peel Hunt gives adjusted pre-tax profit of £23.2m, leading to EPS of 14.1p for FY2019, against £22.2m and 13.8p in FY2018.

TRIFAST (TRI)   
ORD PRICE:265pMARKET VALUE:£322m
TOUCH:262-266p12-MONTH HIGH:277pLOW: 192p
DIVIDEND YIELD:1.5%PE RATIO:21
NET ASSET VALUE:91p*NET DEBT:7%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20141308.96.11.40
201515511.87.42.10
201616113.18.82.80
201718717.310.73.50
201819818.512.53.85
% change+6+7+17+10
Ex-div:13 Sep   
Payment:12 Oct   
*Includes intangible assets of £38.4m, or 32p a share