Trifast Plc Trading Update - February 2017
“Strong trading, keeps us on track with our expectations to achieve another record breaking financial year”
The Board of Trifast issues the following unaudited trading update for the Q3 trading period and up to the date of this announcement.
On a constant currency basis, the Board is pleased to report a continuing strong performance across the Group’s main geographies. Our Asia business returned to growth as it began to benefit from the anticipated recovery in demand during H2, both in the domestic and export markets, whilst the UK and USA operations are continuing to produce results in line with management expectations. Within Europe, the business overall has performed solidly and continues to deliver year-on-year growth although we are seeing a slight change in the product mix – we are also pleased to report an encouraging start at our newest greenfield operation based in Barcelona, a key location for Tier 1 automotive manufacturing, a sector that continues to be an important growth driver for TR.
The Group’s capital investment programme is expected to deliver further opportunities in terms of markets, capabilities and operating efficiencies to support this growth as we move forward. The capability for ‘self-help’ initiatives has served us well in recent years, backed by strong and well proven management teams, giving us confidence that Trifast can sustain its successful track record for long term growth.
As an international business, over 70% of our revenue is generated outside of the UK. In the period under review, the Group’s overall margin has held up well despite the continued weakness of Sterling.
In 2016 Sterling was down c.15% year-on-year against a basket of currencies relevant to the Group’s businesses. At the Half-year end we reported that Trifast had experienced translational FX tailwinds of approximately £1.0m at the underlying PBT level. Since then, the sustained weakness in Sterling has had a further positive translation impact on Group revenues and underlying profit. In the shorter-term, if Sterling weakness persists then we expect this to have an additional positive effect on the Group’s revenue and profitability, however, in the longer term we may also start to experience some challenges within our UK business in terms of input costs as a result.
Summary and outlook
The current financial year remains a positive one for the Trifast business and, given Group trading in Q3 and the further FX tailwinds, the Board now expects the Group’s performance for the full year to be slightly ahead of its previous expectations.
Like many businesses, we cannot fully mitigate current global macroeconomic and political factors or any potential impact from BREXIT on the UK economy in terms of trading dynamics between the UK and the European Single Market. Nevertheless, the Trifast Board remains confident that both our experienced business teams and our wide geographical cover will give us the flexibility and foresight to meet these challenges head on as and when they arise.
In summary, Trifast’s balance sheet remains robust and, as a Group, we are optimistic in terms of our future underlying growth performance, capital investment objectives and remain confident in our prospects.
The Group will release a further trading update and notice of the 2017 Preliminary Results in late April.
Click here to listen to Malcolm Diamond discuss the positive organic growth, FX tailwinds, and the capital investment objectives to ensure it is well positioned to take advantage of future prospects.
Malcolm Diamond MBE, Executive Chairman
Mark Belton, Chief Executive Officer
Clare Foster, Chief Financial Officer
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For further information on Trifast plc please visit our investors website: www.trifast.com