Trifast plc - Trading Update
(Trifast, Group or TR)
London, Thursday, 23 April 2020: Trifast (Main market LSE Symbol: TRI) issues the following unaudited Trading Update covering the Group's financial year ended 31 March 2020 ahead of the announcement of its preliminary financial results.
“TR is proud to be supporting essential industries around the world”
International specialist in the design, engineering, manufacture and distribution of high quality industrial and Category 'C' fastenings principally to major global assembly industries
- Despite a challenging finish to the year:
- Revenue levels held up well against the prior year
- Underlying profit before tax remained broadly in line with market expectations
- Good cash conversion, a strong balance sheet with leverage well within our banking covenants and significant facility headroom provide ongoing resilience in uncertain times
- Global Covid-19 Task force in place and action plans progressing
- Project Atlas ends the year on track and on budget
- Pipeline of opportunities and new business wins provide optimism for the longer term
In our Q3 trading update we reported that ongoing weakness across several of our sectors had continued to constrain revenue growth in the second half of the year. Whilst the impact of Covid-19 at this time was restricted to the extended closure of our Chinese sites.
Covid-19 – Trifast’s response
A cross-functional global Covid-19 Task Force has been set up to develop and implement our action plan, manage internal communications, and drive our responses and activities across the world.
Our first priority was to ensure a safe working environment for all of our employees around the world.
Scenario planning, cost control and cash management initiatives
Daily stress-testing and scenario planning has been in place since the beginning of March to ensure that we are able to look ahead and make the right decisions at the right times.
To protect our existing workforce and their ongoing employment as far as possible, we are making full use of available government backed job retention and wage subsidy schemes. From the 8 April 2020, initially up until the 30 June 2020, the Trifast plc Board has agreed to take a 20% reduction in salaries and fees. Other cost control measures include the implementation of a recruitment freeze, a pay-rise deferral, reductions in temporary and contractor headcount and a ban on all non-essential travel.
Operations – new opportunities in a changing marketplace
Despite ongoing lockdowns in a number of our key geographies, as of today, all of our manufacturing and distribution sites around the world are open for business. We have successfully applied for essential business lockdown exemptions in Italy, Malaysia, and Singapore, which has allowed us to continue to manufacture and service our customer base.
As at the end of FY2020, we are pleased to report that Project Atlas remained on track and on budget. Ready to allow our first pilot in 2020 and full completion of the project by the end of FY2022.
M&A continues to be a key strategic driver for growth and our activities in this area are continuing so that we remain in a position to take advantage of opportunities as conditions in our markets stabilise.
In the short-term we will continue to closely monitor, plan, and take appropriate action to protect and sustain our business. Given the current level of uncertainty, we still consider it remains prudent to remove earnings guidance for the year ending 31 March 2021 until such a time as we have a clearer view on the impact of Covid-19.
Despite the rapidly changing developments regarding Covid-19, our business remains solid. Our operational cash conversion remains good and we have a strong balance sheet and significant facility headroom.