18 September 2008
TRIFAST PLC ('Trifast' or 'the Company' or 'the Group')
Trifast, a worldwide manufacturer and distributor of industrial fasteners and components, today provides an update on recent trading.
As the Company indicated in its last Interim Management Statement, Trifast had a satisfactory start to the financial year and trading was broadly in line with market expectations for the first quarter to 30 June 2008. However, whilst July's results were in line with internal budgets, the trading performance of the Group since then has been extremely disappointing. There have been a number of factors responsible for this. Demand from customers in the UK and Europe has been lower than anticipated and a number of projects that we were due to be supplying product to have been postponed. In the Far East we have seen a major reduction in the supply of fastener components to one customer in the computer industry, causing an additional impact on margin due to the under-utilised capacity in our production facilities in Asia. In addition, in Europe and Asia we have experienced a slowing of demand from customers in the automotive industries.
By contrast, sales activity levels across the Group remain high and future business and new customers are being won at an encouraging level, which will benefit the Group in the next financial year. In addition, our business in the United States has performed well, albeit that it is small in relation to the Group's overall operations.
In current market conditions it is too early to forecast with any certainty prospects for the financial year as a whole. However, the declining and postponed sales orders experienced to date are unlikely to be recovered in the second half of the year and consequently the Board expects that the outcome for the year to 31 March 2009 is likely to be well below current market expectations.
Although efforts are being made to boost sales orders, the financial impact of the factors described above on an annualised basis, when compared with the profit before taxation (before intangible amortisation, IFRS2 charges and impairment of associated company) for the year ended 31 March 2008 of £8.8 million, is likely to be as follows: a reduction in the order of £1 million for the lost contract in the Far East, a reduction of a similar amount for slower sales volumes in Europe, and a reduction of £0.6 million to reflect the higher fuel, energy and freight costs being incurred by the Group.
Overall the Board remains cautiously optimistic with regards to Trifast's medium and long term prospects. The Group has a strong balance sheet with low gearing, good operational cash generation and a broad and growing base of international customers in diverse industry sectors - strengths that will help the Company during the current demanding trading conditions.
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Trifast Group plc Tel: 01825 747 366
Steve Auld, Chief Executive Officer
Stuart Lawson, Chief Financial Officer
Reg Hoare / Will Swan Tel: 020 7360 4900
Fairfax I.S. plc
Simon Bennett / Jeremy Porter Tel: 020 7598 5368
For more information please visit www.trifast.com