Strong H1 from Trifast but certain markets are showing signs of softening

FASTENERS manufacturer Trifast has said its position looks healthy with a strong order pipeline across its operations.

The company, which has operations in the West Midlands, said continued sales growth was expected in operations in Europe and the United States.

Half year revenue for the group has seen a 5.6% increase to £78.1m (H1 2014: £74m) and pre-tax profit up almost 44% to £7.1m (H1 2014: £4.9m).

Nevertheless, as with many other companies exposed to the same markets, the company has forecast that the good results have to be “tempered by a slight softening in demand”. It said this was most evident in the UK where the company said it was starting to see some signs of hesitation and order deferral.

However, it said that in the longer term it felt comfortable that the UK core business remained strong, which it said was “firmly evidenced” by a high level of sales enquiries.

In its Asian markets, the company said it had seen substantial growth in H1 reflecting increased business with certain key customers. However, it has warned that an element of this will start to reduce in the second half of the year.

“At PSEP, slower order levels in the automotive sector are expected to continue in the short term. On a more positive note, following the recent £1.0m capital investment programme, we anticipate our increased capacity in Malaysia will start to counteract any possible slowdown in FY 2017,” it said.

In Europe it expects organic sales to continue to grow on a constant exchange rate (CER) basis. It said it was also very excited about the addition of German business Kuhlmann to its portfolio as it added to the group’s footprint in an important market that would have a positive impact on future trading.

Cost control and supply chain management are said to be positively impacting margins and this will continue, particularly given the group’s ongoing investment into efficiency drivers such as the “lean-lifts” we it is rolling out across its UK business.

“Overall, taking into account the current business climate we are operating within, the board remains optimistic about the group’s prospects and continues to expect its trading for the financial year as a whole to be in line with its expectations,” it said.

“Organic growth remains only part of our strategy and we will continue to look for our next strategic acquisition to complement the group’s existing global, product and sector footprint.”