Trifast forecasts better-than-expected FY results

A RECOVERY in the UK manufacturing sector and increasing business in Asia has helped to boost the performance of engineering group Trifast and raised expectations for better than anticipated full year results.

The company, which operates a major warehousing base in Wednesbury, has seen its UK business return to profit during the last six months, while the rapidly growing needs of Chinese industry have seen the group double its operating profits in Asia.

In its half yearly results statement, the group said it had seen revenue increase to £52.04m in the six months to September 30, which compares with £39.85m for the same period last year. Pre-tax profits for the period jumped from £0.18m this time last year to £1.48m.

Malcolm Diamond, executive chairman, said he was delighted with the performance and it signified that the group was continuing to emerge strongly from recession, aided by the recovery within its customer base.

“As the group continues to advance, and despite some caution across certain global economies we are encouraged by year to date trading and the amount of ‘self-help’ that is within reach,” he said.

“Given the market dynamics visible at this stage, the board would expect profit for the year to March 31, 2011 to be significantly ahead of current expectations.”

Investors reacted well to the news and shares in the group saw the benefit.

The strength of the recovery in the UK has aided its operation in the West Midlands, where Mr Diamond said extra staff were being recruited to cope with demand – despite the consolidation of its warehousing division.

“We have built up our operation in Wednesbury and taken on more staff, even allowing for the relocations from Hartlebury, where we have allowed stocks to dwindle.

“Having two operations in such close proximity is not efficient so we have decided to focus on expanding Wednesbury. The move has paid off because our Midlands operation is in profit,” he said.

The UK business as a whole has seen sales improve by 26% compared with the comparable period last year, although this would be at a low base due to the recession. This helped convert an operating loss of £0.4m in the last half year to a profit of £0.89m.

On the same basis, its Asian operation saw sales grow 54% and operating profit double to £2.09m.

The group continues to focus on growing business in the electronics and automotive sectors, and leveraging its Asian manufacturing facilities while implementing a zero product defect strategy to boost quality.

It is also focused on growing its TR branded products within the UK and EU.

The development of an automotive centre of excellence will see the group build on an existing resource in Holland with a fresh focus on metallurgy and stress testing of new products.

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