Trifast plc

(Trifast, or Group)

"Innovation today to build a better tomorrow - Growing sustainably together"

Q3 Trading update

London, Thursday, 24 February 2022: Trifast plc (LSE Main market premium listing: symbol: TRI), leading international specialist in the design, engineering, manufacture, and distribution of high-quality industrial fastenings and Category 'C' components principally to major global assembly industries, issues the following unaudited Q3 Trading Update for the period 1 October 2021 to 31 December 2021.

Mark Belton, Chief Executive Officer commented:

"Looking beyond the current period of macroeconomic challenge, Trifast has one clear aspiration - to become a much bigger, more profitable company than the one we are today. I would like to thank all of our teams for their ongoing support and dedication as we work together to turn that aspiration into a reality"

TRADING UPDATE

Following on from >30% year-on-year growth in HY1 (at constant exchange rate; against HY2020: growth of 3.2%), we have continued to see underlying demand across all of our key markets with the Group's monthly revenues showing consistent year-on-year growth, even as set against the record trading recovery levels we saw in Q3 of FY2021.

We have seen very strong performances in particular from our distributor trading in the UK, Europe and out of Taiwan, new light vehicle platform wins in the USA and robust energy, tech and infrastructure growth in Hungary. In conjunction with strong Q3 trading from our recent acquisition, TR Falcon, these have more than offset continued short-term market disruption in some segments.  Whilst we have continued to outperform light vehicle production in the YTD period, semi-conductor chip shortages have held back volumes behind prior year in Europe and the UK.  In addition, December floods in Malaysia, coupled with specific sub-contractor transfer issues at a key health and home customer, have temporarily reduced trading in the Asia region.

Supply chain challenges remain and although raw material and freight costs, as well as lead times, are now stabilising across most of the world, these continue to stand at historically high levels.  As a result of these ongoing challenges, the business has continued to invest in inventory levels in HY2, to ensure reliability of supply.  This uplift is expected to reverse as the macroenvironment settles.

Our price increase programme continues to progress at pace, with the majority of first phase negotiations now successfully completed and the remainder expected to be concluded in the coming weeks.  Price negotiations form an ongoing part of doing business, especially as inflationary pressures persist, including the recent well-publicised increases to energy and salary costs which we expect to impact pricing throughout the supply chain.

AREAS OF STRATEGIC FOCUS

·      Project Atlas

Project Atlas, a key driver of future growth and cost efficiencies continues to progress, with a phased roll-out to our largest trading subsidiary underway.  We look forward to providing further details of our progress in due course.

·      Acquisitions

Our latest US acquisition, TR Falcon (August 2021) is integrating well and contributing positively to the Group's results.  We are pleased to report that our pipeline of targets continues to build in North America and beyond, with a number of exciting opportunities at different stages of the process.

OUTLOOK

Despite the ongoing unpredictability in the macroeconomic environment, the long-term fundamentals of our business model and strategy remain unchanged.  Through continued focus on service levels and responsiveness we have strengthened the Group's position in its established markets during this challenging period and we continue to see exciting opportunities in high growth/emerging technologies, including in the Electric Vehicle (EV) space, where our secured order pipeline has never been stronger.  With strong momentum in contract wins, new order pipeline and general activity levels, the Board is confident in the Group's outlook, with its full year FY2022 expectations unchanged.