http://www.investorschronicle.co.uk/2011/11/17/shares/news-and-analysis/trifast-picks-up-speed-wccfFIify4xWuCL8d4RGCI/article.html
Trifast picks up speed
By Lee Wild, 17 November 2011

Trifast's results reflect further progress on pricing, improved sourcing and sales, and importantly there is little sign of momentum slowing. The industrial fasteners firm is "comfortable" with market expectations, despite the eurozone sovereign debt crisis, and a new acquisition in Malaysia is highly complementary.
In the first half, underlying operating profit grew by a third to £2.67m, driven largely by a 63 per cent profit surge in the UK to £1.45m and 19 per cent increase in revenue to Europe and the US. A greater focus on the European motor industry and the company's restructured US division, now in profit, helped there. Those contributions were certainly needed as the Asian unit failed to trump last year's stellar performance.
Still, £14.4m of sales in the Far East was 10 per cent higher than sales in the second half of the financial year to March 2011. Renegotiating contracts and better sourcing aided margin recovery, and improvements will continue to come through during the second half. Buying high-tech fasteners maker Power Steel for a net £12.2m – partly funded by an £8m placing at 37p – will help. That deal was announced alongside these results and, with an adjusted pre-tax profit margin of 17 per cent, Arden Partners estimates that it will enhance group net margin by 1.1 percentage points in the year to March 2013. For the current year, the broker expects adjusted EPS of 3.6p (3.2p for 2011).
TRIFAST (TRI)
ORD PRICE: 40p MARKET VALUE: £34.1m
TOUCH: 39-42p 12-MONTH HIGH: 54.75p Low: 35p
DIVIDEND YIELD: NIL PE RATIO: 17
NET ASSET VALUE: 52p* NET DEBT: 17%
Half-year to 30 Sep Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2010 52.0 1.48 1.37 nil
2011 55.4 2.13 1.77 nil
% change +7 +44 +29 –
*Includes intangible assets of £16.4m, or 19p a share
IC View:

Trifast's management is certainly keeping to its mantra of "underpromise and overdeliver". The acquisition is attractive, a forward PE ratio of 11 is below the sector average and the shares are good value.

Trifast - Excellent fit Click for report
http://www.edisoninvestmentresearch.co.uk/researchreports/trifast171111update.pdf
Thu, Nov 17, 2011 at 4:20 PM

The £15m acquisition of Power Steel, of Malaysia, represents an earnings enhancing deal that also fits neatly with existing operations and the stated group strategy. Meanwhile, interim results are at the upper end of City expectations, reinforcing immediate estimates, despite the challenging trading climate. The shares have justifiably been marked up on the announcement, but continue to offer real value.

Trifast is a leading global manufacturer and distributor of industrial fasteners. Principal operations are in Europe and South-East Asia, with a modest, but growing presence in North America.

Year
End Revenue
(£m) PBT
(£m) EPS
(p) DPS
(p) P/E
(x) Yield
(%)
03/10 85.9
0.92 0.68
0.00
59.0
N/A
03/11 106.1 3.77
3.23
0.00 12.4 N/A
03/12e 115.0 4.75
3.54 0.30 11.3 0.8
03/13e 130.0 6.70 4.30 0.50 9.3 1.3
Trifast is a research client of Edison Investment Research.

Strong first half at acquisitive Trifast
16/11/2011 Robert Tyerman
http://www.growthcompany.co.uk/news/1672328/strong-first-half-at-acquisitive-trifast.thtml


Industrial fasteners concern Trifast (TRI) is seeking £8 million for a Malaysian takeover after interim profits up 40 per cent to £2.1 million pre-tax. The fully-listed company, which operates in Europe, America and Asia, increased sales to its assembly industry customers a more modest 6.5 per cent to £55.4 million in the six months to September, with Europe 19 per cent ahead against an Asian market flat against a year earlier but 10 per cent higher than in the second half of 1010-11.

Steered by executive chairman Malcolm Diamond, an industry veteran, Trifast lifted return on capital from 8.5 per cent to 10.3 per cent and hoisted earnings 27 per cent to 1.66p a share. The company cites selective contract price increases, improved sourcing, branded products growth and a stepped-up focus on sales to the USA, which moved into the black after a restructuring, and China, as reasons for its margin expansion.

Meanwhile, Trifast has identified private Malaysia's Power Steel and Electro-plating Works (PSEP), maker of highly engineered parts for the motor and compressor industries, as an 'exciting' strategic fit. The company has agreed to pay up to £15 million to buy PSEP, which made the equivalent of £2.2 million pre-tax on £13 million turnover last year.

Headed by businessman Charlie Foo, whose founding father wants to retire and arrange an orderly sale, PSEP uses Mitsubishi processes and, argues Diamond, will enable Trifast to extend its automotive product range into premium products and complex , 'high spec' items. A new facility from DB Bank in Singapore will fund nearly half the cost and Trifast, which ended September with £6.5 million cash and net debt of £7.6 million, has raised £8 million at 37p through broker Arden for the rest.

Diamond says restoring the dividend at formerly troubled Trifast is an 'extreme priority'. The shares, recommended by Growth Company Investor at 24p in 2009 and 50.5p last December, have perked up 1.75p this morning to 41p, valuing the company at £35 million. With analysts expecting full-year profits of £4.4 million, they could rally further.





Tags: Automotive parts, Full list, Industrial Fasteners, Malaysian takeover, Malcolm Diamond

Sector: Industrial Engineering

Companies: Trifast

This ahead of the Interim results next Thursday ............

"Trifast (TRI) kept its "buy" rating from Shore Capital, expecting a strong performance from the nuts and bolts manufacturer in the second half of the year. The broker notes that the group performed well in the first half, with further opportunities presenting themselves at the time. However, Shore expects a reduction in revenue growth, resulting from the company's new strategy of focusing on added value contracts. Trifast shares gained 0.5p to 39.75p."

My own view is that Shore are being a bit pessimistic on revenues - I don't see TRI seeing the need to give up business due to tightening margins. The work that they've done on the cost base & input costs should ensure competitiveness in their main markets.