Trifast (TRI) H2 2024 earnings summary

Executive summary

• FY 2024 revenue was slightly lower than FY 2023, mainly due to weaker demand in Asia and global distribution channels, but underlying profit met guidance with a slight improvement in profit before tax to £6.5m.

• Significant operational achievements included the completion of Project Atlas (ERP implementation), UK footprint consolidation, and a 10% reduction in non-operational headcount.

• The business strategy was refreshed, focusing on three growth sectors: automotive, smart infrastructure, and medical equipment, with a goal to return to double-digit EBIT margins in the medium term.

• Strong cash generation from inventory reduction improved net debt to EBITDA to 1.3x, and net debt was significantly reduced.

Financial highlights

• EBIT margin improved to 5.2% in FY 2024, with a clear plan to exceed 10% in the medium term.

• Net debt reduced from £70m to £21m, mainly through a £15m reduction in inventory.

• Gross margin was maintained and operating profit slightly improved despite lower revenue.

• Underlying profit before tax declined due to higher interest costs, which doubled from £2.7m to £5.4m.

• Debt facility increased to £120m, providing over £76m in headroom for future investments.

Outlook and guidance

• FY 2025 is expected to be a turning point, with continued focus on margin improvement, working capital management, and profitable growth in key segments.

• Revenue is expected to remain flat in FY 2025 as the focus shifts to margin and efficiency gains.

• Medium-term ambition is to achieve double-digit EBIT margins, with steady annual progress anticipated.