GCITrifast delivers strong cash conversion and margin gains in FY24 despite macro challenges
() , an international supplier of industrial fasteners and Category 'C' components, posted its annual results for the year ended March 31, 2024 (FY24).
Trifast reported operating profit in line with last year's, despite a lower revenue base of £237.9m, down 2.7% from FY23. Underlying profit before tax was £6.5m, slightly higher than January's guidance. The light vehicle sector had the strongest performance with a 22% increase in revenues over FY23. Gross margin increased by 20 bps to 25.5%, supported by new cost and productivity initiatives.
Trifast saw a significant reduction in inventory of c. £15m, driving high cash conversion and lowering net debt to £21.0m from last year's £38.0m. Turnover was supported by large contract wins in FY24, a new National Distribution Centre in the Midlands UK, and a new manufacturing facility in China to better service local demand.
The group reiterated its progressive dividend policy and announced a final dividend of 1.20p for FY24, bringing the total for the year to 1.80p. Additionally, announced a new dividend reinvestment option.
View from Vox
Trifast delivers resilient performance in FY24 amid macroeconomic challenges, in line with expectations. Despite a small reduction in revenue, the company made material gross and EBIT margin improvements, helped by effective cost control. Meanwhile, a strong pipeline means good visibility and a positive outlook for FY25.
A significant reduction in inventory indicates good momentum as cash conversion peaked and net debt nearly halved from last year. Operational efficiency gains should continue to boost margins into FY25, helped by the recently completed National Distribution Centre in the UK, and a new factory in China to facilitate sales in that market.
Additionally, working capital initiatives are supporting strong cash generation and further reduction in inventories as FY24 contract wins begin to come through. Overall, based on its pipeline, new strategic direction, and efficiency improvements, the company is well-positioned for a value inflection point in FY25.
Follow News & Updates from Trifast:
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.