Fastener maker warns on profits

In an update on recent trading, Trifast, a worldwide manufacturer and distributor of industrial fasteners and components, said that its trading performance since the end of June had been “extremely disappointing”. Demand from customers in the UK and Europe had been lower than anticipated and a number of projects that Trifast was due to supply had been postponed. In the Far East there had been a major reduction in the supply of fastener components to one customer in the computer industry, causing an additional impact on margin due to the under-utilised capacity at the company’s Asian production facilities. In addition, in European and Asian demand from customers in the automotive industries had slowed. However, the company said that sales activity levels remained high and future business and new customers were being won at “an encouraging level, which will benefit the group in the next financial year”. Nevertheless, said Trifast, the declining and postponed sales orders experienced to date were unlikely to be recovered in the second half of the year and it consequently expected that the outcome for the year to 31 March 2009 was likely to be well below current market expectations. Pre-tax profits for the year ended 31 March 2008 were £8.8 million, but in the current year the company said it was likely to see a reduction of around £1 million for the lost contract in the Far East, a reduction of a similar amount for slower sales volumes in Europe, and a reduction of £0.6 million to reflect the higher fuel, energy and freight costs being incurred.