Our opinion on the current state of TRELLIDOR(TRL)Trellidor (TRL) is a long-established manufacturer of barrier security products, blinds, and security shutters, having been in business since 1976. The company is divided into two main divisions: the Trellidor business, which focuses on security barriers, and the Taylor business, which produces security and decorative blinds. Taylor also imports and distributes cornicing and skirting. With 70 franchise outlets in South Africa and representation in 24 countries (17 of which are in Africa), Trellidor has built a strong brand over the years.
As a company linked to the construction and home improvements industry, Trellidor is sensitive to economic conditions, but it has been well-managed and maintains a strong balance sheet. The business has benefitted from the shift toward work-from-home setups and the low-interest-rate environment, both of which have driven demand for home improvements. Additionally, Trellidor has supported its share price through share buy-backs.
In its results for the year ending 30th June 2024, Trellidor reported a 12.6% increase in revenue, and headline earnings per share (HEPS) grew to 36.1c, up significantly from 4.2c in the previous period. The company noted "declining revenue in the domestic market and elevated opening debt levels as at 30 June 2023, at higher interest rates." However, it also highlighted growth in its international revenue, which increased to R173.0 million, and a reduction in net debt from R146.7 million to R115.7 million, driven by improved profitability and better working capital management at Taylor.
Despite being a thinly traded share, with an average daily trading volume of only about R53,000, Trellidor has shown signs of breaking to new higher levels, potentially attracting more institutional interest. Given the continued demand for security products in South Africa, the company's focus on security solutions positions it well for long-term growth, even though its trading volume makes it a riskier investment option.
