Our opinion on the current state of TRL

Trellidor (TRL) is a manufacturer of barrier security products, blinds and security shutters since 1976. The company is divided into the Trellidor business (security barriers) and the Taylor business (security and decorative blinds). Taylor also imports and distributes cornicing and skirting. The company has 70 franchise outlets in South Africa and a very strong brand name. The company has representation in 24 countries, 17 of which are in Africa. Obviously, this company is linked to the construction and home improvements industry and so it is at the mercy of the state of the economy. It is well managed and has a strong balance sheet. It should benefit directly from any improvement in the economy and has benefited from the work-from-home shift in the economy as well as the low level of interest rates. The company has been engaging in share buy-backs which support the current share price. In its results for the six months to 31st December 2022 the company reported revenue down by 3,6% and headline earnings per share (HEPS) up 0,4%. The company said, "The operating environment remained challenging through the first half of the 2023 financial year (“F23”), in part, due to the sustained economic pressure the South African consumer is facing, spend increasingly being allocated to back up power and water systems to mitigate electricity and water supply disruptions". In a trading statement for the six months to 30th June 2023 the company estimated that HEPS would increase by at least 20%. Trellidor is a relatively thinly traded share which increases risk. It gave a strong on balance volume (OBV) buy signal on 22/9/20 at 190c and then moved up to 300c. Since then it has come off a little. Obviously, security remains a priority for South Africans. On 28th October 2020, the company announced that it was buying 100% of its UK franchisor, Really Secure, for about GBP1,5m.