Rocketing steel and aluminium prices – along with the growing popularity of security estates, where Trellidor’s traditional safety barriers are less in demand – have hit the group’s latest results.

For the year to end-June, Trellidor reported a 99% decline in its headline earnings per share to 0.4c per share, from 40.8c in the previous year. Revenue fell by 1% to R513 million.

Apart from the Trellidor security door brand, the group also owns the blinds and shutter group Taylor, and NMC, a cornicing and skirting product distributor. It does business in Africa and the UK.

The company says its underperformance was largely due to big increases in the prices of steel (+87%) and aluminium prices (+52%) over the past two years, as well as a spike in freight costs. Its gross profit margin shrank from above 42% in the previous year to 38.4%.

"In addition, the subdued residential property market and increasing trend in estate living has had a negative impact on sales of Trellidor’s traditional product."

The group reports that economic recovery in Africa following the pandemic has been relatively slow, and sales to African countries (which represents almost 12% of Trellidor’s sales) declined by 29% over the past two years.

In addition, a strike in October 2021 closed the Trellidor factory for the majority of the month, and lost capacity could not be recovered prior to the annual factory shut down in mid-December 2021.

No final dividend has been declared as the group awaits its application with the Constitutional Court for leave to appeal a judgment that could cost it R32 million, including legal costs.

The company has been engaged in a long labour dispute, and earlier this year the Labour Appeal Court ordered it to reinstate 42 employees and to settle some back-pay payments to these employees from January 2017. 

Over the past year, the group bought back some of its franchises, including in Cape Town’s southern suburbs, Johannesburg North, and Midrand, for R9.5 million.

The company expects that operating environment will remain weak, but hopes to benefit from a new line of “lifestyle” security products, aimed at access-gated estates; and a recovery in sales in the Africa market.

Since July, both Trellidor and Taylor have also implemented "accelerated price increases" since July, which the group believes will bolster its margins, together with lower projected metal prices.

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