Trellidor CFO explains franchise investments help to mitigate challenging environments

Damian Judge says the conflict in Russia and the Ukraine will put further pressure on supply chains.

Despite facing ongoing challenges in a difficult operating environment, Trellidor CFO Damian Judge explains that he is very pleased with the performance of the new assets the group has brought on board, including the franchise it has repurchased over the past few years, as well as the performance of its UK franchise, which it purchased at the end of 2020.

These two entities have both shown revenue growth, which has resulted in the group seeing a 0.7 percent revenue increase to R284 million for the six months ended 31 December 2021.

“I have also been pleased with the performance of our two new aluminium louvre shutters, which have been well accepted by the market and we have increased our market share as a result,” Damian says.

However, he explains that there is still a bit of work to do as Trellidor’s operating environment remained challenging through the first half of the 2022 financial year due to many of the same pandemic-related issues that have been compounded by additional crises, like the civil unrest in July 2021 and the three-week metal industry strike in October 2021.

“Raw material input costs and logistics challenges in terms of imports have impacted the business significantly. As a result, we have had to push through stronger price increases and invest in stock.”

Damian adds that these have also resulted in the group’s cash generation not being at the levels it has seen historically.

The group now faces an entirely new challenging operating environment, with the impact of the conflict in Russia and the Ukraine being felt in supply chains across the world. “This is expected to put further pressure on the supply chain in terms of imports, but we have already invested in this area of the business to mitigate the impact,” he explains.

Damian explained that, from a growth perspective, the group has been inward focused over the past few years and it has reaped some rewards. “Looking forward, we need to stabilise our investment in working capital, maximise the impact of our price increases through strong cost control management, and return the business to its ‘normal’ cash generation levels.”

In the short term, Trellidor plans to continue this strategy as it navigates the uncertain times it continues to operate in globally.