Trellidor increases selling prices to protect margins

Trellidor, which manufactures and distributes security gates and window burglar bars, has increased its prices as a way of protecting margins against elevated raw material and freight costs.

Trellidor joins a long list of businesses that are feeling the squeeze from Covid-induced global supply chain disruptions.

Releasing its financial results for the year to end-June, the security barrier company said on Monday that steel and aluminium prices had risen 87% and 52%, respectively, on overage, over the past two years.

“Further, supply chain constraints have persisted, resulting in lost revenue due to stock outs,” the company said in a statement.

The cost pressures come at a time when the JSE-listed firm is dealing with the financial fallout of a court ruling that ordered it to reinstate 42 dismissed employees and make limited back payments.

It has set aside R32m to cover these costs, after its appeal against the labour court judgment in 2020 was dismissed in March 2022. However, it has taken the matter to the Constitutional Court for review.

The dispute related to night-shift workers who engaged in an unprotected strike with day-shift colleagues while not on duty.

The provisions, together with high input costs, hit headline earnings per share, which fell to 0.4c year on year from 40.8c previously.

Household budgets were also stretched, with consumers trading down, resulting in lower demand for the group’s higher priced and premium products, the company said. The subdued residential property market and trend in estate living has had a negative effect on sales of Trellidor’s traditional product.

“Economic recovery in Africa following the pandemic has been relatively slow, a factor of limited government capacity to mitigate the fallout as well as lower international trade flows and foreign direct investment,” the company said.

Sales to African countries, excluding SA represent about 11.7% of total sales and have declined 29% over the past two years.

Trellidor’s distribution is predominantly through a national network of 51 franchise owners, essentially small businesses.

The results were affected by the civil unrest in July 2021, as well as a three-week metal industry strike in October, which resulted in, among other things, lost sales and production inefficiencies.

mahlangua@businesslive.co.za