TIDMTCN
RNS Number : 1339R
Tricorn Group PLC
07 December 2016
7 December 2016
Tricorn Group plc
("Tricorn" or the "Group")
Interim Results
For the six months ended 30 September 2016
Tricorn Group plc (AIM: TCN.L) the AIM listed tube manipulation
specialist, announces its unaudited interim results for the six
months ended 30 September 2016.
Highlights
-- Revenue up 12.3% on previous period, being 6 months to 31 March 2016
-- China restructuring completed, providing a solid platform for future profitable growth
-- Positive cash flow from operating activities
-- Significant new contract win and long term supply agreement announced post-period end
Financial Summary
Unaudited smonths Unaudited
six months to six months to Six months to Year ended
30 September September 30 September 31 March 31 March
2016 2015 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 8,900 10,096 7,920 18,016
Adjusted Operating Profit* 187 183 (150) 33
Adjusted Profit/(Loss) before tax* 4 38 (311) (273)
Cashflow from operating activities 202 370 852 1,222
Cash & cash equivalents 643 730 855 855
Net (Debt) (3,386) (3,167) (2,920) (2,920)
Adj EPS/(LPS) - basic 0.01p 0.11p (0.30)p (0.19)p
- -
-------------- -------------- -----------
*All references to operating profit, operating margin,
profit/loss before tax and EPS are before restructuring costs,
intangible asset amortisation, share based payment charges and
foreign exchange derivative valuation.
Andrew Moss, Chairman of Tricorn, commented:
"The Group has made good progress through the first half of the
year when compared to the previous period and the Board is
encouraged by the new business won. Our USA and UK businesses have
generated increased revenue through increased market share,
enabling both of our divisions to improve profitability.
In line with our previously announced plans, we consolidated our
activities in China providing a solid platform for future
profitable growth.
Adjusted PBT for the period was in line with the Board's
expectations and we anticipate that full year results will be in
line with market expectations."
Enquires:
Tricorn Group plc Tel +44 (0)1684 569956
Mike Welburn, Chief Executive www.tricorn.uk.com
Phil Lee, Group Finance Director corporate@tricorn.uk.com
Stockdale Securities Limited Tel + 44 (0)20 7601 6100
Tom Griffiths/Henry Willcocks
Notes to Editors:
Tricorn is a value added manufacturer and specialist manipulator
of pipe and tubing assemblies to niche markets worldwide in the
Energy and Transportation sectors.
Headquartered in Malvern, UK, Tricorn employs around 300
employees and operates through four brands: MTC, Maxpower, Franklin
Tubular Products and Minguang-Tricorn Tubular Products.
Chairman's and Chief Executive's statement
Performance in the six months ended 30 September 2016
The Group made encouraging progress through the period despite
its markets remaining weak. The USA and UK businesses benefitted
from the impact of new business wins and, as a result, first half
revenue for the Group was 12.3 % higher than in the six months
ended 31 March 2016 (the "Previous Period").
Adjusted PBT at GBP0.004m was in line with the Board's
expectations and substantially ahead of the Previous Period (loss
:GBP0.311m).
Operational Review
The Group operates two main business divisions focused on the
Transportation and Energy sectors and has four manufacturing
facilities in the UK, USA and China. These locations make it
ideally positioned to support its blue chip OEM customer base, many
of whom are seeking to localise supply and technical support for
their facilities in these key regions.
Transportation
The Transportation division is focused on rigid, nylon and
hybrid tubular products for engines, hydraulic actuation,
transmission lubrication and fuel sender sub-systems. Its customer
base serves both the on and off road markets, including
construction, truck and agriculture.
The USA business, Franklin Tubular Products, continued to make
good progress with revenue and profitability up on the Previous
Period. On 10 November 2016, post-period end the Group announced
that it had been awarded business from Volvo Truck Group that is
expected to generate $3.5m (GBP2.8m) of additional revenue over a
4-year period. In addition, on 30 November 2016, the Group
announced a 5 year supply agreement with one of its key strategic
customers which is expected to generate approximately $9.6m
(GBP7.74m) of revenue from current products.
In the UK, Maxpower Automotive also increased revenue compared
to the Previous Period again as a result of new business wins.
In China, the previously announced project to combine the
activities of the Group's wholly owned facility and joint venture
into a single operation was completed to plan at the end of June
2016. All trading in China is now through the enlarged joint
venture, Minguang-Tricorn Tubular Products. This provides a solid
platform for future growth. In line with Group policy, only the
share of the profit or loss is reported in the consolidated
accounts.
Overall externally reported segmental revenue was GBP6.844m,
which was an increase of 13% on the Previous Period (GBP6.054m).
Segmental adjusted profit before tax was GBP0.061m, up GBP0.039m on
the Previous Period (GBP0.022m).
Energy
The Energy division specialises in the design and manufacture of
larger tubular assemblies and fabrications for engine, cooling and
generator set applications. Its customer base serves the power
generation, oil and gas, mining and marine applications
markets.
Malvern Tubular Components continued to benefit from its
on-going improvement activities and won additional business from
new customers particularly in the power generation market.
Revenue at GBP2.056m was up 10.2% from the Previous Period
(GBP1.866m). Segmental adjusted profit before tax at GBP0.018m
improved GBP0.210m from the Previous Period (loss: GBP0.192m).
Financial Review
Through the first half, the Group benefitted from the cost
reduction activities that were initiated during the corresponding
period last year. This has enabled the Group to operate through the
period with a lower cost base and report a broadly similar adjusted
operating profit of GBP0.187m (2015: GBP0.183m), on revenues that
were GBP1.196m lower. In addition, during the period the Group
merged its activities in China. As a result, its subsidiary
businesses were profitable and a small adjusted profit before tax
was delivered at the Group level.
The Group's functional currency is Sterling. Beyond this, the
Group does have a transactional exposure to the U.S. Dollar (USD),
predominantly for the purchase of machined components. Where
possible the Group hedges against this transactional currency
exposure and currently has financial instruments in place until 31
March 2017. The Group's overseas assets, liabilities and borrowings
are translated at the month end exchange rate, with any foreign
exchange variances taken to reserves. The Group's exposure to the
Euro is not material.
Income Statement
Revenue for the first half of the year at GBP8.900m was up 12.3%
on the six months to 31 March 2016 and down 11.8% on the
corresponding period in the prior year (2015: GBP10.096m). The
impact of the strengthening USD added GBP0.246m to the first half
revenue when compared to the Previous Period. However, this is more
than offset by the completion of the merger of the Group's China
activities at the end of June 2016. Please note that from this
date, the Group reports only its share of the profit or loss before
tax and the revenue figure from the joint venture is not shown in
the Group consolidated accounts.
After reacting to the reduced revenue levels seen through the
second half of the last financial year, the Group benefitted from a
lower cost base through the first half of this financial year. This
resulted in an adjusted operating profit GBP0.187m (2015:
GBP0.183m) and an operating loss of GBP0.150m for the six months to
31 March 2016.
In the first half, the Group incurred restructuring charges of
GBP0.198m. The majority of these related to the merger of the
Group's activities in China, with GBP0.114m specifically relating
to asset impairments associated with the closure of activities in
Wuxi.
After restructuring costs, intangible asset amortisation, share
based payment charges and credits relating to foreign exchange
derivative contracts the Group made an operating loss of GBP0.066m
(2015: operating profit of GBP0.098m).
Loss from joint ventures was GBP0.076m (2015: GBP0.039m).
Finance charges for the half year were GBP0.107m (2015: GBP0.106m).
This charge relates to interest costs on both short term borrowing
and lease finance arrangements. The resultant adjusted profit
before tax was GBP0.004m (2015: GBP0.038m).
The adjusted earnings per share was 0.01p (2015: 0.11p) and
after deducting non-underlying items the basic loss per share was
0.74p (2015: 0.14p).
Cash Flow
The Group's net cash flow from operating activities for the
first half was GBP0.202m (2015: GBP0.370m).
The Group's investment in capital expenditure in the first half
was GBP0.307m (2015: GBP0.297m). The majority of this expenditure
was associated with new business and facility improvements in the
UK and US. Funding of capital expenditure projects is through a
combination of short term borrowings and lease finance
arrangements.
Net debt at the half year end was GBP3.386m compared to
GBP3.167m at 30 September 2015 and GBP2.920m at 31 March 2016.
Translation of the Group's USD borrowings at the half year has had
the impact of increasing the Group's net debt by GBP0.224m when
compared to 31 March 2016 and GBP0.311m when compared to 30
September 2015. As a result of the higher net debt, gearing at the
half year was 57.4% (2015: 49.5%).
Balance Sheet
At 30 June 2016 the Group completed the transfer activities
associated with its facilities in China. This involved closing its
wholly owned subsidiary in Wuxi and investing the resultant assets
into its joint venture in Nanjing. On completion of the
transaction, the Group had invested a further GBP0.518m of assets,
comprising tangible assets and inventories, into the joint venture.
After taking into account further investment from the joint venture
partner, the Group now holds 63% of the equity. The Group will
continue to report the business as a joint venture and believes
that this is the most appropriate treatment in its consolidated
accounts.
Total assets at 30 September 2016 were GBP12.538m, down
GBP0.371m on 30 September 2015, largely on the back of lower trade
receivables, inventories and cash and equivalents.
Net working capital at 30 September 2016 was GBP3.834m, which
was GBP0.868m lower than at 30 September 2015 and GBP0.460m higher
than at 31 March 2016.
Outlook
The Group has made good progress through the first half of the
year when compared to the Previous Period and the Board is
encouraged by the new business won. Our USA and UK businesses have
generated increased revenue through increased market share,
enabling both of our divisions to improve profitability.
In line with our previously announced plans, we consolidated our
activities in China providing a solid platform for future
profitable growth.
Adjusted PBT for the period was in line with the Board's
expectations and we anticipate that full year results will be in
line with market expectations.
Andrew Moss Mike Welburn
Chairman Chief Executive
Group statement of comprehensive income
For period ended 30 September 2016
Note Unaudited
Unaudited six six months Audited
months to 30 Unaudited six Unaudited six to 30 Year Ended
September months to 30 months to 30 September 31 March
2016 September 2016 September 2016 2015 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Underlying Non-Underlying Group
Revenue 3 8,900 - 8,900 10,096 18,016
Cost of sales (5,169) - (5,169) (5,962) (10,752)
--------------- ---------------- ----------------- ------------ ----------
Gross profit 3,731 - 3,731 4,134 7,264
Distribution costs (394) - (394) (538) (969)
Administration costs
* General administration costs (3,150) - (3,150) (3,413) (6,262)
* Restructuring costs - (198) (198) (16) (270)
* Intangible asset amortisation - (95) (95) (63) (158)
* Share based payment charge - (4) (4) (29) (59)
* Fair value change relating to forward exchange
contracts - 44 44 23 -
------------------------------------------------------- ---- --------------- ---------------- ----------------- ------------ ----------
Total administration costs (3,150) (253) (3,403) (3,498) (6,749)
Operating profit/(loss) 187 (253) (66) 98 (454)
----------- ---------------- ----------------- ----------------- ----------
Share of loss from joint venture (76) - (76) (39) (99)
Finance costs (107) - (107) (106) (207)
Profit/(loss) before tax 3 4 (253) (249) (47) (760)
Income tax expense - - - - 208
Loss for the year and total comprehensive expense 4 (253) (249) (47) (552)
=========== ================ ================= ================= ==========
Attributable to:
Equity holders of the parent company 4 (253) (249) (47) (552)
=========== ================ ================= ================= ==========
Continuing Operations
Earnings per share:
Basic loss per share 4 (0.74)p (0.14)p (1.64)p
Diluted loss per share 4 (0.74)p (0.14)p (1.64)p
Group statement of changes in equity
For period ended 30 September 2016
Share
based
Share Share Merger Translation payment Retained
capital premium reserve Reserve Reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2015 3,349 1,692 1,388 55 401 (455) 6,430
(audited)
Issue of new shares 30 - - - - - 30
Share based payment
charge - - - - 29 - 29
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Total transactions with
owners 30 - - - 29 - 59
Foreign exchange loss
on translation of
Reserves - - - (47) - - (47)
Comprehensive income - - - - - (47) (47)
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Balance at 30 September
2015 3,379 1,692 1,388 8 430 (502) 6,395
(unaudited)
Share based payment
charge - - - - 30 - 30
Write back of share
based reserve - - - - (160) 160 -
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Total transactions with
owners - - - - (130) 160 30
Foreign exchange gain
on translation of
Reserves - - - 99 - - 99
Comprehensive income - - - - - (505) (505)
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Balance at 31 March
2016 3,379 1,692 1,388 107 300 (847) 6,019
(audited)
Share based payment
charge - - - - 4 - 4
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Total transactions with
owners - - - - 4 - 4
Foreign exchange gain
on translation of
Reserves - - - 116 - - 116
Comprehensive income - - - - - (249) (249)
--------------------------------- ----------------------------------- ----------------------------------- ------------------------------------------- ----------------------------------- --------------------------------------- ------------------------------
Balance at 30 September
2016 3,379 1,692 1,388 223 304 (1,096) 5,890
(unaudited)
========================= ========================= =========================== ========================= ============================ ========================= =====================
Group statement of financial position
At 30 September 2016
Unaudited Unaudited Audited
30 September 30 September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'000
Assets
Non current
Goodwill 391 391 391
Intangible assets 407 404 500
Investment in Joint Venture 660 276 216
Property, plant and equipment 4,113 4,147 3,796
------------ ------------ ---------
5,571 5,218 4,903
Current
Inventories 2,467 2,888 2,258
Trade and other receivables 3,825 4,057 3,550
Cash and cash equivalents 643 730 855
Corporation tax 32 16 32
------------ ------------ ---------
6,967 7,691 6,695
Assets held in disposal group classified as held for sale - - 765
Total assets 12,538 12,909 12,363
============ ============ =========
Liabilities
Current
Trade and other payables (2,458) (2,243) (2,434)
Borrowings (3,924) (3,773) (3,677)
Corporation tax (26) (215) -
(6,408) (6,231) (6,111)
Non-current
Borrowings (105) (124) (98)
Deferred tax (135) (159) (135)
------------ ------------ ---------
(240) (283) (233)
Total liabilities (6,648) (6,514) (6,344)
Net assets 5,890 6,395 6,019
============ ============ =========
Equity
Share capital 3,379 3,379 3,379
Share premium account 1,692 1,692 1,692
Merger reserve 1,388 1,388 1,388
Translation reserve 223 8 107
Share based payment reserve 304 430 300
Retained earnings (1,096) (502) (847)
Total equity 5,890 6,395 6,019
============ ============ =========
Group statement of cash flows
For period ended 30 September 2016
Unaudited Unaudited Audited
Six months Six months Year Ended
to to
30 September 30 September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss) after taxation (249) (47) (552)
Adjustment for:
Depreciation 345 334 704
Net finance costs in statement of comprehensive
income 107 106 207
Restructuring charges 114 - -
Amortisation charge 95 63 158
Share based payment charge 4 29 59
Share of joint venture operating losses 76 39 99
Credit relating to foreign exchange derivative
contracts (44) (23) -
Taxation expense recognised in statement
of comprehensive income - - (208)
(Increase)/Decrease in trade and other
receivables (274) 838 1,329
Increase/(Decrease) in trade payables
and other payables 52 (578) (414)
Decrease/(Increase) in inventories 66 (374) (19)
------------ ------------ ----------
Cash generated 292 387 1,363
Interest paid (132) (132) (207)
Income taxes paid 42 115 66
Net cash generated by operating activities 202 370 1,222
============ ============ ==========
Cash flows from investing activities
Investment in overseas joint venture (518) - -
NBV of asset sold on disposal of business 415 - -
Purchase of plant and equipment (307) (297) (629)
Purchase of intangible assets - - (192)
Net cash used by investing activities (410) (297) (821)
============ ============ ==========
Cash flows from financing activities
Issue of ordinary share capital - 30 30
Movement in short term borrowings 41 (35) (201)
Payment of finance lease liabilities (45) (32) (69)
------------ ------------ ----------
Net cash absorbed by financing activities (4) (37) (240)
Net (decrease)/increase in cash and cash
equivalents (212) 36 161
Cash and cash equivalents at beginning
of period 855 694 694
------------ ------------ ----------
Cash and cash equivalents at end of period 643 730 855
============ ============ ==========
1 General information
Tricorn Group plc and subsidiaries' (the 'Group') principal
activities comprise high precision tube manipulation, systems
engineering and specialist fittings.
The Group's customer base includes major blue chip companies
with world-wide activities in key market sectors, including Power
Generation, Oil & Gas, Off Highway, Commercial Vehicles,
Agriculture and Automotive.
Tricorn Group plc is the Group's ultimate parent company. It is
incorporated and domiciled in the United Kingdom. The address of
Tricorn Group plc's registered office, which is also its principal
place of business, is Spring Lane, Malvern, Worcestershire, WR14
1DA. The Group's shares are admitted to trading on the Alternative
Investment Market of the London Stock Exchange.
These consolidated interim financial statements have been
approved for issue on 7 December 2016 by the Board of Directors.
Amendments to the financial statements are not permitted after they
have been approved. Copies of this announcement are available on
the Company's website, www.tricorn.uk.com.
The financial information set out in this interim report does
not constitute statutory accounts as defined in the Companies Act
2006. The Group's statutory financial statements for the year ended
31 March 2016 have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and
did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006.
2 Accounting policies
Basis of preparation
These unaudited interim consolidated financial statements are
for the six months ended 30 September 2016. They have been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted
by the European Union. They do not include all of the information
required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the
Group for the year ended 31 March 2016, which have been prepared in
accordance with International Financial Reporting Standards.
The same accounting policies and methods of computation are
followed in the interim financial statements as compared with the
most recent annual financial statements.
3 Segmental reporting
The Group operates two main business segments:
-- Energy: manipulated tubular assemblies for use in power
generation, oil and gas and marine sectors.
-- Transportation: ferrous, non-ferrous and nylon material
tubular assemblies for use in on and off-highway applications.
3 Segmental reporting (continued)
The financial information detailed below is frequently reviewed
by the Chief Operating Decision maker.
6 months to 30 September 2016 (unaudited)
Energy Transportation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2,056 6,844 - 8,900
Segmental profit/(loss) before tax 18 61 - 79
Restructuring costs (198)
Intangible asset amortisation (95)
Fair value credit relating to foreign exchange contracts 44
Share based payment charge (4)
Corporate recharges 1
Share of losses of joint venture (76)
________
Loss before tax (249)
Segmental total assets 2,700 8,997 841 12,538
6 months to 30 September 2015 (unaudited) - Restated
Energy Transportation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 3,612 6,484 - 10,096
Segmental profit/(loss) before tax 255 (104) - 151
Restructuring costs (16)
Intangible asset amortisation (63)
Fair value credit relating to foreign exchange contracts 23
Share based payment charge (29)
Corporate recharges (74)
Share of losses of joint venture (39)
_________
Loss before tax (47)
Segmental total assets 3,015 8,731 1,163 12,909
3 Segmental reporting (continued)
Year ended 31 March 2016
Energy Transportation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5,478 12,538 - 18,016
Segmental profit/(loss) before tax 63 (82) - (19)
Restructuring costs (270)
Intangibles amortisation (158)
Share based payment charge (59)
Corporate recharges (155)
Share of loss from joint venture (99)
_________
Profit before tax (760)
Segmental total assets 2,573 9,137 653 12,363
4 (Loss)/Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
and the post tax effect of dividends and/or interest, on the
assumed conversion of all dilutive options and other dilutive
potential ordinary shares.
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
Six months ended 30 September 2016
Weighted average
Loss number of shares Loss per share
GBP'000 Number '000 Pence
Basic loss per share (249) 33,795 (0.74)p
------- ----------------- ----------------
Dilutive shares -
Diluted loss per share (249) 33,795 (0.74)p
------- ----------------- ----------------
Six months ended 30 September 2015
Weighted average
Loss number of shares Loss per share
GBP'000 Number '000 Pence
Basic earnings per share - continuing
operations (47) 33,495 (0.14)p
------- ----------------- ----------------
Dilutive shares -
Diluted earnings per share -
continuing operations (47) 33,495 (0.14)p
------- ----------------- ----------------
4 (Loss)/Earnings per share (continued)
31 March 2016
Weighted average
Loss number of shares Loss per share
GBP'000 Number '000 Pence
Basic earnings per share - continuing
operations (552) 33,646 (1.64)p
------- ----------------- ----------------
Dilutive shares -
Diluted earnings per share -
continuing operations (552) 33,646 (1.64)p
------- ----------------- ----------------
The directors consider that the following adjusted earnings per
share calculation is a more appropriate reflection of the Group
performance.
Six months ended 30 September 2016
Profit Weighted average Earnings per
number of shares share
GBP'000 Number '000 Pence
Basic earnings per share (249) 33,795 (0.74)p
-------- ------------------ -------------
Restructuring costs 198
Intangible asset amortisation 95
Fair value credit relating
to foreign exchange contracts (44)
Share based payment charge 4
Adjusted earnings per share 4 33,795 0.01p
-------- ------------------ -------------
Dilutive shares - - -
Diluted adjusted earnings
per share 4 33,795 0.01p
-------- ------------------ -------------
Six months ended 30 September 2015
Weighted average
Profit number of shares Earnings per
share
GBP'000 Number '000 Pence
Basic earnings per share -
continuing operations (47) 33,495 (0.14)p
-------- ----------------- --------------
Restructuring costs 16
Intangible asset amortisation 63
Fair value credit relating
to foreign exchange contracts (23)
Share based payment charge 29
Adjusted earnings per share 38 33,495 0.11p
-------- ----------------- --------------
Dilutive shares - - -
Diluted adjusted earnings per
share 38 33,495 0.11p
-------- ----------------- --------------
31 March 2016
Weighted average
Loss number of shares Loss per share
GBP'000 Number '000 Pence
Basic earnings per share -
continuing operations (552) 33,646 (1.64)p
------- ----------------- ----------------
Restructuring costs 270
Intangible asset amortisation 158 -
Share based payment charge 59
Adjusted earnings per share (65) 33,646 (0.19)p
------- ----------------- ----------------
Dilutive shares - -
Diluted adjusted earnings per
share (65) 33,646 (0.19)p
------- ----------------- ----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGGRCPUPQGMQ
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