TIDMTCN
RNS Number : 3421H
Tricorn Group PLC
07 June 2017
7 June 2017
Tricorn Group plc
Final Results
For the year ended 31 March 2017
Tricorn Group plc ('Tricorn' or the 'Group'), (TCN.L) the AIM
quoted tube manipulation specialist, announces its audited final
results for the year ended 31 March 2017.
Highlights
-- Profits significantly ahead of market expectations
-- Successfully completed consolidation of China operations
-- Over GBP10m ($12.9m) of business secured in a long term
agreement and new contract wins in the USA
-- Investment in manufacturing footprint aligned to a growing customer base
-- Improved trading through final quarter
-- Positive cash flow from operating activities
Financial Summary
2017 2016
GBP'000 GBP'000
Revenue 18,519 18,016
Operating profit* 497 33
Profit/(loss) before tax* 230 (273)
Net cash from operating activities 614 1,222
Cash and equivalents 642 855
Net debt (3,497) (2,920)
Earnings/(loss) per share - basic* 0.72p (0.19)p
* All references to operating profit, profit/(loss) before tax
and earnings/(loss) per share are for continuing operations and
before restructuring costs, intangible asset amortisation and share
based payment charges.
Commenting on the results and the Group's prospects, Andrew
Moss, Chairman of Tricorn, said:
"In a period in which market conditions have at times been
challenging, we are pleased to report a significant improvement in
our performance, with profits in the year to 31 March 2017 being
significantly ahead of market expectations. During the year we
successfully completed the consolidation of our manufacturing
operations in China, which is now trading profitably.
The investment we have made in aligning our manufacturing
footprint to the needs of our customers combined with our ongoing
focus on operational performance is enabling us to win new
business, grow market share and improve profitability.
We are encouraged by the improved trading in the final quarter
of the year and expect to make further progress in the current
year."
Enquiries:
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 has four manufacturing facilities in the UK, USA and
China. It operates through four brands: Malvern Tubular Components,
Maxpower Automotive, Franklin Tubular Products and Minguang-Tricorn
Tubular Products.
Chairman's and Chief Executive's statement
Performance in the year ended 31 March 2017
Revenue for the year at GBP18.519m was 2.8% higher than the
previous year (2016: GBP18.016m) reflecting the impact of new
business growth and improved trading across the Group towards the
end of the period. Second half revenue was 8% up on the first 6
months and 21.5% higher than the corresponding period last year.
From July 2016, the Group's businesses in China were consolidated
into an enlarged joint venture, which in line with Group policy, is
reported on a profit or loss only basis. A favourable US dollar
translation impact more than offset the resulting reduction in
reported revenue.
Underlying operating profit at GBP0.497m was significantly up
from the previous year (2016: GBP0.033) and with the joint venture
in China operating profitably, following the consolidation, the
underlying profit before tax for the year at GBP0.230m was up
GBP0.503m on the previous year (2016: loss GBP0.273m).
In the Transportation division, good progress continued to be
made on several fronts. In the USA over GBP10m ($12.9m) of business
was secured from both existing and new customers reflecting the
strengthening customer relationships being developed in the region.
In the UK revenue continued to grow as a result of new business and
the product application base was expanded to include braking
systems for electric vehicles.
The Energy division expanded its reach into the power generation
sector and with customer end markets starting to improve saw a
notable increase in demand through the latter part of the year.
Business Review
The Group operates two main business divisions focused on the
transportation and energy sectors. From the Group's four
manufacturing facilities, the businesses serve a global blue chip
OEM customer base many of whom have major facilities in the UK,
USA, and China as well as elsewhere in the world.
With manufacturing operations now established in each of these
key locations, the Group is ideally positioned to support its
customers' facilities as they continue to seek to localise supply
and technical support.
Transportation
The Transportation division is focused on rigid, nylon and
hybrid tubular products for engines, braking systems, transmission
lubrication, fuel sender sub-systems and hydraulic actuation in a
variety of on and off road applications including construction,
trucks and agriculture.
External revenue for the year ended 31 March 2017 was GBP13.595m
(2016: GBP12.538m) and underlying operating profit increased to
GBP0.329m (2016: GBP0.043m).
In the USA Franklin Tubular Products continued to develop its
relationships and secure market share with a growing customer base.
Strong operational performance and early investment in innovative
capabilities for the business has resulted in new contract wins and
a long-term agreement with a combined estimated value of over
GBP10m ($12.9m) for the supply of on-board heavy truck products as
well as hydraulic fluid systems for off road machines.
In the UK, Maxpower Automotive benefited from the impact of new
business growth following the prior year investment in rigid
hydraulic tube manufacture. More recently the development of brake
system products for electric vehicle applications provides further
scope for expansion.
In China, both the Group's wholly owned facility and joint
venture were combined into an enlarged operation. This reduced
operational gearing and concentrated resources into a single
location in an enlarged joint venture in Nanjing. The business
operated profitably over the latter part of the financial year and
is now firmly established on a solid platform for growth.
Energy
The Energy division is focused on the design and manufacture of
larger tubular assemblies and fabrications for diesel engines and
power generator sets. The key markets served through its customers
are power generation, mining, marine and oil and gas
applications.
External revenue for the year at GBP4.924m was down on the
previous year (2016: GBP5.478m), however, second half revenue was
up 39.5% on the previous 6 months. This was a result of the impact
of new business secured, principally in the power generation
sector, and improving end markets for its existing customer base.
Underlying operating profit at GBP0.280m was substantially up on
the previous year (2016: GBP0.098m) as the business benefited from
restructuring in the prior year.
People
The Board would like to take the opportunity to thank all its
employees for their hard work and support through the year. Their
commitment and dedication ensures that we continue to drive the
business forward and deliver quality products to our customers.
Financial Review
The Group entered the financial year with a lower overhead base
following the restructuring implemented in the previous financial
year. Costs were further reduced in July 2016 through the
consolidation of the Group's operations in China.
As a result, and coupled with improving trading conditions, all
of the Group's subsidiary businesses were profitable in the year
and the China joint venture was profitable through the final
quarter. Financial results for the Group were much improved on the
prior year with underlying operating profit for the year of
GBP0.497m (2016: GBP0.033m) and after finance costs and the share
of the full year loss from the joint venture, underlying profit
before tax was GBP0.230m (2016 loss: GBP0.273m).
Income Statement
Revenue for the year, at GBP18.519m was up GBP0.503m on the
prior year of GBP18.016m. The improvement over the prior year
reflected the impact of new business growth and the improved
trading experienced towards the end of the financial year. The
impact of the strengthening US dollar during the year was largely
offset by a reduction in revenues in China following the completion
of the merger of the Group's China activities at the end of June
2016. From that date and in line with Group policy the Group has
reported its share of the profit or loss before tax whilst the
revenue figure for the joint venture is not reported in the Group
consolidated income statement.
Headline administration and distribution costs were down
GBP0.211m over the previous financial year despite a stronger US
dollar, which, on translation added GBP0.410m to these costs in the
year. Excluding the impact of the movement of the US dollar the
Group has seen a GBP0.621m reduction in its distribution and
administrative cost base over the previous financial year.
Underlying operating profit improved significantly to GBP0.497m
when compared to the prior year's underlying operating profit of
GBP0.033m.
Finance costs for the year were GBP0.218m (2016: GBP0.207m) and
the Group delivered an underlying profit before tax for the year of
GBP0.230m (2016: underlying loss before tax GBP0.273m).
Total restructuring costs for the Group in the year were
GBP0.303m (2016: 0.270m), of which GBP0.223m related to the
consolidation of activities in China and of that figure GBP0.114m
comprised non-cash asset write-downs. After deducting restructuring
costs, intangible asset amortisation and share based payment
charges, the loss before tax for the year was GBP0.287m (2016:
GBP0.552m).
Basic loss per share (LPS) for continuing businesses was 0.81p
(2016: LPS 1.64p) and after adjusting for one-off items, the
underlying earnings per share was 0.72p (2016: LPS 0.19p). The
Board is not recommending the payment of a final dividend (2016:
nil pence).
Cash Flow
The improved profit position of the Group and the management of
working capital, as demand increased through the final quarter of
the financial year, enabled it to generate net cash from operating
activities of GBP0.614m (2016: GBP1.222m). Capital expenditure for
the year was GBP0.559m (2016: GBP0.629m).
At 31 March 2017, net debt was GBP3.497m (2016: GBP2.920m). The
stronger US dollar at the year end had a significant impact on the
reported net debt figure, resulting in an increase in reported
borrowings of GBP0.346m on translation at year end rates. A large
proportion of the US dollar debt is used for working capital
purposes in the US and is secured against US assets. Cash and cash
equivalents were GBP0.642m (2016: GBP0.855m) and gearing was 57.9%
(2016: 48.5%), which again was impacted by the stronger US
dollar.
The Group uses short term borrowings to fund its operating
activities, with selected capital additions and larger projects
being financed by lease finance arrangements. At the year end, the
Group did not have any term debt in place.
Balance Sheet
Total assets of the Group as at 31 March 2017 were GBP13.788m,
which was an increase of GBP1.425m on the prior year, with net
working capital in the year also increasing to GBP3.890m (2016:
GBP3.374m).
During the year, the Group assessed the useful lives of its
plant and equipment. As a result of this review, the Group
increased the maximum life for this class of asset from 10 years to
15 years. Assets were not revalued as a part of this exercise and
the impact on the depreciation charge in the year was a reduction
of GBP0.122m.
On translation of its overseas assets and liabilities, the Group
made an exchange gain of GBP0.269m (2016: gain GBP0.052m). This is
a non-cash movement, which is not hedged and is treated as a
movement in other comprehensive income. As a result, the
translation reserve in shareholders' funds now shows a GBP0.376m
surplus (2016: surplus GBP0.107m).
Outlook
In a period in which market conditions have at times been
challenging, we are pleased to report a significant improvement in
our performance, with profits in the year to 31 March 2017 being
significantly ahead of market expectations. During the year we
successfully completed the consolidation of our manufacturing
operations in China, which is now trading profitably.
The investment we have made in aligning our manufacturing
footprint to the needs of our customers combined with our ongoing
focus on operational performance is enabling us to win new
business, grow market share and improve profitability.
We are encouraged by the improved trading in the final quarter
of the year and expect to make further progress in the current
year.
Andrew Moss Mike Welburn
Chairman Chief Executive
Group income statement
For year ended 31 March 2017
All of the activities of the Group are classed as
continuing.
Note
2017 2017 2017 2016 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Underlying Non-underlying Group Underlying Non-underlying Group
Revenue 3 18,519 - 18,519 18,016 - 18,016
Cost of sales (11,002) - (11,002) (10,752) - (10,752)
---------- -------------- ---------- ------------ -------------- ---------
Gross profit 7,517 - 7,517 7,264 - 7,264
Distribution costs (793) - (793) (969) - (969)
Administration costs
- General administration
costs (6,227) - (6,227) (6,262) - (6,262)
- Restructuring
costs - (303) (303) - (270) (270)
- Intangible asset
amortisation - (190) (190) - (158) (158)
- Share based payment
charge - (24) (24) - (59) (59)
Total administration
costs (6,227) (517) (6,744) (6,262) (487) (6,749)
---------- -------------- ---------- ------------ -------------- ---------
Operating profit/(loss) 3 497 (517) (20) 33 (487) (454)
---------- -------------- ---------- ------------ -------------- ---------
Share of loss from
joint venture (49) - (49) (99) - (99)
Finance costs (218) - (218) (207) - (207)
---------- -------------- ---------- ------------ -------------- ---------
Profit/(loss) before
tax 230 (517) (287) (273) (487) (760)
Income tax credit 12 - 12 160 48 208
---------- -------------- ---------- ------------ -------------- ---------
Profit/(loss) after
tax from continuing
operations 3 242 (517) (275) (113) (439) (552)
Attributable to:
Equity holders
of the parent company 242 (517) (275) (113) (439) (552)
========== ============== ========== ============ ============== =========
Continuing Operations
Earnings per share:
Basic loss per share 4 (0.81)p (1.64)p
Diluted loss per
shares 4 (0.81)p (1.64)p
Group statement of comprehensive income
For year ended 31 March 2017
2017 2016
GBP'000 GBP'000
Loss for the year (275) (552)
Other comprehensive income
Items that will subsequently be reclassified
to profit or loss
Foreign exchange translation differences 269 52
Total comprehensive loss attributable to
equity holders of the parent (6) (500)
========= =========
Group statement of changes in equity
For year ended 31 March 2017
Share
based Profit
Share Share Merger Trans-lation payment and loss
Capital premium reserve reserve reserve account 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
Share based payment
charge - - - - 59 - 59
Write back of share
based payment reserve - - - - (160) 160 -
Issue of new shares 30 - - - - - 30
Total transactions
with owners 30 - - - (101) 160 89
Loss and total comprehensive
expense - - - 52 - (552) (500)
--------- -------- -------- ------------ --------- --------- -------
Balance at 31 March
2016 3,379 1,692 1,388 107 300 (847) 6,019
Share based payment
charge - - - - 24 - 24
Write back of share
based payment reserve - - - - (15) 15 -
Total transactions
with owners - - - - 9 15 24
Loss and Total Comprehensive
expense - - - 269 - (275) (6)
--------- -------- -------- ------------ --------- --------- -------
Balance at 31 March
2017 3,379 1,692 1,388 376 309 (1,107) 6,037
========= ======== ======== ============ ========= ========= =======
Group statement of financial position
At 31 March 2017
2017 2016
GBP'000 GBP'000
Assets
Non current
Goodwill 391 391
Intangible assets 385 500
Property, plant and equipment 4,300 3,796
Investment in joint venture 684 216
--------- ---------
5,760 4,903
Current
Inventories 2,662 2,258
Trade and other receivables 4,692 3,550
Cash and cash equivalents 642 855
Corporation tax 32 32
--------- ---------
8,028 6,695
Assets held in disposal group classified as held for sale - 765
Total assets 13,788 12,363
========= =========
Liabilities
Current
Trade and other payables (3,464) (2,434)
Borrowings (4,013) (3,677)
Corporation tax (32) -
(7,509) (6,111)
Non-current
Borrowings (126) (98)
Deferred tax (116) (135)
--------- ---------
(242) (233)
Total liabilities (7,751) (6,344)
Net assets 6,037 6,019
========= =========
Equity attributable to owners of the parent
Share capital 3,379 3,379
Share premium account 1,692 1,692
Merger reserve 1,388 1,388
Translation reserve 376 107
Share based payment reserve 309 300
Profit and loss account (1,107) (847)
Total equity 6,037 6,019
========= =========
Group statement of cash flows
For year ended 31 March 2017
2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Loss after taxation from continuing operations (275) (552)
Adjustment for:
- Depreciation 513 704
- Non-cash restructuring 114 -
- Net finance costs in income statement 218 207
- Amortisation charge 190 158
- Share based payment charge 24 59
- Share of joint venture operating losses 49 99
- Taxation credit recognised in income statement (12) (208)
- (Increase)/Decrease in trade and other receivables (984) 1,329
- Increase/(Decrease) in trade payables and other payables 1,003 (414)
- Increase in inventories (25) (19)
---------- ----------
Cash generated by continuing operations 815 1,363
Interest paid (226) (207)
Income taxes paid 25 66
Net cash generated by operating activities 614 1,222
========== ==========
Cash flows from investing activities
Proceeds of assets sold on disposal of business (157) -
Purchase of plant and equipment (559) (629)
Purchase of intangible assets (75) (192)
Net cash used in investing activities (791) (821)
========== ==========
Cash flows from financing activities
Issue of ordinary share capital - 30
Movement in short term borrowings 41 (201)
Payment of finance lease liabilities (77) (69)
---------- ----------
Net cash used in financing activities (36) (240)
Net (decrease)/increase in cash and cash equivalents (213) 161
Cash and cash equivalents at beginning of year 855 694
---------- ----------
Cash and cash equivalents at end of year 642 855
========== ==========
1 General information
Tricorn Group plc and subsidiaries' (the 'Group') principal
activities comprise high precision tube manipulation and systems
engineering.
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. Tricorn Group plc's shares are quoted on the Alternative
Investment Market of the London Stock Exchange.
The consolidated financial statements have been approved for
issue by the Board of Directors on 6 June 2017. Amendments to the
financial statements are not permitted after they have been
approved.
The financial information set out in this final results
announcement does not constitute statutory accounts as defined in
Section 435 of the Companies Act 2006. The group income statement,
the group statement of comprehensive income, the group statement of
changes in equity, the group statement of financial position, the
group statement of cash flows and the associated notes for the year
ended 31 March 2017 have been extracted from the Group's financial
statements upon which the auditor's opinion is unqualified and does
not include any statement under Section 498 of the Companies Act
2006. The statutory accounts for the year ended 31 March 2017 will
be delivered to the Registrar of Companies following the Group's
Annual General Meeting.
2 Accounting policies
Basis of preparation
This financial information has been prepared under the required
measurement bases specified under International Financial Reporting
Standards (IFRS) and in accordance with applicable IFRS as adopted
by the European Union and IFRS as issued by the International
Accounting Standards Board.
The Group distinguishes between underlying and non-underlying
items in its Consolidated Income Statement. Non-underlying items
are material items which arise from unusual non-recurring or
non-trading events. They are disclosed on the face of the
Consolidated Income Statement where in the opinion of the Directors
such disclosure is necessary in order to fairly present the results
for the period. Non-underlying items comprise exceptional costs of
Group restructuring, intangible assets amortisation and share based
payment charges.
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.
Year ended 31 March 2017 Energy Transport-ation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
- from external customers 4,924 13,595 - 18,519
- from other segments 157 40 (197) -
Segment revenues 5,081 13,635 (197) 18,519
Underlying operating profit/(loss)* 280 329 (112) 497
Restructuring charges (34) (252) (17) (303)
Intangible asset amortisation - - (190) (190)
Share based payment charge - - (24) (24)
Operating profit/(loss) 246 77 (343) (20)
Share of loss from joint venture - - (49) (49)
Net finance costs (29) (134) (55) (218)
---------- ------------------ ------------- ----------
Profit/(Loss) before tax 217 (57) (447) (287)
---------- ------------------ ------------- ----------
Other segment information:
Segmental assets 3,332 10,051 405 13,788
Capital expenditure 184 476 - 660
Depreciation 200 311 2 513
*- Before intangible asset amortisation, share based payment charges and restructuring costs
3 Segmental reporting (continued)
Year ended 31 March 2016 Energy Transportation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
- from external customers 5,478 12,538 - 18,016
- from other segments 329 191 (520) -
Segment revenues 5,807 12,729 (520) 18,016
Underlying operating profit/(loss)* 98 43 (108) 33
Restructuring charges (32) (225) (13) (270)
Intangible asset amortisation - - (158) (158)
Share based payment charge - - (59) (59)
Operating profit/ (loss) 66 (182) (338) (454)
Share of loss from joint venture - - (99) (99)
Net finance costs (35) (125) (47) (207)
-------- --------------- ------------ ---------
Profit/(loss) before tax 31 (307) (484) (760)
-------- --------------- ------------ ---------
Other segment information:
Segmental assets 2,573 9,137 653 12,363
Capital expenditure 251 529 1 781
Depreciation 271 431 2 704
*- Before intangible asset amortisation, share based payment
charges and restructuring costs.
The Group's revenue from external customers (by destination) and
its geographic allocation of total assets may be summarised as
follows:
Year ended
31 March 2017
Revenue Non-current Current Assets Total Assets
assets
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 8,989 2,455 4,903 7,358
Europe 1,086 - - -
Rest of World 8,444 3,305 3,125 6,430
-------- ----------- -------------- ------------
18,519 5,760 8,028 13,788
======== =========== ============== ============
Year ended
31 March 2016
Revenue Non-current Current assets Total Assets
assets
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 7,805 2,386 4,197 6,583
Europe 1,109 - - -
Rest of World 9,102 2,517 3,263 5,780
--------- ------------ -------------- ------------
18,016 4,903 7,460 12,363
========= ============ ============== ============
4 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:
31 March 2017
Weighted average Loss per share
Loss number of shares
GBP'000 Number '000 Pence
Basic loss per share (275) 33,795 (0.81)
------- ----------------- --------------
Dilutive shares - - -
Diluted loss per share (275) 33,795 (0.81)
------- ----------------- --------------
31 March 2016
Weighted average Loss per
Loss number of shares Share
GBP'000 Number '000 Pence
Basic loss per share (552) 33,646 (1.64)
------- ----------------- --------
Dilutive shares -
Diluted loss per share (552) 33,646 (1.64)
------- ----------------- --------
4 Earnings per share (continued)
The directors consider that the following adjusted earnings per
share calculation is a more appropriate reflection of the Group's
performance.
31 March 2017
Weighted
average
number of
Loss shares Loss per
share
GBP'000 Number '000 Pence
Basic loss per share (275) 33,795 (0.81)
-------- ------------ -----------
Restructuring costs 303
Amortisation of intangible asset 190
Share based payment charge 24
Adjusted earnings per share 242 33,795 0.72
-------- ------------ -----------
Dilutive shares - - -
Diluted adjusted earnings per
share 242 33,795 0.72
-------- ------------ -----------
31 March 2016
Weighted
average
number of
shares Loss per
Loss share
GBP'000 Number '000 Pence
Basic loss per share (552) 33,646 (1.64)
-------- ------------ -----------
Restructuring costs 270
Amortisation of intangible asset 158
Share based payment charge 59
Adjusted loss per share (65) 33,646 (0.19)
-------- ------------ -----------
Dilutive shares - - -
Diluted adjusted loss per share (65) 33,646 (0.19)
-------- ------------ -----------
There is no dilution to the basic or adjusted (loss)/earnings
per share in 2017 or 2016 owing to a loss for the year being
reported.
5 Dividend
The Board is not recommending the payment of a final dividend
(2016: Nil pence).
6 Availability
Copies of this announcement will be available from the Company's
registered office, Spring Lane, Malvern, Worcestershire, WR14 1DA,
and on its website, www.tricorn.uk.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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