Tricorn Group PLC Trading Statement (8486U)
April 12 2016 - 2:00AM
UK Regulatory
TIDMTCN
RNS Number : 8486U
Tricorn Group PLC
12 April 2016
12 April 2016
Tricorn Group Plc
("Tricorn" or the "Group")
Trading Update
Tricorn Group plc (AIM: TCN.L), the AIM listed tube manipulation
specialist, provides the following pre close trading update for the
financial year to 31 March 2016 ("the year").
Revenue for the year is expected to be around 15% lower than in
the previous year. This is lower than anticipated at the time of
the Group's interim results announcement released on December 2(nd)
2015 and reflects further slowing in demand from key markets,
particularly within the Energy Division. The Group has taken swift
and decisive action in response to these lower revenue levels and
the Board expects adjusted operating profit for the year to remain
in line with market expectations.
In the Transportation Division, good progress continues to be
made in the USA operation with new business growth largely
offsetting weaker market demand. The business is expected to be
profitable in the year. In the UK, the new customer contract
previously reported at Maxpower Automotive started to contribute
more significantly to overall revenue levels in the latter part of
the year. As a result, external revenue for the business in the
second half of the year was slightly ahead of the previous six
months and, alongside the steps taken to reduce costs, returned the
business to profit.
In China, both our wholly owned facility and joint venture were
loss making and with the less favourable market conditions in the
region, the Board has taken the decision to combine the activities
of both businesses into a single operation. This will significantly
reduce operational gearing and concentrates the Group's
manufacturing and engineering resources into a single location in
Nanjing. Once the transfer is complete, which is expected to be by
July 2016, the Board expects the business to contribute positively
to overall profitability.
Under the new arrangement, assets currently at the wholly owned
facility, Maxpower Wuxi, and valued at approximately RMB 4.9m will
be transferred into the joint venture. As a result, Tricorn's share
of the joint venture will increase from 51% to around 65%, with the
joint venture partner, Nanjing Minguang Oil Pipe Company Ltd
holding the remaining share of the business.
The Energy Division has had a challenging year and has acted
quickly to reduce its cost base in response to lower demand.
Revenue in the year is expected to be around 25% lower than in the
previous year with its key customers experiencing significantly
lower demand from their power generation, oil and gas and mining
end markets. Additionally, one of its UK customers has transferred
production of an engine series to the USA. Whilst this impacted
Malvern Tubular in the second half of the year, the Group has been
able to retain this work through its USA operation, once again
underlining the value of its expanded manufacturing footprint.
Further details and an update on current trading will be given
in Tricorn's full year results that are scheduled to be released on
8 June 2016.
For further information please contact:
Tricorn Group plc Tel +44 (0)1684 569956
Mike Welburn, Chief Executive www.tricorn.uk.com
Phil Lee, Group Finance
Director
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 350
employees, has 5 manufacturing facilities in China, USA and UK. It
operates through three brands: Franklin Tubular Products, Malvern
Tubular Components and Maxpower Automotive.
This information is provided by RNS
The company news service from the London Stock Exchange
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