Tricorn Share Discussion Threads

[shauney2] 02/8/2013 00:07

They fell off the cliff because Rolls Royce wanted a long term fixed price contract which the board decided was not in the best interests of Tricorn.So the contract was ended.RR gave the contract to AVG for 80 million over 10 years.

The fact that the board and management had the balls to stand up to a multi billion pound company is a testimony to their experience and faith they have in the future prospects of TCN.

They have been working with Minguang for many years.They make oil pipes!What do TCN do? They make tubuler pipes.So lets fall in love and make loads of little pipes together.
Oh and lots of money too.

[norbus] 01/8/2013 18:49

shauney2 31 Jul'13 - 11:16 - 1420 of 1421 0 0
last weeks Shares magazine had an article on TCN.
Engineering minnow Tricorn should win the market over as it makes further progress in China following the launch of a joint venture in the country earlier this month.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

I hope Share Magazine knows about China and doing business with Chinese partners.
Usually ends up in trouble. If management is so competent, why did the shares fall off a cliff November before clawing its way back.

[rivaldo] 01/8/2013 13:45

Cheers shauney2, hopefully that article will generate some more interest in TCN before any ISA buying next week.

I note that Bombardier (another TCN customer) have just released good results with a nice positive outlook and a record order backlog:

http ://www.investegate.co.uk/bombardier-inc-/one/bombardier-announces-financial-results-for-the----/20130801130207H0513/

[shauney2] 31/7/2013 11:16

A bit late now but last weeks Shares magazine had an article on TCN.

Engineering minnow Tricorn should win the market over as it makes further progress in China following the launch of a joint venture in the country earlier this month.
This in turn should drive the re-rating of the stock.At the time of writing Tricorn trades on 10.9 times house broker westhouse securitie's forecast for March EPS of 3.1p, and just 5.9p 2015 estimate of 5.7p. Profit growth should boost cash generation and Westhouse's sums imply a March 2015 free cashflow yield of 14.4%.
Tricorn's strategy required a £3 million investment that has taken the firm to a £1.9 million debt position for a gearing rate of 27%.
Nevertheless management signalled it's confidence in their charges future potential when it up the dividend by 50% to 0.3p alongside June's results
for the year to 31 March.

Consensus offers only the house broker view but we agree Tricorn offers a lot of potential at 33.7p.

[daz] 25/7/2013 18:46

I was expecting the shares to remain subdued until there was more confirmation that the US acquisition had bedded down, so too had pencilled in the interim's as the catalyst for a re-rating so am a liitle surprised that this small cap is seeing buying in anticipation of the news.

TCN could be a beneficiary of AIM stocks being allowed into ISA's, as a fairly illiquid stock, any extra buying could have a big effect on the sp, so I think Electronica has down well to increase his stake ahead of that. I wish I had been more on the ball.

[electronica] 25/7/2013 15:30

shauney

Yes, that was me talking about CAT bringing new heavy models in Desford (Leics) & Newton Ayecliffe.

Could also have been me forcing the price up (unavoidable) as I tried to build a bigger position here over the last week or so. In the last hour or so all I get was 1928 from my broker (TDW) & had to pay 35.5p - don't think it will be long till we see a bigger breakout.

Might have to wait for the Interims in early DEC - but I'm in this for 3-4 years at least & expecting 80p+ within 24 months. TCN look like a quality, well managed business - lets hope that they can efficiently digest the 2 big bites they have recently taken.

[shauney2] 25/7/2013 15:09

At a one year high if we stay at 35p.Some turnround considering the gloom and doom of last October.

Caterpillar's poor results having little effect.I think it was Electronica who said in a previous post Caterpilar were moving more work to the UK.

[rivaldo] 18/7/2013 12:42

Aleman, 7.4p EPS to March'16 to be precise.

Plus £1.13m net cash, so yes, they could use their facilities for another acquisition by that time, though of course w/capital is paramount given the global expansion that's going on.

[aleman] 18/7/2013 12:19

That makes earnings for the next 3 years something like 3.1p, 5.7p, 7.4p. Do they give a 2016 eps figure? If net cash is forecasted by then, there is always scope for another acquisition to keep earnings moving on nicely after that.

[rivaldo] 18/7/2013 11:30

I've got hold of Westhouse's recent note, in which they increase their target price to 44p from 40p. Here's the first page FYI:

"Tricorn Group*
Buy
Global platform established

Tricorn made substantial progress during FY2013 with the establishment of a
manufacturing facility in China and an opportune acquisition in the US.
However, this transformation has yet to be reflected in adj PBT which at
£1.6m was flat on FY2012. We have lowered our FY2014 adj PBT forecast by
£0.4m to £1.3m to reflect further investment, but increased FY2015E by
£0.2m to £2.4m. Our increased 44p target price implies an 11.3x P/E based on
average earnings over the next two years. Buy.

Significant operational progress...

While sales were 11.6% lower in FY2013, adj PBT was maintained at £1.6m as a result of a focus on margin improvement, despite softer markets in the second half. Further positives include the establishment of the new Chinese facility on time and on budget and the opportune acquisition in the US. The main negative was the loss of the Rolls-Royce contract. Tricorn now has five manufacturing facilities across three continents and is well-positioned to service key customers, such as Caterpillar and Cummins.

...internally financed...

Tricorn financed the £1m capital expenditure required for the facility in China and further investment in the UK, as well as the £2m cost of the US acquisition. This led to net debt of £1.9m at end FY2013 relative to the net cash of £0.6m a year earlier. In our view, an important indicator of the board's confidence in the business and the future is the 50% increase in the dividend to 0.3p.

...have laid the foundations for substantial profit growth

We have reduced our adj PBT forecast for FY2014 (by £0.4m to £1.3m) to reflect the softer market conditions which have persisted in the year-to-date, but in response to the developments made in FY2013, we have increased our FY2015 forecast by £0.2m to £2.4m and introduced forecasts for FY2016 which show a further significant uplift to £3.1m. In our view, the group now has the capacity to deliver £40-50m of annual sales which implies £4m+ of PBT if the 10% margin target is achieved. We also expect the company to be highly cash-generative in the next three years and forecast net debt to become net cash of £1.1m in FY2016E.

Valuation remains undemanding

In our view, FY0214 is a year of investment to ensure that the group is positioned to take advantage of improved market conditions. Management has highlighted the potential to increase Tricorn's presence in China, to build on the promising start in the US and - via further capex in the UK - develop new solutions across the group. Our revised target price of 44p (previously 40p), implies multiples of 11.3x P/E (and 6.6x EV/EBITDA) based on the average earnings over the next two years. As usual we have corroborated our target price with a DCF analysis, in which we need to assume a WACC of 15% and longterm growth rate of 2% to get a DCF per share of 44p. We maintain our Buy rating."

[pjhutchy] 18/7/2013 07:45

Yes it all looks good we should continue to climb as confidence returns. Well run undervalued company with a bright future.

[chinahere] 17/7/2013 14:06

That 39k was me. I like the look of TCN.

[rivaldo] 17/7/2013 10:52

Yep - certainly new recent highs now.

39k just bought at 35p too.

[the shuffle man] 16/7/2013 17:15

Looks like we are on the verge of a break out !

[rivaldo] 15/7/2013 16:05

Hmmm...another 11k shares just bought at 35.9p - way above the published 33.5p offer price.

[shauney2] 15/7/2013 11:54

Seem to be tightly held at the moment.Maximum online is 1k to buy and sell all you want to.

[rivaldo] 12/7/2013 15:29

Someone's keen - 14k shares just bought at 34.9p, well above the published 34p offer price.

[rivaldo] 11/7/2013 08:47

Interesting summary of the recent acquisition:

hxxp://www.chicagotribune.com/news/local/suburbs/barrington_area/community/chi-ugc-article-newpoint-advisors-sells-assets-of-whitley-pro-2013-07-10,0,6541530.story

Extract:

"Servicing its customers for over six decades, WPI was the largest Tier Two supplier of tubular products to the diesel engine, agricultural equipment, off-highway, construction equipment, and HVAC markets. Whitley had manufacturing facilities in Plymouth, Indiana, and Franklin, North Carolina. The loss of a major customer program, combined with pricing issues and excess leverage, pushed the company into insolvency. In late January, creditors put WPI into receivership.

The Transactions. Immediately following the appointment of the Receiver, and after the second complete shutdown, Newpoint and WPI management restarted both manufacturing facilities and began producing for customers. Within a few weeks, substantially all of the assets of the Franklin facility were sold to Tricorn, with all employees retaining their jobs. While a wind-down plan had been developed with creditors and customers for the Plymouth facility, Newpoint continued to search for strategic and financial buyers interested in a going-concern business. AMI moved quickly to sign a letter-of-intent, and on May 22 closed on the purchase of substantially all of the Plymouth assets. Both Tricorn and AMI have growth plans that will take the total number of jobs well beyond previous peak levels."

[rivaldo] 01/7/2013 12:39

Funny thing, I always see the pessimistic side as easy - optimists in life are generally harder to find in my experience.

For the minimal capital involved the additional risk is slight and the potential reward - for a £12m m/cap company - is massive.

[apad] 01/7/2013 11:12

I saw the positive side Riv. that's always easy

My inner pessimist reads:
49% of JV based on them borrowing a small amount of cash.....
They are putting in capability but it is not fully described.
Remember Buffet's mate's comments on Chinaa nd our own fallen star's China fund.

So, it's more management overhead and more risk.

apad

[rivaldo] 01/7/2013 10:15

Thx for the FT article. Today's news is an EXPANSION in China, a completely separate and "complementary" JV with "wider capabilities" for "larger tube assemblies":

"The production capabilities of the joint venture are entirely complementary with those within our Maxpower Wuxi facility and our recent investment in a semi automated painting facility at Wuxi has been specifically designed to accommodate these larger tube assemblies.

"We are already in advanced discussions with our customers in China who have expressed a strong interest in us developing these wider capabilities and we remain very positive about our prospects in the region.""

[apad] 01/7/2013 08:13

Looks more like a local tax to me, and the latest figures on China manufacturing FT today) are discouraging.
I'd be more impressed with new orders.
To me this has increased the risk of my holding.

Interesting article in FT, on RR, today that is very relevant to TCN losing the order.

apad

[daz] 01/7/2013 08:05

Very encouraging Riv, in a few years time China ought to be making a significant contribution.

[rivaldo] 01/7/2013 07:34

Expansion in China announced this morning indicates things are going well, in particular this closing paragraph:



""We are already in advanced discussions with our customers in China who have expressed a strong interest in us developing these wider capabilities and we remain very positive about our prospects in the region.""