Tricorn Group PLC Trading Statement (8486U)

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 [phone] 
 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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April 12, 2016 02:00 ET (06:00 GMT)