Share Name Share Symbol Market Type Share ISIN Share Description
Tricorn Group LSE:TCN London Ordinary Share GB0009716340 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 10.00p 9.00p 11.00p - - - 0 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering 18.0 -0.8 -1.6 - 3.38

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Date Time Title Posts
27/10/201608:43Tricorn should be worth well over 60 pence SO GET IN AT 12p FOR THE BIG RISE1,690
12/4/201614:55Time for change?-
16/6/200909:55TRICORN 200611

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Trade Time Trade Price Trade Size Trade Value Trade Type
27/10/2016 11:54:019.252,000185.00O
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Tricorn Daily Update: Tricorn Group is listed in the Industrial Engineering sector of the London Stock Exchange with ticker TCN. The last closing price for Tricorn was 10p.
Tricorn Group has a 4 week average price of 10.03p and a 12 week average price of 9.32p.
The 1 year high share price is 16p while the 1 year low share price is currently 0p.
There are currently 33,795,000 shares in issue and the average daily traded volume is 23,853 shares. The market capitalisation of Tricorn Group is £3,379,500.
rivaldo: Not been a holder for a while (to declare my position). The results were in PBT terms slightly better than I expected, but I certainly won't be buying back in for a while. This is because: - gearing is now up to 50%, so is a little weighty, especially as - the outlook is completely unclear/opaque from today's results. The groundwork has been laid, and the opportunity is clear, but there's absolutely no sign given in the outlook as to whether trading is good, bad or indifferent, merely that they're well "positioned" and that progress is "expected". If anything, underlying demand appears weaker in both Energy and Transportation, whilst Aerospace has been suffering. I can't see the share price doing much on today's news except drifting/falling, so will hold fire until the company deigns to signal how it's actually been trading since the year end - which is already 2 1/2 months ago!
apad: Expecting Value has it pat: Sunday, Dec 08 2013 by ExpectingValue 1 comment 2 I've held Tricorn (LON:TCN) in my portfolio since May of this year, and the shares spiked at a price about 70% above my buying price in late September. I had a look and decided to continue to hold then; a decision I might come to regret as the shares drifted down from that week-long peak, and dropped further upon the release of their results this week. They now sit at 28p. As ever, then, the question is how to interpret the drop and results; is it an attractive entry point forged by market misunderstanding, a worrying turn of events, or - and this should always be the default option - the market pricing in the news. Having spoken to Tricorn's management before, I got an email from their nominated adviser and broker asking if I wanted to have a brief chat once again (prior to the results, I should note), which sounded, as always, like a nice chance to get their take on events. I'll present this post as a sort of two-parter, then; I'll briefly talk about my gut, immediate reaction to the results, and then talk about what management said by way of explanation. The results There's not really any escaping the fact that the headline figures are pretty bad; net debt is up to £3.6m (when I first talked about them I pondered what they were going to do with a £3m cash pile!). Revenue is up 15%, and gross profits are up with that, but a far higher level of operating costs means that the company posted a £.281m operating loss and a £.324m loss before tax in the first half of the year. This is a non-trivial loss for a group with a market cap of sub £20m and net tangible assets of about £6.5m. It's also over £1m worse than last year's figures. That's first glance, then. What are potential mitigating factors? In essence, when looking at a company which has just posted figures below market expectations, the question you want to ask is the nature of the disappointment. Does it call into question the structure of the business, the way it operates, or its potential future cashflows - or is it just a temporary blip because of one-off factors? The latter is annoying but hopefully transient. The former should make you seriously rethink your valuation. Well, there's two obvious ones against last year's comparative figures. First is the enormous expansion the company has seen in that time period. The company has widened out its burgeoning operations in China, and they also completed a large acquisition - out of administration - of an American business in the same line of work. Expansion generally has a short-term drag on operating profits, as costs exceed revenues while the business is setting up; you have to get the structure in place before you can ramp up to a profitable level of production. The second drag, an expected one, is the loss of the contract which kicked the company's share price down to the level I bought at in the first place; the aerospace division lost £111k this year, against a profit of £121k last year. The company identifies £528k of non-underlying items for exemption. I don't really have the problem with the classification of any of these except for share based payment, which I'd rather add back in as I think it's simply another form of remuneration. This brings adjusted operating profit to about £.22m for the half against £.783m last year. It's not great, but it's not as bad as at first glance. What management say The tone I got from management - from the call and from the statement - was rather matter-of-fact, actually. In that I mean the concern about the operating loss (and outlook) - which was undeniably a good amount below market expectations - seems minimal. It is for investors to decipher whether management confidence in the execution of their strategy, regardless of what they likely to consider are temporary blips, is well-placed or not. They put the operating loss down predominantly to a poor performance in the UK. The contract loss was a drag that was expected, but perhaps not so expected was an energy & utilities segment which continues to run considerably below its historic level both in terms of revenue and in terms of management expectations. Economic uncertainty, they believed, meant their customers were producing significantly below 'normal' levels of engines/generators/assorted end products. Key here is your judgement on this; if management are right regarding the segment's potential figures in a more normal environment, given operating leverage, the contribution the segment makes to group profits is at a level many multiples higher than the current one. This has been the case in the past. If they're being overly optimistic, or the trend continues downwards, the UK looks a lot more precarious; given the aerospace contract loss and inferring figures on the transportation segment (their one other segment, which includes a huge chunk of US revenue), returns on capital have dropped significantly. Special Offer: Invest like Buffett, Slater and Greenblatt. Click here for details » The really interesting stuff is still regarding the US and China; manufacturing facilities which combined have more sq. feet than the entire UK operations and currently make a far smaller contribution to group revenue. The US operations bought out of administration are operating about break-even at a profit before tax level, they said, which strikes me as a pretty creditable performance given the disruption administration causes. Notably easier than building from scratch, but buying out of administration suggests at least some operational problems, and also suggests prior customer relationships will sustain some spillover damage. The China operations are losing money at the moment as they ramp up. Again, the specifics of manufacturing something like this are not an area of any competence of mine, so I struggle to pass informed judgement. Management weave a very good story from a strategic perspective, though; again they noted that the growing Chinese operations will grow as more and more of their end users migrate manufacturing over there; the vast majority of their product end destination is overseas, though intermediate stages are perhaps in the UK or Europe. There is a clear benefit in localising supply chains. Net debt, they said, was more or less at a peak level, since the bulk of investment was now behind us. I don't find £3.6m hugely concerning. A judgement The bull case, then, comes from lots of different angles. The UK operations can pull back to levels of historic profitability, most obviously. The US operations growing and meeting management's expectation of similar margins to the UK in 3 years would also do the trick, particularly if revenues grow significantly as they have potential to. Finally, the Chinese story is probably the most open ended. Management believe they have a sort of first mover advantage in their production in China vis-a-vis their competitors, which could prove advantageous if the trends they're banking on do turn out. In exchange for that potential, there's evidently more risk. When I first looked at the company, it was a UK based manufacturer with a small Chinese operation and £3m of net cash. It now has sizable operations on 3 continents and £3.6m of debt. There is clearly execution risk here given the speed of the change, and there is potential for funding to become a constraint if things either take a downturn or significant further investment is required for whatever reason. I think my first glance was overly harsh. I hate the phrase 'transformational' period, but I think it's reasonable here. My best judgement is that the balance of risks is still favourable at the current, sub GBP 10m market price.
rivaldo: I sold a while ago only because I thought there might be a bit of a downturn prior to and perhaps after the 3rd December interims, given the slightly downbeat outlook on profit in the trading statement. For a while the share price seemed well supported. However, that appears to have ended now and I can now buy back well below my sale price. I haven't go any doubt that the share price will climb back at some point, but that point may not be for a little while yet. It's all about the timing....which can go right or wrong.
rivaldo: Meanwhile...the share price is at new recent highs and gunning for the March'12 levels.
apad: I researched the Quantas issue at the time and it was clear from the engineering reports that it wasn't a primary manufacturing problem. There were no engineering press comments about quality issues so I came to the conclusion that it was a pricing issue and that Avingtrans could have a poisoned chalice. From personal experience I know that Royces check minor supplier's prices relative to inflation in a proactive sort of a way. Obviously works for Royces - check their 10 year share price. apad
ganthorpe: I don't think we should lose sight of the demands on management of a relatively small business in covering a very serious recovery situation in the USA , a green field start up in China, and trying to replace RR business in the UK all at the same time. I think it is going to stretch Mike Welburn and his team. I am talking down my own largish holding , but that's the way I see it. I think the present share price probably prices in the risks and is about right until we see things more clearly. FWIW I am not selling or buying but I will be a buyer if things go to plan. GAN
rivaldo: Yep, the last two trading updates were 3rd and 4th April, so not long to wait. Looks like awareness of the excellence of the acquisition is spreading judging by the share price. More excellent info above, for which thanks.
rivaldo: Yep, I echo APAD's comments - excellent, balanced and informative posts revealing the true situation here. It seems that the acquisition news has (unsurprisingly imo) brought out a few buyers and is starting to have an effect on the share price. Has anyone actually talked to the directors about the purchase etc? If not, I might try to get hold of them when I've some free time soon. If anyone wants to put up some relevant questions I could try and get them answered.
rivaldo: Cheers Wilmdav - 3.1p and 3.9p EPS it is then. Good to see the share price continue to recover on just a little buying.
ganthorpe: Looking at the sector breakdown in the Mar 2012 results shows Aerospace as the weakest sector with only £25000 profit on £5.3M sales. The previous year was a £300K loss on slightly higher sales. So RR accounted for about 50% of Aero sales and not much in profit.However it may be that TCN had succeeded in squeezing better prices/margins out of RR , and now RR have found a suitable alternative supplier. Clearly there will be a cost in adjusting Aerospace to losing half the turnover , but the assets involved are not great and TCN has a strong cash position. I think the share price fall to 20P has been overdone and by early December when the Interims are due we will see an assessment of the situation ,which will confirm this. I have bought some more but not betting the farm. GAN
Tricorn share price data is direct from the London Stock Exchange
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