Tricorn Share Discussion Threads

[interceptor2] 02/8/2012 08:21

AGM to be held on 4th September.

TCN will seek authority to buy back upto a maximum of 10% of the issued share capital.

Like investors here the management view TCN as undervalued, a company operating in a niche market, with increasing net cash position and a forward per of 8.2 and 6.4.

I first invested here in February 2011 @ 21p, then TCN had a small net debt position and forward per of 11.05 and 8.4. So even more undervalued now, they could be in danger of being taken over imv.

ic2...

[apad] 31/7/2012 21:01

Interesting, E....
In the 90s Royce's was paranoid about what it called "hollowing out", which meant gradually losing its manufacturing technological advantage to supply companies if they worked on improving manufacturing processes.
Blades and discs are key core intellectual properties so I would doubt that they would risk losing control.
Strange, however, that the same company should buy safety critical parts from a dodgy supplier.
apad

[electronica] 31/7/2012 15:31

APAD

The supplier info on that oil pipe came out of a news article in The Engineer about 18 months ago. The Engineer's article archive is not held on line (as far as I know) but I'll try & seek the item out when I find a few minutes.

They were discussing this in the context of the "rush" to Far Eastern sourcing having many potential pitfalls & the decision by RR to expand turbine blade manufacture in the UK (instead of opening on a greenfield in Malaysia) & keeping 100% of shaft & ring forgings with Forgemasters rather than switching some to China.

No ........ not IMI (thank goodness)! I spend a few days a month as a Market Development specialist with a couple of divisions of Bosch.

[apad] 31/7/2012 15:02

How do you find those figures Riv...?

Elec...
The Wikipedia article doesn't mention the "uncontrolled supplier", at least as far as I could see.
Where did you get that information?
I was speculating that you might work for IMI :-)

apad

[rivaldo] 31/7/2012 14:30

Excellent posts above, cheers.

Reasonably encouraging online following today's blip upwards - you can sell 25k at 31.25p, but only buy 15k maximum at 32.7p.

[electronica] 31/7/2012 10:01

APAD

Here's the Wikipedia page on the inident.

Failing memory caused me to misidentify an oil pipe as a fuel pipe ......



"Rolls Royce determined that the direct cause of the oil fire and resulting engine failure was a misaligned counter bore within a stub oil pipe leading to a fatigue fracture. The ATSB's preliminary investigation report confirmed that Rolls Royce determination."

[apad] 31/7/2012 09:31

E

"Rolls Royce are faced with a #150m bill to rectify the engines for Quantas A380 aircraft that exploded in mid air after metal fatigue failure in an engine fuel pipe. That pipe came from an uncontrolled supplier in the Far East."

Good grief....and I train Royce's engineers in failure and fatigue!

Is that information in the public domain, if so do you have a reference?

We are in danger of a sterile debate. I don't disagree at all, but it is a generic point not a TCN specific point.

apad

[alter ego] 30/7/2012 22:56

Excellent info Electronica. People often assume TCN are just a metal basher but every component in a complex machine needs to be faultless. It's not just about price, it's about meeting the specification and being trusted as a supplier.

[interceptor2] 30/7/2012 20:39

Electronica, I remember the Quantas incident, and trying unsuccessfully to find out who the supplier was. So thanks very much for the answer, which bodes well for companies like Tricorn.

ic2...

[electronica] 30/7/2012 17:57

APAD

You might not "buy" my arguement - but it is very real!

I spend a good part of my week working with CAT & JCB on hydaulic components (where I act as a consultant "salesman" for one of the world's largest suppliers). Component certification for each application takes an age & neither OEM will lightly incur the expense of changing source once the supply partnership is working well.

Additionally we have a graphic example of what can happen when pipe ("just a pipe" to paraphase you) qualification goes wrong in the aerospace sector. Rolls Royce are faced with a #150m bill to rectify the engines for Quantas A380 aircraft that exploded in mid air after metal fatigue failure in an engine fuel pipe. That pipe came from an uncontrolled supplier in the Far East. I'm pretty sure that Rolls Royce will be paying more attention to the quality & traceability in their pipe supply chain in future. Is it coincidental that TCN's business with RR has increased since those disasterous Qantas incidents?

[apad] 30/7/2012 17:33

FWIW electronica I don't buy that argument. I would expect any halfway decent engineering company to sport such badges.

My question is about what would stop IMI, for example, competing at a level that would squeeze the pips of this little tiddler (market cap about £10m).

Note that I am impressed with the company and have increased my holding, but I search hard for negatives.

I like to look at job vacancies for this type of company and I can't find any information on the constituent company's websites.

apad

[electronica] 30/7/2012 14:04

APAD

Barriers to entry are customer supply qualification & international quality qualifications. These are significant barriers to entry to new suppliers & provide security of outlook on some very long programs.

TCN looks well set for a couple of years of good growth at least.

[apad] 30/7/2012 13:29

cfro
I buy that, and that the CEO, being ex IMI, has significant credentials:
"Mr. Michael Ian Welburn is Chief Executive Officer, Executive Director of Tricorn Group PLC. He joined Tricorn in April 2003, appointed to the Board in March 2004 and as Chief Executive in November 2007. He had previously been with IMI plc for 18 years where he had held a number of senior roles within the Fluid Power Division. This included responsibility for European Operations and Global OEM Strategy."

However, I do not see any barriers to entry. It is a minnow after all.

apad

[cfro] 30/7/2012 10:13

They must be doing something right tho APAD to be so much in demand by the likes of Cat and Boeing.

As shauey says above, a little patience is needed. Im actually looking to buy more here at some point.

[apad] 30/7/2012 09:44

Agree with c2i, it's a pleasant and informative board - thanks.
Increased my initial holding based on another read of the results.
Still don't buy the patents argument in the header.
Would still like to understand what technical/engineering (as opposed to business) advantage, if any, supports TCN. Then I would increase more enthusiastically
"They make pipes, anyone can make pipes"
Thanks again,
apad

[shauney2] 25/7/2012 16:14

Illiquid but patience will pay off in the long run here.

Good results from Caterpillar and Boeing.

[interceptor2] 16/7/2012 20:51

No problem contrarian2investor, good to see you here and will look forward to your views on TCN.

Almost a perfect cup and handle in the charts, the 37p in the handle is important imv, once a break out here is achieved then we should see a good advance.

ic2...

[contrarian2investor] 16/7/2012 19:51

The recent newsflow and results have alerted me to the long term potential here. So I will be joining you current holders soon.
Rivaldo, ic2 and other posters thank you all for your informative posts.

[interceptor2] 12/7/2012 07:56

Yet again you beat me to post the news :o). I think the Aerospace division will be a major driver for TCN this year, making a significant impact on group margins.

ic2...

[rivaldo] 12/7/2012 07:29

Yet another large contract win for Rolls-Royce this morning.

I suspect that the booming sales to Rolls-Royce, Bombardier, Smiths Aerospace, Caterpillar etc - which should ensure excellent business for TCN for some time to come - will make up for anything happening at Cummins shauney2.

[shauney2] 11/7/2012 15:34

Good to see buyers.Not sure why the price should drop.

This could have an impact on the Maxpower division



Cummins said orders for trucks and power-generation equipment in the United States have declined, and it saw weaker-than-expected sales trends in Brazil, China and India.

[interceptor2] 11/7/2012 09:19

You beat me to it rivaldo, I noticed the contract win this morning then forgot to post it. If you look at the AVG trading update today, it is the Aerospace division that is performing very strongly.

Bodes well here.

ic2...

[rivaldo] 11/7/2012 09:05

Another large aerospace contract win for Rolls-Royce this morning:

[alter ego] 10/7/2012 18:53

Rolls have certainly been busy lately with engines for Boeing Dreamliner and Airbus planes - see RNS's.

I wonder how much each engine is worth to TCN

[cfro] 10/7/2012 18:21

Slowly starting to move back up. Not surprising really given how undervalued these still are. Pe only 7.8 and now qualifying in the Company REFS low PEG tables as a PEG of only 0.44.