Tricorn Share Discussion Threads

[apad] 03/12/2012 11:06

I think I would sell Avingtrans on the contract news.
Company run by non-expert managers with a new acquisition - I'd guess that they bid low for the business and it's not a high margin game.
apad

[wilmdav] 03/12/2012 11:04

I too have topped up. More comment later.

[shauney2] 03/12/2012 10:45

I think one very positive is the loss of the contract with RR customer was apparently not down to quality issues.

Bombardier, one of their aerospace existing customers won a major order last week of 4.8b.Way down the line but they would be hoping to win a slice of that.

[rivaldo] 03/12/2012 09:53

TCN is certainly at an interesting valuation at present:

- £5.9m m/cap
- outlook confirms PAT of say £1.1m and 3p-3.5p EPS, i.e a P/E of 5.5
- £3.1m gross cash and £1.1m net cash
- £6.7m of net tangible assets, incl £1.8m of PPE
- on the look out for acquisitions
- first production from Chinese manufacturing facility later this month
- implied 0.3p annual divi, i.e almost 2% yield, a 43% rise - very confident

The negatives are of course softening demand and the contract loss. However, the narrative is actually more bullish than I expected.

The wording implies that the "remaining expenditure" on the Chinese facility will be expensed this year, so next year will see quite a large reduction in costs which could offset much of the lost contract profits etc.

TCN may be a terrific buy at this valuation if things work out re China and the "softening" plateaus out reasonably - or perhaps if there's an earnings-enhancing acquisition to bring on board.

EDIT - wcb, our posts crossed!

[westcountryboy] 03/12/2012 09:48

Lots of gloom here today! Trading below NAV with £1.13m cash and on a PE of 5. It takes all sorts to make a market: my 10k top-up was the first of the day at 17.1p.

[apad] 03/12/2012 09:27

Managing the business in the current environment very well.

Minnow, so vulnerable.

Need news of a new big customer or order.

Statements about pipeline too wooly

Hold.

apad

[woodcutter] 03/12/2012 09:01

Having been through the results more carefully i have decided to sit on the sidelines for the moment. With revenues in two of the groups down and the aero revenue contract loss it seems all divisions are contracting. Despite the good performance in terms of profit there's only so much you can do with efficiency drives.

I think it may rebound a little but could equally flat line for a while until we see confirmation of revenue improvement. I think there is also risk of further downgrades, given that they aren't able to see their forward revenue that clearly (it's only two months since their trading update and they forecast a further 10% drop in revenue) so i guess the risk reward is not well balanced for me.

WC

[electronica] 03/12/2012 08:32

Stagrego

Thanks for that statement of the bleeding obvious!

[stegrego] 03/12/2012 08:27

The results are taken before loss of contract and drop off in sales...

[royaloak] 03/12/2012 08:14

Pleaased with these results, reminds me a bit of MSI a few years ago when it was sold down heavily to around 35p!

[pj 1] 03/12/2012 08:08

''Second tier supplier''= we will leave you on our supplier list in case of default by our preferred supplier

[woodcutter] 03/12/2012 08:02

It seems a bit of a mixed statement to me and quite a difficult one to judge in terms of whether to buy or not.

"Full year PBT excluding China start up costs is expected to be at similar levels to prior year."

If this is the case and they deliver somewhere in the region of 3.5p eps and their historic per is between 7/9 then it still looks appealing at up to 21p. The real issue is once you start to see downgrades then they often continue so that's the risk i guess.

WC

[pugugly] 03/12/2012 07:35

greengiant:> Agreed - U beat me to it.

full link if anyone wants it

[greengiant] 03/12/2012 07:17

Electronica,

I don't think so, after that statement comes:
"In the near term however we have seen some further softening in demand and now anticipate revenue in the second half to be around 10% lower than indicated at the time of our trading update on 3rd October 2012. Full year PBT excluding China start up costs is expected to be at similar levels to prior year."

In the space of a month they have dropped revenue forecasts by 10% for H2

gg

[electronica] 03/12/2012 07:09

Surprisingly strong results & then this ............

"The move by a major customer to rationalise its supplier base, and the associated contract loss announced in November, was clearly disappointing. However, this does not preclude operating as a second tier supplier to this same customer. It is anticipated that customer specific inventory associated with the contract loss will be run out over the early part of 2013 and this will minimise the impact in the current financial year"

Has the market been too pessimistic in taking TCN down so radically.

[apad] 29/11/2012 14:07

Doubt whether there will be anything new.
Contract wins are what's needed.
apad

[royaloak] 29/11/2012 14:03

Will have a better idea with results and update on Monday.

[charo] 29/11/2012 13:28

long way back to 35p.

[apad] 28/11/2012 10:30

I think that it must be price.

"Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, and medical sectors, announces that it has acquired Aerotech Tubes Ltd ("Aerotech") to expand Avingtrans' Aerospace Division for a cash consideration of £2 million. Furthermore, the Company is pleased to have secured a new long term agreement, valued currently at £2 million per annum, over the next ten years, with an existing Aerotech customer.

Based in Derby, Aerotech manufactures pipe assemblies and manifolds for leading tier-1 customers in the aero-engine industry. Aerotech, which employs 10 people, reported revenue of £2.36 million* and an adjusted operating profit of £0.46 million* (being £0.25 million* before certain costs which are not expected to recur) for the year ended 31 December 2011."

Acquisitive company.
apad

[pugugly] 28/11/2012 08:16

Stegrego: U beat me to it. I wish we had clarity on the reason TCN lost the business.

[stegrego] 28/11/2012 07:14

10 year contract so no way TCN getting that work back anytime soon.

[stegrego] 28/11/2012 07:12

Avingtrans (AIM:AVG), a manufacturer of critical components and associated
services to the global aerospace, energy and medical sectors is pleased to
announce that Sigma Precision Components UK Ltd, part of Avingtrans plc's
Aerospace Division, has signed a long term agreement (LTA) with Rolls-Royce
plc. The contract is to supply rigid pipe assemblies and precision components
and is valued at £80 million over its duration of 10 years.

[deej4y] 28/11/2012 07:11

Looks like the contact has gone to Avingtrans

[royaloak] 07/11/2012 10:54

Seems to have settled down now, quote 18.5/20 however in reality best prices in quantity either side 18.99 / 19.29.

[apad] 06/11/2012 15:26

Looks like a quick round number to me Riv.
There will be a lot of unused process capacity and skilled workers at RMDG.
apad