Tricorn Share Discussion Threads

[pjhutchy] 09/4/2013 11:36

Shauny2. Good point they did previously mention softening in demand which wasn't mentioned in today's statement so looking positive from where I'm standing

[rivaldo] 09/4/2013 10:29

Orb1t, adjusted PBT s/be around £1.6m, so that suggests around £0.75m PBT in H2 given £0.85m in H1.

Similarly, adjusted EPS was 2.07p in H1, so assuming a similar EPS to last year that gives arund 1.7p EPS in H2.

That's a run-rate of 3.4p EPS per annum based on the H2 figures, with China now adding a contribution too, whilst America may or may not be a drain initially. I've no idea where you got your figures from, unless you think these numbers are wrong.

[0rb1t] 09/4/2013 10:10

So H2 was weaker only making 1p eps. So current run rate is 2p eps. A lot of improvement is factored in to make this year's eps targets. America will be a drain and not expected to be profitable until end of the March 2014 financial year. So difficult to assess if that was a good decision. Looks a good strategy overall but will have to wait and see if it is successful.

[rivaldo] 09/4/2013 09:45

Westhouse say Buy today and have a 40p valuation:



"Tricorn Group plc Given "Buy" Rating at Westhouse Securities (TCN)
Posted by Nolan Pearson on Apr 9th, 2013 // No Comments

Tricorn Group plc (LON: TCN)'s stock had its "buy" rating restated by equities researchers at Westhouse Securities in a report issued on Tuesday, AnalystRatings.Net reports. They currently have a $0.61 (40 GBX) target price on the stock."

[ganthorpe] 09/4/2013 09:36

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

[shauney2] 09/4/2013 09:03

Very positive.
No mention of the softening from the last AGM.

This might be aim tiddler at the moment but experienced management is the key.No doubt the loss of the RR contract was a big setback.They have sought and won other work and the new facilities in China and the USA which should provide a platform for future growth.

Westhouse had a target price of 50p last year.

[royaloak] 09/4/2013 08:41

Agree, excellent statement, hoping for a bit of weakness to add the next few sessions.

[pjhutchy] 09/4/2013 08:21

Very good statement. The valuation is far to cheap and the scope for growth is large especially with the new chineese factory now up and running and the recent acquisition integrated smoothly into the business. Also the dividend increase is showing confidence.The market will wake up to this soon.

[daz] 09/4/2013 08:10

Yes, also agree with the above, early signs of replacing the lost Rolls Royce business and the integration of the US acquisition are very encouraging. They may need more proof to convince the sceptics but hopefully the finals in June will give a better indication but as has been already pointed out, they are already cheaply and will become a bargain if things go to plan.

[rivaldo] 09/4/2013 07:21

Agreed, a rather bullish statement.

The figures suggest an adjusted PBT of around £1.6m and EPS of 3.8p or so, with a possible dividend of 0.25p-0.3p.

This compares to the forecast from Westhouse of £1.35m PBT and EPS of 3.1p...

Very promising comments too on the Aerospace division and of course on the new global reach of the newly expanded company. And all achieved from internal resources too.

[electronica] 09/4/2013 07:08

"the Board will be recommending the payment of a final dividend increased on 2012"

Confidence indeed!

That plus the start-up of shipments from China & very successful damage limitation in aerospace ought to get us back on our previous rating - from a rebased (higher) eps.

Definitely will be adding now,

[shauney2] 03/4/2013 14:33

Thanks for posting Rivaldo.
Shows great confidence for future earnings.Trading update last years was on the 4th.So maybe tomorrow

[meijiman] 03/4/2013 14:30

There should be a trading update due soon. these shares should be north of 30p in the light of projected earnings. A share that still offers value.

[rivaldo] 03/4/2013 13:33

Interesting stuff...



"Tricorn moves to HSBC to support international expansion
03 Apr 2013

Worcestershire-based engineering group Tricorn PLC has moved its full business banking to HSBC to support its growing international operations. The company has secured a £10 million finance facility with HSBC, which includes a significant invoice finance line and working capital facilities.

In addition, the AIM-listed tube manipulation specialist has opened a Renminbi (RMB) currency account with HSBC to support its manufacturing plant and growing trade in China. The new account will enable the business to make and receive payments in the country's local currency, helping it to build stronger relationships with employees, distributors and local suppliers.

Tricorn acquired a US-business in March this year to establish a foothold in the North American market and recently commenced operations at its Chinese manufacturing plant. It plans further international growth in both North America and Asia through either acquisition or establishing manufacturing facilities. Headquartered in Malvern, Tricorn now employs around 400 people and operates through five brands: MTC, Redman Fittings, Maxpower, Franklin Tubular Products and RMDG Aerospace.

The company was seeking a banking partner across all three continents and has moved its banking to HSBC's South West Midlands International Commercial Centre in a deal led by Senior International Commercial Manager Emma Hallam.

Tricorn established the RMB account initially to make payments in relation to the development of its manufacturing site in China, but will also look to trade with its Chinese suppliers using RMB going forward.

Recent research from HSBC shows that UK businesses trading with their Chinese counterparts in RMB are likely to receive improved pricing or terms of trade. The research, carried out amongst HSBC corporate customers in mainland China, found that half (50%) of businesses are willing to offer a discount to companies providing payment in RMB. Four in ten (41%) said they were prepared to offer a discount up to 3%, with a further 9% willing to consider even larger discounts for settling trade in RMB.

Tricorn Finance Director Phil Lee said: "We currently exchange Sterling into US Dollars to pay for our goods in China but we plan to start dealing in the local currency as we believe we can secure more favourable terms with suppliers. We are currently quoted in US Dollars but we really want to get under the pricing and to see what we could achieve by trading in RMB."

He added: "Over the past 12 months we have developed from a UK centred group into one which now operates over three continents. This internationalisation will continue so we wanted a banking partner that could support our needs across these distinct markets with just one main point of contact. We felt HSBC was the best fit for this requirement and Emma Hallam has helped us establish local banking arrangements with the HSBC teams in China and the US."

Emma Hallam, HSBC Senior International Commercial Manager, added: "Tricorn supplies worldwide markets in the energy, utilities, transportation and aerospace sectors so the company has naturally been expanding internationally to ensure it best serves its customer base. HSBC's international footprint makes it a logical banking partner and I am pleased the company has moved its business banking to us."

She added: "We believe RMB will become the world's third largest currency, due to the growing economic importance of China, and I would urge any business that trades with China to consider opening an RMB currency account. Our research showed that half of all Chinese businesses are willing to offer a discount to companies providing payment in RMB, which could not only have a material impact on UK businesses' cost of trading, it will also help to forge long-term relationships."

Midlands based leading law firm Harrison Clark acted for Tricorn handling the US element of the deal. Richard Wilkey, Partner at Harrison Clark, said: "We were delighted to manage the US part of this deal from the UK and via one of our alliance firms, a transaction that turned out to be more complex than everyone originally envisaged. Our team has in-depth sector knowledge and excellent experience of handling international deals. I am really pleased for Tricorn, as the acquisition really reinforces their international expansion."

[daz] 15/3/2013 15:31

Just to say I emailed the company with the questions above, unfortunately they weren't really answered but they expect to provide more details with the preliminary results, which last year were in June, so 3 months away.

one thing that was said was that, they made existing customers aware of their intentions during the due diligence process, so I think that can be taken as positive but otherwise I can't really understand why they are being so guarded.

Daz

[rivaldo] 11/3/2013 13:34

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.

[meijiman] 11/3/2013 12:20

Looking at last year there should be a trading update in early April.
Ive bt some more this morning.Spent a bit of time last week looking in more detail at Whitley. its easy enough to cut costs in the USA.
I think Im correct in thinking that the next results are the prelims-but these are some way off.

[electronica] 11/3/2013 12:13

mark

Your question can only really be answered by TCN's management ........ but .....

My 1st instinct is that TCN's UK production is of bigger (more expensive) components in smaller batches than Whitley's output. Also TCN's UK businesses appear to do more design-in work that Whitley - probably a function of the lower OEM equipment volumes.

Whitley will be more like the recent TCN investment in China - & I see all sorts of synergies there.

[markgahagan] 11/3/2013 11:51

Can any of you guys with experience in this business answer me a question:Tricorn does about 20 odd million of revenue and has 300 employeesWhitley did about the same revenue with just 200 employees.It seems to me that whitley was actually a more efficient operation albeit loaded with debt.. I wonder if this is the case or is there some other reason such as vastly different businesses ( which they don't appear to be) or have I missed something?If it was a more efficient business then there may be even greater value for Tricorn in taking across some of those efficiencies now that the debt is gone and making the margins even better?

[shauney2] 11/3/2013 10:52

Thanks for all that work above.
Very experienced management.Doubt they would have paid over the odds.

Maximum 1k available at the moment online.You can sell plenty.

[electronica] 11/3/2013 10:04

As I expected the vast majority of employees at both plants are what we would clasify as semi-skilled in the UK. In North Carolina this would probably mean that the average pay is in the $18-22 per hour range. So with the lower US employment cost for new hires the cost per production employee is approx $50-55k per annum.

With a 15% management/overhead employee ratio we can expect that a 125 person operation could hit that $20m revenue capacity target for a wage bill of $7-8m.

In my view a pre-tax margin of 7-9% looks a reasonable target - but it would be nice to hear TCNs management's view (probably via a note from the house broker).

I'm pretty sure that the TCN can make this work & make it transformational - the RR debacle notwithstanding. I've been adding over the last week.

[electronica] 11/3/2013 09:26

markg

Thanks for those links - most helpful.

Nice to see another uplift in the TCN shareprice this morning. It looks like 30p post the results to me - than a steady move up to 40p+ after the Interims & a positive report on the integration of Whitley.

[markgahagan] 10/3/2013 23:18

Forgot the web addresshttp://www.nccommerce.com/Portals/11/Documents/Reports/WARN/Warn.pdf

[markgahagan] 10/3/2013 23:18

Here's the WARN for the North Carolina plant. Another96 posts but less detail than indiana

[markgahagan] 10/3/2013 23:14

Found some good stuff hereIt's the list of posts being lost submitted in the WARN notice to Indiana state government. Shows exactly what posts are going:http://www.in.gov/dwd/files/WARN_WhitleyProductsPlymouth021913.pdf