Tricorn Share Discussion Threads

[rivaldo] 26/6/2013 10:32

TCN showing good strength despite the weak markets recently.

Westhouse's forecasts dated 4th June show 3.1p EPS this year and 5.7p EPS next year, with 0.4p and 0.6p dividends respectively. I assume these are the latest (and only) broker forecasts.

[apad] 19/6/2013 09:23

Elect...
good to see you still around.
I'd really like to see some sort of order announcement from TCN.
Given the burgeoning aircraft sector it'd be nice to see a plaster over the RR wound.
apad

[electronica] 19/6/2013 09:07

shauney

Caterpillar may be laying off in Wisconsin but in the UK they are continuing to expand and are in the process of transferring more European production to the UK (Peterlee, County Durham, & Desford, Leicestershire). That's much more relevant to Tricorn.

I speak as a Business Development consultant to Caterpillar's largest supplier of hydraulic components.

[shauney2] 19/6/2013 08:43

Caterpillar laying off but Bombardier are buoyant.

TCN are not in this market but Bombardier have just won a massive electric locomotive order.

[apad] 16/6/2013 22:02

Caterpillar Plans for Layoffs
Caterpillar said it would lay off one-third of its production workforce in Wisconsin in response to falling demand for mining equipment.
apad

[meijiman] 15/6/2013 12:34

i think there is more to come here. If the Westinghouse analyst forecasts are believable the rating is still very modest. the negative here is that the shares trading is illiquid and its a bit small for institutions.
However with these overseas expansions -first China and now USA , it will be coming onto the radar of some new funds I think.
Im hoping for 50p sooner -not later. In hindsight the RR related share price collapse was a great buying opportunity.

[shauney2] 14/6/2013 16:35

Good to see the strong finish.Seems to be buyers for any sells.
Been tempted to add to my holdings all week but the illiquidity puts me off.

Last time I added was just before the RR termination.Been holding through gritted teeth since but my patience has been rewarded.

[meijiman] 14/6/2013 16:30

Another good finish to the day. Expect over 50p by the end of the year if not before.Still very inexpensive in terms of its PER.

[apad] 12/6/2013 12:09

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

[daz] 12/6/2013 10:59

yes, pleasantly surprised to see the shares moving ahead, I had thought that more evidence would be needed for the replacement of the RR business and the performance of the US takeover.

[rivaldo] 12/6/2013 10:51

Great to see - a little buying always goes a long way with TCN.

[the shuffle man] 12/6/2013 09:51

Looks like a re-rating is on the cards.

[shauney2] 12/6/2013 09:48

Thanks for posting Electronica,

I'm sure some investors sold on the Rolls Royce news.It came at the same time as the Quantas engine problems.
"It was not about product quality" could have been said at the time.

The Whitley acquisition was a great business move though and definitely back on track.
Lack of shares available at the moment driving the price up.

[pj 1] 12/6/2013 09:43

Woh there.

No one ever wants to lose Roycies !!

[pjhutchy] 12/6/2013 09:40

Looking good. So rolls Royce were trying to take the mic out of tricorn. Probably a good thing that we let them go then. No point in working for nothing.

[rivaldo] 11/6/2013 22:48

Excellent article, and particularly interesting comments re Rolls-Royce (implications for AVG I wonder?).

7.4p EPS going forward makes the investment proposition here very attractive for investors with a little patience.

[the shuffle man] 11/6/2013 17:55

All looking very good here.

Will look to top up if they come back a bit.

[electronica] 11/6/2013 16:48

Nice puff for TCN on the Penny Sleuth newsletter. Just an average tip sheet - but any awareness raising for TCN is good news ...........

"How to say no to Rolls-Royce and live to tell the tale

Dear .............

The loss of your biggest customer is about the worst thing that can happen to a small company. Given that this fate befell TRICORN at the end of last year it looks in remarkably good shape, as I learned when I spoke to chief executive Mike Welburn a few days ago.

I have a bit of a soft spot for Tricorn. I first visited the business back in 2005 when it operated out of one small factory in Malvern. Today it has facilities in China, the USA and the West Midlands and it is this diversity that has enabled Tricorn to withstand last year's blow to the chin.

Tricorn is a specialist in metal pipes, bending, forming and joining them together. If this sounds rudimentary, it is anything but. These twisted pipe formations must be made to the most exacting specifications. When engineers design engines they tend to position the major components and then assume that pipes can be readily connected to them. This involves some contorted pipework, at which Tricorn excels. This is a great little company.

Life after Rolls-Royce

The major customer that deserted Tricorn was Rolls-Royce. Accounting for 11% of its turnover at the time, this was a blow to Tricorn's aspirations in the aerospace industry. I asked Welburn why Rolls-Royce had made its decision. "It was not about product quality. Ours is top notch. But we are running the business for profit," was his reply. "Rolls were demanding a long term fixed price contract and such are the ups and downs of business that we could not accept this."

Businesses need to be adaptable and as one door closed others have opened. For a while Welburn has had his eye on the major markets of China and the USA and now the group has a factory outside Shanghai and another in North Carolina.

It has become established in China by following its major customers, notably Caterpillar which already has 23 factories over there. The US giant, explained Welburn, has a certain way of doing things with which Chinese suppliers were struggling to conform. Having served Caterpillar for several years in the UK, Tricorn is thoroughly familiar with Caterpillar's modus operandi and this gave it the chance to get into the Chinese market. It has opened a modern factory, which is already being extended in anticipation of expansion. It has delivered its first products, and has had several enquiries from potential new customers.

This could double Tricorn's revenue

Tricorn's other opportunity has arisen in the United States, another market that is not only huge but is also looking rather more buoyant than Europe. Here Tricorn has been able to acquire the business and assets of Whitley Products Inc, a company that was founded in 1942 to make screw machine parts for the war effort. It subsequently expanded its product line to include tube fabrication from factories in Plymouth, Indiana, and Franklin, North Carolina but has recently become financially distressed. Tricorn has moved the whole operation down to Franklin, a ten-hour truck drive for the machinery from Plymouth and has secured the jobs of over 100 local staff. It has done so without disruption of supply to Whitley's customers, which include the giant maker of agricultural machinery, John Deere.

This looks like a great deal for Tricorn. It has paid just £1.95m for assets valued at £2.8m, and now has its hands on a business with an annual turnover of around £20m. To put that into perspective Tricorn, which has a turnover of similar magnitude, has been valued at around £8m over the last few years. Especially impressive has been Tricorn's ability to make these strategic moves without having to raise fresh finance. It has always had a strong balance sheet, has maintained this throughout the financial crisis, and has paid a rising dividend as well.

Despite these attributes the business is not highly rated and never has been. It suffers from prejudice against small companies, against the perceived cyclicality of heavy industry, and a completely misplaced belief that the UK is not very good at making things.

We are great at making things

This is a story that I've constantly talked about in Penny Sleuth – the thriving manufacturing industry in the UK. I've spent years travelling up and down the country, talking to small manufacturing companies that sell high precision products right across the globe. Companies that make everything from turbochargers to plane parts.

These manufacturing businesses are true survivors. They have seen off a banking crisis, a global economic collapse, and years of industrial outsourcing to the East.

And many of those industrial threats are now in retreat. And that has helped spur a remarkable recovery in UK manufacturing over the last year.

Take Tricorn. With the benefits of these new initiatives in the USA and China, broker Westhouse thinks that Tricorn's revenue will almost double over the next three years. By 2016 Westhouse is forecasting a pre-tax profit of £3.1m on sales of £39.4m. It foresees earnings per share of 7.4p, a dividend of 0.9p and a net cash balance of over £1m.

Tricorn has plenty on its plate, and much can change in three years. But with its international dimension, the business is surely better placed than it was when I first made its acquaintance in 2005 – yet another case of a great UK stock that can prosper no matter what the state of our flagging economy.

Good investing,

Tom Bulford
The Penny Sleuth"

[rivaldo] 10/6/2013 09:17

Excellent article ExV, cheers. Interesting to see that the CEO doesn't rule out further acquisitions.

Nice to see a 25k buy this morning too.

[exv] 06/6/2013 09:14

Morning,

Posted another piece on TCN last night; not much changed from last time, really, but I did have a chat to management about the results and growth prospects. The CEO, Mike Wellburn, was very much of the opinion that this was a pivotal year, with their global offering sort of coming together now the US and China are both up and running.

Same risks are before, too, though.

hxxp://expectingvalue.com/shares/tricorn-tcn-3

[pj 1] 05/6/2013 22:10

meijiman 5 Jun'13 - 21:57 - 1377 of 1377

So ''Westinghouse'' is no good, but you are? Please justify?

[meijiman] 05/6/2013 21:57

I don't think the Westinghouse analyst is very good so I would not put too much faith in the numbers.however these shares are set to rise to over 50p in the next 6 months.

[meijiman] 05/6/2013 21:56

I don't think the Westinghouse analyst is very good so I would not put too much faith in the numbers.however these shares are set to rise to over 50p in the next 6 months.

[aleman] 05/6/2013 13:58

Somehow, Westinghouse have 3.1p for 2014 and 5.7p for 2015 so p/e for next year is only 5.4.