Tricorn says outlook more positive following earlier profits warning

WEST Bromwich and Malvern engineering group Tricorn says it has made significant progress in laying the foundations for long-term growth.

But the AIM-listed tube manipulation specialist, which issued a profits warning in February, said the trading climate remains challenging with demand lower through the second half of its financial year when compared to the first half.

In a  pre-close trading update for the financial year to March 31, it said the lower demand has impacted on its UK businesses in particular.

“Nevertheless, the group has made significant progress in laying the foundations for long term growth and has made further encouraging progress in strengthening relationships with its customers,” it said.

“Since the trading statement released on 11 February 2014 demand has generally stabilised and in some instances is starting to show signs of a slight improvement. As a result, second half revenues are expected to be marginally up on this earlier guidance.”

Tricorn said restructuring within its energy division was completed as planned and with demand now steadied the business is far better positioned going forward.

Within the transportation division, the UK business is starting to see some benefit from new business that has been secured and is well advanced with further prospects.

In China, both the wholly-owned facility and joint venture are developing well, Tricorn says, with revenue increasing from a broadening customer base and expanded product offering.

In the US, new customer revenues continued to grow, offsetting some of the impact of business lost from resourcing decisions made by existing customers at the time the business went into receivership and prior to the acquisition by Tricorn.

The aerospace division has seen a slight drop in revenues in the second half but set against a lower cost base. New business and further opportunities continue to be developed.

“Overall cash inflow in the second half has been positive and is expected to result in a reduction in net debt from the half year position,” the statement said.

 

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