Weaker underlying markets prompt profit warning for manufacturer

Tube manipulation specialist Tricorn has issued a profit warning this morning, blaming weaker underlying market conditions.

The Malvern-based AIM listed company updated this markets this morning on its performance for the six months to the end of September, saying demand in the USA has remained broadly in line with expectations but that its USA operation has seen some short-term pressure on margins.

It said this was due to a lag between the impact of the increase in tariffs in the USA on goods sourced from China and the time taken to negotiate price increases with customers.

In the UK demand slowed significantly through the second quarter resulting in revenue for the period being around 12% lower corresponding period last year.

As a result, first half revenue for the group is expected to be around 7% down on the prior year period and slightly lower than expectations.

It warned that pre-tax profit will also be lower, reflecting both the lower demand levels and short-term pressure on margins in the USA.

The company said: “There is a strong pipeline of opportunities and the board continues to evaluate the impact of new business inload and the extent to which this can offset the impact of weaker underlying market conditions.

“However, the board now anticipates that full year results will be materially lower than market expectations.”

Tricorn said it will provide a further update on current trading and prospects when it releases its unaudited interim results for the six months ended 30 September 2019, which is expected to be on 4 December.