Engineering group Tricorn issues profits warning after weaker than expected second half

WEST Bromwich engineering group Tricorn has issued a profits warning to investors after a weaker-than-expected second half severely impacted the business.

In a full-year trading update the AIM-listed tube manipulation specialist said it had seen a further softening of demand since the company’s interim results in December.

The company said it had taken steps to restructure the business in response to the lower revenue levels but it was anticipated that full year pre-tax profit will be “materially below current market expectations”.

In the statement, it said: “The board’s current view is that second half revenue, for ongoing businesses, will be approximately 15% lower than for the first half of the current financial year.

“Whilst revenue in the Aerospace division is expected to be broadly flat there have been a number of contributory factors in the other business segments.”

It said the Energy division had seen lower demand from its customers as a result of continuing weakness in the mining and, to a lesser extent, power generation sectors.

“In the Transportation division, the ramp up in new customer revenues in the second half for the US business, whilst encouraging, has not been sufficient to offset the business lost through the latter part of the first half which was the result of resourcing decisions made by customers at the time the business went into receivership,” it added.

The slightly lower second half revenues from the UK Transportation business are expected to be in part compensated for by the growth in product revenues from the China operation.

Tricorn, which specialises in the manipulation of pipe and tubing assemblies to niche markets in the energy & utilities, transportation and aerospace sectors, said it would provide a further update on current trading and its prospects for 2014 in April, following the completion of its financial year to March 31, 2014.

H1 performance showed a 15% increase in revenue to £13.272m (2012: £11.552m). However, adjusted pre-tax profit was down considerably at £0.204m (2012: £0.855m) – below management expectations.