Tricorn braces shareholders for significant revenue decline after Chinese slowdown
STRONG interim results will fail to save Worcestershire-based engineering group Tricorn from an expected 10% decline in year-on-year revenues.
The tube manipulation specialist is exposed to the Chinese market where it has seen a decline in demand since the end of the first half; to such an extent that the company has warned shareholders to expect a significant decline in full year revenues.
The Malvern-headquartered group said it had acted to preserve performance by implementing cost-cutting measures.
The decline in the Chinese markets is a disappointment for the company after a strong first-half showing by its US operations saw the group return to profit at the end of the six months to September 30.
Revenue reached £10.096m in the period (H1 2014: £10.6m), while pre-tax profit was £0.4m (H1 2014: loss of £0.7m).
Commenting on the group’s prospects, Andrew Moss, chairman of Tricorn said: “The group has made further progress through the first half of the year. Our USA business has increased revenue through new business growth, continued to improve operationally and was profitable for the period. In China the businesses have delivered further increases in revenue.
“Group profit for the first half was ahead of each of the previous and corresponding six month periods although demand from key markets slowed towards the end of the period.
“This slowdown has accelerated since the period end and with full year revenue now expected to be around 10% lower than the previous year, we have reacted quickly and decisively to cut costs.”
He said that while full year results were expected to be below market expectations, the group anticipated it would remain profitable at an operating profit level for the full year.
“The board is optimistic about the group’s longer term growth opportunities and encouraged by recent market share gains. Profitability will benefit further from the lower operational costs as and when markets recover,” added Moss.
