Interim Results Presentation for 6 months ended 30 September 2016
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Interim Results Presentation for 6 months ended 30 September 2016
Summary
• Group made good progress through the first half of the year and the Board is
encouraged by the new business won
• USA and UK businesses have generated increased revenue through
increased market share enabling both divisions to improve profitability
• Highlights
– Revenue up 12.3% on previous period, being 6 months to 31 March 2016
– China restructuring completed providing solid platform for future profitable
growth
– Positive cash flow from operating activities
– Significant contract win and long term supply agreement announced post-
period end
2Post period end announcements
• New Business Win
– Volvo Group Truck Operations
– Expect around $3.50m (£2.80m) additional revenue over a
4 year contract period
– To commence current financial year
• Long Term Supply Agreement
– Key strategic customer
– 5 year agreement
– Expect around $9.6m (£7.74m) revenue from current
products
3Financial Review-Summary
H1 H1 H1 H2 H1
2016/17 2015/16 2016/17 v 2015/16 2016/17 v
£’000 £’000 H1 £’000 H2
2015/16 2015/16
Revenue 8,900 10,096 (1,196) 7,920 980
Adjusted Operating profit* 187 183 4 (150) 337
Adjusted Profit/(loss)
4 38 (34) (311) 315
before tax*
Adjusted EPS/(LPS)-
0.01p 0.11p (0.10)p (0.30)p 0.31p
basic*
Net cash from operations 202 370 (168) 852 (650)
Cash and equivalents 643 730 (87) 855 (212)
Net debt (3,386) (3,167) (219) (2,920) (466)
*All references to operating profit, profit/(loss) before tax and EPS/LPS are before restructuring costs, intangible asset
amortisation, share based payment charges and foreign exchange derivative valuation.
4Financial Review-Profit Bridge
Tricorn Group plc
Group Half Year Profit Bridge
2016/17 H1 v 2015/16 H2
Energy &
Transportation Joint venture Corporate costs Group
Revenue H2 2015/16 7,920 7,920
Revenue H1 2016/17 8,900 8,900
Movement as Presented 980 - - 980
% Movement 12.4% 12.4%
Impact of USD FX (246) (246)
Impact of Wuxi merger 198 198
Underlying Net Movement 932 - - 932
% Movement 10.5% 10.5%
Adj Profit/(Loss) Before Tax H2 2015/16 (170) (60) (81) (311)
Yr on Yr Change Attributable to:-
Volume 328 328
Efficiency (9) (42) 82 32
Volume impact of Wuxi merger (70) 25 (44)
Adj Profit/(Loss) Before Tax H1 2016/17 79 (76) 1 4
5China Activities
• The Group completed the merger of its China activities on 30th
June 2016
• At this date the trading activities ceased at the wholly owned
subsidiary in Wuxi, with all trade and assets being absorbed into the
joint venture in Nanjing
• The transferred assets were exchanged for additional equity in the
joint venture
• On completion, the Group held 63% of the enlarged business
• The Group will continue to account for the joint venture on an
equity accounting basis
6Financial Review-Balance Sheet
• Net debt £3.386m compared to £3.167m at 30 September 2015 and
£2.920m at 31 March 2016. Gearing at 57.4% (2015: 49.5%)
• Current year impacted by movement on USD.
• Adverse movement on USD borrowings against H1 2015 of
£0.311m and 31 March 2016 of £0.224m
• Cash resources available to the Group c£1.0m
• The Group operates without any covenants on its facilities
• No term debt or long term borrowing
• Capital investment of £0.309m in the first half of the year, broadly in line
with prior year
• Expenditure on UK and US facilities
• Funding new business growth and facility improvements
• Capital expenditure is funded by a mix of short term borrowings and
lease finance
7Financial Review-change in net funds
£000’s
30
31 March Operating September
Net movement
2016 Net profit (Excl Tax Finance 2016
on working Restructuring Capital FX on USD Other
Debt JV) Dep’n receipts charges costs expenditure Borrowing mvmts Net Debt
capital
Net Cash Generated from Operating
Activities
£202k
(2,920) 42
(132)
345 (156) (3,386)
(84)
187
(307)
(224)
(137)
Gearing Gearing
49.5% 57.4%
8 8Business review-introduction
• Two business divisions
• 4 manufacturing operations in the UK, USA Revenue £8.9m for 6 months
and China ended 30 September 2016
• Ideally positioned to support OEM customer
base in these key regions 23%
Transportation
• Transportation Energy
• End markets: on and off highway including 77%
construction, truck and agriculture
• Bespoke tubular solutions for engines,
hydraulic actuation, transmission lubrication
and fuel sender sub systems
• Energy
• End markets: power generation, oil and gas,
mining and marine
• Bespoke tubular solutions for large engines,
cooling and generator sets
9 9Business Performance Review
Transportation Energy 2016/17Centr 2015/16 H1 H2
£’000 al Central 2016/17 2015/16
H1 16/17 H2 15/16 H1 16/17 H2 15/16 adjustments adjustments Group Group
Revenue 6,844 6,054 2,056 1,866 - 8,900 7,920
PBT 61 22 18 (192) (75) (141) 4 (311)
• USA
Transportation
– Increased revenue through new business growth
– Significant new contract win and long term agreement announced post period end
– Sustained improvements in operational performance
• UK
– Increased revenue as a result of new business wins
– Further new projects under development
• China
– Activities now consolidated providing a solid platform for future profitable growth
• UK
Energy
– Continued to benefit from on-going improvement activities
– New business from new customers in the power generation sector
10Outlook
• Group has made good progress
– Encouraged by new business wins
– US and UK businesses have generated increased revenue through
increased market share enabling both divisions to improve profitability
– Consolidated activities in China providing a solid platform for future
profitable growth
– Adjusted PBT for the period was in line with the Board’s expectations
and we anticipate full year results will be in line with market
expectations
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