(Alliance News) - Tricorn Group PLC on Wednesday said it expects earnings in the first half of its current financial year to come in below expectations due to margin pressure in the US, with its annual results to be "materially lower" than market expectations.
The stock was trading 33% lower on Wednesday in London at 12.02 pence a share.
The manufacturer of pipes said its current financial year has started "encouragingly" with the new paint facility in the US integrating well and ahead of plan.
Tricorn noted that the demand in the US has remained broadly in line with expectations. However, it has experienced some short-term pressure on margins, due to a lag between the impact of the increase in tariffs in the US on goods sourced from China and the time taken to negotiate price increases with customers.
Meanwhile, the joint venture in China performed in line with expectations, Tricorn highlighted.
Turning to the UK, the company said demand slowed "significantly" through the second quarter, resulting in revenue for the first half being around 12% lower than last year.
As a result, first half revenue for the whole firm is expected to be around 7% down on the prior year's GBP11.4 million and slightly lower than expectations. Pretax profit will also be lower year-on-year, Tricorn said, reflecting both the lower demand levels and short-term pressure on margins in the US.
Looking ahead, Tricorn said there is a strong pipeline of opportunities and it 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 in a statement Wednesday.
Tricorn will publish its interim results on December 4, it said.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.