Tricorn flags 'significant impact' of Covid on revenues

(Sharecast News) - Tube manipulation company Tricorn Group updated the market on its trading on Thursday, ahead of its unaudited interim results for the six months ended 31 March, reporting that its Chinese joint venture had continued to operate "normally" after the reopening of its facility on 15 February.
The AIM-traded firm did note, however, that the impact of the Covid-19 coronavirus pandemic had created "significant disruption" elsewhere.

Both of its UK facilities were temporarily closed on 25 March amid safety concerns for employees, and following disruption to supply chains and a number of customer closures.

The group's United States facilities closed a few days later, the board said, with similar concerns and challenges.

Revenue and EBITDA for the six months ended 31 March were "significantly impacted", and were expected to be around 20% and 87% lower, respectively, than in the six months ended 30 September.

"Most of the group's UK and US employees were furloughed from the end of March, with the remaining key staff focussed on ensuring that the group's facilities were in full compliance with the latest Government guidelines to allow an early and safe restart once supply chains and customer demand were re-established," the board said in its statement.

Both its UK and US facilities reopened from 20 April onwards, although with reduced staffing levels and employees continuing to work from home wherever possible.

It explained that, while trading at its UK Malvern facility had returned to pre-lockdown levels, the UK West Bromwich and US facilities were still experiencing significantly lower demand.

"The group has retained the vast majority of its employees whilst its assessment of future customer demand is evaluated and current furlough schemes are utilised."

Both the UK Coronavirus Job Retention Scheme and the US furlough scheme had been used, and £0.55m was also obtained through the US Payroll Protection Program.

The group said it also secured an additional £1m of funding through the Coronavirus Business Interruption Loan Scheme facility from its existing bank, HSBC.

"This loan has a six-year term, with the first year being free of interest and capital repayments, and an interest rate thereafter of 3.99% over base.

"Combined with the other measures taken, this provides the group - as of 1 June - with cash headroom of £1.8m."

Tricorn's board said it was focusing on the safety of its employees, supporting its customers, and mitigating the impact of lower revenues on its profitability.

It said it would provide a further update in its interim results on 23 June.

At 1206 BST, shares in Tricorn Group were down 7.65% at 7.85p.