12 Dec 2008 07:00
Tricorn Group plc
Interim results
Tricorn Group plc, the AIM listed developer and manufacturer of pipe solutions, is pleased to present its interim figures for the period ended 30th September 2008.
Summary of results
|
| 6 months to | 6 months to | Year to |
|
| 30 September | 30 September | 31 March |
|
| 2008 | 2007 | 2008 |
|
| £'000 | £'000 | £'000 |
| Sales revenue | 12,103 | 8,797 | 20,829 |
| Operating profit* | 931 | 768 | 1,661 |
| Profit before tax* | 821 | 651 | 1,402 |
| Adjusted earnings per share - basic* | 1.83p | 1.64p | 3.51p |
*(before intangible asset amortisation and share based charges)
Highlights
Further consecutive period of record results
Operating profit* up 21.2% to £931k (2007 £768k)
Balance sheet continues to strengthen
Group well positioned in current economic climate
Enquiries:
| Tricorn Group plc | |
| Mike Welburn, Chief Executive | Tel +44(0) 1684 569956 |
| mikewelburn@tricorn.uk.com | www.tricorn.uk.com |
Chairman's statement
Once again the six months ended 30 September 2008 have seen the Group deliver record results. Our strategy of operating across a number of industry sectors and markets has helped to ensure profitable growth in a period of economic uncertainty. Operating profit before amortisation and share based charges grew by 21.2% to £931k (2007: £768k). Adjusted earnings per share were up 11.6% at 1.83p (2007: 1.64p). Total interest cover at the half year was 8.5 times, gearing* has further reduced and operating cash flows continue to be positive.
At Malvern Tubular Components sales and orders have been at record levels and have remained strong through the initial months of the second half. This has more than offset the weak market conditions that the Redman Fittings business continues to experience and which were anticipated at the time of the preliminary announcement.
Maxpower Automotive was acquired in June 2007 and half year performance was in line with expectations. Good progress was made moving material spend to low cost country sources with the majority of components now received and approved. There has been some softening of demand as we approach the end of the calendar year and we expect generally softer conditions through the balance of the second half.
At RMDG Aerospace, the order book has remained firm and low cost country sourcing is starting to accelerate. This has continued to be a slower process than within the other businesses due to the lengthy customer approval procedures required in the aerospace sector.
Looking to the future Tricorn continues to be well positioned in what is an increasingly challenging and uncertain economic climate. The second half has started strongly but we do anticipate recent market softening to extend further with full year results toward the lower end of expectations.
Nick Paul, Chairman, 12 December 2008
*Long term debt to equity
Consolidated interim income statement
| 6 months to 30 September 2008 | 6 months to 30 September 2007 | Year to 31 March 2008 | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | 3 | 12,103 | 8,797 | 20,829 |
| Cost of sales | (7,792) | (5,640) | (14,584) | |
| -------------- | -------------- | -------------- | ||
| Gross profit | 4,311 | 3,157 | 6,245 | |
| Distribution costs | (559) | (355) | (912) | |
| Administrative costs | (2,821) | (2,034) | (3,672) | |
| -------------- | -------------- | -------------- | ||
| Operating profit before amortisation and share based charge | 931 | 768 | 1,661 | |
| Amortisation | (59) | (36) | (94) | |
| Share based charge | - | (26) | (335) | |
| -------------- | -------------- | -------------- | ||
| Operating profit | 872 | 706 | 1,232 | |
| Finance income | 13 | 3 | 10 | |
| Finance costs | (123) | (120) | (269) | |
| -------------- | -------------- | -------------- | ||
| Profit before tax | 762 | 589 | 973 | |
| Income tax expense | (217) | (143) | (174) |
| --------------- | -------------------- | -------------- | ||
| Profit for the period | 3 | 545 | 446 | 799 |
| ============== | ============== | ============== | ||
| Attributable to: | ||||
| Equity holders of the parent | 545 | 446 | 799 | |
| ============== | ============== | ============== | ||
| Earnings per share: | ||||
| Basic earnings per share | 4 | 1.65p | 1.44p | 2.56p |
| ============== | ============== | ============== | ||
| Diluted earnings per share | 4 | 1.54p | 1.27p | 2.27p |
| ============== | ============== | ============== |
Consolidated interim balance sheet
| 30 September 2008 | 30 September 2007 | 31 March 2008 | |||
| £'000 | £'000 | £'000 | |||
| ASSETS | |||||
| Non-current | |||||
| Goodwill | 591 | 627 | 591 | ||
| Other intangible assets | 970 | 1,087 | 1,029 | ||
| Plant and equipment | 1,343 | 1,432 | 1,414 | ||
| -------------- | -------------- | -------------- | |||
| 2,904 | 3,146 | 3,034 | |||
| -------------- | -------------- | -------------- | |||
| Current | |||||
| Inventories | 4,088 | 3,215 | 3,547 | ||
| Trade and other receivables | 5,090 | 4,516 | 5,728 | ||
| Cash and cash equivalents | 440 | 181 | 397 | ||
| -------------- | -------------- | -------------- | |||
| 9,618 | 7,912 | 9,672 | |||
| -------------- | -------------- | -------------- | |||
| -------------- | -------------- | -------------- | |||
| Total assets | 12,522 | 11,058 | 12,706 | ||
| LIABILITIES | |||||
| Current | |||||
| Trade and other payables | (4,129) | (3,929) | (4,709) | ||
| Borrowings | (1,966) | (1,880) | (2,180) | ||
| Corporation tax | (498) | (420) | (273) | ||
| -------------- | -------------- | -------------- | |||
| (6,593) | (6,229) | (7,162) | |||
| -------------- | -------------- | -------------- | |||
| Non-current | |||||
| Borrowings | (945) | (1,247) | (1,087) | ||
| Deferred tax liabilities | (346) | (428) | (364) | ||
| -------------- | -------------- | -------------- | |||
| Total non-current liabilities | (1,291) | (1,675) | (1,451) | ||
| -------------- | -------------- | -------------- | |||
| Total liabilities | (7,884) | (7,904) | (8,613) | ||
| -------------- | -------------- | -------------- | |||
| Net assets | 4,638 | 3,154 | 4,093 | ||
| ========= | ========= | ========= | |||
| EQUITY | |||||
| Equity attributable to equity holders of the parent | |||||
| Share capital | 3,302 | 3,102 | 3,302 | ||
| Share premium account | 1,448 | 1,371 | 1,448 | ||
| Merger reserve | 1,388 | 1,388 | 1,388 | ||
| Share based payment reserve | 193 | 78 | 193 | ||
| Profit and loss account | (1,693) | (2,785) | (2,238) | ||
| -------------- | -------------- | -------------- | |||
| Total equity | 4,638 | 3,154 | 4,093 | ||
| ========= | ========= | ========= | |||
Consolidated interim statement of changes in equity
| Share capital | Share premium account | Merger reserve | Profit and loss account | Share based payment reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 31 March 2007 | 3,102 | 1,371 | 1,388 | (3,231) | 52 | 2,682 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Share based charge | - | - | - | - | 26 | 26 |
| Profit for the period | - | - | - | 446 | - | 446 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Total recognised income and expense for the period | - | - | - | 446 | 26 | 472 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Balance at 30 September 2007 | 3,102 | 1,371 | 1,388 | (2,785) | 78 | 3,154 |
| ========= | ========= | ========= | ========= | ========= | ========= | |
| Share based charge | - | - | - | - | 309 | 309 |
| Share based charge exercised in period | - | - | - | 194 | (194) | - |
| Profit for the period | - | - | - | 353 | - | 353 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Total recognised income and expense for the period | - | - | - | 547 | 115 | 662 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Balance at 31 March 2008 | 3,302 | 1,448 | 1,388 | (2,238) | 193 | 4,093 |
| ========= | ========= | ========= | ========= | ========= | ========= | |
| Profit for the period | - | - | - | 545 | - | 545 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Total recognised income and expense for the period | - | - | - | 545 | - | 545 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Balance at 30 September 2008 | 3,302 | 1,448 | 1,388 | (1,693) | 193 | 4,638 |
| ================= | ========= | ========= | ========= | ========= | ========= |
Consolidated interim cash flow statement
| 6 months to 30 September 2008 | 6 months to 30 September 2007 | Year to 31 March 2008 | |
| £'000 | £'000 | £'000 |
Cash flows from operating activities
| Profit after taxation | 545 | 446 | 799 |
| Adjustments for: | |||
| Depreciation | 194 | 158 | 344 |
| Interest charge in the income statement | 110 | 117 | 259 |
| Profit on sale of plant and equipment | - | (2) | (2) |
| Amortisation charge | 59 | 36 | 94 |
| Share based charge | - | 26 | 335 |
| Taxation expense recognised in the income statement | 217 | 143 | 174 |
| Decrease/ (increase) in trade and other receivables | 638 | 93 | (918) |
| Increase in inventories | (541) | (353) | (685) |
| (Decrease)/increase in trade payables, other payables and accruals | (529) | 292 | 1,064 |
| -------------- | -------------- | -------------- | |
| Cash generated from operations | 693 | 956 | 1,464 |
| Interest paid | (122) | (120) | (257) |
| Income taxes paid | - | - | (208) |
| -------------- | -------------- | -------------- | |
| Net cash from operating activities | 571 | 836 | 999 |
| -------------- | -------------- | -------------- | |
| Cash flows from investing activities | |||
| Acquisition of subsidiaries net of cash acquired | - | (1,512) | (1,537) |
| Cash acquired from acquisition | - | 28 | 28 |
| Purchase of property, plant and equipment | (117) | (75) | (148) |
| Proceeds from sale of equipment | - | 2 | 2 |
| Interest received | 12 | 3 | 10 |
| -------------- | -------------- | -------------- | |
| Net cash used in investing activities | (105) | (1,554) | (1,645) |
| -------------- | -------------- | -------------- | |
| Cash flows from financing activities | |||
| Issue of ordinary share capital | 100 | ||
| Repayment of short term borrowings | (214) | (517) | (244) |
| Proceeds from long term borrowings | - | 1,500 | 1,400 |
| Fees in relation to bank borrowings | - | - | (37) |
| Repayment of bank borrowings | (150) | - | (100) |
| Payment of finance lease liabilities | (69) | (119) | (111) |
| -------------- | -------------- | -------------- | |
| Net cash used in financing activities | (423) | 864 | 1,008 |
| -------------- | -------------- | -------------- | |
| Net increase in cash and cash equivalents | 43 | 146 | 362 |
| Cash and cash equivalents at beginning of period | 397 | 35 | 35 |
| -------------- | -------------- | -------------- | |
| Cash and cash equivalents at end of period | 440 | 181 | 397 |
| ========= | ========= | ========= |
Notes to the consolidated interim financial statements
1. Nature of operations and general information
Tricorn Group plc and subsidiaries' (the 'Group') principal activities include the development and manufacturing of pipe solutions to a growing and increasingly international customer base.
The Group's customer base includes major blue chip companies with world-wide activities in key market sectors, including Pipefittings, Power Generation, Aerospace, Off Highway, and Automotive. The products supplied to the last four sectors share common means of production and are classified as 'Tube Manipulation'. Refer to note 3 for further information about Tricorn Group's operating segments.
Tricorn Group plc is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of Tricorn Group plc's registered office, which is also its principal place of business, is Spring Lane, Malvern, Worcestershire, United Kingdom. Tricorn Group plc's shares are listed on the Alternative Investment Market of the London Stock Exchange.
These consolidated interim financial statements have been approved for issue on 12 December 2008 by the Board of Directors. Under the security regulations act of the EU, amendments to the financial statements are not permitted after they have been approved.
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31 March 2008 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.
2. Basis of preparation
These interim consolidated financial statements are for the six months ended 30 September 2008. They have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2008.
These consolidated interim financial statements have been prepared under the historical cost convention.
These consolidated interim financial statements (the interim financial statements) have been prepared in, and in accordance with, the accounting policies set out in the Group's 31 March 2008 statutory accounts.
3. Segment analysis
The Group operates two main business segments:
Tube manipulation: the activities undertaken by Tube Manipulation comprise the supply of steel, plastic, titanium, and hybrid tube fabrications and fittings for, amongst others areas, diesel engine, generator set, jet engine and niche automotive applications Pipefittings: the pipefittings sector produces innovative jointing systems for polyethylene pipes, typically within the utility industry.The revenues and net result generated by each of the group's business segments are summarised as follows:
6 months to 30 September 2008
| Tube manipulation | Pipefittings | Total | |||||||
| £'000 | £'000 | £'000 | |||||||
| Revenue | 11,231 | 872 | 12,103 | ||||||
| Profit after tax | 380 | 165 | 545 | ||||||
| ========= | ========= | ========= | |||||||
6 months to 30 September 2007
| Tube manipulation | Pipefittings | Total | |||||
| £'000 | £'000 | £'000 | |||||
| Revenue | 7,661 | 1,136 | 8,797 | ||||
| Profit after tax | 226 | 220 | 446 | ||||
| ========= | ========= | ========= | |||||
Year to 31 March 2008
| Tube manipulation | Pipefittings | Total | |||
| £'000 | £'000 | £'000 | |||
| Revenue | 18,164 | 2,665 | 20,829 | ||
| Profit after tax | 234 | 565 | 799 | ||
| ========= | ========= | ========= |
4. Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
| 30 September 2008 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 545 | 33,020 | 1.65p |
| Dilutive shares | - | 2,435 | - |
| Diluted earnings per share | 545 | 35,455 | 1.54p |
| 30 September 2007 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 446 | 31,020 | 1.44p |
| Dilutive shares | - | 4,060 | - |
| Diluted earnings per share | 446 | 35,080 | 1.27p |
| 31 March 2008 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 799 | 31,228 | 2.56p |
| Dilutive shares | - | 3,977 | - |
| Diluted earnings per share | 799 | 35,205 | 2.27p |
The Directors consider that the following adjusted earnings per share calculation is a more appropriate reflection of the group performance.
| 30 September 2008 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 545 | 33,020 | 1.65p |
| Amortisation | 59 | - | - |
| Share based charge | - | - | - |
| Adjusted earnings per share | 604 | 33,020 | 1.83p |
| Dilutive shares | - | 2,435 | - |
| Diluted earnings per share | 604 | 35,455 | 1.70p |
| 30 September 2007 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 446 | 31,020 | 1.44p |
| Amortisation | 36 | - | - |
| Share based charge | 26 | - | - |
| Adjusted earnings per share | 508 | 31,020 | 1.64p |
| Dilutive shares | - | 4,060 | - |
| Diluted earnings per share | 508 | 35,080 | 1.45p |
| 31 March 2008 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 799 | 31,228 | 2.56p |
| Amortisation | 94 | - | - |
| Share based charge | 335 | - | - |
| Tax credit on share options exercised | (131) | - | - |
| Adjusted earnings per share | 1,097 | 31,228 | 3.51p |
| Dilutive shares | - | 3,977 | - |
| Diluted earnings per share | 1,097 | 35,205 | 3.12p |
5. Dividends
The Directors do not recommend the payment of a dividend (2008: nil).