TCN.L Regulatory News (TCN)

6 December 2017

Tricorn Group plc

("Tricorn" or the "Group")

Interim Results

For the six months ended 30 September 2017

Tricorn Group plc (AIM: TCN.L) the AIM listed tube manipulation specialist, announces its unaudited interim results for the six months ended 30 September 2017.

Highlights

· Revenue up 28.4% compared to the six months ended 30 September 2016

· Substantial increase in profitability

· Market conditions improved over prior period

· Global footprint creating new business opportunities

· Long term agreement secured with London Electric Vehicle Company

· Anticipate that full year results will be in line with market expectations

Financial Summary

*All references to EBITDA, operating profit, profit before tax and EPS are before restructuring costs, intangible asset amortisation, share based payment charges and foreign exchange derivative valuation.

Andrew Moss, Chairman of Tricorn, commented:

"The Group has made significant progress through the reporting period with all businesses benefitting from improved end markets and the impact of new business wins.

The Group's strategy to build a business capable of supporting a global customer base across the UK, USA and China has created significant opportunities to expand our existing relationships and to develop business with new customers.

Our focus on securing long term agreements with blue chip OEMs is proving successful and over the past three years we have announced long term agreements with four major customers amounting to aggregate revenue in excess of £25m. We are further encouraged by the pipeline of new opportunities and, therefore, continue to invest in our worldwide manufacturing capabilities.

Underlying profit before tax for the six month period was substantially higher than in the previous full year and in line with the Board's expectations. We anticipate that the full year results will be in line with market expectations."

Enquires:

Notes to Editors:

Tricorn is a value added manufacturer and specialist manipulator of pipe and tubing assemblies to niche markets worldwide in the Energy and Transportation sectors.

Headquartered in Malvern, UK, Tricorn employs around 300 employees and operates through four brands: MTC, Maxpower, Franklin Tubular Products and Minguang-Tricorn Tubular Products.

Chairman's and Chief Executive's statement

Performance in the six months ended 30 September 2017

With improved market conditions and the businesses benefitting from the impact of new business wins revenue at £11.427m was up 28.4% when compared to the six months ended 30 September 2016 (the "Corresponding Period") (2016: £8.900m).

Both of the Group's divisions made good progress and our joint venture in China is now contributing positively to overall profitability.

Underlying profit before tax at £0.370m was in line with the Board's expectations and substantially ahead of the Corresponding Period (2016: £0.004m).

Operational Review

The Group operates two main business divisions focused on the Transportation and Energy sectors and has four manufacturing facilities in the UK, USA and China. These locations make it ideally positioned to support its blue chip OEM customer base, many of whom are seeking to localise supply and technical support for their facilities in these key regions.

Transportation

The Transportation division is focused on rigid, nylon and hybrid tubular products for engines, hydraulic actuation, transmission lubrication and fuel sender sub-systems. Its customer base serves both the on and off road markets, including construction, truck and agriculture.

The USA business, Franklin Tubular Products, has built excellent relationships with its customers based on its strong operational performance, responsiveness and the investment made in innovative capabilities. Revenue and profits in the six months ended 30 September 2017 are up sharply, with further substantial opportunities for new business being progressed.

In the UK, Maxpower Automotive also increased revenue and profitability in the first half compared to the Corresponding Period. There has been further expansion of rotary welding capabilities to support the increasing demand for rigid hydraulic tube assemblies which now represent a significant proportion of overall revenue. Towards the end of the period the business was successful in securing a long term agreement with the London Electric Vehicle Company for the supply of brake pipe assemblies on the recently launched TX eCity electric taxi which is expected to generate around £5m of revenue over the length of the contract.

Overall externally reported segmental revenue was £8.097m, up 18.3% compared to the same period last year (2016: £6.844m). Segmental underlying profit before tax was £0.156m (2016: £0.061m).

Energy

The Energy division specialises in the design and manufacture of larger tubular assemblies and fabrications for engine, cooling and generator set applications. Its customer base serves the power generation, oil and gas, mining and marine applications markets.

Revenue during the period at £3.330m was significantly ahead of the Corresponding Period (2016: £2.056m) with the business benefitting from the impact of new business particularly within the power generation sector. Segmental profit before tax at £0.278m was £0.260m ahead of the Corresponding Period (2016: £0.018m).

Joint Venture

Our Chinese joint venture, Minguang-Tricorn Tubular Products performed well, benefiting from the consolidation of our activities in China in the previous year as well as improved market conditions. The Group's share of profit before tax at £0.099m was substantially improved (2016: Loss £0.076m).

Financial Review

Over the past couple of years the Group has undertaken activities to restructure its businesses. The most significant of these was to consolidate its China facilities, which was completed in June 2016. Coupled with cost reductions across its other subsidiaries, the Group completed its restructuring programme towards the end of the last financial year and began to benefit from those activities through its final quarter.

Through the first half of the current financial year, the Group has built on the progress that it made in the previous year. It has seen improvements in market demand across all of its business segments. In addition, it has continued to develop and introduce contracts with new and existing customers.

As a result, the Group saw revenue increase over the Corresponding Period to £11.427m, with underlying profit before tax increasing substantially to £0.370m (2016: £0.004m).

Income Statement

Revenue for the first half of the financial year at £11.427m was up 28.4% on the Corresponding Period (2016: £8.900m). The impact of movements on the USD added £0.208m to the revenue in the first half. However, this is offset by £0.400m relating to activities in China which were reported in the Corresponding Period. As previously indicated, revenue from the Group's China joint venture is not reported in the Group statement of comprehensive income.

The Group's administration and distribution costs increased as a result of incurring a level of product introduction expense on new business, but compared to the Corresponding Period delivered more than a doubling of its operating profit to £0.388m (2016: £0.187m).

Following the merger of its China activities, the joint venture delivered a profit in the first half of the financial year, of which the Group's reported share was £0.099m (2016: loss £0.076m). After finance charges the Group made an underlying profit before tax of £0.370m (2016: £0.004m).

After intangible asset amortisation and share based payment charges, headline profit before tax was £0.256m (2016: loss before tax £0.249m).

The underlying earnings per share was 1.00p (2016: 0.01p) and after deducting non-underlying items the basic earnings per share was 0.66p (2016: loss per share 0.74p).

Cash Flow

The Group's net cash flow from operating activities for the first half was £0.186m (2016: £0.202m). With demand increasing through the first half of the financial year, the Group saw an increase in net working capital to support that growth, which impacted operating cashflows.

The Group's investment in capital expenditure in the first half was £0.281m (2016: £0.307m). The majority of this expenditure was associated with new business and facility improvements in the UK and US. Funding of capital expenditure projects is through a combination of short term borrowings and lease finance arrangements.

Net debt at the half year end was £3.470m compared to £3.386m at 30 September 2016 and £3.497m at 31 March 2017. With net debt only marginally down on the position at 31 March 2017, gearing was largely unchanged at 57.5% (Sept 2016: 57.4%).

Balance Sheet

Total assets at 30 September 2017 were £14.202m, up £1.664m on 30 September 2016. The increase related mainly to increases in trade receivables, inventories and cash and equivalents reflecting the increased demand and trading activity though the first half of the year.

Net working capital at 30 September 2017 was £4.052m, which was £0.218m higher than at 30 September 2016 and £0.162m higher than at 31 March 2017.

Outlook

The Group has made significant progress through the reporting period with all businesses benefitting from improved end markets and the impact of new business wins.

The Group's strategy to build a business capable of supporting a global customer base across the UK, USA and China has created significant opportunities to expand our existing relationships and to develop business with new customers.

Our focus on securing long term agreements with blue chip OEMs is proving successful and over the past three years we have announced long term agreements with four major customers amounting to aggregate revenue in excess of £25m. We are further encouraged by the pipeline of new opportunities and, therefore, continue to invest in our worldwide manufacturing capabilities.

Underlying profit before tax for the six month period was substantially higher than in the previous full year and in line with the Board's expectations. We anticipate that the full year results will be in line with market expectations.

Andrew Moss Mike Welburn

Chairman Chief Executive

Group statement of comprehensive income

For period ended 30 September 2017

Group statement of changes in equity

For period ended 30 September 2017

Group statement of financial position

At 30 September 2017

Group statement of cash flows

For period ended 30 September 2017

1 General information

Tricorn Group plc and subsidiaries' (the 'Group') principal activities comprise high precision tube manipulation, systems engineering and specialist fittings.

The Group's customer base includes major blue chip companies with world-wide activities in key market sectors, including Power Generation, Oil & Gas, Off Highway, Commercial Vehicles, Agriculture and Automotive.

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, WR14 1DA. The Group's shares are admitted to trading on the Alternative Investment Market of the London Stock Exchange.

These consolidated interim financial statements have been approved for issue on 6 December 2017 by the Board of Directors. Amendments to the financial statements are not permitted after they have been approved. Copies of this announcement are available on the Company's website, www.tricorn.uk.com.

The financial information set out in this interim report does not constitute statutory accounts as defined in the Companies Act 2006. The Group's statutory financial statements for the year ended 31 March 2017 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 498(2) or (3) of the Companies Act 2006.

2 Accounting policies

Basis of preparation

These unaudited interim consolidated financial statements are for the six months ended 30 September 2017. 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 2017, which have been prepared in accordance with International Financial Reporting Standards.

The same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements.

3 Segmental reporting

The Group operates two main business segments:

§ Energy: manipulated tubular assemblies for use in power generation, oil and gas and marine sectors.

§ Transportation: ferrous, non-ferrous and nylon material tubular assemblies for use in on and off-highway applications.

3 Segmental reporting (continued)

The financial information detailed below is frequently reviewed by the Chief Operating Decision maker.

3 Segmental reporting (continued)

4 Earnings/(Loss) 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.

4 Earnings/(Loss) per share (continued)

The directors consider that the following adjusted earnings per share calculation is a more appropriate reflection of the Group's performance.