17 Jun 2008 07:00
Tricorn Group plc Preliminary Results 2007/08
Tricorn Group plc today announced its results for the year ended 31 March 2008.
| 2008 £'000 | 2007 £'000 | Change % | ||
| Sales | 20,829 | 11,147 | +86.9 | |
| Operating profit* | 1,661 | 1,044 | +59.1 | |
| Operating profit* after restructuring costs | 1,661 | 924 | +79.8 | |
| Adjusted earnings per share*^ | 3.51p | 2.23p | +57.4 | |
| * before amortisation, share based charge and restructuring costs ^ 2007 EPS restated under IFRS | ||||
The year ended 31 March 2008 has again seen record results for the Group as we continue to move forward with the successful execution of our strategy to expand organically and through acquisition.
Revenues were up 86.9% to £20,829K (2007: £11,147K) operating profit (before intangible asset amortisation and share based charges) grew 59.1% to £1,661k (2007: £1,044k) and adjusted basic earnings per share rose to 3.51p (2007: 2.23p)
Malvern Tubular Components made good progress in the year and demand for its products increased particularly through the latter part of the period. The year ended with revenues up 12.6% and with an encouraging outlook.
At Redman Fittings capacity was added as demand increased substantially through the year. Its patented jointing system is gaining greater market acceptance and this is expected to continue over the medium to longer term. However in the short term we expect the weaker housing market will lead to some softening of demand.
The improved operational performance at RMDG Aerospace has enabled it to strengthen its relationship with its customers and the business is well positioned to gain market share. Transfer of component sourcing to lower cost countries has been slower than anticipated but the business started to contribute to Group profits in the second half and this is expected to accelerate in the current financial year
We acquired Maxpower Automotive in June 2007, which further strengthened the Group's position as a pipe solutions provider. Good progress has been made in improving operational performance and in establishing sources of components from low cost countries. We remain on track to deliver significant benefits from this activity in 2008.
The outlook for the Group remains encouraging. The majority of our customers are operating in markets that remain strong. We continue to move component spend to low cost countries and we remain focussed on improving our operational efficiency.
We will continue to look for acquisitions that fit our business model and where Tricorn expertise can add significant value.
Nick Paul
Chairman
16 June 2008
Enquiries:
Tricorn Group plc
Mike Welburn, Chief Executive Tel +44(0) 1684 569956
corporate@tricorn.uk.com www.tricorn.uk.com
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2008
| 2008 | 2007 | ||
| £'000 | £'000 | ||
| Revenue | 3 | 20,829 | 11,147 |
| Cost of sales | (14,584) | (6,787) | |
| Gross profit | 6,245 | 4,360 | |
| Distribution costs | (912) | (451) | |
| Administration costs | (3,672) | (2,865) | |
| Operating profit before amortisation, share based charge and restructuring costs | 3 | 1,661 | 1,044 |
| Amortisation | (94) | (19) | |
| Share based charge | (335) | (52) | |
| Restructuring costs | - | (120) | |
| Operating profit | 1,232 | 853 | |
| Finance income | 10 | 11 | |
| Finance costs | (269) | (129) | |
| Profit before tax | 973 | 735 | |
| Income tax expense | (174) | (235) | |
| Profit for the year | 3 | 799 | 500 |
| Attributable to: | |||
| Equity holders of the parent | 799 | 500 | |
| Earnings per share: | |||
| Basic earnings per share | 4 | 2.56 | 1.61 |
| Diluted earnings per share | 4 | 2.27 | 1.47 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2008
| Share capital | Share premium | Merger reserve | Share based payment reserve | Profit and loss account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 1 April 2006 | 3,102 | 1,371 | 1,388 | - | (3,731) | 2,130 |
| ------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Profit for the year | - | - | - | 500 | 500 | |
| -------------- | -------------- | ------------- | -------------- | -------------- | -------------- | |
| Total recognised income for the year | - | - | - | - | 500 | 500 |
| Share based charge | - | - | - | 52 | - | 52 |
| ------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Balance at 31 March 2007 | 3,102 | 1,371 | 1,388 | 52 | (3,231) | 2,682 |
| Profit for the year | - | - | - | 799 | 799 | |
| -------------- | -------------- | -------------- | ------------- | -------------- | -------------- | |
| Total recognised income for the year | - | - | - | - | 799 | 799 |
| Share based charge | - | - | - | 335 | - | 335 |
| Share based charge exercised in year | - | - | - | (194) | 194 | - |
| Issue of new shares | 200 | 77 | - | - | - | 277 |
| -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | |
| Balance at 31 March 2008 | 3,302 | 1,448 | 1,388 | 193 | (2,238) | 4,093 |
| ======== | ======== | ======== | ======== | ======== | ======== |
CONSOLIDATED BALANCE SHEET
As at 31 March 2008
| 2008 | 2007 | ||
| £'000 | £'000 | ||
| Assets | |||
| Non current | |||
| Goodwill | 5 | 591 | 200 |
| Other intangible assets | 1,029 | 361 | |
| Property, plant and equipment | 1,414 | 839 | |
| 3,034 | 1,400 | ||
| Current | |||
| Inventories | 3,547 | 2,359 | |
| Trade and other receivables | 5,728 | 3,446 | |
| Cash and cash equivalents | 397 | 35 | |
| 9,672 | 5,840 | ||
| Total assets | 12,706 | 7,240 | |
| Liabilities | |||
| Current | |||
| Trade and other payables | (4,709) | (2,406) | |
| Borrowings | (2,180) | (1,798) | |
| Corporation tax | (273) | (135) | |
| (7,162) | (4,339) | ||
| Non-current | |||
| Borrowings | (1,087) | (70) | |
| Deferred tax | (364) | (149) | |
| (1,451) | (219) | ||
| Total liabilities | (8,613) | (4,558) | |
| Net assets | 4,093 | 2,682 | |
| Equity | |||
| Share capital | 3,302 | 3,102 | |
| Share premium account | 1,448 | 1,371 | |
| Merger reserve | 1,388 | 1,388 | |
| Share based charge reserve | 193 | 52 | |
| Profit and loss account | (2,238) | (3,231) | |
| Total equity | 4,093 | 2,682 | |
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2008
| | | | 2008 | 2007 |
| | | | £'000 | £'000 |
| | | | | |
| Cash flows from operating activities | | | ||
| Profit after taxation | 799 | 500 | ||
| Adjustment for: | | | ||
| Depreciation | 344 | 207 | ||
| Interest charge in income statement | 259 | 118 | ||
| Profit on sale of plant and equipment | (2) | (17) | ||
| Amortisation charge | 94 | 19 | ||
| Share based charge | 335 | 52 | ||
| Taxation expense recognised in income statement | 174 | 235 | ||
| Increase in trade and other receivables | (918) | (134) | ||
| Increase in trade payables, other payables and accruals | 1,064 | 82 | ||
| | Increase in inventories | | (685) | (553) |
| | | | | |
| | Cash generated from operations | | 1,464 | 509 |
| | Interest paid | | (257) | (129) |
| | Income taxes paid | | (208) | (11) |
| | | | | |
| | Net cash from operating activities | | 999 | 369 |
| | | | | |
| | Cash flows from investing activities | | | |
| | | | | |
| | Acquisition of subsidiaries | | (1,537) | (2,016) |
| | Cash/(overdraft) acquired from acquisition | | 28 | (485) |
| | Purchase of plant and equipment | | (148) | (254) |
| | Proceeds from sale of plant and equipment | | 2 | 32 |
| | Interest received | | 10 | 11 |
| | Net cash used in investing activities | | (1,645) | (2,712) |
| | | | | |
| | Cash flows from financing activities | | | |
| | Issue of ordinary share capital | | 100 | - |
| | (Repayment)/receipt of short term borrowings | | (244) | 1,389 |
| | Proceeds from bank borrowing | | 1,400 | - |
| | Fees in relation to bank borrowings | | (37) | - |
| | Repayment of bank borrowings | | (100) | - |
| | Payment of finance lease liabilities | | (111) | (10) |
| | Net cash used in financing activities | | 1,008 | 1,379 |
| | | | | |
| | Net increase/(decrease) in cash and cash equivalents | | 362 | (964) |
| | | | | |
| | Cash and cash equivalents at beginning of year | | 35 | 999 |
| | | | | |
| | Cash and cash equivalents at end of year | | 397 | 35 |
| | | | | |
| | | | | |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2008
1 GENERAL INFORMATION
Tricorn Group plc and its subsidiaries principal activities are specialist engineering incorporating high precision tube manipulation, systems engineering and specialist fittings.
Tricorn Group plc, a Public Limited Company, is incorporated and domiciled in the United Kingdom.
The financial statements for the year ended 31 March 2008 (including the comparative for the year ended 31 March 2007) were approved by the board of directors on 16 June 2008. Amendments to the financial statements are not permitted after they have been approved.
2 ACCOUNTING POLICIES
These consolidated financial statements have been prepared using the required measurement bases specified under International Financial Reporting Standards (IFRS) and in accordance with applicable IFRS as adopted by the European Union and IFRS as issued by the International Accounting Standards Board.
The significant accounting policies that have been used in the preparation of these consolidated financial statements and the disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS were summarised in the interim statement for the period ended 30 September 2007.
3 segmental reporting
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
These activities may be analysed as follows:
| Tube Manipulation | Pipefittings | Total | |
| £'000 | £'000 | £'000 | |
| Year to 31 March 2008 | |||
| Revenue | 18,164 | 2,665 | 20,829 |
| Operating profit | 994 | 667 | 1,661 |
| Amortisation | (94) | ||
| Share based charge | (335) | ||
| Finance charge net | (259) | ||
| Tax charge | (174) | ||
| Profit for the year | 799 | ||
| Year to 31 March 2007 | |||
| Revenue | 10,566 | 581 | 11,147 |
| Operating profit | 744 | 300 | 1,044 |
| Amortisation | (19) | ||
| Share based charge | (52) | ||
| Restructuring costs | (120) | ||
| Finance charge net | (118) | ||
| Tax charge | (235) | ||
| Profit for the year | 500 | ||
3 segmental reporting (CONTINUED)
Further information on the segments are given below:
| Tube Manipulation | Pipefittings | Total | ||
| £'000 | £'000 | £'000 | ||
| 31 March 2008 | ||||
| Segment assets | 11,399 | 858 | 12,257 | |
| Unallocated assets | 449 | |||
| Consolidated total assets | 12,706 | |||
| Segment liabilities | 5,608 | 703 | 6,311 | |
| Unallocated liabilities | 2,302 | |||
| Consolidated total liabilities | 8,613 | |||
| Capital expenditure | 177 | 66 | 243 | |
| Depreciation | 332 | 12 | 344 | |
| Amortisation | 94 | - | 94 | |
| 31 March 2007 | ||||
| Segment assets | 6,814 | 324 | 7,138 | |
| Unallocated assets | 102 | |||
| Consolidated total assets | 7,240 | |||
| Segment liabilities | 3,905 | 178 | 4,083 | |
| Unallocated liabilities | 475 | |||
| Consolidated total liabilities | 4,558 | |||
| Capital expenditure | 254 | - | 254 | |
| Depreciation | 195 | 12 | 207 | |
| Amortisation | 19 | - | 19 | |
3 segmental reporting (CONTINUED)
Segment details by geographic segments are as follows:
| United Kingdom | Europe | Rest of the World | Total | |||
| £'000 | £'000 | £'000 | £'000 | |||
| 31 March 2008 | ||||||
| Revenue | 16,919 | 2,744 | 1,166 | 20,829 | ||
| Assets | 12,706 | - | - | 12,706 | ||
| Liabilities | (8,613) | - | - | (8,613) | ||
| Net assets | 4,093 | - | - | 4,093 | ||
| Capital additions | 243 | - | - | 243 | ||
| 31 March 2007 | ||||||
| Revenue | 8,556 | 1,691 | 900 | 11,147 | ||
| Assets | 7,240 | - | - | 7,240 | ||
| Liabilities | (4,558) | - | - | (4,558) | ||
| Net assets | 2,682 | - | - | 2,682 | ||
| Capital additions | 254 | - | - | 254 |
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. Shares held in employee share trusts are treated as cancelled for the purposes of this calculation.
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.
| 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 |
| 31 March 2007 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 500 | 31,020 | 1.61p |
| Dilutive shares | - | 2,885 | - |
| Diluted earnings per share | 500 | 33,905 | 1.47p |
The directors consider that the following adjusted earnings per share calculation is a more appropriate reflection of the group performance.
| 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 of goodwill | 94 | - | - |
| Share based payment charge | 335 | - | - |
| Tax credit on share options exercised | (131) | ||
| Adjusted earnings per share | 1,097 | 31,228 | 3.51p |
| Dilutive shares | - | 3,977 | - |
| Diluted adjusted earnings per share | 1,097 | 35,205 | 3.12p |
4 EARNINGS PER SHARE
| 31 March 2007 | |||
| Profit | Weighted average number of shares | Earnings per share | |
| £'000 | Number '000 | pence | |
| Basic earnings per share | 500 | 31,020 | 1.61p |
| Amortisation of goodwill | 19 | - | - |
| Share based charge | 52 | - | - |
| Restructuring costs | 120 | - | - |
| Adjusted earnings per share | 691 | 31,020 | 2.23p |
| Dilutive shares | - | 2,885 | - |
| Diluted adjusted earnings per share | 691 | 33,905 | 2.04p |
5 business combination
On 26 June 2007 Tricorn Group plc acquired 100% of the issued share capital of Maxpower Automotive Limited, a company incorporated in the United Kingdom. The total cost of acquisition includes the following components:
| £'000 | |
| Cash | 1,350 |
| Contingent consideration | 200 |
| Professional fees | 187 |
| ----------------------- | |
| 1,737 | |
| ============= |
The contingent consideration is payable one year from the date of acquisition based on Maxpower Automotive Limited achieving earnings above an agreed figure. The amounts recognised for each class of the acquiree's assets, liabilities and contingent liabilities recognised at the acquisition date are as follows:
| Carrying amount | Adjustments | Provisional fair value | ||
| £'000 | £'000 | £'000 | ||
| Intangible assets | 762 | - | 762 | |
| Plant and equipment | 676 | - | 676 | |
| Inventories | 503 | - | 503 | |
| Trade and other receivables | 1,187 | - | 1,187 | |
| Cash and cash equivalents | 28 | - | 28 | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Total assets | 3,156 | 3,156 | ||
| Trade and other payables | (1,029) | - | (1,029) | |
| Current tax | (122) | - | (122) | |
| Finance lease and hire purchase liability | (154) | - | (154) | |
| Invoice discounting | (241) | - | (241) | |
| Deferred tax | (264) | - | (264) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Total liabilities | (1,810) | - | (1,810) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Net assets | 1,346 | - | 1,346 | |
| ============= | ============== | |||
| Fair value of purchase consideration | 1,737 | |||
| ------------------------- | ||||
| Goodwill | 391 | |||
| ============= | ||||
The goodwill that arose on the combination can be attributed to the synergies expected to be derived from the combination and the value of the workforce of Maxpower Automotive Limited which cannot be recognised as an intangible asset under IAS 38 "Intangible Assets".
Since the acquisition Maxpower Automotive Limited has contributed £104,000 to the group profit for the period to 31 March 2008.
Had the acquisition occurred on 1 April 2007 the revenue and profit for group for the period to 31 March 2008 would have been £22,524,000 and £869,000 respectively.
6 Dividend
The directors do not recommend the payment of a dividend (31 March 2007 No dividend paid).
7 PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.
The group income statement, group statement of changes in equity, the group balance sheet, the group cash flow statement and the associated notes for the year then ended have been extracted from the Group's financial statements. Those financial statements have not yet been delivered to the Registrar.