Tricorn Group plc (AIM: TCN.L), the AIM listed tube manipulation specialist, provides the following pre-close trading update for the six months ended 30 September 2019 (the “Period”).
The Period started encouragingly with the new paint facility in the USA integrating well and ahead of plan. Demand in the USA has remained broadly in line with expectations, but the USA operation has seen some short-term pressure on margins. This has been due to a lag between the impact of the increase in tariffs in the USA on goods sourced from China and the time taken to negotiate price increases with customers.
The Joint Venture in China performed in line with expectations.
In the UK demand slowed significantly through the second quarter resulting in revenue for the Period being around 12% lower than the six months ended 30 September 2018 (the “Corresponding Period”).
As a result, first half revenue for the Group is expected to be around 7% down on the Corresponding Period and slightly lower than expectations.
PBT for the Period will be lower than the Corresponding Period reflecting both the lower demand levels and short-term pressure on margins in the USA.
There is a strong pipeline of opportunities and the Board 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 will provide a further update on current trading and prospects at the time of the release of its unaudited interim results for the six months ended 30 September 2019, which is expected to be on 4 December 2019.