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Tricorn Preliminary Results For year ended 31st March 2010. Agenda. Results Overview Financial Review Business Performance Outlook. Results Overview. Decisive action in response to economic downturn H2 operating profit* up 40% on first half - PowerPoint PPT Presentation
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Tricorn Preliminary ResultsFor year ended 31st March 2010
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• Results Overview
• Financial Review
• Business Performance
• Outlook
Agenda
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Results Overview 2010£’000
2009 £’000
Sales revenue 15,031 22,245
Operating profit* 425 1,430
Profit before tax* 288 1,234
Cash and equiv 1,296 713
Net debt 841 2,064
• Decisive action in response to economic downturn• H2 operating profit* up 40% on first half • All business segments profitable for the full year• Significantly stronger balance sheet• Improving demand in Energy and Transportation sectors
*Before intangible asset amortisation, restructuring charges and interest rate swap valuation
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– Focus for 2009/10 effectively executed• Capacity alignment
– Headcount reduced by 25% and introduction of short time working
– Maintained productivity through the year– Retention of key skills enabled swift response to increasing
demand in H2
• Cost Reduction– Administration costs down 27% to £3.7m– Well positioned as markets recover
• Strengthened balance sheet– Year end cash– Net debt– Gearing
Results Overview
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Financial Review
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£’000 2010 2009 Change %
Sales 15,031 22,245 (32)
Admin & distribution costs (4,413) (6,065) 27
EBITDA* 817 1,809 (55)
Profit before tax* 288 1,234 (77)
Adjusted EPS 0.79p 3.16p (75)
Capital Expenditure% of depreciation in 2010
13534.4%
347 61
Net debt (841) (2,064) 59
Purchase of own shares (49) - -
Total headcount 238 317 25
Headlines
*Before intangible asset amortisation, restructuring charges and interest rate swap valuation
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£’000 2010 2009 Change %
Turnover 15,031 22,245 (32)
EBITDA* 817 1,809 (55)
Depreciation (392) (379)
Interest charge* (137) (196) 30
Profit before tax* 288 1,234 (77)
Intangible amortisation (118) (118)
Swap FV Adj 8 (100)
Restructuring costs - (239)
Profit before tax 178 777 (77)
Taxation (29) (192)
Profit after tax 149 585 (75)
Profitability
*Before intangible asset amortisation, restructuring charges and interest rate swap valuation
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£’000 2010 2009 Change %
Total Fixed Assets 2,510 2,884
Inventory 3,107 3,817 19
Trade & other receivables 3,839 3,661
Trade & other payables (3,360) (2,897)
Net working capital 3,586 4,581 22
Taxation & other creditors (477) (723)
Net Debt (841) (2,064) 59
Net Assets 4,778 4,678 2
Gearing (total debt/equity) 17.6% 44.1%
Net assets
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5101,223
(267)
PBIT Depreciation &
Amortisation
Components of 2010 cashflow
307
Cashflow
710
285
Inventory reduction
Other working capital
movements
Taxation
(138)
Net interest paid
(135)
Capital expenditure
(49)
Purchase of own shares
EBITDA£817k
£000’s
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£’000 2010 2009
Cash & cash equivalents 1,296 713
Invoice discounting (1,388) (1,620) Renewed in November 2009
Term Loan (678) (969) 1.6 times EBITA
Finance leases (71) (188)
Closing net debt (841) (2,064)
Banking covenants
Interest cover (EBITA/Interest)
3.1 times 4.6 times Hurdle 2.5 times
Cashflow cover 2.5 times 2.0 times Hurdle 1.1 times
Banking Facilities
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• Foreign currency:-– The Group utilises forward contracts to hedge FX risk– Rates achieved in 2009/10 were $1.59 and EURO1.14
• 10% movement in USD impacts the Group by £14k• 10% movement in the Euro impacts the Group by £22k
• Steel prices:-– The Group monitors steel prices closely and seeks to
pass increases through to its customers– A 10% movement in the steel price impacts costs by
£116k per annum
Economic exposures
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Business Review
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• To acquire and grow engineering-based businesses which are supplying blue chip OEM customers which are focused on attractive end markets
• The key elements of this approach are to:-– Drive for operational excellence - ensuring products and services are globally
competitive and that class-leading quality and delivery performance is achieved
– Improve margins by the implementation of lean manufacturing, the resourcing of materials to low cost countries and the utilisation of Group resources (shared services and expertise)
– Growth - organically by increasing share within its customers and developing new customers. Inorganically through selective acquisitions where Tricorn's management expertise can generate sufficient added value
Strategy
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• Energy– Fabricated tubular assemblies for
diesel engines and radiators sets used in power generation, mining, oil and gas
• Transportation– Nylon, rigid and hybrid pipe
assemblies for engines, brake systems, fuel sender sub-systems used in both on and off highway applications
• Aerospace– Rigid pipe assemblies for civil and
military aerospace applications• Utilities
– Patented jointing solution for multi layer and single layer pipe used in the water and gas markets
Energy32%
Transportation
31%
Aerospace34%
Utilities3%
Sales 2010
Business Segments
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£’000 2010 H2 H1 2009
Sales 4,849 2,702 2,147 8,428
PBT* 50 87 (37) 612
• Markets improving with H2 sales up 26%
• Returned to profitability in H2• Product finishing capabilities
extended• New orders secured
Energy Segment
*excludes restructuring costs
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£’000 2010 H2 H1 2009
Sales 4,671 2,700 1,971 6,645
PBT* 36 60 (24) 112
• H2 sales up 37%• Returned to profitability in H2• Factory layout improved to
accommodate new business wins• Additional growth opportunities
identified
Transportation Segment
*excludes restructuring costs
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£’000 2010 H2 H1 2009
Sales 5,014 2,389 2,625 5,995
PBT 106 3 103 (8)
• Some softening in demand but now stabilising
• Returned to profitability on sales 16% down
• Management team strengthened• Further scope for operational
improvements
Aerospace Segment
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Utilities Segment
£’000 2010 H2 H1 2009
Sales 497 275 222 1,177
PBT 51 17 34 253
• Demand remains relatively weak with sales down 58%
• Business still profitable on lower sales
• Should make significant contribution to Group earnings as housing market recovers
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• Economic uncertainty remains• Encouraged by H2 growth in revenues• Remain well positioned to respond to further
changes in market demand• Will consider potential acquisitions where
Tricorn expertise can generate the necessary added value
Outlook