Tricorn reinstates dividend after transportation revenues spur profit increase

Tricorn Group on Monday reported an increase in annual profits and revenue, leading the company to reinstate its final dividend.

The tube manipulation specialist reported a group profit before tax of £1.0m for the year ended 31 March, an increase of 57% compared to the year before, as revenue increased by 3% to £22.8m as new business growth in its transportation division outweighed a dip in energy revenue.

External revenue for the transportation division increased from £15.9m to £17.1m and underlying profit before tax increased by 38.8% to £0.6m, while lower demand from the power generation rental sector sent the energy division's external revenue down from £6.3m to £5.7m and underlying profit before tax to £0.472m from £0.6m.

Meanwhile, Tricorn's Chinese joint venture, Minguang-Tricorn Tubular Products, saw market conditions soften slightly in the second half of the year, though a strong operational performance saw the group's share of profit before tax increase to £0.3m, up 34.9% compared to the year before.

The AIM traded company consequently reinstated its final dividend and recommended a final payment of 0.2p per share, having paid no final dividend the year before.

Andrew Moss, chairman of Tricorn, said: "These results reflect our focus on growth and our continuing investment in our global operations. Our transportation division delivered strong revenue growth coupled with improved margins. The increased contribution from our joint venture in China resulted from strong operational performance."

A statement from Tricorn added that the board are excited by recently announced expansion of the company's capabilities in the USA with the purchase of a custom built, installed and fully operational, powder coat and wet spray painting line, which allows the company to bring in-house previously sub-contracted painting processes and also addresses plans to broaden product offerings.

Analysts from Shore Capital reduced forecasts to account for the expected continuation of transportation revenues compensating for a lower anticipated contribution from the energy division.

"With the group in the future to be focused on the UK and USA, we continue to believe that Tricorn has the management and infrastructure in place to deliver a “normalised” adjusted PBT of £2.5m in due course," said analysts.

Tricorn Group's shares were down 3.95% at 18.25p at 1213 BST.