Final Results Presentation for year ended 31 March 2019 2 - PowerPoint PPT Presentation

Final Results Presentation for year ended 31 March 2019 2

Highlights – Year ended 31 March 2019 Revenue up 2.6% to £22.763m • Corporate Profit before tax up 31.6% to £1.088m • Continued strong growth in profits from the China Joint Venture • Recommended final dividend of 0.2p per share • Strong revenue growth Transportation • Improved profitability • Rigid hydraulic tube business continues to grow • US expansion announced post year end • Good progress in developing new business opportunities • Energy Lower demand from power generation rental sector • Efficiency gains helped to offset impact of lower volumes • All references to EBITDA, profit/(loss) before tax and EPS/(LPS) are before restructuring costs, intangible asset amortisation, share based payment charges and foreign exchange derivative valuation. 2

Financial Review – Profit & Loss Revenue/Profit Before Tax - £m 2.5 30.0 Operational Highlights • Further improvements in China 20.0 • Post year end expansion in the US 0.5 • Reinstatement of a final dividend of 0.2p per share 10.0 -1.5 0.0 Profit & Loss Highlights 2016 2017 2018 2019 • Significant revenue and profit growth over last four Revenue PBT years • LBT of £0.273m in 2016 to PBT of £1.088m in 2019, on a EBITDA £m/EBITDA return % 26.4% increase in revenue over the period 10% 2.0 • Operational gearing improved to 29.4% (2018: 29.9%) 8% 1.5 6% • EBITDA increased by 18.8% over prior year to £1.872m 1.0 (2018: £1.575m) 4% 0.5 • 2% EBITDA return on sales more than doubled over the last four years to 8.2% 0% 0.0 • Profit before tax growth of 31.6% to £1.088m (2018: 2016 2017 2018 2019 £0.827m) EBITDA EBITDA Return • Earnings per share growth of 14.0% to 3.02p (2018: 2.65p) Earnings/(Loss) per share - pence • Recommended final dividend of 0.2p per share 4.0 (2018:nil) 3.0 2.0 1.0 *All references to EBITDA, profit/(loss) before tax and EPS/(LPS) are before intangible 0.0 asset amortisation, share based payment charges and foreign exchange derivative valuation. -1.0 2016 2017 2018 2019 3

Financial Review – Balance Sheet Cashflow Highlights £m Mar 19 Mar 18 • Cash generated by operations at £1.189m • Cash generated by operations 1.189 1,532 Cash generation ratio at 0.64:1 impacted by working capital movements and incentive payments EBITDA 1.872 1.575 • Continued investment in line with new contracts Cash generation/EBITDA ratio 0.64:1 0.97:1 resulting in capital expenditure, net of finance leases, up to £0.723m • Expenditure on intangible assets of £0.278m Capital expenditure 0.723 0.696 Balance Sheet Highlights Capex/depreciation ratio 1.26 1.33 • Net assets increased £0.685m to £15.044m • Net working capital increased to £4.040m • Net debt increased to £3.290m, but gearing reduced to 45.0% Net debt 3.290 2.982 • The Group operates without any covenants on its Gearing % 45.0% 47.6% borrowings *All references to EBITDA, profit/(loss) before tax and EPS/(LPS) are before restructuring costs, intangible asset amortisation, share based payment charges and foreign exchange derivative valuation. 4

Financial Review - change in net funds £000’s 31 March Underlying 31 March Net movement Sales 2018 net operating 2019 Finance Capital in working development Depreciation debt profit Other costs net debt charges expenditure capital costs (401) 575 (2,982) (246) (3,290) 1,015 (723) (278) (250) Cash generated by operations £1,189k 5

Business Review - Introduction • Two divisions- Transportation and Energy • Operational base spanning three key geographic regions (USA, UK and China) • Footprint has created significant opportunities to expand existing relationships and to develop new business with customers • Post year end the Group consolidated its brands with Franklin Tubular Products and the newly announced expansion at Rabun Gap operating as Tricorn USA and Malvern Tubular Components and Maxpower Automotive as Tricorn UK. The joint venture in China remains as Minguang-Tricorn Tubular Products • Future reporting will be on a geographic segment basis 6

Customer Product Markets Application: Global Markets Engine Truck – Medium Gearbox Lube and Heavy Duty Global Markets Application: Coolant Coolant Construction Hydraulic fluid On Road Truck Agriculture and transfer – Mining Actuator control Global Markets Application: Off Road Machines Agriculture, Fluid transfer Application: Global Construction of oil , fuel, Gas Vacuum Markets Mining air, water and Braking Semi-Con. Oil and Gas coolant System Medium and Other Transmission Heavy Duty Breathers Truck Fuel suction Off Road Engines Application: Global Markets Energy Generation Fluid Transfer Power –Oil, Air and Generation Water Construction and Mining 7

Growth Priorities • Focus on large blue chip OEM customers • Building long term collaborative relationships • Differentiated offering • Engaged from early design through to full production • Recurring revenue • Capitalise on significant growth opportunities • Alert, agile and responsive to growth opportunities • Investing in capability and capacity • Drive for operational excellence • Best in class • Enhanced competitiveness • Employee engagement 9 8

US Expansion • Just 12 miles from Franklin and part of a 1,000,000 square feet facility • Installed and fully operational powder coat and wet spray painting line complete with pre treatment plant. Purchase price $50,000 • Initial 5 year lease of 47,000 square feet premises with option on additional 50,000 square feet • Provides Tricorn USA with the ability to pre-treat and paint its tubular assemblies in-house. These processes had previously been sub-contracted • Addresses plans to expand USA product offering • Expected to be fully operational by the end of July 2019 9

Business Review - Performance Transportation Energy FY 2019 FY 2018 FY 2019 FY 2018 £’000 Central Central Group Group FY 2019 FY 2018 FY 2019 FY 2018 adjustments adjustments Revenue 17,052 15,901 5,711 6,279 22,763 22,180 PBT 569 410 472 567 47 (150) 1,088 827 • UK Transportation • Rigid hydraulic tube business continues to grow Revenue • Supply of brake pipe assemblies to London Electric Vehicle Company successfully entered production phase Up 7.2% • Investment in in-house cutting yielded further productivity gains • USA PBT • Market conditions favourable Up 38.8% • Tight labour market presented challenges in recruitment and retention of skilled employees- largely overcome by year end • Extension of capabilities and capacity at Rabun Gap provides a solid platform for further growth Revenue • Strong operational performance Energy Down 9.0 % • Revenue, as anticipated, lower due to reduction in demand from the power generation rental PBT sector Down 16.8 % • Joint Venture – Market conditions softened slightly in the second half of the year – Strong operational performance saw PBT increase 34.9% to £0.282m (2018: £0.209m) 10

Transportation division delivered strong revenue growth combined with improved margins The contribution from our joint venture increased resulting from strong operational performance Outlook We are excited by the recently announced expansion of our capabilities in the USA Given the progress made to date and our confidence in future prospects, the Board is recommending the reinstatement of a final dividend of 0.2p per share 11