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

Final Results Presentation for year ended 31 March 2019

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Highlights – Year ended 31 March 2019

• Revenue up 2.6% to £22.763m
• 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

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Transportation Energy Corporate

• Strong revenue growth
• Improved profitability
• Rigid hydraulic tube business continues to grow
• US expansion announced post year end
• Good progress in developing new business opportunities
• 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.

Financial Review – Profit & Loss

Operational Highlights

• Further improvements in China
• Post year end expansion in the US
• Reinstatement of a final dividend of 0.2p per share

Profit & Loss Highlights

• Significant revenue and profit growth over last four

years

• LBT of £0.273m in 2016 to PBT of £1.088m in 2019, on a

26.4% increase in revenue over the period

• Operational gearing improved to 29.4% (2018: 29.9%)
• EBITDA increased by 18.8% over prior year to £1.872m

(2018: £1.575m)

• EBITDA return on sales more than doubled over the last

four years to 8.2%

• Profit before tax growth of 31.6% to £1.088m (2018:

£0.827m)

• Earnings per share growth of 14.0% to 3.02p (2018:

2.65p)

• Recommended final dividend of 0.2p per share

(2018:nil)

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*All references to EBITDA, profit/(loss) before tax and EPS/(LPS) are before intangible asset amortisation, share based payment charges and foreign exchange derivative valuation.

• 1.5

0.5 2.5

0.0 10.0 20.0 30.0

2016 2017 2018 2019

Revenue/Profit Before Tax - £m

Revenue PBT

• 1.0

0.0 1.0 2.0 3.0 4.0

2016 2017 2018 2019

Earnings/(Loss) per share - pence

0% 2% 4% 6% 8% 10%

0.0 0.5 1.0 1.5 2.0

2016 2017 2018 2019

EBITDA £m/EBITDA return %

EBITDA EBITDA Return

Financial Review – Balance Sheet

£m Mar 19 Mar 18 Cash generated by operations 1.189 1,532 EBITDA 1.872 1.575 Cash generation/EBITDA ratio 0.64:1 0.97:1 Capital expenditure 0.723 0.696 Capex/depreciation ratio 1.26 1.33 Net debt 3.290 2.982 Gearing % 45.0% 47.6% Cashflow Highlights

• Cash generated by operations at £1.189m
• Cash generation ratio at 0.64:1 impacted by

working capital movements and incentive payments

• Continued investment in line with new contracts

resulting in capital expenditure, net of finance leases, up to £0.723m

• Expenditure on intangible assets of £0.278m

Balance Sheet Highlights

• 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%

• The Group operates without any covenants on its

borrowings

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*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.

575 (3,290)

31 March 2018 net debt Underlying

• perating

profit

Financial Review - change in net funds

(2,982)

31 March 2019 net debt

(246)

Depreciation

£000’s (723)

Capital expenditure

1,015

Net movement in working capital Finance charges

5

Cash generated by operations £1,189k

(401)

Sales development costs

(278)

Other costs

(250)

Business Review - Introduction

• Two divisions-Transportation and Energy
• Operational base spanning three key

geographic regions (USA, UK and China)

• Footprint has created significant
• pportunities 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

• perating 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

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On Road Truck

Customer Product Markets

Off Road Machines Other Off Road Engines Energy Generation

Application: Engine Gearbox Lube Coolant Global Markets Truck – Medium and Heavy Duty Coolant Application: Fluid Transfer –Oil, Air and Water Global Markets Power Generation Construction and Mining Application: Gas Vacuum Braking System Transmission Breathers Fuel suction Global Markets Semi-Con. Medium and Heavy Duty Truck Application: Fluid transfer

• f oil , fuel,

air, water and coolant Global Markets Agriculture, Construction Mining Oil and Gas Application: Hydraulic fluid transfer – Actuator control Global Markets Construction Agriculture and Mining

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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

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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

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Business Review - Performance

• UK
• Rigid hydraulic tube business continues to grow
• Supply of brake pipe assemblies to London Electric Vehicle Company successfully entered

production phase

• Investment in in-house cutting yielded further productivity gains
• USA
• Market conditions favourable
• 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

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• Strong operational performance
• Revenue, as anticipated, lower due to reduction in demand from the power generation rental

sector

£’000 Transportation Energy FY 2019 Central adjustments FY 2018 Central adjustments FY 2019 Group FY 2018 Group FY 2019 FY 2018 FY 2019 FY 2018 Revenue 17,052 15,901 5,711 6,279 22,763 22,180 PBT 569 410 472 567 47 (150) 1,088 827

Energy Transportation

• 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)

Revenue Up 7.2% PBT Up 38.8% Revenue

Down 9.0% PBT Down 16.8 %

Outlook

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Transportation division delivered strong revenue growth combined with improved margins The contribution from our joint venture increased resulting from strong operational performance 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