Share Search
Visit the Share Search
Tricorn warns on profits as trade war takes its toll
9th Oct 2019 08:41
(Sharecast News) - Tube manipulation specialist Tricorn warned on Wednesday that full-year results would be "materially lower" than market expectations, principally due to Washington's long and protracted trade war with China and slowing demand in the UK.
In a pre-close update for the six months to 30 September, Tricorn said the period started "encouragingly", with the new paint facility in the US integrating well ahead of plan. Demand in the USA was said to have remained broadly in line with expectations.
However, the AIM-listed group's US operations saw some short-term pressure on margins as a result of a lag between the impact of increased tariffs on goods sourced from China and the time taken by the firm to negotiate price increases with its customers.
Tricorn also said demand had slowed "significantly" across the UK during the second quarter, leading to revenues being around 12% lower year-on-year.
"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," said Tricorn, while pre-tax profits were also set to be lower.
"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," it said.
"However, the board now anticipates that full-year results will be materially lower than market expectations."
As of 0840 BST, Tricorn shares had tumbled 29.17% to 12.75p.
In a pre-close update for the six months to 30 September, Tricorn said the period started "encouragingly", with the new paint facility in the US integrating well ahead of plan. Demand in the USA was said to have remained broadly in line with expectations.
However, the AIM-listed group's US operations saw some short-term pressure on margins as a result of a lag between the impact of increased tariffs on goods sourced from China and the time taken by the firm to negotiate price increases with its customers.
Tricorn also said demand had slowed "significantly" across the UK during the second quarter, leading to revenues being around 12% lower year-on-year.
"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," said Tricorn, while pre-tax profits were also set to be lower.
"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," it said.
"However, the board now anticipates that full-year results will be materially lower than market expectations."
As of 0840 BST, Tricorn shares had tumbled 29.17% to 12.75p.