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Tricorn Preliminary ResultsFor year ended 31st March 2011

June 2011

Mike Welburn, Chief Executive OfficerPhil Lee, Group Finance Director

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• Results Overview

• Introduction to Tricorn

• Financial Review

• Business Performance

• Outlook

Agenda

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Results Overview

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Results Overview£’000 2011 2010 % change

Revenue 21,764 15,031 45%

Operating profit* 1,198 425 182%

Operating profit margin* 5.5% 2.8% 95%

Profit before tax* 1,066 288 270%

Cash and equivalents 1,612 1,296 24%

Net debt 61 841 93%

Adjusted EPS 2.57p 0.79p 325%

Recommended dividend 0.1p - n/a

*- Before intangible asset amortisation, shared based payment charges, interest rate swap and foreign exchange derivative valuation.

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– 45% growth in revenue• Energy and Transportation divisions key drivers• Improving demand in Utilities• Aerospace revenues broadly flat

– 95% improvement in operating margin• Reduced operational gearing• Gross margins maintained

– 3.2x increase in adjusted EPS– Significantly strengthened balance sheet

• Net debt reduced to £61k• Paid off £0.780m of debt in the year• Inventories maintained at last year’s levels• Cash and cash equivalents £1.6m at year end

– Maiden dividend recommended

Results Overview

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Introduction to Tricorn

Divisions Energy Transportation Aerospace Utilities

DivisionalBrand

Sales Revenue 2010/11

£8.79m £7.16m £4.93m £0.88m

Product Summary

Tubular components and assemblies for diesel power engines, generator sets and radiator manufacture

Manipulated tube and pipe assemblies in ferrous, non-ferrous and nylon

Rigid pipes and assemblies for aero engines

Worldwide patented technology for joining multi layer and polyethylene pipe systems

Markets Power generation, mining oil & gas

Off Highway and niche automotive manufacturers

Worldwide aviation market

Water and gas utilities

Clients Include

CAT (includes Perkins, FG Wilson, CAT)Cummins (includes Cummins Engines, Cummins Powergen)Bearward Engineering

CAT (Perkins, Turner Powertrain)JCBLand RoverEdwards Vacuum

Rolls RoyceAircelleAPPH

GPSRadius SystemsWestwood Pipelines

Competition Industrial and Tractor, Global Engineering, Dinex, Morton Welding

Industrial and Tractor, Norma Group, Hi-Flex, Hydrapower, Iracroft

ITA, PFW Aerospace, Sigma Engineering, Accles and Pollock

No direct competition.

Introduction - Group Overview

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Introduction - Market Drivers

Product Substitutes

Specialised products; limited substitutes readily availableConservative marketsAbility to source components at low cost acts as a deterrent

Industry Competitors

Limited number of competitorsMany sub scale to TricornFocus is on niche markets with low batch sizes and high variety Customers to Tricorn

Large customers provide access to global markets

Customers profitable-low credit riskSwitching costs highHigh proportion of recurring incomeSpecialist nature of supply provides some resilience

Suppliers to Tricorn

LCC sourcingCommodity materialsAlternative sources Switching costs low

Potential Entrants

Close customer relationships make it difficult for a start up to gain tractionBarriers to entry due to product approval process and complexity of supply

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Introduction - Tricorn Strategy

• To acquire and grow engineering-based businesses which:-– supply blue chip OEM customers– are focused on attractive end markets– have potential to deliver EBITDA margins of +10%

• The key elements of this approach are to:-– find underperforming businesses– drive for operational excellence– improve margins through the implementation of lean manufacturing

and low cost country component sourcing– service niche markets which offer healthy margin opportunities– increase market share

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Financial Review

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£’000 2011 2010 % Change

Revenue 21,764 15,031 45%

Admin & distribution (5,721) (4,413) (30)%

Operating profit* 1,198 425 182%

Profit before tax* 1,066 288 270%

Adjusted EPS* 2.57p 0.79p 325%

Capital expenditureCapital commitments

187524

135-

39%

Cash & equivalents 1,612 1,296 24%

Net debt (61) (841) 93%

Total headcount 291 238 22%

Financial Review-Headlines

* - Before intangible asset amortisation, shared based payment charges, interest rate swap and foreign exchange derivative valuation.

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£’000 2011 2010 Change

Turnover 21,764 15,031 45%

Gross margin 6,919 4,838

Administration costs (4,796) (3,737)** (28)%

Administration costs/turnover % 22.0% 24.9% 12%

Distribution costs (925) (676)

Operating profit* 1,198 425 182%

Operating profit margin %* 5.5% 2.8% 95%

Financial Review-Profitability

* Before intangible asset amortisation, share based payment charges, interest rate swap and foreign exchange derivative valuation

** Includes a period of reduced working hours and associated reduced payroll costs

• Improved operational gearing

• Admin costs show a 12% improvement as a proportion of turnover

• Operating profit margins* almost doubled versus last year

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Financial Strength – Enabling Investment

• Cash Generation:-• 94% Profit After Tax* to net cash flow generation in the year

• Strong liquidity:-• Cash & equivalents increased 24% to £1.6m• > £1m headroom on invoice discounting facility• Term loan on course to be fully repaid by August 2012• Net debt reduced to £61k (2010: £841k)

• Focus on working capital:-• Control over inventory levels. Flat on significantly higher volumes

• New investment commitments:-• In excess of £0.5m capital investment programmes already

committed for delivery during 2011/12• Building on existing plant capacity

* - Before intangible asset amortisation, shared based payment charges, interest rate swap and foreign exchange derivative valuation.

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458

780

(69)

Adjusted PBT

Depreciation & interest

charge

Components of 2011 cashflow

1,066

Cashflow

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Inventory reduction

Other working capital

movements

Taxation

(132)

Net interest paid

(187)

Capital expenditure

EBITDA£1,524k

£000’s

(378)

Proceeds from share

issues

2

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Business Review

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• Blue chip OEM customer base provides Tricorn with global reach

• Revenue growth driven by market recovery and market share gains

• Gross margins maintained despite some raw material price pressure and lower aerospace margins

• Three out of four divisions met or exceeded 10% EBITDA target

• Group Sales Director appointed to accelerate execution of organic growth plans

Business Review

Energy Division

• Sales up 81% on previous year

• Strong recovery and market share gains

• Capital investment being accelerated to meet on-going high demand levels

• EBITDA margin significantly improved

£’000 2011 2010

Sales 8,792 4,849

EBITDA 883 247

EBITDA % 10.0 5.1

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Transportation Division

• Sales up 53% on the previous year

• Engineering team has introduced over 50 customer driven new products in the year

• Next generation of fixtures have created further differentiation

• Operational improvements have delivered an EBITDA margin of over 10%

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£’000 2011 2010

Sales 7,155 4,671

EBITDA 730 217

EBITDA % 10.2 4.6

2 43 5

Aerospace Division

• Sales levels flat year on year

• Margins impacted by supply chain constraints and higher material costs

• Operational improvements and price increases to customers being sought

• New divisional management team making good progress

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£’000 2010/11 2009/10

Sales 4,935 5,014

EBITDA (226) 186

EBITDA % n/a 3.7

Utilities Division

• Revenue up 77% year on year

• Focus on soil contamination issues may drive further demand

• EBITDA margin remains strong

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£’000 2010/11 2009/10

Sales 882 497

EBITDA 127 70

EBITDA % 14.4 14.1

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• Key markets remain buoyant• Additional opportunities for further market share

gains• Higher level of investment being made in plant

and equipment planned to continue through current year

• Will consider potential acquisitions where Tricorn expertise can generate the necessary added value

Outlook

Appendices

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Board of Directors Nick Paul CBE - Non Executive Chairman

Appointed to the Board as non-executive Chairman in October 2001. Member of the Remuneration and Audit Committees, and Chairman of the Nomination Committee. He has a wealth of international business experience and had previously been deputy Chief Executive of IMI Plc.. Chairman of the Regional Development Agency, Advantage West Midlands and Chairman of Midlands Expressway Limited.  He has also been Chairman of the West Midlands CBI and non-executive Director of John Laing Homes plc and Sig Plc

Mike Welburn - Chief Executive

Joined Tricorn in April 2003, appointed to the Board in March 2004 and as Chief Executive in November 2007.He had previously been with IMI plc for 18 years where he had held a number of senior roles within the Fluid Power Division. This included responsibility for European Operations and Global OEM Strategy. 

Phil Lee - Group Finance Director

Joined Tricorn in January 2009 and appointed to the Board in February 2009.He had previously been at Rolls-Royce for 9 years working in a number of roles including Finance Director of Distributed Generation Systems (part of the Rolls-Royce Energy Business). Prior to Rolls-Royce he had been with National Grid Plc. 

David Leakey - Group Sales Director

For the past 27 years he has worked at Norgren Ltd, the Motion and Fluid Controls division of IMI Plc. He has most recently held the role of Global Sales Director in the Energy Sector, with responsibility for the global business development of the company’s products into the oil and gas markets.David has also held the position of Sales Director in Norgren’s Life Sciences and Automotive Sectors.

Roger Allsop - Non Executive Director

Purchased MTC in 1984 and Chief Executive of Tricorn up to 2002 after which he became a non-executive Director. Chairman of the Audit and Remuneration Committees and a member of the Nomination Committee. He was previously managing Director of Westwood Dawes plc and is currently a non-executive Director of Netcall plc.

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Shareholders

Major shareholders:-

%

R Allsop 34.9%

Hargreave Hale 21.7%

PR of J Rubins 4.6%

Rock Nominees 4.3%

Quilter Nominees 3.2%

22%

42%

36%

Shareholder Analysis

Institutions Private shareholders Directors

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