Tricorn Group – 18p

14 May 2019 – US expansion

The tube manipulation specialist has announced that it has extended its capabilities and facilities in the US by buying a custom built, installed and fully operational, powder coat and wet spray painting line from Precision Partners LLC for US$50k.  The paint line originally cost in excess of $500k and is located in premises in Rabun Gap, Georgia, 12 miles from Tricorn USA’s facility in Franklin, North Carolina.  The premises comprise a 47,000 square feet facility located within a larger building occupying approximately 970,000 square feet that is owned by the Development Authority of Rabun County, Rabun Gap, Georgia.  Tricorn has signed an initial 5 year lease from the Development Authority with the option to extend for a further 5 years as well as an option to add 50,000 square feet of space within the building.  This facility and the associated paint line provide Tricorn USA with the ability to pre-treat and paint its tubular assemblies in-house.  These processes had previously been sub-contracted out.  The facility and the associated paint line are expected to be fully operational by the end of July 2019.  We see this as an attractive step with limited financial risk.  We rate the shares as a BUY.

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