£1.5m takeover is firm success

New ownership has led to more jobs and a new vision for a 90-year-old Black Country specialist engineering firm.

Maxpower Automotive has built up an impressive reputation for its specialist pipe assemblies and fittings, used on cars like the BMW Mini and particularly on off-road construction and mining vehicles made by the likes of JCB, as well as in diesel engines produced by Perkins.

This summer it was taken over in a £1.5 million deal by Malvern-based engineering group Tricorn.

With its roots in the West Midlands’ IMI industrial giant and chaired by Nick Paul – former IMI deputy chief executive and now high-profile chairman of the regional development agency Advantage West Midlands – Tricorn is building up a string of niche piping businesses working in the aerospace, automotive and power generation industries.

The attraction of Maxpower Automotive was that its tube manipulation business fitted well with Tricorn’s existing Malvern Tubular Components business, which handles larger bore tubing.

Tricorn group acting chief executive Mike Welburn said: “The management running Maxpower had done a really good job, getting turnover up to £5 million.

“But, using the lessons we have learned at our other companies, we have a business model we feel can substantially increase profit margins. For instance we can source low-cost components from Tricorn’s existing contacts in China – something Maxpower was not previously in a position to do.”

Maxpower was established in 1917 as a spring and pressings manufacturer, moving into manipulation of steel tubing in the early 1990s. It now employs 150 people at its site in Bank Street, Hall End, and in the year to March 2006 made a pre-tax profit of £70,000 on sales of £5.3 million.

Tricorn believes it is now on the road to improving those profit margins at the same time as improving efficiency at the plant and adding to the workforce – Maxpower hired another five people in the weeks after the takeover and has recently taken on five more.

“We have been working very closely with the workforce, who have been coming up with ideas to improve performance on the shop floor,” said Mr Welburn. 

“Nothing that we are doing is rocket science; it is a very simple strategy. Getting the costs right, improving profit margins and quality, making sure everyone here understands what we are doing and where we are going; that all gives us a platform for growth.

“All of us at Tricorn, from Nick Paul down, are really passionate about engineering,” he said. “We believe the success of our companies shows there is a real future for UK engineering in a modern world.”

The success of the Tricorn group was underlined when it revealed to its shareholders on the AIM small stock market in July that annual operating profits had soared by almost 60 per cent to £1.04 million, 

Another of the attractions of Maxpower for Tricorn was its work with nylon tubes, and in developing a hybrid metal and nylon tube system combining light weight with the ability to work at high temperatures.

The firm also has close working links with JCB, supplying its tubes to the Staffordshire construction equipment company’s new diesel engine plant at Dove Valley.

And, as Mike Welburn pointed out, the company’s reputation for quality work meant it retained the job of supplying tubing for the BMW Mini engine even when manufacturing was transfered back to Germany. Maxpower also makes around 8,000 parts per week for the iconic Land Rover Defender.

“We are now hoping to secure Ford’s Q1 quality approval, which would possibly enable us to supply our parts to a much wider range of their engines and vehicles.”