Tricorn Group (TCN)- Fall after contract loss overdone? TCN revealed the loss of a contract to Rolls Royce at the end of last week. The contract will not be renewed past the end of this year. Price dropped further over the weekend as investors sold and it currently sits at 19p from around 28p a week previous – just over 30% drop.
A poster on the Motley Fool message board posted his opinion that the fool may be overdone:
http://boards.fool.co.uk/you-may-well-be-right-about-avingtrans-taking-over-12677594.aspx
A quick glance at the balance sheet from March 2012 shows roughly £6m assets not including good will of which £2.47m is cash. Compare this to the present market cap of £6.28m. However with £1.7m forecast profit before tax for year ending 2013 and £2.18m for year end 2014 I’m wondering what effect this will have on profit forecasts. Note, the contract has not ended yet so will contribute to this years profit.
It does seem like a large fall for a contract that amounts to 11% of the groups revenue. I don’t have the knowledge to assess just how much this will impact the bottom line so I’m not going to dive in.