House broker Shore Capital has slashed its pre-tax profit forecast for engineer Tricorn Group by two-thirds to £420,000.
Shore had not updated its forecasts since the profit warning in October and following the interims it has updated them for the next three years.
Demand slumped in the UK during the second quarter. There is also margin pressure in the US due to trade tariffs.
Full year revenues are set to fall from £22.8m to £20m with the decline coming in the UK. Revenues will recover slowly but are not expected to reach the former level in the next three years. Pre-tax profit is set to recover to £714,000 in 2021-22, but that is still well below the £1.04m made last year.
Looking on the bright side, the operational gearing means that any more significant recovery in revenues will have a significant effect on profit.
At 10.25p, Tricorn is trading on six times prospective 2021-22 earnings.
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