Coventry Group has issued a profit warning for the first half of 2011 saying that its earnings before interest and tax is likely to be 20 per cent below the previous corresponding period.
"The Board now advises that the current forecast for Operating EBIT for the first half of the current financial year is likely to be around $4 million," Coventry said in a statement to the Australian Securities Exchange.
The automotive parts company blamed weakness in the market, particularly for its fastener products in October and November for the profit downgrade.
Coventry also warned of a $22 million goodwill hit on its fastener business.
"Coventry advises that there are likely to be expenses related to non-current, non-cash items (with) the most material being an assessment of the capitalised goodwill related to Fastener operations mostly acquired more than a decade ago in Australia and New Zealand amounting to $22 million," the statement said.
"It is therefore probable that a significant amount of this sum will be deemed impaired and thus written off in the financial results for the first half of the 2010-11 financial year."
Coventry said that it was while it was too early to give firm financial guidance for the full 2011 financial year, it was likely that the company's operating profit would be lower than 2010.
Coventry recorded a net profit after tax of $7 million for 2010.
At 9.15am Coventry shares were down 31 cents or 13.42 per cent to $2.00.
