Investors have savaged engineering and maintenance group Engenco after the company, formerly known as Coote Industrial, said its earnings for the 2012 financial year would be lower than expected and the company would remain in breach of its financing agreements.
The company said it expected a full year loss of between $1.5 million and $2.5 million, making it unlikely to restore breaches of its financial covenants with the Commonwealth Bank.
Engenco stocks finished the day down 42.9 per cent, at 34 cents.
Engenco said a comprehensive review of its current assets, non-current inventory and goodwill was underway.
“It is anticipated that this may require significant impairment of current assets and non-current inventory,” the company said in a statement.
“As the review is still preliminary and subject to review by the company’s external auditors, the company is not yet able to provide an estimate on the size of any impairment.”
Engenco said major shareholder, the Elphinstone Group, remained supportive of the company, but was expecting a significant improvement in performance towards the latter part of a three to five year turnaround plan.