Tricorn finds 'various matters' after internal review

(Sharecast News) - Tube manipulation specialist Tricorn Group updated the market on its trading on Monday, reporting that following the appointment of Michael Stock as group finance director and the hiring of a new finance team, an internal review of the group's performance was conducted.
The AIM-traded firm said "various matters" had come to light in the preparation of its financial statements for the 18 months ended 30 September.

At the current stage, a balance sheet exposure risk estimated at about £3.6m had been identified, which excluded an inter-company imbalance of around £1.0m, which was still being investigated.

"Approximately £1.1m of the exposure risk relates to the group's US operation," Tricorn said in its statement.

"This includes the write-off of capitalised development costs of £0.3m following a contract loss since the onset of Covid-19, the write-down of net inventory of £0.5m and a more prudent view on debtor recovery of £0.3m."

In the UK, Tricorn said adjustments were estimated at a further £2.5m, which related to a stock write-down of £0.7m, approximately £0.6m relating to an audit of fixed assets combined with a change in accounting policies, and £0.2m attributable to assumed non-recovery of debtor balances.

The balance of about £1.0m was still under investigation.

"The group continues to work closely with BDO, the group's new auditors, who were appointed subsequent to its audited financial statements for the year ended 31 March 2019."

The Tricorn board said trading had been "extremely challenging" over the last nine months, and while the outlook still remained uncertain, demand levels from a number of customers was increasing and providing additional availability in the UK from the group's invoice discounting facility.

"Of a total invoice discounting facility of £3.0m, as at 13 November, the group generated funding availability of approximately £1.8m - advanced at 90% - and has been fully drawn.

"Cash balances for the Group as at 13 November were approximately £0.7m."

At 1411 GMT, shares in Tricorn Group were down 29.33% at 5.83p.