Canada Trojan shows signs of return to health
Monday October 4, 4:31 pm Eastern Time
biz.yahoo.com
TORONTO, Oct 4 (Reuters) - Beleaguered Trojan Technologies Inc. (Toronto:TUV.TO - news) shares made a slight rebound on Monday after a miserable week, gaining 14.5 percent as investors snapped up the discounted stock.
London, Ontario-based Trojan, which specializes in ultraviolet water disinfection systems, gained 85 Canadian cents on the Toronto Stock Exchange to close at C$6.70 as more than 369,000 shares changed hands.
''It's people trying to find the low and betting we hit it on Friday,'' said Sara Elford, analyst at Canaccord Capital Corp. in Vancouver.
The gains follow a massive slide in the stock. It tumbled from last Tuesday's close of C$11.90 after the firm issued its second profit warning in three months last Wednesday.
Trojan said on Monday it has appointed Douglas Alexander as interim chief financial officer, replacing Vice-President of Finance David Holden, who is ill.
Trojan also announced that it has hired consulting firm PricewaterhouseCoopers LLP to review its operations and reporting systems. The review, expected to take six weeks, will include recommendations to more accurately record results.
PricewaterhouseCoopers is also looking for ways to improve gross margins and earnings in manufacturing, engineering and overhead costs.
''I also view that quite positively,'' said Elford. ''They need to go through their controls with a fine-tooth comb.''
Trojan, which split its stock early in September, now expects to break even in the fiscal year ended August 31. An internal audit has shown the firm had understated the cost of goods and overhead.
Before the stock split, a consensus estimate of C$1.07 per share was dropped to 60-65 Canadian cents per share. Increased competition and higher-than-expected legal and product development costs were blamed for the downgrade.
($1=$1.47 Canadian)
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