Companies: CPC   

Capcon, a previous Growth Company Investor recommendation, warned that first half profits to March will disappoint, a statement that sent the shares south by more than 35%. Ken Dulieu, chairman, explained that Capcon's audit, stocktaking and 'Capcon Argen' operations performed to budget but trading at Capcon's investigations business has continued to prove volatile, due to the difficulty of forecasting the completion of high value projects. Although the division enjoyed good trading in the first quarter, the second quarter saw less completed projects than expected. Also weighing on the warning were the costs of restructuring Capcon's specialist insurance investigating arm and the setting up of a new specialist investigations business. Last year to September, sales moved 5% higher to £7.45m and profits before interest and goodwill gained 12% to £570,000. Before goodwill, pre-tax profits were 13.2% higher at £430,000. Long term, Capcon should benefit from rising awareness of the damage caused to business from corporate fraud. But with the shares on the back foot, a distinct lack of broker coverage on the stock and Capcon trading well below our 63.5p recommendation price, it might be time to cut your losses. Sell if you haven't already.