Transpacific counts the cost

Transpacific’s share price has fallen 2% after announcing that grounding its fleet following a fatal crash involving one of its trucks (see Transpacific grounds its fleet from 20 Aug 14 (Buy – $0.93)) will cost around $20m. Truck repairs cost about $7m, with the rest due to ‘ancillary matters, such as roadworthy inspections, subcontracting costs, lost revenue and vehicle write-offs’. As the intrinsic value of a business is the sum of its future discounted cashflows, this one-off cost hasn’t changed our view of the company. What would worry us is if the slow down in the resources sector savaged revenues...

Transpacific’s share price has fallen 2% after announcing that grounding its fleet following a fatal crash involving one of its trucks (see Transpacific grounds its fleet from 20 Aug 14 (Buy – $0.93)) will cost around $20m. Truck repairs cost about $7m, with the rest due to ‘ancillary matters, such as roadworthy inspections, subcontracting costs, lost revenue and vehicle write-offs’.

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