‘Challenging’ times for loss-making Optare
THE board of coach building group Optare admitted today progress has been “more difficult” than expected as losses came in at nearly £12m.
Optare is an amalgamation of East Lancashire Coachbuilders, bought out of administration in 2007, and Leeds-based Optare, acquired in a reverse takeover last July.
The group posted a pre-tax loss of £11.9m – including £7.2m exceptional costs – on turnover of £49.2m for the year to December.
The directors said this loss reflected the challenges associated with turning around a failing business and integrating another.
“This has proved to be a more difficult and time consuming challenge than was originally envisaged,” said the company in a statement.
In addition to restructuring issues the group has faced challenges from higher material costs and weak demand. It has already cut 80 temporary jobs at Blackburn and is mulling redundancies among the factory’s 320 staff.
But it said the order book was still strong with work worth £26.1m in the pipeline.
Today’s announcement showed signs of a shift of direction following the departure of chief executive Andrew Brian in December. He has been replaced by ex-Leyland Trucks boss Jim Sumner.
Optare is now no longer moving to Walker Park in Blackburn, a decision that will cost the group £600,000. It is also reviewing “burdensome” contracts which were drawn up when the firm was establishing its presence in bus markets.
