Optare on the road to recovery
LANCASHIRE bus maker Optare has dived further into the red but said it is well placed to recover once demand for its vehicles increase.
The Blackburn company has seen demand fall dramatically in the last six months. However it has taken a number of measures to slash costs. It has closed its Rotherham manufacturing site and reduced headcount at the group from 5.3 per bus to 3.6.
It has identified opportunities for new products and for outsourcing raw materials and components. In addition, the manufacturing time for double deck buses has been slashed from six weeks to three.
Optare has recently raised around £8.6m through a share placing in a move to shore up its balance sheet and give it the “ability to exploit opportunities as the market recovers” which it expects to be in 2010 to 2011.
Shareholders will vote to approve the fundraising today.
In the six months to June 30, losses widened to £3.9m from £3.2m last time. However, turnover soared 567% to £52.1m from £7.8m.
Chief executive officer Jim Sumner said: “I am delighted with the rapid progress being made to turn the business around after a difficult period for the company.
“While market conditions will continue to be challenging over the next six to nine months, Optare will be well placed to make a strong recovery as demand for new buses improves.”
