Optare cuts losses despite drop in sales
LANCASHIRE busmaker Optare has cut its losses and bolstered its order book despite a slump in the UK market.
The company said its focus on low carbon buses and exports paid off during 2010 with 25% of sales in the last three months of the year going to overseas markets. It now has £58m or orders, up from £8.8m in the last quarter of 2009.
Overall sales fell during the year which Optare said was down to a challenging economic environment in which demand from UK operators was down 40% on pre-recession levels.
In the year to December 31 sales fell by 35% to £52.2m but the company halved pre-tax losses to £6.5m. After stripping out exceptional items the firm made a loss of £4.3m.
The company singled out its earnings before interest, tax, depreciation and amortisation (EBITDA) figure which showed a £2.7m loss, down 68% on last time.
In August Ashok Leyland, one of India’s biggest commercial vehicle manufacturers, took a 26% stake in Optare. The business said the deal has helped help it improve cashflow, increase export sales and tap into low cost sourcing channels used by Ashok, which is 51%-owned by the Hinduja Group.
Chief executive Jim Sumner, said: “The last two years have been all about the turnaround of Optare from a challenging position. I believe that, with many of the difficulties of the last few years behind us, a new larger factory, the backing of Ashok and our institutional investors we have every reason to look forward to 2011 and beyond with confidence.”
On Friday the company said it had agreed a 17-year lease for a 140,000 sq ft factory at Sherburn in Elmet, 11 miles from its existing site at Crossgates in Leeds. It plans to start production at the site in September. It will be its only factory with its Blackburn facility dedicated to repairs and refurbishment.
