Manganese Bronze reduces losses on strong exports
MANGANESE Bronze, manufacturer of the iconic London taxi, has managed to claw back some of its losses in what proved to be a sluggish year for the business.
The Coventry firm said its operating loss before exceptional items fell by £0.6m to £1.3m last year (2010: £1.9m). The pre-tax loss was £2.6m (2010: £6.3m).
The firm said this reflected the action it had taken throughout the year in an effort to return the group to profitability.
Group revenue rose 7.8% to £75m (2010: £69.6m), largely boosted by the large over to supply 1,000 vehicles to Azerbaijan, the last 500 of which were shipped to Baku last month.
The group’s UK operating loss reduced to £377,000 before exceptional costs and share of results of joint venture (2010: £2m loss). In addition, the company bore a £500,000 exceptional item for future legal costs of litigation relating to driver compensation claims from its 2008 product recall (2010: £3.5m exceptional cost of restructuring).
Manganese said 2011 had been a record year for export sales, with 705 vehicles (2010: 226) sold and more orders pending.
Sales of new taxis in London increased 3.9% to 1,074 vehicles (2010: 1,034) but sales in the rest of the UK market fell to 428 vehicles (2010: 619).
It said it strategy now was to deliver the profit and cash benefits of restructuring, while continuing to work with Chinese partner Geely on improving the quality, sales and profitability of the TX4 vehicle internationally.
The firm is also working with Geely to develop the TXn vehicle which will allow the JV to compete in mainstream taxi markets globally.
John Russell, Group Chief Executive said: “The tough decisions that we have taken in recent years to re-structure the business and develop close ties with Geely through our joint venture are beginning to bear fruit. It was pleasing to see the improvement to the UK core business and we hope to build on this success in the coming year.
“The signing of an interim agreement in August 2011 with Geely International to sell and distribute Geely vehicles in the UK is an important milestone towards an even closer working relationship with Geely in the future.
“There continues to be much uncertainty over the global economic conditions that will prevail during 2012 and the resulting lack of business confidence, particularly in the UK, makes it very difficult to forecast sales volumes.
“However the steps that have been taken to reduce and control costs should continue to feed through to increased margins and improved profitability.”
He said the board was confident that, with the ongoing support it receives from Geely, the group was well positioned to take advantage of new business opportunities and to make further financial and strategic progress in the current year.
