Taxi maker shares plunge by a third after £4m black hole in accounts
COVENTRY taxi manufacturer Manganese Bronze will be looking to make improvements today after seeing a third of its share value wiped out after revealing a near £4m black hole in its accounts.
Shares fell by 34% yesterday after the firm revealed it was delaying publication of its interim results after “accounting errors” had come to light.
The situation was not helped when the firm confirmed it was trading at a loss following a difficult seven months and that the picture continued to look challenging.
In a statement to the London Stock Exchange, the firm said: “In August 2010 the group introduced a new integrated IT system to help to manage the increasingly complex global supply chain and uploaded the closing general ledger balances from the previous IT system.
“Due to a combination of system and procedural errors, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly processed through the new IT system.
“This problem led to the over-statement of stock and under-statement of liabilities in the financial statements of previous years. The cumulative effect of these errors is an estimated £3.9m understatement of historical losses which go back over several years although the work to apportion the loss between previous years is not yet complete.”
The company now expects to publish its half year results on Sepetmber 24.
Adding to the firm’s woes, the statement went on to say that trading in the first seven months of the year had been difficult and the group was continuing to trade at a loss.
The company announced in May that sales for the first half were lower than the previous year, to such an extent that it was expecting to report net losses for the first half substantially above those of 2011.
It is expecting higher sales in the second half but added in its statement that it did not know at this stage if the full year results would be in line with market expectations.
It said that as of June 30, 2012, the group had £2.8m of headroom on its agreed banking facilities and continued to enjoy the ongoing support of its bankers and Chinese partner Geely, which holds a 20% stake in the business.
