First half sales up 16% at Manganese Bronze

FIRST half revenues have improved 16% at black cab manufacturer Manganese Bronze but the firm has warned trading conditions in the UK, especially outside London are likely to remain tough.

Nevertheless, the Coventry firm has said it is optimistic it will return to profitability during the second half.

The firm saw H1 revenue rise from £33.4m to £38.7m, while it managed to reduce a £1m operating loss this time last year by almost 80% to £0.2m.

Pre-tax losses declined almost 85% from £4.9m to £0.7m, while basic loss per share eased by 82% from 13.6p to 2.4p.

In common with many other automotive manufacturers, the firm was saved by strong global sales. The period saw record international sales volumes – up 323% to 474 vehicles (2010: 112). This included an order for 300 vehicles from Azerbaijan Holdings.

Nevertheless, UK sales volumes were down 6.8% to 748 vehicles (2010: 803) as challenging market conditions continued. UK break-even new vehicle UK sales volumes reduced from over 2,000 to around 1,400.

John Russell, group chief executive, said the board had been encouraged by the group’s return to revenue growth and record international sales and despite the difficult conditions, remained confident for the year ahead.

“Given the underlying improvements in operations and the reduction in the group’s net loss resulting from the major restructuring initiatives in 2009 and 2010, and strong international sales, the board remains confident that, despite continuing adverse UK market conditions, the group can return to profitability in the second half of 2011,” he said.

“However, the level of this profitability is directly linked to UK new vehicle sales volumes, which are difficult to predict in the current macro economic environment, and dependent upon progress on cost reduction in the Shanghai joint venture.”

SLTI, the group’s joint venture with Geely Automobile Holdings in China, made a loss for the half year due to increased costs, low taxi sales into Asian markets, and a lack of orders for the tooling company. The group’s 48% share of the loss amounts to £0.7m (2010: £0.1m profit). An increased order book for the tooling company, along with cost-reduction activities in the Shanghai-based manufacturing facility, should lead to improvements in the second half.

In the UK there were contrasting market conditions. Sales into the London market rose by 5.8% to 511 vehicles (2010: 483), while sales into regional markets fell 25.9% at 237 vehicles (2010: 320). The firm said this reflected a similar pattern to many retail sectors, with taxi driver earnings and confidence, particularly in the regions, negatively affected by generally lower disposable income, higher fuel costs, concerns about job security and the potential impact of public sector spending cuts.  

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