London black cabs maker Manganese Bronze had a challenging first half as taxi drivers held on to their fares and tips rather than splash out on a new vehicle.
“It was a half very much of two quarters,” said chief executive John Russell. “In the first three months we sold 4% more cabs, or 453.
“Then came the disruption to airports caused by the volcanic ash cloud, the general election and the ending of the scrappage scheme. Second-quarter sales dropped 29% to just 330 vehicles. Since then things have moved back to more normal levels.”
Manganese is near to completing the biggest shake-up in its history, which will see black cabs manufactured in China and merely assembled in a scaled-down operation in Coventry.
That should reduce costs by some £1500 per cab.
The firm is also concluding a 20 million share placing with its Chinese partner Geely, which will become the largest single shareholder.
Operating losses were reduced from £1.4 million to £1 million in the six months to June on revenues down by 9% at £33.4 million.
The Chinese joint venture was profitable in the first half.
Manganese shares, which recently transferred to the junior AIM, rose 1¼p to 36p.
The Group has incurred exceptional costs related to the planned move to import kits of bodies and panels from SLTI for assembly in Coventry. The transfer will begin following the three week summer shutdown on 16 August.
Ending the manufacture of body panels and chassis in Coventry will result in a total of 60 manufacturing redundancies with 32 employees having already left the business, with a further 28 scheduled to leave during August/September. The company expects to realise annual savings of £2.4 million by assembling the Chinese-made bodies and panels for its TX4s in Coventry.
Nick Goodway-Evening Standard