TIDMMNGS
RNS Number : 5210N
Manganese Bronze Hldgs PLC
28 September 2012
Friday 28 September 2012
MANGANESE BRONZE HOLDINGS PLC
UNAUDITED HALF-YEAR RESULTS
Manganese Bronze Holdings PLC ("Manganese Bronze" or the
"Group"), the leading manufacturer of the distinctive London taxi
that is built in Coventry, announces its unaudited half-year
results for the six month period ended 30 June 2012.
2012 2011 2011
Half year Half year Variance Full year
(restated) (restated)
Group revenue GBP34.3m GBP38.7m (11.3%) GBP75.0m
Operating loss* GBP3.1m GBP1.9m (64.2%) GBP4.7m
Finance costs GBP0.4m GBP0.5m 15.0% GBP0.8m
Loss before tax * GBP3.6m GBP2.4m (51.9%) GBP5.5m
Underlying loss per
share* 12.92p 8.32p (55.3%) 19.43p
Net debt GBP11.4m GBP13.6m 16.8% GBP11.1m
* Before exceptional items
Summary
-- Group revenue down 11.3% to GBP34.3m as challenging UK market conditions continued
-- UK sales volumes down 22.9% to 577 vehicles (2011: 748)
-- International sales volumes up 6.3% to 504 vehicles (2011: 474)
-- Operating margins reduced due to supply chain issues and increased warranty costs
-- Operating loss before exceptional items increased to GBP3.1m (2011: GBP1.9m)
-- Net cash inflow from operating activities of GBP0.2m (2011: GBP1.8m inflow)
-- Extension of proposed UK distribution agreement with Geely
-- Discovery of material accounting errors; adjustment to prior
year accounts increases previously reported operating losses by
GBP4.25m
-- Trading since 30 June 2012 period end broadly in line with revised expectations
Commenting on the results, John Russell, Group Chief Executive,
said:
"The Board is disappointed by the Group's results for the Half
Year, which reflect continued challenging trading conditions in the
UK.
Trading in the period since 30 June 2012 has been broadly in
line with revised expectations and better than the level of trading
experienced in the second quarter. The Board expects that sales in
the final quarter of the year will be at similar levels to the
current running rate but this will not allow the Group to return to
profit in the second half of the year.
In light of the continuing weak economic outlook for the UK, the
Board is taking steps to review its cost base with the objective of
achieving a breakeven or better result in the new financial year.
However, the level of this profitability is directly linked to UK
new vehicle sales volumes, which are difficult to predict in the
current economic environment."
For further information, please contact:
Manganese Bronze Holdings PLC
------------------------------------ --------------
John Russell, Group Chief Executive 02476 572108
------------------------------------ --------------
Grant Thornton UK LLP
------------------------------------ --------------
Philip Secrett/Melanie Frean 020 7383 5100
------------------------------------ --------------
MC Peat & Co 020 7104 2334
------------------------------------ --------------
Charlie Peat / John Beaumont
------------------------------------ --------------
FTI Consulting 020 7269 7291
------------------------------------ --------------
Nick Hasell
------------------------------------ --------------
INTERIM REPORT
To the members of Manganese Bronze Holdings PLC
Summary
Manganese Bronze is disappointed to report an 11.3% reduction in
total Group revenue in the first half to GBP34.3m (2011: GBP38.7m).
Total vehicle sales fell by 11.5% to 1,081 vehicles (2011: 1,222).
International sales increased by 6.3% but this was more than offset
by an overall 22.9% decline in UK sales.
The discovery that there have been material accounting errors in
the reported results for 2011 and prior periods delayed the release
of this Interim Report and, as required by IAS 8, necessitated the
restatement of the results for 2011 and prior periods. The effect
of the prior year adjustments has been to reduce the equity
attributable to the owners of the parent by GBP4.25m but there is
no impact on the Group's cash or borrowing position.
The introduction of a new computer system during 2010, which
coincided with the outsourcing of components to China, led to a
breakdown in operational and accounting controls and procedures.
The errors were discovered by the new Group Finance Director and
his team who have acted promptly to address the key issues.
The Board engaged forensic accountants to carry out a detailed
investigation into the causes of these errors and to make
recommendations for improvements to operational and accounting
procedures. A preliminary report has been received but some
elements of this investigation are still ongoing.
The Group's operating loss before exceptional items increased by
64.2% to GBP3.1m (2011: GBP1.9m), reflecting both the decrease in
sales volume and an increase in the cost of warranty claims.
SLTI, the Group's joint venture with Geely Automobile Holdings
Limited ("Geely"), made a reduced loss for the half year due to
better operating efficiencies despite lower production volumes. The
Group's 48% share of the loss amounts to GBP0.5m (2011:
GBP0.7m).
The Group has incurred exceptional charges of GBP2.5m (2011:
nil) which relate to a provision of GBP0.8m against the costs
incurred in transferring production to China that may not be
recoverable from SLTI, legal and professional fees of GBP250,000
relating to the forensic accounting investigation and litigation
resulting from the 2008 product recall and a GBP1.5m reduction in
the deferred tax asset. After taking account of finance costs of
GBP0.5m (2011: GBP0.5m), the Group's loss before tax increased by
GBP2.2m to GBP4.6m (2011: GBP2.4m).
UK trading/market
Trading in the UK was impacted by a fall in business confidence
as the UK economy returned to recession in the second quarter due
to the continuing uncertainty of the global macro economic
environment which makes forecasting the demand for new vehicles
challenging. Taxi drivers in the UK have also had to absorb higher
fuel and insurance costs which have reduced their earnings.
Consequently there has been a trend towards deferring the purchase
of new vehicles and the average age of vehicles taken in
part-exchange has increased from 36 months in 2010 to 48 months in
2012. UK new vehicles sales for the first half were down 22.9% at
577 vehicles (2011: 748 vehicles).
Within the UK there were contrasting market conditions. Sales
into the London market fell by 13.5% to 442 vehicles (2011: 511),
whilst sales into regional markets, at 135 vehicles (2011: 237),
fell by 43.0%. This reflects a similar pattern to many retail
sectors of the economy, 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.
In December 2010 the Mayor of London announced an age
restriction on the London taxi fleet as part of his Air Quality
Strategy. The measures came into effect from 1 January 2012, after
which no vehicle over 15 years old can be re-registered for use as
a taxi in London. The initial impact of this policy has been to
increase the demand for second hand vehicles which are now in short
supply. The total fleet of taxis operating in London is also
beginning to fall and, with more vehicles having to be retired in
the coming months, the demand for new vehicles is expected to
increase.
Since the launch of the new Style and Elegance models of TX4 in
November 2010, the Group's share of the London market has been
broadly stable at 73%. The Group's share of the London market fell
in the second quarter of 2012 as a result of a heavily subsidised
finance programme on the Mercedes Vito. The launch in June of a
competitive but non-subsidised finance offer on the Group's TX4 has
lead to a recovery in market share.
As a result of the reduced UK vehicles sales volumes, a period
of short-time working was introduced at the Coventry assembly
facility, with the production schedule during the second quarter
reduced by 18 days. Further, production during November and
December will be limited to 20 vehicles per week. The Board would
like to thank all of the Group's employees for their commitment,
support, and understanding during this challenging period.
Against this backdrop, the parts and finance businesses continue
to perform well.
International sales
International sales volumes in the first half of 2012 were a
record 504 vehicles (2011: 474), an increase of 6.3%, and included
the remaining 500 vehicles of the Azerbaijan order for 1,000
vehicles. Sales and orders for international markets other than
Azerbaijan were poor in the first half but are expected to increase
in the second half of the year.
The publicity surrounding the Azerbaijan order has generated
increased interest in the wider Central and Eastern European
region. Prospects for further significant orders from Azerbaijan,
Australia, India and Italy remain encouraging.
Geely and SLTI
The Group continues to receive significant financial support
from Geely by way of informal extended credit terms. As at 30 June
2012, the Group owed Geely GBP18.6m (US $29.2m) for component parts
and vehicles supplied through the SLTI joint venture.
Relationships between the Group and Geely continue to be very
positive. The Group has assigned more senior staff to support the
SLTI management team in a cost reduction programme which will also
deliver improved quality and enhanced supply chain performance.
Improving the quality of components should reduce future warranty
costs and further enhance customer confidence in the London
Taxi.
In addition, the Group continues to collaborate with Geely
senior management to develop the launch plans for the TXN, the
saloon car based taxi, and other business development
opportunities. On 27 July 2012 the Group signed an extension of the
agreement with Geely International Corporation for the potential
distribution of Geely vehicles in the UK and their on-going after
market support.
SLTI made a reduced loss in the first half of 2012, the Group's
48% share of which was a loss of GBP0.5m (2011: GBP0.7m). The TX4
manufacturing operation improved its operating efficiency and
reduced its losses to GBP0.1m (2011: GBP0.8m) but the performance
of Shanghai Maple Tooling Company ("SMTC") subsidiary declined
slightly to GBP0.4m (2011: GBP0.1m). In recognition of the
contribution that MBH has made to the improved efficiency and
reduced losses of SLTI, the number of expatriate employees working
in China has been increased and their roles strengthened to take a
greater leadership role in the SLTI organisation. This is
specifically aimed at improving the quality of the components
manufactured at SLTI and at local Chinese component suppliers in
order to improve the overall quality of the London Taxi and reduce
future warranty costs which have remained stubbornly high.
Cash, funding and dividends
In the six months to 30 June 2012, there was an operating cash
outflow, before movements in working capital of GBP1.9m (2011:
nil). There was a net GBP3.0m reduction (2011: GBP2.6m reduction)
in working capital with increases in stock of GBP3.5m (2011:
GBP2.9m reduction) and a decrease in debtors of GBP0.3m (2011:
GBP0.3m increase) offset by an increase in creditors of GBP6.2m
(2011: nil) primarily due to the impact of extended credit granted
by Geely. With pension contributions of GBP0.6m (2011: GBP0.6m),
interest payments of GBP0.2m (2011: GBP0.3m), and a GBP0.1m loss
(2011: nil) on cash flow hedging, the Group had a net cash inflow
from operations of GBP0.2m (2011: GBP1.8m inflow).
With investment in plant and equipment of GBP0.5m (2011:
GBP1.0m) at 30 June 2012 the Group had net cash of GBP2.5m (2011:
GBP0.2m) and a stocking loan of GBP13.8m (2011: GBP13.9m). At 30
June 2012 the Group had an undrawn GBP0.7m overdraft facility
(2011: GBP1.5m facility that reduced to GBP1.0m from 1 July 2011)
provided by HSBC Bank plc ("HSBC"), and a stocking loan facility of
GBP13.95m (2011: GBP13.95m) provided by the Lloyds Banking Group
PLC. This resulted in GBP3.3m (2011: GBP1.3m) of headroom on the
committed borrowing facilities.
Despite the continuing challenging business and economic
circumstances, the Group's bankers remain supportive.
As previously announced, dividends, including preference share
dividends, can not be paid until the Group returns to profitability
and has sufficient distributable reserves. No interim or preference
dividends will therefore be paid (2011: nil).
Principal risks and uncertainties
The Group is exposed to a variety of risks in the conduct of its
business operations. Set out on pages 14 and 15 of the Group's
Annual Report for the year ended 31 December 2011 is a summary of
some of the most significant risks, which, in the opinion of the
Directors, could impact performance. These risks remain, with
updated guidance being provided through this statement.
Prospects
Trading in the period since 30 June 2012 has been broadly in
line with revised expectations and better than the level of trading
experienced in the second quarter. The Board expects that sales in
the final quarter of the year will be at similar levels to the
current running rate but this will not allow the Group to return to
profit in the second half of the year. In the light of the
continuing weak economic outlook for the UK, the Board is taking
steps to review its cost base with the objective of achieving a
breakeven or better result in the new financial year. 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.
Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to communicate the Group's
strategies and the potential for those strategies to succeed. The
Interim Report should not be relied on by any other party for any
other purpose.
The Interim Report contains certain forward-looking statements.
These statements are made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report, and such statements should be treated with caution
due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking
information.
Key Statistics
(before exceptional items)
Six months Six months Year
ended 30 ended 30 ended 31
Jun Jun Dec
2012 2011 2011
(unaudited) (restated) (restated)
Vehicle sales volumes
UK 577 748 1,502
Overseas 504 474 705
Total 1,081 1,222 2,207
GBP000 GBP000 GBP000
From continuing operations:
Revenue 34,286 38,673 74,980
Operating loss (3,068) (1,869) (4,692)
Finance costs - net (426) (501) (798)
Other gains and losses (105) - -
Loss before tax (3,599) (2,370) (5,490)
Net assets 5,340 16,917 11,749
Pence Pence Pence
Underlying loss per ordinary
share (12.92) (8.32) (19.43)
Interim dividend per ordinary
share - - -
Final dividend per ordinary
share - - -
Price range of ordinary
shares (pence)
1 January - 30 June 21.00 - 42.00 37.00 - 57.50 -
1 January - 31 December - - 32.00 - 57.50
Six months Six months
ended 30 ended 30 Year ended
Jun 2012 Jun 2011 31 Dec 2011
(unaudited) (restated) (restated)
Number of ordinary shares
in issue 30,469,927 30,469,927 30,469,927
Market capitalisation
at 1 July GBP9.29m GBP14.17m -
at 1 January 2012 - - GBP9.75m
Net assets per ordinary
share 17.5p 55.5p 38.6p
Consolidated Income statement
for the six months ended 30 June 2012
Six months
Six months ended 30 Six months
ended 30 Jun ended 30
Jun 2012 Jun Six months
2012 before exceptional 2012 after ended Year ended
exceptional items - exceptional 30 Jun 31 Dec
items note 5 items 2011 2011
(unaudited) (unaudited) (unaudited) (restated) (restated)
Notes GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue 4 34,286 - 34,286 38,673 74,980
Cost of sales (32,029) (779) (32,808) (35,618) (69,818)
Gross profit 2,257 (779) 1,478 3,055 5,162
Distribution costs (2,067) - (2,067) (2,084) (3,684)
Administrative expenses 5 (2,743) (250) (2,993) (2,138) (5,738)
Share of results
of joint ventures (515) - (515) (702) (932)
Operating loss (3,068) (1,029) (4,097) (1,869) (5,192)
Finance costs (426) - (426) (501) (798)
Other gains and
losses (105) - (105) - -
Loss before tax (3,599) (1,029) (4,628) (2,370) (5,990)
Tax 5, 6 (335) (1,456) (1,791) (163) (423)
Loss for the period 4 (3,934) (2,485) (6,419) (2,533) (6,413)
Attributable to:
Equity holders of
the parent (3,934) (2,485) (6,419) (2,533) (6,413)
Loss per share
Pence Pence Pence Pence Pence
From continuing
operations
Basic and diluted 8 (12.92) (8.17) (21.09) (8.32) (21.07)
Consolidated Statement of Comprehensive income
for the six months ended 30 June 2012
Six months
ended
30 Jun 2012 Six months
after ended Year ended
exceptional 30 Jun 31 Dec
items 2011 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Loss for the period (6,419) (2,533) (6,413)
Gains/(losses) on cash flow hedges 10 97 (165)
Actuarial loss on defined benefit
pension scheme - - (1,441)
Other comprehensive income 10 97 (1,606)
Tax relating to components of other
comprehensive income - (25) 383
Other comprehensive income for the
period 10 72 (1,223)
Total comprehensive income recognised
in period (6,409) (2,461) (7,636)
Attributable to:
Equity holders of the parent (6,409) (2,461) (7,636)
Consolidated Statement of Financial Position
as at 30 June 2012
As at As at As at
30 Jun 2012 30 Jun 2011 31 Dec 2011
(unaudited) (restated) (restated)
Notes GBP000 GBP000 GBP000
---------------------------------- ------ ------------ ------------ ------------
Non-current assets
Intangible assets 9 211 378 234
Property, plant and equipment 10 9,249 9,387 9,690
Investment in joint ventures 11 14,138 14,883 14,653
Deferred tax asset 2,401 4,043 4,192
---------------------------------- ------ ------------ ------------ ------------
Total non-current assets 25,999 28,691 28,769
Current assets
Inventories 12 23,496 19,823 20,040
Trade and other receivables 5,622 5,448 5,199
Cash and cash equivalents 13 2,485 223 1,799
Derivative financial instruments - 97 -
---------------------------------- ------ ------------ ------------ ------------
Total current assets 31,603 25,591 27,038
---------------------------------- ------ ------------ ------------ ------------
Total assets 57,602 54,282 55,807
Current liabilities
Trade and other payables 29,703 15,863 22,713
Borrowings 14 13,835 13,864 12,861
Provisions 2,450 2,202 2,170
Derivative financial instruments 155 - 165
---------------------------------- ------ ------------ ------------ ------------
Total current liabilities 46,143 31,929 37,909
Non-current liabilities
Retirement benefit obligations 16 3,926 3,592 4,405
Provisions 1,552 1,203 1,103
Preference shares 641 641 641
---------------------------------- ------ ------------ ------------ ------------
Total non-current liabilities 6,119 5,436 6,149
---------------------------------- ------ ------------ ------------ ------------
Total liabilities 52,262 37,365 44,058
Net assets 4 5,340 16,917 11,749
Equity
Share capital 7,618 7,618 7,618
Share premium account 25,926 25,926 25,926
Capital redemption reserve 916 916 916
Employee Share Ownership Plan
("ESOP") reserve (47) (47) (47)
Hedging and translation reserves (155) 72 (165)
Retained earnings (28,918) (17,568) (22,499)
---------------------------------- ------ ------------ ------------ ------------
Equity attributable to equity
holders of the parent 5,340 16,917 11,749
Total equity 5,340 16,917 11,749
Consolidated Statement of Changes in Equity
as at 30 June 2012
Equity attributable to equity holders of the parent
-----------------------------------------------------------------------------------------------
Share Capital Hedging
premium redemption and translation Retained Total
Share capital account reserve ESOP reserve reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------------- --------- ------------ ------------- ----------------- ---------- --------
Balance at 1 January
2011 (as originally
reported) 7,618 25,926 916 (47) - (14,168) 20,245
Prior year
adjustment (note 3) - - - - - (867) (867)
--------------------- -------------- --------- ------------ ------------- ----------------- ---------- --------
Balance at 1 January
2011 (restated) 7,618 25,926 916 (47) - (15,035) 19,378
Loss for the period
(restated) - - - - - (2,533) (2,533)
Other comprehensive
income for the
period - - - - 97 - 97
Tax relating to
components of other
comprehensive
income - - - - (25) - (25)
--------------------- -------------- --------- ------------ ------------- ----------------- ---------- --------
Total comprehensive
income for the
period - - - - 72 (2,533) (2,461)
Balance at 30 June
2011 (restated) 7,618 25,926 916 (47) 72 (17,568) 16,917
Loss for the period
(restated) - - - - - (3,880) (3,880)
Other comprehensive
income for the
period - - - - (237) (1,058) (1,295)
Total comprehensive
income for the
period - - - - (237) (4,938) (5,175)
Credit to equity for
share-based
payments - - - - - 7 7
Tax on items taken
direct to equity - - - - - - -
--------------------- -------------- --------- ------------ ------------- ----------------- ---------- --------
Balance at 31
December 2011
(restated) 7,618 25,926 916 (47) (165) (22,499) 11,749
Loss for the period - - - - - (6,419) (6,419)
Other comprehensive
income for the
period - - - - 10 - 10
Total comprehensive
income for the
period - - - - 10 (6,419) (6,409)
Balance at 30 June
2012 (unaudited) 7,618 25,926 916 (47) (155) (28,918) 5,340
Consolidated Cash Flow Statement
for the six months ended 30 June 2012
Six months
ended 30
Jun 2012 Six months
after exceptional ended 30 Year ended
items Jun 2011 31 Dec 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Operating activities
Operating loss from continuing operations (4,097) (1,869) (5,192)
Adjustments for:
Share of results of joint ventures 515 702 932
Depreciation of property, plant and
equipment 889 278 613
Amortisation of intangible assets 23 215 359
(Profit)/loss on disposal of property,
plant and equipment - - (1)
Charge for share-based payments - - 7
Increase in provisions 729 720 588
Operating cash flows before movement
in working capital (1,941) 46 (2,694)
(Increase)/decrease in inventories (3,456) 2,875 2,658
Decrease/(increase) in receivables 334 (260) (11)
Increase in payables 6,154 34 6,909
Contribution to defined benefit pension
scheme (600) (600) (1,200)
Cash (used in)/from operations 491 2,095 5,662
Interest paid (226) (325) (676)
Fair value losses on cash flow hedges (105) - -
Net cash (used in)/from operating activities 160 1,770 4,986
Investing activities
Proceeds on disposal of property, plant
and equipment 24 - 116
Purchases of property, plant and equipment (472) (978) (1,731)
Net cash used in investing activities (448) (978) (1,615)
Financing activities
(Decrease)/increase in bank borrowings - (567) (567)
Increase/(decrease) in stocking loan 974 (71) (1,074)
Net cash from/(used in) financing activities 974 (638) (1,641)
Net increase in cash and cash equivalents 686 154 1,730
Cash and cash equivalents at beginning
of period 1,799 69 69
Cash and cash equivalents at end of
period 2,485 223 1,799
Notes to the consolidated financial statements
for the six months ended 30 June 2012
1 General information
Manganese Bronze Holdings PLC is a company incorporated in
England and Wales under registration number 61050. The address of
the registered office is given in note 18. The nature of the
Group's operations and its principal activities are set out in note
4.
These financial statements are presented in pounds sterling
because that is the currency of the primary economic environment in
which the Group operates.
The information for the year ended 31 December 2011 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditors'
reported on those accounts. Their report was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
2 Accounting policies
Basis of preparation
The Interim Report has been prepared in accordance with the AIM
Rules for companies and with International Financial Reporting
Standards ("IFRS's") as adopted for use in the European Union.
However, as permitted, the Group has chosen not to adopt
International Accounting Standard 34, "Interim Financial
Reporting", in preparing this Interim Report.
The Interim Report is unaudited, and does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006. The Interim Report, which was approved by the Board of
Directors on 27 September 2012, should be read in conjunction with
the financial statements for the year ended 31 December 2011, which
are available on the Group's website.
Going concern
The financial statements of the Group have been prepared on a
going concern basis. In making this assessment, the Directors have
prepared financial forecasts for the period to 31 December 2013
which considers the funding and capital position for the Group.
Those forecasts make assumptions in respect of future trading
conditions, notably the economic environment and its impact on the
Group's revenues and costs. The forecasts take into account
foreseeable downside risks, based on the information that is
available to them at the time of approval of these financial
statements.
Sales volumes in the current year have been below expectations
but the Directors believe that demand for new taxis in London will
increase in the coming months due to the impact of the Mayor of
London's Air Quality Strategy and this might allow the Group to
achieve a breakeven or better result in the new financial year.
However, in the light of the continuing weak economic outlook for
the UK, the level of profitability that could be achieved is
directly linked to UK new vehicle sales volumes, which are
difficult to predict in the current macro economic environment.
As detailed in note 15, LTI Limited is one of 12 defendants in a
legal action that has been listed for a trial in the High Court of
the preliminary issues in March 2013. At this stage in the process,
it is not possible to produce a reliable estimate either of the
probability of the outcome of the litigation or the quantum of any
liability.
Consequently, no provision has been made in the forecasts for
the outcome of this litigation beyond providing for the legal costs
that may arise.
As part of the on-going support by Geely to the Group, LTI
Limited enjoys the benefit of informal extended trading terms from
Shanghai Maple. As at 30 June 2012, LTI Limited owed Shanghai Maple
GBP18.6m (US$29.2m) of which GBP8.9m (US$14.4m) was technically
overdue. The Directors have obtained verbal assurances of the
continuing support from Geely.
The Group's borrowing facilities are set out in note 14. At 30
June 2012 the Group had GBP3.3m of headroom on its agreed
facilities. The existing facilities are due for renewal on 31 March
2013 and the Directors believe that these facilities will be
maintained at their existing levels.
The Directors acknowledge that the matters described above
represent a material uncertainty that could, in certain adverse
circumstances, cast doubt upon the Company's and the Group's
ability to continue as a going concern. If such an adverse
situation were to arise, the Company and the Group may be unable to
realise its assets and discharge its liabilities in the normal
course of business. Nevertheless, the Board has an expectation that
such an adverse situation will not arise.
In the absence of an adverse situation arising, the Directors
are satisfied that the Group has sufficient resources to continue
in operation for the foreseeable future, a period of not less than
12 months from the date of this report. Accordingly, they continue
to adopt the going concern basis in preparing the financial
statements.
Changes in accounting policies
The same accounting policies, presentation and methods of
computation are followed in the Interim Report as applied in the
Group's latest annual audited financial statements.
3 Prior year adjustments
As previously announced on 14 August 2012, the Directors have
identified material accounting errors in the reported financial
results for the year ended 31 December 2011 and prior periods and
in accordance with the provisions of IAS 8, statements of financial
position and the financial results for 2011 and prior periods have
been restated.
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 inventories and under/over-statement of liabilities in the
balance sheets of previous periods.
The effect of the prior year adjustments has been to reduce the
equity attributable to the owners of the parent by GBP4,250,000 and
the nature of the adjustments and the impact on the Group financial
statements are set out below:-
31-Dec 30-Jun 31-Dec
2011 2011 2010
GBP'000 GBP'000 GBP'000
Equity attributable to owners of the
parent as previously reported 15,999 19,412 20,245
Restatement of accounting errors
(Over) statement of inventories (2,992) (3,711) (2,638)
(Under)/over-statement of liabilities (1,258) 1,216 1,771
(Over)/under-statement of debtors - - -
(4,250) (2,495) (867)
Impact of accounting errors on taxation - - -
Equity attributable to the owners of
the parent as restated 11,749 16,917 19,378
A reassessment of the likelihood of recovery following the
identification of the prior year adjustments reduced the carrying
value of the deferred tax asset (note 5).
4 Operating segment information
For management purposes, the Group is currently organised into
three operating divisions - vehicle sales, vehicle services, and
Shanghai LTI. These divisions are the basis on which the Group
reports its segment information internally to the chief operating
decision maker, the Group Chief Executive.
The products and services from which each reportable segment
derives its revenues are as follows:
i. The "vehicle sales" segment includes the design, development,
UK assembly, and retailing of new purpose-built taxis, along with
the sale of used vehicles taken in part exchange, parts, and
vehicle maintenance.
ii. The "vehicle services" segment comprises the taxi finance
business.
iii. The "Shanghai LTI" ("SLTI") segment is the joint venture
based in Shanghai, China, which assembles the London Taxi under
license from the Group and manufactures body tooling.
Segmental information about these businesses, which all relate
to continuing operations, is presented below:-
Six months
ended 30
Jun Six months
2012 after ended 30 Year ended
exceptional Jun 31 Dec
Income statement items 2011 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Revenue
Vehicle sales 33,391 37,870 73,360
Vehicle services 895 803 1,620
Total Group 34,286 38,673 74,980
Result
Vehicle sales (3,752) (1,519) (5,426)
Vehicle services 170 352 1,166
SLTI (515) (702) (932)
Total operating loss from continuing
operations (4,097) (1,869) (5,192)
Finance costs (531) (501) (798)
Loss before tax (4,628) (2,370) (5,990)
Tax (1,791) (163) (423)
Loss after tax (6,419) (2,533) (6,413)
Six months
ended 30
Jun Six months
2012 after ended 30 Year ended
exceptional Jun 31 Dec
Statement of financial position items 2011 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Vehicle sales 7,536 19,252 12,436
Vehicle services (581) 290 172
SLTI 14,138 14,883 14,653
Total segment 21,093 34,425 27,261
Unallocated corporate (4,403) (3,867) (4,450)
Net debt (11,350) (13,641) (11,062)
Total Group 5,340 16,917 11,749
5 Exceptional items
Six months Six months
ended 30 ended 30 Year ended
Jun Jun 31 Dec
note 2012 2011 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Cost of sales
Provision for irrecoverable
costs i 779 - -
Administrative expenses
Legal costs - TX4 fire litigation ii 150 - 500
Legal and professional fees
- forensic accountancy investigation iii 100 - -
250 - 500
Taxation
Deferred tax asset iv 1,456 - -
2,485 - 500
i. Following a review of debtor balances, a provision has been
made against costs incurred during 2008 and 2009 in relation to the
transfer of production in China that may not be recoverable from
SLTI.
ii. Additional legal costs in relation to the TX4 fire
litigation claim (note 15).
iii. Legal and professional fees in relation to the ongoing
forensic investigation into the causes of the material accounting
errors that gave rise to the prior year adjustment (note 3).
iv. A reassessment of the likelihood of recovery following the
identification of the prior year adjustments (note 3) reduced the
carrying value of the deferred tax asset.
6 Tax
UK corporation tax for the six month period is calculated at
24.5% (2011: 26.5%), representing the best estimate of the average
annual effective tax rate expected for the full year, applied to
the pre-tax loss of the six month period.
The Finance Act 2012 was substantively enacted on 3 July 2012
and given Royal Assent on 17 July 2012. This legislation announced
headline corporation tax rates to be 24% from 1 April 2012, falling
to 23% from 1 April 2013. Deferred tax at 30 June 2012 has been
provided at 23%, being the substantively enacted rate expected to
apply in the periods in which the timing differences are expected
to reverse.
The Budget on 21 March 2012 announced a further reduction to 22%
from 1 April 2014 which is expected to be included in Finance Act
2013 and will be substantively enacted when this Act has completed
its final House of Commons stage. This has not been factored into
the tax calculations in this Interim Report.
The tax charge for the period of GBP335,000 (2011: GBP163,000)
has arisen due to the decrease in the Group's deferred tax asset
resulting from the reduction in Corporation tax rate from 25% to
23%.
At 30 June 2012, the Group had unused tax losses of
GBP18,864,000 available for offset against future taxable profits.
No deferred tax has been recognised in respect of these losses due
to the unpredictability of future taxable profit streams.
7 Dividends
There are no amounts recognised as distributions to equity
holders during the period (2011: nil).
No interim dividend (2011: nil) has been declared.
8 Loss per ordinary share
The calculation of the basic and diluted loss per share is based
on the following data:
Six months Six months
ended 30 ended 30 Year ended
Jun Jun 31 Dec
Loss 2012 2011 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Loss for the purposes of underlying
loss per share being net loss
(before exceptional items) attributed
to equity holders of the parent (3,934) (2,533) (5,913)
Loss for the purposes of basic
and diluted loss per share being
net loss attributed to equity
holders of the parent (6,419) (2,533) (6,413)
Six months Six months
ended 30 ended 30 Year ended
Number of shares Jun 2012 Jun 2011 31 Dec 2011
(unaudited) (unaudited) (audited)
Number Number Number
Weighted average number of ordinary
shares for the purposes of basic
loss per share 30,438,647 30,438,647 30,438,647
The denominators used in the calculation of loss per share are
the same for underlying loss per share and both basic and diluted
loss per share.
Six months Six months
ended 30 ended 30 Year ended
Loss per ordinary share Jun 2012 Jun 2011 31 Dec 2011
(unaudited) (restated) (restated)
Pence Pence Pence
Underlying (before exceptionals) (12.92) (8.32) (19.43)
Basic and diluted (after exceptionals) (21.09) (8.32) (21.07)
As the Group incurred a loss for the period, diluted loss per
share is the same as basic loss per share.
9 Intangible assets
Development
costs Licences Total
GBP000 GBP000 GBP000
Cost:
At 1 January, 1 July 2011, 1 January
and 30 June 2012 2,299 90 2,389
Accumulated amortisation and impairment:
At 1 January 2011 1,721 75 1,796
Charge for the period 205 10 215
At 1 July 2011 1,926 85 2,011
Charge for the period 139 5 144
At 1 January 2012 2,065 90 2,155
Charge for the period 23 - 23
At 30 June 2012 2,088 90 2,178
Carrying amount:
At 31 December 2010 578 15 593
At 30 June 2011 373 5 378
At 31 December 2011 234 - 234
At 30 June 2012 211 - 211
10 Property, plant and equipment
Freehold
land and Long leasehold Short leasehold Plant and
buildings buildings buildings equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2011 550 4,850 298 25,217 30,915
Additions - - - 978 978
At 1 July 2011 550 4,850 298 26,195 31,893
Additions - - - 753 753
Disposals - - - (250) (250)
At 1 January 2012 550 4,850 298 26,698 32,396
Additions - - - 472 472
Disposals - - - (86) (86)
At 30 June 2012 550 4,850 298 27,084 32,782
Accumulated depreciation
and impairment:
At 1 January 2011 135 663 246 21,184 22,228
Charge for the
period 9 48 11 210 278
At 1 July 2011 144 711 257 21,394 22,506
Charge for the
period 9 49 12 265 335
Disposals - - - (135) (135)
At 1 January 2012 153 760 269 21,524 22,706
Charge for the
period 9 48 12 820 889
Disposals - - - (62) (62)
At 30 June 2012 162 808 281 22,282 23,533
Carrying amount:
At 31 December
2010 415 4,187 52 4,033 8,687
At 30 June 2011 406 4,139 41 4,801 9,387
At 31 December
2011 397 4,090 29 5,174 9,690
At 30 June 2012 388 4,042 17 4,802 9,249
During the period the Group spent GBP472,000 on plant and
equipment, including GBP240,890 relating to the Euro 5 emission
compliant taxi which was launched on 1 January 2012.
The depreciation charge of GBP889,000 for the period includes
GBP477,000 for the commencement of depreciation (from 1 January
2012) of capital expenditure relating to the Euro 5 emission
compliant taxi. In aggregate, total capital expenditure incurred
that related to the Euro 5 emission compliant taxi to 30 June 2012
was GBP3,703,000.
11 Investment in joint ventures
GBP000
Cost:
At 1 January, 1 July 2011, 1 January and 30
June 2012 16,034
Share of profits/(losses):
At 1 January 2011 (449)
Loss for the period (702)
At 1 July 2011 (1,151)
Loss for the period (230)
At 1 January 2012 (1,381)
Loss for the period (515)
At 30 June 2012 (1,896)
Carrying amount:
At 31 December 2010 15,585
At 30 June 2011 14,883
At 31 December 2011 14,653
At 30 June 2012 14,138
During 2007, the Group finalised the establishment of a joint
venture with Chinese car manufacturer Geely Automobile Holdings
Limited ("Geely") and Shanghai Maple Automobile Company Limited
("Maple"), to produce the London taxi in Shanghai. The joint
venture company, Shanghai LTI Automobile Components Company Limited
("SLTI"), was incorporated in the People's Republic of China on 15
June 2007.
The parties to the joint venture are the Group, holding 48% of
the share capital of SLTI, and Geely and Maple, who hold 51% and 1%
respectively.
The Group is accounting for its investment on an equity basis,
with the total cost of GBP16,034,000 comprising shares of
GBP14,250,000 and transaction costs of GBP1,784,000.
On 19 January 2011, the Group pledged its shares in SLTI to
Maple as security over the payment obligations of LTI Limited (the
Group's wholly-owned subsidiary) to Maple. The recourse which Maple
has against the Company in the event that LTI Limited breaches its
payment obligations is limited to a maximum amount of US$8 million.
In exchange for the pledge of shares, the Group has agreed an
extension of credit terms to 120 days for amounts due to Maple
relating to the supply of kits of bodies and panels, parts,
components and completed vehicles.
12 Inventories
As at As at As at
30 Jun 2012 30 Jun 2011 31 Dec 2011
(unaudited) (restated) (restated)
GBP000 GBP000 GBP000
Raw materials 4,813 2,614 4,831
Work in progress 617 689 982
Finished goods 18,066 16,520 14,227
23,496 19,823 20,040
Finished goods with a carrying amount of GBP13,835,000 (2011:
GBP13,864,000) are pledged as security for the Group's stocking
loan facility.
13 Cash and cash equivalents
As at As at As at
30-Jun-2012 30-Jun-2011 31-Dec-2011
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash at banks and in hand 2,485 223 1,799
Cash at banks and in hand do not attract interest
14 Borrowings
As at As at As at
30-Jun-2012 30-Jun-2011 31-Dec-2011
(unaudited) (unaudited) (restated)
GBP000 GBP000 GBP000
Bank overdrafts - - -
Stocking loan 13,835 13,864 12,861
13,835 13,864 12,861
All borrowings are repayable on demand or within one year.
Other principal features of the Group's borrowings are as
follows:
i. The Group's overdraft facility at the period end date of
GBP0.7m (2011: GBP1.5m) was provided by HSBC Bank plc ("HSBC") and
attracted interest at a rate of 5.0% (2011: 5.0%) above the bank's
sterling base rate. This facility is repayable on demand and is
secured by a debenture comprising fixed and floating charges over
all the Group's assets and undertakings, and first legal mortgage
over the Group's freehold property in Broughton Street, Manchester,
and long leasehold property in Brewery Road, London.
ii. The Group's stocking loan facility of GBP13.95m (2011:
GBP13.95m) is provided by the Lloyds Banking Group PLC and attracts
interest linked to the Finance House Base Rate. The stocking loan
is secured on the vehicles within finished goods.
At 30 June 2012, the Group had available GBP3.3m (2011: GBP1.3m)
of headroom on undrawn committed borrowing facilities in respect of
which all conditions precedent had been met. Of this amount GBP0.1m
(2011: GBP0.1m) relates to the undrawn element of the stocking loan
facility, which can only be drawn down provided the Group has
suitable taxis to offer as security.
15 Contingent liabilities
Certain subsidiaries provide warranties, and sometimes extended
warranties, in respect of their products. The Directors review the
position regularly and consider that appropriate provisions have
been made to cover known and expected costs likely to arise under
these warranties.
In March 2011 a claim was lodged in the High Court by 436 taxi
drivers against LTI Limited and 11 other defendants for alleged
financial loss as a result of the 2008 product recall that was
undertaken to resolve concerns following 12 under bonnet fires in
early production models of the TX4 taxi. The case has been listed
for a trial in the High Court of the preliminary issues in March
2013. After carrying out a full and thorough investigation using an
independent fire investigator, the Directors believe that the cause
of the fires was due to improper servicing by third parties who
used flammable solvents to clean the engine compartment.
Accordingly, the Board intends to contest the claim and, in the
2011 accounts, provided GBP500,000 to meet the future legal costs
of this action. At this stage of the legal process, it is not
possible to produce a reliable estimate either, of the probability
of the outcome of the litigation, or the quantum of any liability.
Consequently, no provision has been made for the outcome of this
litigation beyond providing for the legal costs that may arise.
16 Defined benefit scheme
The valuation position of the Group's defined benefit pension
scheme (Manganese Bronze Group Pension Scheme), which was closed in
1995, was assessed at 31 December 2011 by a qualified independent
actuary using a set of assumptions which are commensurate with the
guidance given under IAS19. The defined benefit obligation as at 30
June 2012 is calculated on a year-to-date basis, based on the 30
December 2011 actuarial valuation. There have not been any
significant fluctuations or one-time events since that time that
would require adjustment to the actuarial assumptions made at 31
December 2011.
Contributions of GBP0.6m (2011: GBP0.6m) were paid into the
scheme during the period. Contributions to the scheme for the six
months to 31 December 2012 are likely to be in the region of
GBP0.6m.
17 Related party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
During the period, the Group entered into the following
transactions with related parties who are not (members) of the
Group.
Sale of goods Purchase of goods
---------------------------------------- ----------------------------------------
Six months Six months Six months Six months
ended ended Year ended ended ended Year ended
30-Jun-2012 30-Jun-2011 31-Dec-2011 30-Jun-2012 30-Jun-2011 31-Dec-2011
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Shanghai LTI 894 - 2,518 - - -
Shanghai Maple Automobile
Company Ltd - - - 11,653 8,560 16,077
The following amounts were outstanding at the period end date.
Amounts owed by related parties Amounts owed to related parties
--------------------------- ---------------------------------------- ----------------------------------------
As at As at As at As at As at As at
30-Jun-2012 30-Jun-2011 31-Dec-2011 30-Jun-2012 30-Jun-2011 31-Dec-2011
(unaudited) (restated) (restated) (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Shanghai LTI 1,708 1,345 1,526 - - -
Shanghai Maple Automobile
Company Ltd - - - 18,571 10,155 11,070
Shanghai LTI ("SLTI") is a related party of the Group because
the Group has a 48% shareholding in the company (see note 11).
Shanghai Maple Automobile Company Ltd ("Maple") is a related
party of the Group because it is 90% owned by Geely Holding, which
is wholly owned by Mr Li Shu Fu and his associates. Mr Li Shu Fu is
chairman of Geely Automobile Holdings Ltd, the Group's 51% joint
venture partner in SLTI.
Sales of goods to, and purchases from, related parties were made
at the contracted rate of cost plus 3%.
On 19 January 2011, the Group pledged its shares in SLTI as
security over the amounts owed to Maple (see note 11). Other
amounts outstanding are unsecured, with no guarantees given or
received.
GBP1,421,000 (2011: GBP662,000) has been provided for doubtful
debts in respect of the amounts owed by related parties.
Amounts outstanding will be settled in cash.
18 Copies of this announcement can be obtained from the Company
Secretary, Manganese Bronze Holdings PLC, Holyhead Road, Coventry,
CV5 8JJ, or from the Group's website at www.manganese.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QVLFLLKFFBBL
Grafico Azioni Manganese Bronze (LSE:MNGS)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Manganese Bronze (LSE:MNGS)
Storico
Da Giu 2023 a Giu 2024