By Tony Collins
The share price of a company that makes London black cabs lost more than a third of their value yesterday (Tuesday) after announcing poor results and IT-related problems.
Manganese Bronze, which was founded 113 years ago, is an automotive products and services group that includes the London Taxi Company. Its taxis are made at a factory in Coventry, though the parts are sourced from China. Its vehicles sold internationally, including a tranche of 1,000 to Azerbaijan, which showed them off at the Eurovision song contest this year, according to the FT today.
Manganese says on its website it is delaying the release of its half-year results for the six months ended 30 June 2012 because of the need to “restate prior years’ financial results because of accounting errors that have come to light”. The half-year results will be announced on or before 24 September 2012.
In a statement Manganese said that in August 2010 the Group introduced an integrated IT system to help to manage the increasingly complex global supply chain. The company 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 balance sheet at 31 December 2011 and the financial results for 2011 and prior years will have to be restated.”
Manganese said it expected “to report net losses for the first half that are substantially higher than last year”. News of the poor results and IT-related problems led to a fall in share price of 34% to 16.5p, compared to a 52-week high of .45.5p. The FT said the company has a market value of just £5m, down from £230m five years ago.