TIDMMNGS
RNS Number : 3193L
Manganese Bronze Hldgs PLC
29 July 2011
Friday 29 July 2011
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,
announces its unaudited half-year results for the six month period
ended 30 June 2011.
2011 Half 2010 2010
year Half year % Variance Full year
Group revenue - GBPm 38.7 33.4 16.0 69.6
Operating loss - GBPm
* 0.2 1.0 76.3 1.9
Finance costs - GBPm 0.5 0.3 (52.3) 0.9
Loss before tax - GBPm 0.7 4.9 84.8 6.3
Basic loss per share
- pence 2.4 13.6 82.1 18.2
Net debt - GBPm 13.6 13.7 0.4 14.4
* Before exceptional items
Summary
-- Group revenue up 16% to GBP38.7m
-- Operating loss before exceptional items reduced by 76% to
GBP0.2m (2010: GBP1.0m)
-- Net cash inflow from operating activities of GBP1.8m (2010:
GBP8.3m outflow)
-- Record international sales volumes: up 323% to 474 vehicles
(2010: 112), including 300 vehicles to Azerbaijan
-- UK sales volumes down 6.8% to 748 vehicles (2010: 803) as
challenging market conditions continue
-- UK break-even new vehicle UK sales volumes reduced from over
2,000 to c. 1,400
Outlook
-- Substantial international sales order book of over 1,300
vehicles
-- Difficult UK trading conditions expected to continue,
particularly outside of London
-- Operating margins improved to a level able to support a
return to Group profitability
Commenting on the results, John Russell, Group Chief Executive,
said:
"The Board is encouraged by the Group's return to revenue growth
and cash generation, and a record level of international sales in
the first six months of 2011. 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.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."
At today's half-year results presentation, John Russell, Group
Chief Executive, and Tony Pearman, Group Finance Director, will
give a short PowerPoint presentation which will be available on the
Company's website www.manganese.com, along with this
announcement.
For further information, please contact:
Manganese Bronze Holdings PLC
------------------------------------- -------------
John Russell, Group Chief Executive 02476 572108
------------------------------------- -------------
Tony Pearman, Group Finance Director 02476 572214
------------------------------------- -------------
Matrix Corporate Capital LLP 020 3206 7000
------------------------------------- -------------
Malcolm Strang/Robert Beenstock
------------------------------------- -------------
Financial Dynamics 020 7269 7291
------------------------------------- -------------
Nick Hasell/Sophie Moate
------------------------------------- -------------
INTERIM MANAGEMENT REPORT
To the members of Manganese Bronze Holdings PLC
Summary
Manganese Bronze is pleased to report a return to revenue growth
in the first six months of 2011, with total Group revenue in the
first half increasing by 16% to GBP38.7 million (2010: GBP33.4
million). Total vehicle sales rose by 34% to 1,222 vehicles (2010:
915). However, progress has been uneven, with success in
international markets tempered by continuing uncertain macro
economic conditions in the UK.
The operating loss before exceptional items reduced by 76.3% to
GBP0.2 million (2010: GBP1.0 million), reflecting the effectiveness
of the initiatives to return the Group to profitability completed
during 2009 and 2010. The savings from these measures have been
broadly in line with expectations, reducing the level of break-even
new vehicle sales volumes in the UK from over 2,000 to c 1,400.
Earnings continue to be adversely affected by the lower level of
UK sales and the weakness of Sterling, particularly against the
Euro, which has increased the cost of engines from Italy. In
addition, UK sales for the half year include the remaining 108
vehicles built prior to the restructuring of the Coventry operation
in July 2010, which generated margins significantly lower than the
current TX4, launched in November 2010.
SLTI, the Group's joint venture with Geely Automobile Holdings
Limited ("Geely"), 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
GBP0.7m (2010: GBP0.1 million 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.
With no exceptional costs (2010: GBP3.5m) and finance costs of
GBP0.5 million (2010: GBP0.3 million), the Group's loss before tax
reduced by GBP4.1m (84.8%) to GBP0.7 million (2010: GBP4.9
million).
UK trading/market
Trading in the UK continues to be impacted by uncertain macro
economic conditions, which makes forecasting the level of demand
for new vehicles challenging. UK sales for the first half were down
6.8% at 748 vehicles (2010: 803 vehicles).
Within the UK there were contrasting market conditions. Sales
into the London market rose by 5.8% to 511 vehicles (2010: 483),
whilst sales into regional markets, at 237 vehicles (2010: 320),
fell by 25.9%. 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.
Whilst the increase in sales into the London market is
encouraging, this primarily reflects the very low sales achieved in
the second quarter of 2010, when trading was impacted by lower
earnings for taxi drivers due to the volcanic ash cloud prompting
the closure of airports, the cessation of the Government's
scrappage scheme, the introduction of a new vehicle showroom tax,
and uncertainty ahead of the general election.
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 take effect from 1 January 2012, after which
no vehicle over 15 years old will be re-registered for use as a
taxi in London. As at 30 June 2011, there were approximately 3,000
vehicles over 15 years old. This represents a significant
opportunity for increased sales of both new and used taxis for the
Group in the next 18 months.
Since the launch of the revised TX4 in November 2010, the
Group's share of the London market has increased from around 75% to
79%.
With the significant decline of new vehicle sales into regional
markets, the Group has taken the decision to close the Birmingham
dealership and relocate the vehicle sales activity to the Coventry
facility. This consolidation at a single site follows the opening
of a used vehicle sales facility in Coventry during 2010, and will
reduce operating costs by GBP0.3 million on an annualised
basis.
As a result of the reduced UK vehicles sales volumes, a period
of short-time working was introduced at the Coventry assembly
facility, with 18 days production being taken out during the second
quarter. Full time production, at 40 vehicles per week, was
restored at the start of July. No further short time working is
envisaged in the third quarter. However, dependent on UK sales
volumes in September, a traditionally high sales month associated
with registration plate changes, further reduced production may be
necessary in the last quarter. The Board would like to thank all of
the Group's employees for their commitment, support, and
understanding during these challenging economic conditions.
Against this backdrop, the parts and finance businesses continue
to perform well.
International sales
International sales volumes in the first half of 2010 were a
record 474 vehicles (2010: 112), an increase of 323%, and included
300 vehicles of the Azerbaijan order for 1,000 vehicles. Orders for
2011 are now over 1,300, and well ahead of the expectation of 1,000
vehicles set at the start of the year. Sales and orders for
international markets other than Azerbaijan already exceed 2010's
full year sales total of 226, but unrest in the Middle East is
expected to negatively impact sales prospects in the coming
months.
The first 300 vehicles of the Azerbaijan order have arrived in
Baku and are being operated by the Baki Taksi Company. The
Directors understand that the vehicles are proving very popular and
drivers are reporting a higher than average take in fares as
customers choose to use the London taxis instead of the local
saloon type taxis. Training and after sales support continues from
the UK with London Taxi Company employees present in Baku to
support the operations.
The publicity surrounding the Azerbaijan order has generated
increased interest in the wider Central and Eastern European
region. In Ukraine, our newly appointed partner is looking to
supply vehicles to the airport in preparation for the 2012 European
football championships. Discussions are also taking place with
contacts in Moscow.
Geely and SLTI
Relationships between the Group and Geely continue to be very
positive. The Group has assigned expert staff to support the SLTI
management team on a series of planned projects to improve quality
and supply chain performance and deal with the challenges posed by
increasing build volumes in the Shanghai facility. In addition, the
Group continues to collaborate with Geely senior management to
develop the launch plans for the TXN, the saloon car based-taxi
scheduled for introduction in 2014, and other business development
opportunities.
SLTI made a loss in the first half of 2011, the Group's 48%
share of which was a loss of GBP0.7 million (2010: GBP0.1 million
profit). Losses of GBP0.8 million (2010: GBP0.5 million) in the TX4
manufacturing operation were partly offset by a profit of GBP0.1
million (2010: GBP0.6 million) from the Shanghai Maple Tooling
Company ("SMTC") subsidiary. The increased losses at the
manufacturing facility reflect a low level of taxi sales into Asian
markets, and increased costs, while the reduced profit from SMTC
reflects a period of low orders for vehicle tooling. The Group will
work closely with Geely personnel over the coming months to look at
ways to reduce costs and increase sales into Asian markets. This,
along with an increased order book for the tooling company, should
lead to improvements in the second half.
Cash, funding and dividends
In the six months to 30 June 2011, the Group returned to
generating cash, with a cash inflow from operations, before
movements in working capital, of GBP1.7 million (2010: GBP1.2
million outflow). Working capital reduced during the half year by
GBP1.0 million (2010: GBP6.3 million increase), primarily due to
reductions in inventories. With pension contributions of GBP0.6
million (2010: GBP0.6 million), and interest payments of GBP0.3
million (2010: GBP0.2 million), the Group had a net cash inflow
from operations of GBP1.8 million (2010: GBP8.3 million
outflow).
With investment in plant and equipment of GBP1.0 million (2010:
GBP0.3 million), including GBP0.8 million relating to the Euro V
emission compliant taxi scheduled for introduction by 1 January
2012, at 30 June 2011 the Group had net cash of GBP0.2 million
(2010: GBP0.3 million overdraft) and a stocking loan of GBP13.9
million (2010: GBP13.4 million). At 30 June 2011 the Group had a
GBP1.5 million (2010: GBP1.5 million) overdraft facility provided
by HSBC Bank plc ("HSBC"), and a stocking loan facility of GBP13.95
million (2010: GBP14.1 million) provided by the Lloyds Banking
Group PLC. This resulted in GBP1.3 million (2010: GBP1.9 million)
of undrawn committed borrowing facilities.
As agreed with HSBC, the Group's overdraft facility reduced to
GBP1.0 million from 1 July 2011. Despite the continuing challenging
business and economic circumstances, the Group's bankers remain
supportive.
As previously announced, dividends, including preference share
dividends, will not be paid until the Group returns to
profitability and has sufficient distributable reserves, and, thus,
no interim dividend will be paid (2010: 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 11 and 12 of the Group's
Annual Report for the year ended 31 December 2010 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
The Board is encouraged by the Group's return to revenue growth
and cash generation, and a record level of international sales in
the first six months of 2011. 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.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.
Cautionary statement
This Interim Management Report ("IMR") has been prepared solely
to provide additional information to shareholders to access the
Group's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party for any
other purpose.
The IMR 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
Six months Six months
ended ended Year ended
31 Dec
30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited)
------------ ------------ -----------
Vehicle sales
volumes UK 748 803 1,653
Overseas 474 112 226
Total 1,222 915 1,879
------------ ------------ -----------
GBP000 GBP000 GBP000
From continuing operations:
Revenue 38,673 33,353 69,557
------------ ------------ -----------
Operating loss before exceptional
items (241) (1,015) (1,892)
Exceptional items (see note
4) - (3,537) (3,492)
Operating loss (241) (4,552) (5,384)
Finance costs - net (501) (329) (867)
Loss before tax (742) (4,881) (6,251)
------------ ------------ -----------
Net assets 19,412 23,430 20,245
------------ ------------ -----------
Pence Pence Pence
Basic loss per ordinary
share (2.97) (13.61) (18.19)
------------ ------------ -----------
Interim dividend per
ordinary share - - -
Final dividend per ordinary
share - - -
Price range of ordinary
shares
1 January - 30 37.00 - 35.25 -
June 57.50 112.50 -
30.75 -
1 January - 31 December - - 112.50
------------ ------------ -----------
Six months Six months
ended ended Year ended
31 Dec
30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited)
------------ ------------ -----------
Weighted average number of ordinary
shares in issue 30,469,927 30,469,927 30,469,927
Market
capitalisation
at 1 July GBP14.17m GBP10.74m -
at 1 February
2011 - - GBP12.40m
Net assets per ordinary
share 63.7p 76.9p 66.4p
Condensed consolidated income
statement
for the six months ended 30 June
2011
Six months Six months
ended ended Year ended
31 Dec
30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited)
Notes GBP000 GBP000 GBP000
------- ------------ ------------ -----------
Continuing
operations
Revenue 3 38,673 33,353 69,557
Cost of sales (33,990) (33,661) (66,790)
Gross profit/(loss) 4,683 (308) 2,767
Distribution costs (2,084) (1,731) (3,790)
Administrative expenses (2,138) (2,599) (4,440)
Share of results of joint
ventures (702) 86 79
Operating loss (241) (4,552) (5,384)
Investment revenues - - 4
Finance costs (501) (329) (871)
Loss before tax (742) (4,881) (6,251)
Tax 5 (163) 737 714
Loss for the period 3 (905) (4,144) (5,537)
------------ ------------ -----------
Attributable
to:
Equity holders of the
parent (905) (4,144) (5,537)
------------ ------------ -----------
Loss per share
Pence Pence Pence
From continuing operations
Basic 7 (2.97) (13.61) (18.19)
Diluted 7 (2.97) (13.61) (18.19)
Condensed consolidated statement of
comprehensive income
for the six months ended
30 June 2011
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Loss for the period (905) (4,144) (5,537)
----------------- ----------------- ------------
Gains/(losses) on cash
flow hedges 97 (105) 4
Actuarial loss on defined
benefit pension scheme - - (2,014)
Other comprehensive
income 97 (105) (2,010)
Tax relating to
components of other
comprehensive income (25) 29 563
Other comprehensive
income for the period 72 (76) (1,447)
----------------- ----------------- ------------
Total comprehensive
income for the period (833) (4,220) (6,984)
----------------- ----------------- ------------
Attributable to:
Equity holders of the
parent (833) (4,220) (6,984)
----------------- ----------------- ------------
Condensed consolidated statement of financial position
as at 30 June 2011
As at As at As at
31 Dec
30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited)
Notes GBP000 GBP000 GBP000
----------- ------------ ------------ ----------
Non-current assets
Intangible
assets 8 378 820 593
Property, plant and equipment 9 9,387 7,687 8,687
Investment in joint ventures 10 14,883 15,593 15,585
Deferred tax asset 4,043 3,721 4,232
Total non-current assets 28,691 27,821 29,097
Current assets
Inventories 11 23,534 23,726 25,336
Trade and other receivables 5,448 6,589 5,188
Cash and cash equivalents 12 223 20 69
Derivative financial instruments 97 - -
Total current assets 29,302 30,335 30,593
Total assets 57,993 58,156 59,690
------------ ------------ ----------
Current liabilities
Trade and other payables 17,079 14,355 17,575
Borrowings 13 13,864 13,719 14,502
Provisions 2,202 2,046 1,736
Derivative financial instruments - 110 -
Total current liabilities 33,145 30,230 33,813
Non-current liabilities
Retirement benefit obligations 15 3,592 2,444 4,042
Provisions 1,203 1,411 949
Preference shares 641 641 641
Total non-current liabilities 5,436 4,496 5,632
Total liabilities 38,581 34,726 39,445
Net assets 3 19,412 23,430 20,245
------------ ------------ ----------
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 72 368 -
Retained earnings (15,073) (11,351) (14,168)
Equity attributable to equity
holders of the parent 19,412 23,430 20,245
Total equity 19,412 23,430 20,245
------------ ------------ ----------
Condensed consolidated statement of changes in equity
as at 30 June 2011
Equity attributable to equity holders of the parent
---------------------------------------------------------------------------------
Share Share Capital ESOP Hedging and Retained Total
capital premium redemption reserve translation earnings equity
account reserve reserves
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- ----------- -------- ------------ ------------ ----------
Balance at 1
January 2011 7,618 25,926 916 (47) - (14,168) 20,245
-------- -------- ----------- -------- ------------ ------------ ----------
Loss for the
period - - - - - (905) (905)
Other
comprehensive
income for
the period - - - - 97 - 97
Total
comprehensive
income for
the period - - - - 97 (905) (808)
-------- -------- ----------- -------- ------------ ------------ ----------
Tax on items
taken direct
to equity - - - - (25) - (25)
Balance at 30
June 2011
(unaudited) 7,618 25,926 916 (47) 72 (15,073) 19,412
-------- -------- ----------- -------- ------------ ------------ ----------
Condensed consolidated statement of changes in equity
(continued)
as at 30 June 2011
Equity attributable to equity holders of the parent
----------------------------------------------------------------------------
Share Share Capital ESOP Hedging and Retained Total
capital premium redemption reserve translation earnings equity
account reserve reserves
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- ----------- -------- ------------ --------- --------
Balance at 1
January 2010 7,618 25,926 916 (47) 473 (7,328) 27,558
-------- -------- ----------- -------- ------------ --------- --------
Loss for the
period - - - - - (4,144) (4,144)
Other
comprehensive
income for
the period - - - - (105) 29 (76)
Total
comprehensive
income for
the period - - - - (105) (4,115) (4,220)
-------- -------- ----------- -------- ------------ --------- --------
Credit to
equity for
share-based
payments - - - - - 102 102
Tax on items
taken direct
to equity - - - - - (10) (10)
Balance at 30
June 2010
(Unaudited) 7,618 25,926 916 (47) 368 (11,351) 23,430
-------- -------- ----------- -------- ------------ --------- --------
Condensed consolidated statement of changes in equity
(continued)
as at 30 June 2011
Equity attributable to equity holders of the parent
----------------------------------------------------------------------------
Share Share Capital ESOP Hedging and Retained Total
capital premium redemption reserve translation earnings equity
account reserve reserves
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- ----------- -------- ------------ --------- --------
Balance at 1
January 2010 7,618 25,926 916 (47) 473 (7,328) 27,558
-------- -------- ----------- -------- ------------ --------- --------
Loss for the
year - - - - - (5,537) (5,537)
Other
comprehensive
income for
the year - - - - 4 (1,451) (1,447)
Total
comprehensive
income for
the year - - - - 4 (6,988) (6,984)
-------- -------- ----------- -------- ------------ --------- --------
Charge to
equity for
share-based
payments - - - - - (319) (319)
Tax on items
taken direct
to equity - - - - - (10) (10)
Transfer to
retained
earnings - - - - (477) 477 -
Balance at 31
December 2010
(Audited) 7,618 25,926 916 (47) - (14,168) 20,245
-------- -------- ----------- -------- ------------ --------- --------
Condensed consolidated
cash flow statement
for the six months ended
30 June 2011
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Operating activities
Operating loss from
continuing operations (241) (4,552) (5,384)
Adjustments for:
Share of results of joint
ventures 702 (87) (79)
Depreciation of property,
plant and equipment 278 787 1,104
Impairment loss on
property, plant and
equipment - 2,504 2,504
Amortisation of
intangible assets 215 206 433
(Gain)/loss on disposal
of property, plant and
equipment - (2) 6
Charge/(credit) for
share-based payments - 102 (319)
Increase/(decrease) in
provisions 720 (137) (909)
Operating cash flows
before movement in
working capital 1,674 (1,179) (2,644)
Decrease/(increase) in
inventories 1,802 (5,007) (6,617)
(Increase)/decrease in
receivables (260) (598) 802
(Decrease)/increase in
payables (521) (697) 2,523
Contribution to defined
benefit pension scheme (600) (600) (1,200)
Cash from/(used in)
operations 2,095 (8,081) (7,136)
Interest paid (325) (229) (587)
Net cash from/(used in)
operating activities 1,770 (8,310) (7,723)
----------------- ----------------- ------------
Investing activities
Interest received - - 4
Proceeds on disposal of
property, plant and
equipment - 13 121
Purchases of property,
plant and equipment (978) (318) (1,751)
Net cash used in
investing activities (978) (305) (1,626)
----------------- ----------------- ------------
Financing activities
(Decrease)/increase in
bank overdrafts (567) 288 567
(Decrease)/increase in
stocking loan (71) 5,649 6,153
Net cash (used in)/from
financing activities (638) 5,937 6,720
----------------- ----------------- ------------
Net increase/(decrease)
in cash and cash
equivalents 154 (2,678) (2,629)
Cash and cash equivalents
at beginning of period 69 2,698 2,698
Cash and cash equivalents
at end of period 223 20 69
----------------- ----------------- ------------
Notes to the condensed consolidated
financial statements
for the six months ended
30 June 2011
General
1 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
17. The nature of the Group's operations and its principal
activities are set out in note 3.
These financial statements are presented in pounds
sterling because that is the currency of the primary
economic environment in which the Group operates.
Foreign operations are included in accordance with
the policies set out in note 2.
The information for the year ended 31 December 2010
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.
Accounting
2 policies
Basis of
preparation
The half-yearly financial information 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. Whilst the
half-yearly information is presented consistently
with that of the Half-yearly Financial Report 2010,
as permitted, the Group has chosen not to adopt International
Accounting Standard 34, "Interim Financial Reporting",
in preparing these half-yearly financial statements,
and, therefore, this information may not be wholly
compliant with IFRS's.
The half-yearly financial statements are unaudited,
and do not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The Half-yearly
Financial Report, which was approved by the Board
of Directors on 28 July 2011, should be read in conjunction
with the financial statements for the year ended 31
December 2010, which are available on the Group's
website.
Going concern
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 condensed set of
financial statements as applied in the Group's latest
annual audited financial statements.
Operating segment
3 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:
The vehicle sales segment includes the design, development,
assembly, and retailing of new purpose-built taxis,
along with the sale of used vehicles taken in part
exchange, parts, and vehicle maintenance.
The vehicle services segment comprises the taxi finance
business.
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 Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Revenue
Vehicle sales 37,870 32,810 68,369
Vehicle services 803 543 1,188
Total Group 38,673 33,353 69,557
----------------- ----------------- ------------
Result
Vehicle sales 109 (5,105) (6,173)
Vehicle services 352 466 710
SLTI (702) 87 79
Total operating loss
from continuing
operations (241) (4,552) (5,384)
Investment revenues - - 4
Finance costs (501) (329) (871)
Loss before tax (742) (4,881) (6,251)
Tax (163) 737 714
Loss after tax (905) (4,144) (5,537)
----------------- ----------------- ------------
Statement of
financial
position
As at As at As at
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Vehicle sales 21,747 24,115 23,519
Vehicle services 290 135 219
SLTI 14,883 15,593 15,585
Total segment 36,920 39,843 39,323
----------------- ----------------- ------------
Unallocated corporate (3,867) (2,714) (4,645)
Net debt (13,641) (13,699) (14,433)
Total Group 19,412 23,430 20,245
----------------- ----------------- ------------
4 Exceptional items
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Cost of sales
Redundancy and severance
pay - (1,033) (953)
Impairment loss on
property, plant and
equipment - (2,504) (2,504)
- (3,537) (3,457)
Administrative
expenses
Redundancy and severance
pay - - (35)
- (3,537) (3,492)
----------------- ----------------- ------------
5 Tax
UK corporation tax for the six month period is calculated
at 26.5% (2010: 28%), representing the best estimate
of the average annual effective tax rate expected
for the full year, applied to the pre-tax income of
the six month period.
By parliamentary resolution the corporation tax rate
effective from 1 April 2011 is 26%. Further reductions
in the corporation tax rate for future years as announced
in the budget in March 2011 had not been enacted by
30 June 2011.
The tax charge for the period of GBP163,000 (2010:
GBP737,000 credit) has arisen primarily due to the
decrease in the Group's deferred tax asset resulting
from the reduction in Corporation tax rate from 27%
to 26%.
At 30 June 2011 the Group had unused tax losses of
GBP9,847,000 (30 June 2010: GBP8,871,000; 31 December
2010: GBP9,955,000) 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.
6 Dividends
There are no amounts recognised as distributions to
equity holders during the period (2010: nil).
No interim dividend (2010: nil) has been declared.
Loss per ordinary
7 share
The calculation of the basic and diluted loss per
share is based on the following data:
Loss
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Loss for the purposes of
basic and diluted loss
per share being net
loss attributed to
equity holders of the
parent (905) (4,144) (5,537)
----------------- ----------------- ------------
Number of shares
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(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 both basic and diluted loss
per share.
Loss per ordinary
share
Six months ended Six months ended Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
Pence Pence Pence
----------------- ----------------- ------------
Basic (2.97) (13.61) (18.19)
----------------- ----------------- ------------
Diluted (2.97) (13.61) (18.19)
----------------- ----------------- ------------
As the Group incurred a loss for the period, diluted
loss per share is the same as basic loss per share.
8 Intangible assets
Development costs Licences Total
GBP000 GBP000 GBP000
------------------ --------- -------
Cost:
At 1 January and 1 July 2010, and 1
January and 30 June 2011 2,299 90 2,389
------------------ --------- -------
Accumulated amortisation and
impairment:
At 1 January 2010 1,298 65 1,363
Charge for the period 205 1 206
At 1 July 2010 1,503 66 1,569
Charge for the period 218 9 227
At 1 January 2011 1,721 75 1,796
Charge for the period 205 10 215
At 30 June 2011 1,926 85 2,011
------------------ --------- -------
Carrying amount:
At 31 December 2009 1,001 25 1,026
------------------ --------- -------
At 30 June 2010 796 24 820
------------------ --------- -------
At 31 December 2010 578 15 593
At 30 June 2011 373 5 378
------------------ --------- -------
Property,
plant and
9 equipment
Freehold Long Short Plant and Total
land and leasehold leasehold equipment
buildings buildings buildings
GBP000 GBP000 GBP000 GBP000 GBP000
---------- ---------- ---------- ---------- ---------
Cost:
At 1 January 2010 550 4,850 298 40,851 46,549
Additions - - - 318 318
Disposals - - - (13) (13)
At 1 July 2010 550 4,850 298 41,156 46,854
Additions - - - 1,433 1,433
Disposals - - - (17,372) (17,372)
At 1 January 2011 550 4,850 298 25,217 30,915
Additions - - - 978 978
At 30 June 2011 550 4,850 298 26,195 31,893
---------- ---------- ---------- ---------- ---------
Accumulated depreciation
and impairment:
At 1 January 2010 117 566 223 34,972 35,878
Charge for the
period 10 48 11 718 787
Impairment loss - - - 2,504 2,504
Disposals - - - (2) (2)
At 1 July 2010 127 614 234 38,192 39,167
Charge for the
period 8 49 12 248 317
Disposals - - - (17,256) (17,256)
At 1 January 2011 135 663 246 21,184 22,228
Charge for the
period 9 48 11 210 278
At 30 June 2011 144 711 257 21,394 22,506
---------- ---------- ---------- ---------- ---------
Carrying
amount:
At 31 December
2009 433 4,284 75 5,879 10,671
---------- ---------- ---------- ---------- ---------
At 30 June 2010 423 4,236 64 2,964 7,687
---------- ---------- ---------- ---------- ---------
At 31 December
2010 415 4,187 52 4,033 8,687
---------- ---------- ---------- ---------- ---------
At 30 June 2011 406 4,139 41 4,801 9,387
---------- ---------- ---------- ---------- ---------
During the period the Group spent GBP978,000 on plant
and equipment, including GBP805,000 relating to the
Euro V emission compliant taxi scheduled for introduction
by 1 January 2012.
10 Investment in joint ventures
GBP000
------------
Cost:
At 1 January and 1 July 2010, and
1 January and 30 June 2011 16,034
------------
Share of profits/(losses):
At 1 January 2010 (528)
Profit for the period 87
At 1 July 2010 (441)
Loss for the period (8)
At 1 January 2011 (449)
Loss for the period (702)
At 30 June 2011 (1,151)
------------
Carrying amount:
At 31 December 2009 15,506
------------
At 30 June 2010 15,593
------------
At 31 December 2010 15,585
------------
At 30 June 2011 14,883
------------
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.
11 Inventories
As at As at As at
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------ ------------ ------------
Raw materials 5,716 4,027 6,299
Work in progress 1,298 2,269 1,236
Finished goods 16,520 17,430 17,801
23,534 23,726 25,336
------------ ------------ ------------
Finished goods with a carrying amount of GBP13,014,946
(2010: GBP13,445,750) are pledged as security for
the Group's stocking loan facility.
12 Cash and cash equivalents
As at As at As at
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------ ------------ ------------
Cash at banks and in hand 223 20 69
------------ ------------ ------------
Cash at banks and in hand do not attract interest.
13 Borrowings
As at As at As at
30 Jun 2011 30 Jun 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------ ------------ ------------
Bank overdrafts - 288 567
Stocking loan 13,864 13,431 13,935
13,864 13,719 14,502
------------ ------------ ------------
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 GBP1.5m (2010: GBP1.5m) was provided by HSBC Bank
plc ("HSBC") and attracted interest at a rate of 5.0%
(2010: 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.
As agreed with HSBC, the Group's overdraft facility
reduced to GBP1.0m from 1 July 2011.
ii) The Group's stocking loan facility of GBP13.95m (2010:
GBP14.1m) 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 2011 the Group had available GBP1.3m (2010:
GBP1.9m) of undrawn committed borrowing facilities
in respect of which all conditions precedent had been
met. Of this amount GBP0.1m (2010: GBP0.7m) 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.
14 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.
Defined
benefit
15 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
2010 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 2011 is calculated on a year-to-date
basis, based on the 30 December 2010 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 2010.
Contributions of GBP0.6m (2010: GBP0.6m) were paid
into the scheme during the period. Contributions to
the scheme for the six months to 31 December 2011
are likely to be in the region of GBP0.6m.
Related party
16 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 Year Six months Six months Year
ended ended ended ended ended ended
31 Dec 31 Dec
30 Jun 2011 30 Jun 2010 2010 30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------ ------------ ---------- ------------ ------------ ----------
Shanghai LTI - 751 1,404 - - -
------------ ------------ ---------- ------------ ------------ ----------
Shanghai Maple
Automobile
Company Ltd - - - 8,560 3,082 9,756
------------ ------------ ---------- ------------ ------------ ----------
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
31 Dec 31 Dec
30 Jun 2011 30 Jun 2010 2010 30 Jun 2011 30 Jun 2010 2010
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------ ------------ ---------- ------------ ------------ ----------
Shanghai LTI 425 949 436 - - -
------------ ------------ ---------- ------------ ------------ ----------
Shanghai Maple
Automobile
Company Ltd - - - 10,115 1,294 7,892
------------ ------------ ---------- ------------ ------------ ----------
Shanghai LTI ("SLTI") is a related party of the Group
because the Group has a 48% shareholding in the company
(see note 10).
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 10). Other amounts outstanding are unsecured,
with no guarantees given or received. No provisions
have been made for doubtful debts in respect of the
amounts owed by related parties. Amounts outstanding
will be settled in cash.
17 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 QVLFLFDFXBBX
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