Manganese seeks government help as cab sales fall

Peter Stiff

Manganese Bronze, the maker of London’s black cabs, revealed today that it was seeking assistance from the Government after it reported a sharp fall in the sales of taxis and swung to a full year loss.

The company said it had sought financing help from the Government, as part of the car industry's £2.3 billion rescue package, to support its environmental initiatives and mitigate potential additional risk.

Manganese said that risks to the business had increased significantly over the past year when sales fell and financing for cabbies to buy taxis became harder to obtain as the British economy fell into recession and banks clamped down on lending.

The group is also at risk from the loss of key suppliers, with only a single source for almost every component used, which it said could lead to “major funding consequences” if production had to be suspended.
It also cautioned that the restriction of credit from suppliers could have a “marked effect” on its working capital.

The warning came as the group reported a 37.5 per cent fall in annual new vehicle sales from 4,147 units to 1,951 over 17 months, during which time the company changed its reporting period.

Poor sales and challenging economic conditions saw the group slump to a pre-tax loss of £14.2 million over the period to December 31, compared to a previous profit of £4.9 million.

Profits were also hit by writedowns on the value of its used vehicles and redundancy costs, combined with costs associated with the recall of some taxis due to several under bonnet fires.

Manganese has also been forced to axe its final dividend as part of an agreement to renew its overdraft facility.

In an attempt to reduce costs the group said that it had cut 20 per cent of its workforce and stopped production for the equivalent of about six weeks.

It also revealed that from the beginning of February this year all employees, including directors, had agreed a 10 per cent pay cut.

John Russell, chief executive of Manganese Bonze, said that 2008 had been a challenging year, with sales and margins under pressure, and that current trading continues to be adversely impacted by the wider downturn in the automotive market.

The one bright spot for the company is its expansion into China, where commercial production has now started in Shanghai, with indicative orders for 8,000 vehicles.

Manganese shares, which have been hammered over the past year, fell 9p to 58.5p.

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article5851227.ece

Nothing to rejoice about, every manufacturer is feeling the bite. I hope LTI can come out of this with a bail-out, otherwise we are in deep trouble and will be at the mercy of bread van converters.

Some ask form help because they need it and some do it because they think the'll get it anyway under today's economic climate. Specialist manufactutrer has always has a limited market and their adverts about how brilliant TX4 is and how ell it was selling was ajust a big lie then?

Hi Tony, welcome back, I thought we lost you.
Please read the news article again, it's not only because of dropping sales but share price going down, lack of new money and dwindling suppliers that are hampering the company. As Aftab said, the taxi trade needs LTI to contiue.

Ex-Northfield MP Roger King's warning on manufacturing jobs

Mar 10 2009 by Jon Griffin, Birmingham Mail

TOP UK industry boss Roger King – who is campaigning for a £10 million emergency loan for LDV from Birmingham City Council – has warned that Britain could become “a nation of coffee shops”.

The former Northfield Tory MP, who is chief executive of the Road Haulage Association, said firms like LDV could go to the wall unless government help was provided urgently.

At a VIP dinner at the Mansion House in the City of London tonight, Mr King was due to tell 350 dignitaries: “As the recession tightens its icy grip, all over the UK, businesses, especially those engaged in manufacturing, will reel from the shock.

“Already the motor industry is a prime victim. In the West Midlands Jaguar Land Rover is striving to meet the challenge. But for LDV and taxi maker Manganese Bronze it may be too much to hope for survival unless help is given.

“Are we to abandon manufacturing in the UK? Are we doomed to become a nation of coffee shops?

“We are not talking about throwing money at basket cases, but wealth creators temporarily stranded by the current financial tsunami.

“It is no good saving the banks if we let go those that could make money, for where will future jobs come from?”

Mr King, who last week called for Birmingham City Council to stump up £10 million for cash-stricken LDV and for business secretary Lord Mandelson to match it from government coffers, said solving the financial sector’s problems could not be at the expense of the rest of UK plc.

“Great cities like Birmingham will need help to re-establish prosperity and to encourage technical excellence.

“I do not advocate protectionism, for we are a trading nation first and foremost. But we have seen to our cost overtrading on financial services is not the way to build a secure national future.

“The Government must re-balance our economy and allow companies such as LDV and Manganese Bronze the chance to invest in greener technology and thereby create a secure future for both themselves and for us.”

Looks like the cab trade will be well and truly f***d shortly I hope not though for your lads sake, but things not looking so good are they?

Not quite Tony.
The 3.2 Million setback for the recall of the faulty TX4 has hit the firm hard but not down and out yet. Don't forget they can manufacture twice as many black cabs in China than they do here, and production has already started there in January. It seems to me they will use this as an excuse to move all of the production to China, and so the black cabs are not about to disappear just yet. It may lead to a rethink on the restriction as a must have vehicle by some of the local authorities though, but Sheffield already licenses the alternatives anyway so don't dance in the street just yet at demise of the black cab Tony boyo.

Share price: 67.00p
It's rising but ever so slowly.

It's not all bad yet, we are all in the same boat and all are going to be suffering worse yet.

If they sell cab cheep then more drivers afford can buy cabs brand new but too expencive at the moment.

Shre price gone up to 70 pence today so far and every penny counts
Things will sort themselves out, just keep working at it.