We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mang.Bronze | LSE:MNGS | London | Ordinary Share | GB0005617013 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMMNGS
RNS Number : 0200A
Manganese Bronze Hldgs PLC
26 March 2012
Manganese Bronze Holdings PLC
Monday, 26 March 2012
MANGANESE BRONZE HOLDINGS PLC
ANNUAL RESULTS ANNOUNCEMENT
Manganese Bronze Holdings PLC ("Manganese Bronze" or "the Group"), the leading manufacturer of the distinctive London Taxi, announces its audited results for the year ended 31 December 2011.
Hot Features
Premium
31 Dec 31 Dec %
2011 2010 Variance
Group revenue GBP75.0m GBP69.6m 7.8%
Operating loss
* GBP1.3m GBP1.9m 31.6%
Finance costs GBP0.8m GBP0.9m 8.0%
Loss before tax GBP2.6m GBP6.3m 58.3%
Basic loss per
share 9.95p 18.19p 45.3%
Net debt GBP8.9m GBP14.4m 38.2%
*Before exceptional
items
Financials
-- Record year for export sales of 705 vehicles (2010 : 226) with a further 500 vehicles shipped to Azerbaijan in February 2012 and more orders pending
-- Sales of new taxis in London increased 3.9% to 1,074 vehicles (2010 : 1,034) but sales in the rest of the UK market fell to 428 vehicles (2010 : 619)
-- Operating loss before exceptional items reduced by GBP0.6m to GBP1.3m (2010: GBP1.9m)
-- Group UK operating loss reduced to GBP377,000 before exceptional costs and share of results of joint venture (2010 : GBP2.0m loss)
-- GBP500,000 exceptional cost provided for the future legal costs of litigation relating to driver compensation claims from the 2008 product recall (2010: GBP3.5m exceptional cost of restructuring)
-- GBP7.1m of cash generated from operations (2010 : GBP7.7m used)
Strategy
-- Deliver the profit and cash benefits of restructuring -- Work with Geely on the continuing improvement of quality, sales and profitability of the TX4 internationally -- Develop with Geely the TXn to compete in mainstream taxi markets globally -- Identify and develop further business development opportunities with Geely
Outlook
-- Financial position stabilised and improving with support from extended credit terms by Geely
-- Sluggish UK trading environment: new London taxi regulations expected to benefit current year growth
-- Good prospects for further growth in international markets -- Operating margin improved with a full year effect in current year -- Launch of new Euro V vehicle positively received -- Interim agreement signed for the launch of Geely cars in UK by 2014
-- The Board believes that the Group is well positioned to make further progress in joint initiatives with Geely
Commenting on the results John Russell, Group Chief Executive said:
"The tough decisions that we have taken in recent years to re-structure the business and develop close ties with Geely through our joint venture are beginning to bear fruit. It was pleasing to see the improvement to the UK core business and we hope to build on this success in the coming year.
The signing of an interim agreement in August 2011 with Geely International to sell and distribute Geely vehicles in the UK is an important milestone towards an even closer working relationship with Geely in the future.
There continues to be much uncertainty over the global economic conditions that will prevail during 2012 and the resulting lack of business confidence, particularly in the UK, makes it very difficult to forecast sales volumes. However the steps that have been taken to reduce and control costs should continue to feed through to increased margins and improved profitability. The Board is confident that, with the ongoing support that it receives from Geely, the Group is well positioned to take advantage of new business opportunities and to make further financial and strategic progress in the current year."
For further information please contact:
Manganese Bronze Holdings PLC
John Russell, Group Chief Executive Tel: +44 (0)24 7657 2108 Peter Johansen, Group Finance Director Tel: +44 (0)24 7657 2214
FTI Consulting
Nick Hasell / Sophie Moate Tel: +44 (0)20 7269 7291
Grant Thornton UK LLP
Philip Secrett / Melanie Frean Tel: +44 (0)20 7383 5100
MC Peat & Co
Charley Peat / John Beaumont /
Andy Cuthill / David Crompton Tel: +44 (0) 20 7104 2334
The information contained in this Release is an extract from the Annual Report and Accounts 2011. However, some references to note and page numbers have been amended to reflect note and page numbers appropriate to this release.
BUSINESS REVIEW
Overview of the year
2011 was a year during which the difficult decisions that were taken in previous years to restructure the business began to work through into improved profitability and positive cash generation. The signing of an interim agreement to distribute Geely vehicles in the UK in August 2011 was an important milestone in the deepening relationship of Geely with Manganese Bronze. The close daily working relationship between the two companies to jointly develop new products and to improve manufacturing and supply chain processes should continue to feed through into improved financial performance in the future.
The cautious optimism which was expressed in the first half of last year that the global economic environment would continue to improve throughout 2011 suffered a setback in the second half of the year when concerns re-emerged over the level of sovereign debt in Greece and other European Union countries. This undermined business confidence which led to a fall in UK GDP in the fourth quarter and the risk of a return to recession in 2012. Against this gloomy back drop, it was encouraging that the Group increased its turnover in 2011 by 7.8% to GBP75.0 million (2010 : GBP69.6 million) due to record export sales.
There was an unexpected increase in the level of warranty claims received during the year and this impacted our results by an estimated GBP500,000. The main cause of this problem has been traced back to the recurrence of an increase in the failure rate of radiators which has been rectified by a more robust design supplied by a different component manufacturer.
The increased dependency on parts sourced from Chinese component manufacturers via the SLTI joint venture has increased the importance of the effective management of our extended supply chain. The management of issues within the supply chain is on-going with respect to quality of parts supplied and rework processes are in place in the UK to ensure that the quality of our delivered vehicles to customers is not compromised. The effective resolution of these issues with SLTI and the Chinese suppliers is making progress. The Group is working closely with Geely to improve the quality and consistency of parts and there are now five Manganese Bronze employees based in China to oversee quality and manufacturing processes. This is in addition to a series of nine joint kaisen improvement projects aimed at the continual improvement of products and processes.
The outsourcing of components from China though the SLTI joint venture has continued with the rear axle sub-assembly being the final major component to be transferred to a Chinese manufacturer during the year. The full year financial benefit of this outsourcing programme should help to further improve profit margins in 2012.
Maintaining our reputation for producing high quality, reliable and durable vehicles is essential for the ongoing success of the business. The launch of the new Euro V TX4 in January 2012 provided the opportunity to extend our standard three year or 100,000 miles warranty to give an unlimited three year warranty for the core engine which has been positively received by customers.
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. 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 has provided an additional GBP500,000 as an exceptional cost to meet the future legal costs of this action in addition to the GBP89,000 that was expensed during the year.
The operating loss before exceptional items fell by GBP0.6 million, to GBP1.3 million (2010: GBP1.9 million), reflecting the actions to return the Group to profitability that were completed progressively through 2011.
The Group has been awarded a EUR1.8 million grant for its role in a consortium that is developing a fuel cell powered zero emission TX4 and this is one of several green technology projects in which the Group continues to invest.
UK trading/market
In the year to 31 December 2011, 1,502 new vehicles were sold in the UK (2010: 1,653), a reduction of 9.1%. However, sales in London grew for the second consecutive year and increased by 3.9% to 1,074 vehicles (2010 : 1,034). Sales in other parts of the UK fell by 30.9% to 428 vehicles (2010 : 619). This contrasting performance reflects the economic differences between the London area which is showing signs of recovery and the rest of the country which is still struggling with high levels of unemployment and a continuing lack of business confidence.
As reported in the preceding four years, our overall UK sales performance continues to be affected by drivers' confidence to commit themselves to the purchase of a new taxi during a sustained period of economic weakness. The reputation for reliability and durability of the traditional London taxi allows drivers to delay the replacement of their taxis during periods of uncertainty and lower earnings. Consequently, we have seen over the last three years an increase in the average age of the vehicles taken in as part exchange from 39 months in 2009 to 49 months in 2011.
Sales volumes were spread fairly evenly over the year with 748 (49.8%) vehicles sold in the first half and 754 (50.2%) in the second half of the year. Transport for London publishes statistics on the number of taxis licensed in London for the first time. These statistics confirm that the TX4 is continuing to outperform the Mercedes Vito with its market share increasing from 73.3% in 2010 to 76.6% in 2011.
In 2009 we began to restructure our UK dealership network by terminating the contracts of our independent dealers, converting them to service dealers, and announcing the opening new wholly-owned dealerships in Edinburgh, Glasgow and Coventry. During 2011 we completed this restructuring programme when we closed the Birmingham dealership and relocated it to new premises adjacent to the factory site in Coventry. The new network is working well and, together with a sales call centre that is based in Coventry, has allowed us to develop closer links with our customer base.
As part of the Mayor of London's Air Quality Strategy, new regulations came into force in London from 1 January 2012 that prohibit vehicles over 15 years old from being re-plated, and this offers the opportunity in the coming years for increased sales of both new and used vehicles for the Group. There is evidence that a number of taxi owners took the opportunity in the fourth quarter of 2011 to re-plate their vehicles early in order to get another year of usage from their vehicles and thus the impact of the change in regulations is not expected to feed through into increased sales until the second half of 2012.
Despite the challenging new vehicle sales environment, the taxi finance business has had another strong year with a 10% increase in its operating profit. The Group's relationship with Black Horse Taxi Finance, part of the Lloyds Banking Group PLC, remains strong.
SLTI and international sales
The winning of an order in 2011 for 1,000 taxis from the Baki Taksi Company in Azerbaijan enabled the Group to achieve record export sales of 705 vehicles (2010: 226). However, difficulties in confirming the finance for a further tranche of 500 vehicles delayed the despatch of these taxis until February 2012. The Baki Taksi Company has indicated that it wants to place further orders for up to 3,000 more vehicles over the next two years and negotiations are progressing well but securing finance is likely to remain a constraining factor. The success of the Azerbaijan project has created interest in The London Taxi Service concept in other parts of the world with particular interest being shown in Italy, India and the Middle East.
The delay in despatching the Azerbaijan vehicles and inflationary cost increases in China caused a loss of GBP1.9 million (2010 : GBP0.2 million profit) in the SLTI joint venture of which the Group's 48% share was GBP0.9 million (2010 : GBP0.1 million). The TX4 manufacturing operation suffered a loss of GBP1.7 million (2010 : GBP1.7 million loss) and its subsidiary, the Shanghai Maple Tooling Company ("SMTC") lost GBP0.2 million (2010 : GBP1.9 million profit). SLTI continued to benefit from Chinese Government grants of GBP2.0 million (2010 : GBP0.8million) but these are not expected to be available in future years. The organisational and cost structure of the SLTI joint venture is under review which is likely to result in a restructuring of this business unit in order to restore its profitability.
The uncertainty arising from political unrest in the Middle East and a lack of global bank liquidity hampered sales in some export markets. The ability to secure reliable finance for international trade is likely to continue to be an obstacle to meeting the growing demand for TX4 taxis in developing regions of the world. Despite these financing difficulties, the objective remains to continue to build on the success of The London Taxi Service concept to achieve a substantial export sales rate in excess of 1,000 vehicles per annum into our international markets whilst supporting Geely in their efforts to improve sales in China and Asia.
Shanghai Maple Automobile Company Limited is in discussions to appoint a new distributor in China, Hong Kong and Macau to exclusively market and service the TX4 with an expectation of selling 3,000 vehicles over the next three years using The London Taxi Service concept.
Initiatives with Geely
In August 2011, the Group signed an interim framework agreement with Geely International Corporation for the exclusive right to distribute Geely vehicles and spare parts in the UK together with the provision of after-sales services. The intention is to launch a right-hand drive version of the Geely Emgrand EC 718 in the UK by 2014. Testing and development work has progressed well with the vehicle achieving a four star Euro NCAP rating. This achievement generated a substantial amount of positive press coverage and considerable interest has been received from UK car dealerships that are keen to become associated with this new brand. Discussions are ongoing to put in place a comprehensive agreement for the UK distribution rights for Geely products which is expected to be signed later this year.
Work has also continued on developing the specification of the TXn, a new saloon based global taxi for SLTI production. By reflecting the iconic style and look of the London Taxi shape, the TXn will address the mainstream lower cost but higher volume global taxi market and will supplement the TX4 which caters for the higher value end of the market. Geely has confirmed its willingness to fund the majority of the development costs of this vehicle which will be project led by Manganese Bronze personnel.
The Euro V compliant TX4 was launched in January 2012. The investment cost to date was GBP3.0 million and the programme was delivered in partnership with VM Motori and Geely.
In anticipation of the launch of the EC 718 in the UK, MBH has incorporated a new subsidiary, Geely Automobile Limited. In conjunction with Geely, the Group is reviewing the management and organisational structure of its UK operations and the SLTI joint venture with the objective of further improving efficiency, reducing costs and minimising risks.
Cash, funding and dividends
Following the agreement by Geely to provide an extension of credit terms to help fund the supply of components from China, together with tight controls over working capital, the Group's liquidity position has improved considerably during the year. There was a GBP7.8 million cash inflow from operations (2010 : GBP7.1 million outflow) which funded a GBP3.8 million reduction in debt (2010 : GBP6.7 million increase).
During the year ended 31 December 2011 the operating cash inflow before movements in working capital increased by 126% to GBP0.7 million (2010: GBP2.6 million outflow). Working capital reduced by GBP8.3 million (2010: GBP3.3 million) which included a reduction in inventory of GBP2.3 million (2010: GBP6.6 million increase) and an increase in creditors of GBP6.0 million With pension contributions of GBP1.2 million (2010: GBP1.2 million) and interest payments of GBP0.7 million (2010: GBP0.6 million), net cash generated in operations for the year was GBP7.1 million (2010: GBP7.7 million used).
As at 31 December 2011, the Group had net cash balances of GBP1.8m (2010 : GBP0.5 million overdraft) and a stocking loan of GBP10.7 million (2010: GBP13.9 million). The Group had a GBP1.0 million (2010: GBP1.5 million) overdraft facility provided by HSBC Bank plc, and a stocking loan facility of GBP13.9 million (2010: GBP13.9 million) provided by the Lloyds Banking Group PLC. At the year end the Group had GBP6.0 million (2010: GBP1.0 million) of headroom on its undrawn committed borrowing facilities.
Dividends will not be paid until the Group returns to profitability and has sufficient distributable reserves.
The Board
Tony Pearman, Group Finance Director, retired at the end of October 2011 after 15 years' service with the Group. The Board would like to thank Tony for his significant contribution that he has made to the Group.
Peter Johansen was recruited and appointed Group Finance Director on 1 December 2011. Peter is a Chartered Accountant with banking and corporate finance experience and has worked for a number of large multi-national companies which led to his involvement in several Chinese businesses and joint ventures.
We were also delighted to welcome to the Board Daniel Li, the Chief Financial Officer of Zhejiang Geely Holding Group, who was appointed on 13 December 2011, replacing Frank Cao. The Board is grateful to Frank Cao for his valuable contribution in helping to strengthen our relationship within the SLTI joint venture.
Current trading and prospects
All of the projects and initiatives to return the Group to profitability, namely the restructuring of UK manufacturing operations and UK dealer network and the Chinese supply of parts, have now been completed. Progress continues with the support of Geely on new business opportunities.
Trading in the first two months of the new financial year has been sluggish reflecting a continuing lack of business confidence in the UK. The change in the regulations in London that prohibits the re-plating of vehicles over 15 years old should generate additional new and used vehicle sales in the coming months but this impact is expected to occur in the second half of the year. Sales in international markets are likely to be affected by the availability of trade finance and the lack of liquidity in the banking sector continues to restrain growth in export markets.
The relationship with Geely is crucial to the Group's long term success. The support provided by Geely to date has enabled the re-structuring of Coventry and a significant reduction in the break even point for the UK manufacturing operation. Geely's further support with extended trading terms, the development of new products and potential appointment of the Group to be Geely's distributor in Europe are evidence of both the value to the Group of the relationship and its strength.
The Board is confident that, with the continuing credit terms available from Geely, the continued support of the Group's bankers, and the improvement in operating margins delivered by restructuring, the Group is well positioned to return to profitability in 2012 and make further progress with joint initiatives with Geely.
Going concern
With the projects and initiatives to return the Group to profitability and cash generation, and the extended credit terms agreed with Geely, the risk profile of the Group has improved, despite the effects of the ongoing challenging economic environment.
The Group is compliant with all terms of finance facilities and these have been renewed. Management plans are in place to seek to mitigate financial risks and these have been stress tested.
Current economic conditions create uncertainty, particularly over the level of demand for the Group's products. For these reasons, a sensitivity analysis has been performed on the Group's forecasts and financial projections to take account of changes in trading performance. This analysis shows that the Group will be able to operate within the level of its borrowing facilities. As a consequence, and after making other relevant enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Board has continued to adopt the going concern basis in preparing the Group's 2011 Annual Report & Accounts.
The principal risks and uncertainties to which the Group is exposed are detailed in the Group's Annual Report and Accounts 2011.
Statement of accounting policies
The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") in issue and effective for periods commencing on or after 1 January 2011. The Group's accounting policies are set out in note 3 of the notes to the Annual Report and Accounts 2011.
Review of performance for the year
The table below sets out the key financial performance indicators which are closely monitored by the Directors and management throughout the year and which are measured against preset targets.
Year ended Year ended
31 Dec 2011 31 Dec 2010 % Variance
New vehicle sales volumes
- UK 1,502 1,653 (9.1%)
- Overseas 705 226 212%
- Total 2,207 1,879 17.5%
Revenue GBP75.0m GBP69.6m 7.8%
Operating loss before exceptional items (GBP1.3m) (GBP1.9m) 31.6%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
GBP0.6m (GBP0.4m) 243%
Exceptional items (GBP0.5m) (GBP3.5m) 85.7%
Finance costs (GBP0.8m) (GBP0.9m) 8.0%
Loss before tax (GBP2.6m) (GBP6.3m) 58.3%
Net assets GBP16.0m GBP20.2m (21.0%)
Basic loss per share (9.95p) (18.19p) 45.3%
Operating cash flow GBP7.1m (GBP7.7m) 193%
Net cash / (overdraft) GBP1.8m (GBP0.5m) 460%
Net debt (GBP8.9m) (GBP14.4m) 38.2%
Revenue
For the year ended 31 December 2011 total revenue was GBP75.0 million (2010: GBP69.6 million), an increase of 7.8%. UK new vehicle sales volumes declined by 9.1% to 1,502 (2010: 1,653), whilst international new vehicle sales increased by 212% to 705 (2010: 226).
Operating loss before exceptional items
The Group's operating loss before exceptional items reduced by GBP0.6 million (30.8 %) to GBP1.3 million (2010: GBP1.9 million). The core UK business returned an operating loss of GBP377,000 (2010 : GBP2.0m loss) and the SLTI joint venture made an operating loss of GBP1.9m (2010 : GBP165,000 profit) of which the Group's share of the loss was GBP932,000 (2010 : GBP79,000 profit).
Exceptional items
Exceptional costs of GBP0.5 million were provided for during the year (2010: GBP3.5 million exceptional cost of restructuring) for future legal costs relating to litigation brought by drivers for lost earnings and other consequential losses arising from the 2008 product recall.
Finance costs
The net finance expense reduced by GBP0.1 million to GBP0.8 million due to higher stocking finance charges that were offset by a reduction in the net interest payable on the defined benefit pension scheme liability.
Net assets
The Group's net assets have reduced to GBP16.0 million (2010: GBP20.2 million), an increase in trade and other receivables of GBP11,000 was more than offset by reductions in inventory of GBP2.3 million and an increase in trade and other payables of GBP6.0 million. The carrying value of intangibles, property, plant and equipment, and investments reduced by GBP0.3 million, net debt fell by GBP5.5 million, but retirement benefit obligations increased by GBP0.4 million and provisions by GBP0.7 million.
Operating cash flow
Net cash generated in operations for the year was GBP7.1 million (2010: GBP7.7 million used). There was an operating cash inflow, before movements in working capital, of GBP0.7 million (2010: GBP2.6 million outflow). Working capital reduced by GBP8.3 million (2010: GBP3.3 million increase), including a reduction in inventory of GBP2.3 million (2010: GBP6.6 million increase). Pension contributions were GBP1.2 million (2010: GBP1.2 million) and interest payments were GBP0.7 million (2010: GBP0.6 million),
Pensions
The Group's pension deficit, for the closed defined benefit scheme, increased to GBP4.4 million (2010: GBP4.0 million) in the year, after contributions of GBP1.2 million (2010: GBP1.2 million), due principally to a decrease in the discount rate to 4.7% from 5.4%. The assumptions underpinning the scheme valuation are disclosed in note 19 to the consolidated financial statements. In conjunction with the scheme actuaries and trustees, the Group has an agreed funding structure in place.
Cautionary statement
This Business Review has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Business Review should not be relied on by any other party for any other purpose.
The Business Review 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.
Consolidated income statement
for the year ended 31 December 2011 Year ended Year ended Year ended Year ended Year ended
Year ended 31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010 31 Dec 2011
31 Dec 2010
Before Before Exceptional Exceptional
After After exceptional exceptional items items
exceptional exceptional
items items (note 3) (note 3) items items
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue 1&2 74,980 69,557 - - 74,980 69,557
Cost of sales (66,435) (63,333) - (3,457) (66,435) (66,790)
Gross profit / (loss) 8,545 6,224 - (3,457) 8,545 2,767
Distribution costs (3,684) (3,790) - - (3,684) (3,790)
Administrative expenses (5,238) (4,405) (500) (35) (5,738) (4,440)
Share of results of joint ventures (932) 79 - - (932) 79
Operating loss (1,309) (1,892) (500) (3,492) (1,809) (5,384)
Investment revenues - 4 - - - 4
Finance costs (798) (871) - - (798) (871)
Loss before tax (2,107) (2,759) (500) (3,492) (2,607) (6,251)
Tax 4 (523) 38 100 676 (423) 714
Loss for the year (2,630) (2,721) (400) (2,816) (3,030) (5,537)
Attributable to:
Equity holders of the parent (3,030) (5,537)
Pence Pence
Loss per share
From continuing operations
Basic and diluted 6 (9.95) (18.19)
Consolidated statement of comprehensive income
for the year ended 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Notes GBP000 GBP000
Loss for the year (3,030) (5,537)
(Loss) / Gain on cash flow hedges (165) 4
Actuarial loss on defined benefit pension scheme 19 (1,441) (2,014)
Other comprehensive income (1,606) (2,010)
Tax relating to components of other comprehensive income 383 563
Other comprehensive income for the year (1,223) (1,447)
Total comprehensive income for the year (4,253) (6,984)
Attributable to:
Equity holders of the parent (4,253) (6,984)
Consolidated statement of financial position
as at 31 December 2011
As at As at
31 Dec 2011 31 Dec 2010
Notes GBP000 GBP000
Non-current assets
Intangible assets 7 234 593
Property, plant and equipment 8 9,690 8,687
Investment in joint ventures 9 14,653 15,585
Deferred tax asset 10 4,192 4,232
Total non-current assets 28,769 29,097
Current assets
Inventories 11 23,032 25,336
Trade and other receivables 12 5,199 5,188
Cash and cash equivalents 12 1,799 69
Total current assets 30,030 30,593
Total assets 58,799 59,690
Current liabilities
Trade and other payables 15 23,616 17,575
Borrowings 13 10,700 14,502
Provisions 16 2,170 1,736
Derivative financial instruments 14 165 -
Total current liabilities 36,651 33,813
Non-current liabilities
Retirement benefit obligations 19 4,405 4,042
Provisions 16 1,103 949
Preference shares 17 641 641
Total non-current liabilities 6,149 5,632
Total liabilities 42,800 39,445
Net assets 15,999 20,245
Equity
Share capital 18 7,618 7,618
Share premium account 25,926 25,926
Capital redemption reserve 916 916
Employee Share Ownership Plan ("ESOP") reserve (47) (47)
Hedging and translation reserves (165) -
Retained earnings (18,249) (14,168)
Total equity attributable to equity holders of the parent 15,999 20,245
Consolidated statement of changes in equity
as at 31 December 2011
Equity attributable to equity holders of the parent
Share Capital Hedging and
Share
premium redemption ESOP translation
Retained Total
capital account reserve reserve reserves earnings equity
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 7,618 25,926 916 (47) - (14,168) 20,245
Loss for the year - - - - - (3,030) (3,030)
Other comprehensive income for the year - - - - (165) (1,058) (1,223)
Total comprehensive income for the year - - - - (165) (4,088) (4,253)
Charge to equity for share- based payments - - - - - 7 7
Tax on items taken direct to equity - - - - - - -
Balance at 31 December 2011 7,618 25,926 916 (47) (165) (18,249) 15,999
Consolidated cash flow statement
for the year ended 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Operating activities
Operating loss from continuing operations (1,809) (5,384)
Adjustments for:
Share of results of joint ventures 932 (79)
Depreciation of property, plant and equipment 613 1,104
Impairment loss on property, plant and equipment - 2,504
Amortisation of intangible assets 359 433
(Profit) / loss on disposal of property, plant and equipment (1) 6
Charge/ (credit) for share-based payments 7 (319)
Increase / (decrease) in provisions 588 (909)
Operating cash flows before movement in working capital 689 (2,644)
Decrease / (increase) in inventories 2,304 (6,617)
(Increase) /decrease in receivables (11) 802
Increase in payables 6,041 2,523
Contribution to defined benefit pension scheme (1,200) (1,200)
Cash generated by / (used in) operations 7,823 (7,136)
Interest paid (676) (587)
Net cash generated by / (used in) operating activities 7,147 (7,723)
Investing activities
Interest received - 4
Proceeds on disposal of property, plant and equipment 116 121
Purchases of property, plant and equipment (1,731) (1,751)
Net cash used in investing activities (1,615) (1,626)
Financing activities
(Decrease) / increase in bank borrowings (567) 567
(Decrease) / increase in stocking loan (3,235) 6,153
Net cash from financing activities (3,802) 6,720
Net increase / (decrease) in cash and cash equivalents 1,730 (2,629)
Cash and cash equivalents at beginning of year 69 2,698
Cash and cash equivalents at end of year 1,799 69
Notes to the consolidated financial statements
1 Revenue
An analysis of the Group's revenue is as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Continuing operations
Sale of goods 73,099 67,957
Rendering of services 1,881 1,600
74,980 69,557
Investment income - 4
Total revenue 74,980 69,561
2 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:
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 taxi finance and, previously, the advertising business based in the United States of America, which was closed in August 2010.
The Shanghai LTI ("SLTI") segment is the joint venture based in Shanghai, China, which assembles the London Taxi under license from the Group (see note 9).
Segmental information about these businesses, which all relate to continuing operations, is presented below:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Revenue
Vehicle sales 73,360 68,369
Vehicle services 1,620 1,188
Total Group 74,980 69,557
Result
Vehicle sales (2,043) (6,173)
Vehicle services 1,166 710
SLTI (932) 79
Total operating loss from continuing operations (1,809) (5,384)
Investment revenues - 4
Finance costs (798) (871)
Loss before tax (2,607) (6,251)
Tax (423) 714
Loss after tax (3,030) (5,537)
Head office costs have been allocated to segments based on operating loss. There are no inter-segment sales.
The exceptional costs of GBP500,000 disclosed in note 3 relate to the vehicle sales segment.
There have been no major customers requiring separate disclosure in the current or prior year.
Other segment information
Additions to property, Impairment losses
plant and equipment Depreciation and amortisation recognised in income Year ended Year ended Year ended Year ended Year ended
Year ended
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Vehicle sales 1,731 1,751 957 1,537 - 2,504
Vehicle services - - - - - -
Total Group 1,731 1,751 957 1,537 - 2,504
Statement of financial position
Total assets Total liabilities Net assets/(liabilities)
As at As at As at
As at As at As at
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Vehicle sales 40,727 42,877 26,202 19,358 14,525 23,519
Vehicle services 172 219 - - 172 219
SLTI 14,653 15,585 - - 14,653 15,585
Total segment 55,552 58,681 26,202 19,358 29,350 39,323
Unallocated corporate 1,448 940 5,898 5,585 (4,450) (4,645)
Net funds/(debt) 1,799 69 10,700 14,502 (8,901) (14,433)
Total Group 58,799 59,690 42,800 39,445 15,999 20,245
Geographical information
The Group's operations are located in the United Kingdom and China.
The following table provides an analysis of the Group's sales by geographical location and by origin:
Sales by origin Sales by location
Year ended Year ended
Year ended Year ended
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000
United Kingdom 61,208 64,414 61,208 64,414
Rest of Europe - 1,409 548 931
North America - - - -
Asia 13,772 3,734 2,950 1,420
Rest of world - - 10,274 2,792
Total Group 74,980 69,557 74,980 69,557
The following is an analysis of the carrying amount of segment net assets analysed by the geographic area in which the assets are located:
Carrying amount of segment Carrying amount of
non-current assets segment net assets
As at
As at As at As at
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000
United Kingdom 9,925 9,280 14,697 23,738
China 14,653 15,585 14,653 15,585
29,350 39,323
3 Exceptional items
Year ended Year ended
31 Dec 2011 31 Dec 2010
Note GBP000 GBP000
Cost of sales
Redundancy and severance pay - (953)
Impairment loss on property, plant and equipment a) - (2,504)
- (3,457)
Administrative expenses
Redundancy and severance pay - (35)
Legal costs b) (500) -
(500) (3,492)
a) Following the decision to cease the manufacture and primer coating ("e-coating") of body panels and chassis in Coventry, and the subsequent decision to import kits of bodies and panels from SLTI for assembly in Coventry, the value of certain TX4 tooling and presses was no longer expected to be recovered through future use in the business, and an impairment loss of GBP2,504,000 was incurred.
b) 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. 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 has provided an additional GBP500,000 as an exceptional cost to meet the future legal costs of this action in addition to the GBP89,000 that was expensed during the year.
The tax effect of exceptional items for the year ended 31 December 2011 was a credit of GBP100,000 (2010: GBP676,000).
4 Tax
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Current tax:
UK corporation tax - -
Adjustments relating to prior periods - -
Deferred tax (note 10)
Origination and reversal of temporary differences 429 (707)
Adjustments relating to prior periods (6) (7)
Total tax charge / (credit) 423 (714)
UK corporation tax is calculated at 26.5% (2010: 28%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rate prevailing in the respective jurisdictions.
Deferred tax has been provided at a rate of 25% being the most recently substantively enacted corporation tax rate. In the Budget on 21 March 2012 the UK Government announced an intention for the main rate of corporation tax to be reduced to 24% in April 2012, to 23% in April 2013 and to 22% in April 2014. A reduction of the corporation tax rate in future years is expected to have the effect of reducing deferred tax assets held by the Group.
The tax charge / (credit) for the year can be reconciled to the loss per the income statement as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Loss before tax (2,607) (6,251)
Tax at the UK corporation tax rate of 26.5% (2010: 28%) (691) (1,750)
Adjustment in respect of prior periods (6) (7)
Tax effect of expenses that are not deductible in determining taxable profit
113 162
Tax effect of deferred tax rate differences 549 255
Tax effect of UK losses not recognised as a deferred tax asset 211 648
Tax effect of share of results of associates 247 (22)
Tax charge / (credit) for the year 423 (714)
In addition to the amount charged to the income statement, deferred tax relating to losses/gains on cash flow hedges amounting to GBPnil (2010: GBP1,000) has been charged directly to other comprehensive income (2010: credited), and deferred tax relating to actuarial losses amounting to GBP383,000 (2010: GBP564,000) has been credited directly to other comprehensive income.
In addition to the amount charged to the income statement and the amount recognised directly in other comprehensive income, deferred tax relating to share-based payments amounting to GBPnil (2010: GBP10,000 charged) has been charged directly to equity.
5 Dividends
No dividends are proposed for the year ended 31 December 2011 (2010: nil).
6 Loss per ordinary share
The calculation of the basic and diluted loss per share is based on the following data:
Loss
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Loss for the purposes of basic and diluted loss per share being net loss attributed to equity holders of the parent
(3,030) (5,537)
Number of shares
Year ended Year ended
31 Dec 2011 31 Dec 2010
Number Number
Weighted average number of ordinary shares for the purposes of basic loss per share
30,438,647 30,438,647
Loss per ordinary share
The denominators used in the calculation of loss per share are the same for both basic and diluted loss per share.
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Pence Pence
Basic (9.95) (18.19)
Diluted (9.95) (18.19)
As the Group incurred a loss for the year, diluted loss per share is the same as basic loss per share.
7 Intangible assets
Development
costs
(note (i)) Licences Total
GBP000 GBP000 GBP000
Cost:
At 1 January and 31 December 2011 2,299 90 2,389
Accumulated amortisation and impairment:
At 1 January 2010 1,298 65 1,363
Charge for the year 423 10 433
At 1 January 2011 1,721 75 1,796
Charge for the year 344 15 359
At 31 December 2011 2,065 90 2,155
Carrying amount:
At 31 December 2010 578 15 593
At 31 December 2011 234 - 234
i) The net book value of development costs comprises TX4 GBPnil (2010: GBP342,000) and low emission TX4 GBP234,000 (2010: GBP236,000).
8 Property, plant and equipment
Freehold Long Short
land and leasehold leasehold Plant and
buildings buildings buildings equipment Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2010 550 4,850 298 40,851 46,549
Additions - - - 1,751 1,751
Disposals - - - (17,385) (17,385)
At 1 January 2011 550 4,850 298 25,217 30,915
Additions (i) - - - 1,731 1,731
Disposals (i) - - - (250) (250)
At 31 December 2011 550 4,850 298 26,698 32,396
Accumulated depreciation and impairment:
At 1 January 2010 117 566 223 34,972 35,878
Charge for the year 18 97 23 966 1,104
Impairment loss - - - 2,504 2,504
Disposals - - - (17,258) (17,258)
At 1 January 2011 135 663 246 21,184 22,228
Charge for the year 18 97 23 475 613
Impairment loss - - - - -
Disposals (i) - - - (135) (135)
At 31 December 2011 153 760 269 21,524 22,706
Carrying amount:
At 31 December 2010 415 4,187 52 4,033 8,687
At 31 December 2011 397 4,090 29 5,174 9,690
(i) During the year the Group spent GBP1,731,000 on plant and equipment, including GBP1,226,000 relating to the Euro V emission compliant taxi scheduled for introduction by 1 January 2012. The Group also disposed of certain of its plant and equipment with carrying amounts of GBP115,000 for proceeds of GBP116,000.
(ii) The freehold property in Broughton Street, Manchester, and long leasehold property in Brewery Road, London, with respective carrying amounts of GBP415,000 and GBP4,187,000, are pledged to secure ongoing borrowings of the Group (see note 13). These properties were valued in 2011 by DTZ, independent valuers, on the basis of market value, at GBP550,000 and GBP2,530,000 respectively. The Directors consider that these valuations broadly represent market value as at 31 December 2011. As the market valuation of the long leasehold property in London is below its carrying value an impairment review has been undertaken of the cash generating unit ("CGU") which occupies the property, the Group's London dealership, and, as the value in use of the CGU is in excess of the carrying value of the property, no impairment charge was made.
(iii) At 31 December 2011, the Group had contractual commitments for the acquisition of property, plant and equipment of GBP517,000 (2010: GBP1,227,000). This relates to the Euro V emission compliant taxi.
9 Investment in joint ventures
GBP000
Cost:
At 1 January 2010, 1 January 2011 and 31 December 2011 16,034
Share of profits/ (losses):
At 1 January 2010 (528)
Profit for the year 79
At 1 January 2011 (449)
Loss for the year (932)
At 31 December 2011 (1,381)
Carrying amount:
At 31 December 2010 15,585
At 31 December 2011 14,653
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.
The Group has 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 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.
10 Deferred tax
The following are the major deferred tax assets recognised by the Group and movements thereon during the current and prior year.
Accelerated Other Retirement
tax temporary
benefit Share-based
depreciation differences obligations payments Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2010 2,036 21 824 84 2,965
Credit/ (charge) to income statement 1,096 (11) (297) (74) 714
(Charge) / Credit to other comprehensive income - (1) 564 - 563
Charge direct to equity - - - (10) (10)
At 1 January 2011 3,132 9 1,091 - 4,232
(Charge) / credit to income statement (57) 7 (373) - (423)
Credit to other comprehensive income - - 383 - 383
Charge direct to equity - - - - -
At 31 December 2011 3,075 16 1,101 - 4,192
At the year end date the Group has unused tax losses of GBP11,212,000 (2010: GBP9,955,000) available for offset against future taxable profits.
No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future taxable profit streams.
Tax losses have no expiry date.
11 Inventories
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Raw materials 5,312 6,299
Work in progress 1,522 1,236
Finished goods 16,198 17,801
23,032 25,336
All classes of inventory are held at cost.
Finished goods with a carrying amount of GBP11,520,000 (2010: GBP13,505,000) are pledged as security for the Group's stocking loan facility (see note 13).
12 Other financial assets
Trade and other receivables
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Trade receivables 3,344 3,134
Allowance for doubtful debts (74) (49)
3,270 3,085
Other debtors 350 905
Prepayments 1,579 1,198
5,199 5,188
The average credit period taken on sale of goods is 16 days (2010: 14 days). Trade and other receivables are non-interest bearing. An allowance has been made for estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience and knowledge of specific customers' financial circumstances.
Included in the Group's trade receivable balances are debtors with a carrying value of GBP988,000 (2010: GBP65,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The average age of these receivables is 94 days (2010: 59 days).
Ageing of past but not impaired receivables
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
30-60 days 363 48
60-90 days 152 4
90-120 days 44 13
120+ days 429 -
Total 988 65
Movement in the allowance for doubtful debts
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Balance at the beginning of the year 49 26
Impairment losses recognised 25 23
Balance at the end of the year 74 49
In determining the recoverability of trade receivables the Group considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The credit risk on trade receivables is limited as the majority of revenue transactions are settled immediately and are, therefore, not on a credit basis.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
Cash and cash equivalents
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Cash at banks and in hand 1,799 69
Cash at banks and in hand do not attract interest.
The fair value of cash and cash equivalents is not materially different from their carrying amount.
Other financial assets are expected to mature within three months of the year end date.
13 Borrowings
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Bank overdrafts - 567
Stocking loan 10,700 13,935
1 0,700 14,502
All borrowings are repayable on demand or within one year.
Other principle features of the Group's borrowings are as follows:
i) The Group's overdraft facility at the year end date of GBP1.0m (2010: GBP1.5m) was provided by HSBC Bank plc 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.
Since the year end date the Group has agreed with HSBC a reduction of GBP0.3m in the overdraft facility to GBP0.7m with effect from 31 March 2012 which is available until 31 March 2013.
ii) The Group's stocking loan facility of GBP13.95m (2010: GBP13.95m) is provided by the Lloyds Banking Group PLC ("Lloyds") and attracts interest linked to the Finance House Base Rate. The stocking loan is secured on the vehicles within finished goods (see note 11).
At 31 December 2011 the Group had available GBP4.2m (2010: GBP1.0m) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met. Of this amount GBP3.2m (2010: nil) 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.
The weighted average interest rates paid during the year were as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
% %
Bank overdrafts 5.56 5.71
Stocking loans 3.25 3.25
The Directors consider that the carrying amount of borrowings approximate to their fair value.
14 Derivative financial instruments
Derivatives that are designated and effective as hedging instruments carried at fair value.
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Forward foreign currency contracts 165 -
The fair value of currency derivatives that are designated and effective as cash flow hedges are deferred in equity. The fair value was determined using quoted prices.
15 Other financial liabilities
Trade and other payables
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Trade payables 15,925 14,117
Social security, payroll and other taxes 2,477 1,926
Other payables 3,681 795
Accruals 1,533 737
Amounts due for settlement within 12 months (shown within current liabilities)
23,616 17,575
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 72 days (2010: 68 days). For most suppliers no interest is charged on the trade payables if payment is made within the pre-agreed credit terms, thereafter, interest may be charged on the outstanding balances at various interest rates.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
Other financial liabilities are expected to mature within six months of the year end date.
16 Provisions
Warranty
GBP000
At 1 January 2011 2,685
Included in current liabilities 1,736
Included in non-current liabilities 949
2,685
Charge to income statement 3,173
Utilised in the year (2,585)
At 31 December 2011 3,273
Included in current liabilities 2,170
Included in non-current liabilities 1,103
3,273
The warranty provision represents management's best estimate of the Group's liability under three-year or 100,000 mile (whichever occurs sooner) warranties granted on new vehicles sold, based on past experience and known product improvements.
It is expected that the majority of this expenditure will be incurred in the next year and that all will be incurred within three years of the year end date.
17 Preference shares
Number GBP000
8.25% cumulative preference shares of GBP1 each
Authorised 684,165 684
Issued and fully paid:
At 1 January 2010, 1 January 2011 and 31 December 2011 640,701 641
Preference shares are irredeemable and carry no voting rights.
The Company has insufficient distributable reserves to pay any dividends. The Preference dividend due in 2011 has been accrued for but not paid.
18 Share capital
Number GBP000
Ordinary shares of 25p each
Authorised
At 1 January 2010 26,256,692 6,564
Authorised during the year 15,743,308 3,936
At 1 January 2011 and 31 December 2011 42,000,000 10,500
Allotted, called up and fully paid:
At 1 January 2010 25,122,334 6,281
Issued during the year 5,347,593 1,337
At 1 January 2011 and 31 December 2011 30,469,927 7,618
19 Contingent liabilities
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. 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 has provided an additional GBP500,000 as an exceptional cost to meet the future legal costs of this action in addition to the GBP89,000 that was expensed during the year. 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.
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.
20 Retirement benefit schemes
Defined contribution scheme
On 1 November 2011 the Group implemented a group personal pension scheme which is open to all employees of Group companies on a money purchase basis. Prior to this date the Group operated a defined contribution pension plan (Account Plus).
The total cost charged to income for these schemes for the year was GBP393,000 (2010: GBP378,000). As at 31 December 2011, contributions of GBP50,000 (2010: GBP38,000) due in respect of the current reporting period had not been paid over to the schemes.
Defined benefit scheme (Manganese Bronze Group Pension Scheme)
The Group also operates a defined benefit scheme (Manganese Bronze Group Pension Scheme) in which members have ceased to accrue additional pensionable service but benefits continue to be linked to salary or Limited Price Indexation (LPI).
The assets of the scheme are held separately from those of the Group under the control of the trustees.
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. Although the scheme primarily provides defined benefits, it also has a small defined contribution section.
Contributions of GBP1.2m (2010: GBP1.2m) were paid into the scheme during the period. No contributions were paid into the defined contribution section of the scheme.
Valuation at
31 Dec 2011 31 Dec 2010
Key assumptions used:
Discount rate 4.70% 5.40%
Expected return on scheme assets 4.60% 5.60%
Salary increases 3.00% 3.60%
Inflation 3.00% 3.60%
Mortality rates:
Pre-retirement PNA00 MC YoB PNA00 MC YoB
Post-retirement: Deferreds PNA00 MC YoB PNA00 MC YoB
Pensioners PNA00 MC YoB PNA00 MC YoB
The rates of increase of pensions in payment were allowed for at the rates set out in the scheme rules, which range between nil and 5%.
Amounts recognised in income in respect of the defined benefit scheme are as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Current service cost - -
Interest cost (1,936) (1,908)
Expected return on scheme assets 1,814 1,624
Past service costs - -
Net charge to income (122) (284)
The total net charge for the year has been included within finance costs in the consolidated income statement.
Actuarial gains and losses have been reported in the statement of comprehensive income. The cumulative amount of actuarial gains and losses recognised in the statement of comprehensive income since the adoption of IFRSs is a loss of GBP4,644,000 (2010: GBP3,203,000 loss).
The actual return on scheme assets was GBP3,158,000 (2010: GBP3,078,000).
The amount included in the statement of financial position arising from the Group's obligations in respect of the defined benefit scheme is as follows:
As at As at
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Present value of defined benefit obligations (39,339) (37,041)
Fair value of scheme assets 34,934 32,999
Deficit in scheme recognised as a liability in the statement of financial position
(4,405) (4,042)
Movements in the present value of defined benefit obligations were as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
At 1 January 37,041 34,083
Interest cost 1,936 1,908
Actuarial losses 2,785 3,468
Benefits paid (2,423) (2,418)
At 31 December 39,339 37,041
Movements in the fair value of the scheme assets were as follows:
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
At 1 January 32,999 31,139
Expected return on assets 1,814 1,624
Gains 1,344 1,454
Employer contributions 1,200 1,200
Benefits paid (2,423) (2,418)
At 31 December 34,934 32,999
The analysis of the scheme assets and the expected rate of return at the year end date was as follows:
Expected return Fair value of assets
As at
As at As at As at
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
% % GBP000 GBP000
Equities 6.0 7.2 11,438 11,368
Bonds
- Gilts 3.0 4.2 11,564 10,564
- Corporate 4.7 5.4 11,682 10,622
Cash 3.0 4.2 250 445
34,934 32,999
The expected rate of return on each asset class has been determined on the basis of market expectations for the rate of return on each asset class over the life of the related obligation, at the year end date.
The five year history of experience adjustments is as follows:
2011 2010 2009 2008 2007
GBP000 GBP000 GBP000 GBP000 GBP000
Present value of defined benefit obligations (39,339) (37,041)
(34,083) (30,947) (34,074)
Fair value of scheme assets 34,934 32,999 31,139 29,392 29,978
Deficit in the scheme (4,405) (4,042) (2,944) (1,555) (4,096)
Experience adjustments on scheme liabilities
Amount (GBP000) 19 (1,985) (174) 498 34
Percentage of scheme liabilities (%) - (5.4) (0.5) 1.6 0.1
Experience adjustments on scheme assets
Amount (GBP000) 1,344 1,454 1,110 (1,548) 3
Percentage of scheme assets (%) 3.8 4.4 3.6 (5.3) 0.0
The estimated amounts of contributions expected to be paid to the scheme during the current financial year is GBP1,200,000.
21 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. Transactions between the Group and its related parties are disclosed below.
Trading transactions
During the year, the Group entered into the following transactions with related parties who are not members of the Group.
Sale of goods Purchase of goods
Year ended Year ended
Year ended Year ended
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000
Shanghai LTI 2,518 1,404 - -
Shanghai Maple Automobile Company Limited - - 16,077 9,756
The following amounts were outstanding at the year end date.
Amounts owed by related parties Amounts owed to related parties
As at
As at As at As at
31 Dec 2011 31 Dec 2010 31 Dec 2011 31 Dec 2010
GBP000 GBP000 GBP000 GBP000
Shanghai LTI 533 436 - -
Shanghai Maple Automobile Company Limited - - 11,070 7,892
Shanghai LTI ("SLTI") is a related party of the Group because the Group has a 48% shareholding in the company (see note 9).
Shanghai Maple Automobile Company Limited ("Maple") is a related party of the Group because it is 90% controlled by Zhejiang Geely Holding Group, which is wholly owned by Mr Li Shu Fu and his associates. Mr Li Shu Fu is Chairman of Geely Automobile Holdings Limited, 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 2010, the Group pledged its shares in SLTI as security over the amounts owed to Maple (see note 9). 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.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 "Related Party Disclosures".
Year ended Year ended
31 Dec 2011 31 Dec 2010
GBP000 GBP000
Short-term employee benefits 901 935
Post-employment benefits 116 84
1,017 1,019
22 The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010, but is derived from those accounts. Statutory accounts for the year ended 21 December 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Company's Annual General meeting. The Auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
23 The 2011 Annual Results, and the full financial statements that comply with IFRS, were approved by the Board of Manganese Bronze Holdings PLC on 25 March 2012.
24 The 113th Annual General Meeting of Manganese Bronze Holdings will be held at LTI Limited, Holyhead Road, Coventry, CV5 8JJ on 17 May 2012 at noon.
25 Copies of this announcement may be obtained from the Company Secretary, Manganese Bronze Holdings PLC, Holyhead Road, Coventry, CV5 8JJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JAMLTMBTTBMT
1 Year Manganese Bronze Chart |
1 Month Manganese Bronze Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
