News blog
Optare
- BY: Andrew Hore |
- POSTED: 27/05/2009 |
Bus manufacturer Optare has found that integrating its acquisitions has been more difficult than expected.
The shares had started to recover in recent weeks but that was reversed with the share price falling 2.5p to 5.75p, which values Optare at £6.24m.
Optare has changed significantly over the past year. It reports 2008 revenues of £49.2m but on a pro forma basis the figure is £82.4m. Restructuring costs of £7.21m added to the operating loss. The total loss for the year was £12m, including a £610,000 loss from discontinued coach refurbishment activities.
The core Blackburn-based Darwen business was acquired from administration and then the Leeds-based Optare business was acquired during the year.
The closure of a factory in Rotherham cost £1.7m while the costs of financing and organising the acquisitions was £1.4m. The biggest headache was the result of the attempt to establish a foothold in the market. The contracts that were entered into could not easily be fulfilled. This led to a provision of £3.5m.
Net debt was £9.4m at the end of February 2009 and there were outstanding provisions of £3.83m which will lead to cash outflows over more than one year.
Jim Sumner joins as chief executive on 1 June 2009.
The order book is worth £26.1m but trading is still tough. All the temporary workers at the Blackburn factory have been laid off. Demand for double deckers is weak.
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