Bus maker Optare to keep Leeds site

The firm, which announced a £6.5m loss, said a 17-year lease had been agreed for a site in the Leeds area, as it cuts its manufacturing bases from three to one as part of the turnaround strategy.

Optare said 2010 had been a “very challenging” year with the market down nearly 40 per cent from pre-recession level but added that the new facility would help it to grow.

“As part of the turnaround strategy, a consistent focus has been to reduce from the three manufacturing sites the company had in June 2009 (Rotherham, Blackburn and Leeds) to a single site in order to reduce the group’s break-even point.

“Following closure of the Rotherham site in August 2009, the decision was taken in September 2010 to cease the manufacture of new buses in Blackburn. The site now maintains a relatively small workforce for refurbishment, low-carbon upgrades, product development and some finishing operations...

“The board believes that the new (Leeds) facility will be better able to support the company in its growth phase by significantly increasing capacity enabling us to demonstrate to major operators that we have the ability to deliver fleet volumes. The new optimised plant layout is also expected to considerably improve efficiency.”

Results for the 12 months to December 31 2010 saw Optare nearly halve pre-tax losses after exceptional items from £12m to £6.51m. Revenue fell fell from £79.83m to £52.27m.

Jim Sumner, chief executive, said, “the last two years have been all about the turnaround of Optare from a challenging position. I believe that, with many of the difficulties of the last few years behind us, a new larger factory, the backing of Ashok and our institutional investors we have every reason to look forward to 2011 and beyond with confidence.”