Bus maker sees its future route as getting on board with a partner

The company, which has one of its two operating sites in Leeds, is at an advanced stages of talks with a potential new partner.

On January 7 it revealed it had received a preliminary approach which could lead to an offer being made for the majority of its shares.

Chief executive Jim Sumner told investors at the group's annual general meeting yesterday that the talks continue to be positive and a further announcement will be made in due course.

"The board continues to believe that entering into such a partnership will be a key part of Optare's strategy to realise the full potential of the business by benefiting from joint sales activity, new distribution channels, low cost sourcing and potential technology sharing," he said.

Optare has almost halved its workforce from a peak of 913 full-time staff to 474, resulting in a 2.5m non-recurring redundancy charge.

Earlier this month the group won a 1.9m repair and maintenance contract with Greater Manchester Integrated Transport Authority.

The five-year contract covers the Optare hybrid buses that will start entering service later this year.

The authority's hybrid fleet, which will be one of the largest in the country, will be made up of Optare Solo, Solo SR, Versa and Tempo models.

The group's order book is at a 12-month high and it anticipates stronger UK demand, particularly for single deck buses in 2011 and 2012.

This will be driven by the desire among transport operators to avoid new legislation in 2013 and compliance with Disability Discrimination legislation which is required for all single-decker buses by

2014.