Fall in demand from recession-hit firms pushes Minorplanet to a loss

The Leeds-based group blamed a fall in demand from small to medium-sized businesses, which were hit by the recession.

The group was also hit by a major shortage in lease funding, due to banks tightening their lending criteria.

Minorplanet has cut costs by reducing its number of UK staff by 40 per cent from 167 to 100 since September 1, 2008.

Despite these setbacks, the company said it had strong support from major shareholders, lease funders and banks during the refinancing.

The company said the financial climate remained very difficult, with funding challenges ahead.

The group is hoping to overcome these problems with a strong sales drive highlighting the fact that its tracking system is environmentally friendly and efficient.

Recent new customer contract wins include AGA Rangemaster and York City Council.

The group is in negotiations over the sale of its Australasian subsidiary.

The company said its January 2010 sales performance was a big improvement in the UK on the previous months and this is expected to continue.

Terry Donovan, chief executive of Minorplanet, said: "The past five years have been a rollercoaster ride for the group, its employees and its shareholders.

"We completed a turnaround, stabilising sales and returning the business to profitability prior to 2009, and improved Minorplanet's product and service beyond recognition.

"Our strategy to shift focus from SMEs to large corporates was starting to gain foothold, when unprecedented economic turmoil hit the world.

"Although the climate is expected to remain difficult, I firmly believe that the longer term prospects for Minorplanet remain sound."

The group made a loss for the first time since 2005. In the year to August 31, the group made a loss of 7.2m compared to a 1.5m profit in 2008.

This included a loss of 3.2m due to the discontinued operations in Germany and Australasia.

Mr Donovan added: "Our major shareholders and the board continue to back this vision with substantial investments in Minorplanet to assist it in getting through the worst economic conditions experienced in decades.

"The extensive support and goodwill shown by our other partners, including lease funders, creditors and banks, during this incredibly difficult year also demonstrated their faith in this business and their understanding of the growth potential inherent in our markets."