Manganese sees turnaround progress

BLACK cab maker Manganese Bronze today said it was well placed to return to profit after a restructuring saw it shift production of parts to China.

The change in the group’s business model, which resulted in redundancies at its Coventry factory, has increased its margins to a level that will allow it to return to profit, it said.

Operating losses reduced by 73 per cent to £1.9m in 2010, while sales reduced five per cent to £69.6m.

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Its future prospects have also been boosted by an order for 1,000 vehicles from Azerbaijan in recent weeks.

Its Coventry-based London Taxis International arm, which has manufactured the cabs since 1948, has now moved to an assembly role using parts made in China.

The new strategy, which was described as the biggest change in the group’s history, reduced the cost of building a TX4 cab by £3,000 per vehicle, it said.

Trading conditions continued to be difficult last year, as vehicle sales in the UK were down four per cent to 1,653, as cab drivers lacked the confidence to invest in new taxis.

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However, sales in the second half of the year were slightly up on the same period a year ago, while the group’s share of the black cab market in London increased to 82 per cent from 75 per cent.

Manganese said sales in London should benefit from a new rule forcing taxis over the age of 15 years to be taken out of service, which is due to come into force at the start of 2012 as part of the Air Quality Strategy.

International vehicle sales grew eight per cent to 226 in 2010, but were well below its target of 1,000.

But it currently has orders for 1,250 cabs overseas, boosted by the big order from Azerbaijan.

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Chief executive John Russell said: “2010 was another difficult year for our UK taxi manufacturing operation.

“However, the actions taken to return the group to profitability have now been completed.”

He said the group was “well positioned to return to profitability in 2011” after the restructuring and it had been given an extension in its credit terms for the parts by its Chinese joint-venture partner Geely.

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