Minorplanet misery goes on as group suffers deeper loss

The Leeds-based group recently staved off a winding-up petition from HM Revenue & Customs over a 2m unpaid tax bill, by winning the backing of South African rival DigiCore International.

Minorplanet's satellite tracking helps companies cut vehicle fleets' emissions and fuel consumption, but it has floundered in the recession as small to medium-sized businesses struggle to get lease credit.

The group made a deeper 1.8m pre-tax loss in the six month to the end of February. Turnover from continuing operations fell more than 36 per cent to 3.5m.

Even aggressive cost cutting, reducing its headcount by about 70 to 238, could not offset the sales decline.

"The ongoing uncertainty surrounding the group's financial position and the associated negative perception has adversely impacted our ability to win business in the larger corporate sector," it said.

Rivals have attempted to cash in on its struggles, with one firm, Trimble MRM, publicising special deals aimed at Minorplanet customers. However, the group was given breathing space when earlier this month a newly-formed subsidiary, MPS 2010 Ltd, bought the group's intellectual property, plus its UK arm out of administration. HMRC subsequently suspended the winding up petition for the UK business.

The deal was funded by a 3m loan from DigiCore, a Johannesburg Stock Exchange-listed vehicle tracking firm. Minorplanet has until November 14 to repay the loan or DigiCore could end up owning more than 30 per cent of its shares.

Chairman Lars McBride said while the DigiCore deal gives it "greater financial stability", funding issues remain.

"However, in DigiCore we have a strong partner, already well established in the larger corporate sector," he said.

Minorplanet added it is close to selling its Australian subsidiary, Minorplanet Asia Pacific, but warned the price will be much less than it hoped.