Minorplanet sees first loss in five years

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 undertaken an extensive cost reduction programme as a result including a 40 per cent reduction in headcount and a 45 per cent cut in overhead costs in the UK

A full review of the group's loss making European operations was also completed and actions have been taken.

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

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

The group is hoping to overcome the difficult market with a strong sales drive highlighting the cost saving and "green" nature of its tracking systems, which offer full investment payback in under one year.

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 as the pipeline and platform increase.

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.