Manganese Bronze Holdings plc announced on 12 October a recall of approximately 400 of its TX4 London taxis and the suspension of sales of new TX4 models as a result of the discovery of a defect in the steering box. The steering box is a new design from a new supplier (not identified by Manganese Bronze) that was introduced into production at the group’s Coventry factory in late February 2012. The manufacturer is in discussions with investor and JV partner Geely International Corp. to “put in place a robust technical solution for the steering box faults”.
Manganese Bronze advised shareholders that “the suspension of sales will have a very material and detrimental impact on the Group’s cash flows and the board are working to establish the options available to the business given the impact on working capital.
“Until such time that a technical solution is developed to rectify the fault, the financial position of the Group remains unclear and trading in the company’s shares will remain suspended.” Manganese shares had been trading at 10p at the time of the announcement, compared to an annual high of £0.41p ( and a low of £0.9.5p.
On 28 September, announcing unaudited results for the six months ended 30 June 2012, Manganese Bronze said group revenue was down 11.3% to £34.3m as “challenging UK market conditions continued”, bringing UK unit sales volume down 22.9% to just 577 taxes, compared to 748 a year earlier. This and the correction of previous-year accounting errors and supply chain problems incurred a pre-tax loss of £3m. Restated 2011 accounts showed a pre-tax lost of £5.5m.
Manganese Bronze Holdings plc had announced in late July the signing of an agreement with Geely International Corporation (“Geely”), its joint venture partner for taxi assembly in Shanghai. relating to the extension for a year of an agreement whereby Manganese Bronze would potentially be conferred with responsiblity for distribution in the UK of Geely’s vehicles and spare parts, and the provision of after-sales service.