Losses at Optare in wake of Euro 6 launches

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Opatre has announced its unaudited results for the six months ended  September 30, 2014.

The company made an EBITDA loss of £1.4m compared to a £0.8m loss in the first half of 2013.  Loss from operations stood at £2.1m, down a further £0.7m on 2013.

Gross margin decreased to 9.5% (2013: 10.3%). Optare claimed this was primarily driven by the execution of new product orders and the introduction of new Euro 6 specification vehicles, though sales volumes were also lower than the previous year by 13%.

The company’s underlying administration costs have increased by £0.2m to £4.6m, though this includes a one off charge of £0.3m relating to obligations resulting from an onerous contract in May 2014.

Loss per share increased from 0.08p at September 2013 to 0.12p at September 2014.

Commenting on the interim results, Enrico Vassallo, Optare’s CEO: “We have seen a difficult trading period in the first half of the 2014/15 financial year, due to the contraction of the UK bus market and the launch of several new products and Euro 6 specification vehicles.

“We have continued to invest in new products and, for the first time, the Company can offer an extended product range to meet operators’ urban and suburban requirements. The Management are committed to top line growth in both UK and export markets and to reduce fixed costs to ensure a long term sustainable future for Optare.”

Optare has also announced that it has entered into a £1.5m loan facility agreement with Ashok Leyland (UAE) LLC for future product development.