Gross profit margins almost doubled as export market set for further growth
In announcing its interim results for the six months to the end of September 30, 2013, Optare has reiterated its plans to introduce its new double-decker product in the first quarter of 2014.
It also says that it has been successful in winning initial orders in Australia for the whole of its single-decker range. “Further sizeable orders are expected in 2014 through our dealers in Australia,” said John Fickling, Optare’s Non-Executive Chairman. “We are excited about the growth prospects and market demand in this part of the world for Optare’s products.”
Results for the six months to September 30, 2013 saw losses before interest, taxes, depreciation and amortisation cut by a third to £0.8m as a stronger product mix and cost savings helped gross profit margins to almost double to 10.3%. Revenue was down 31% to £32.4m.
Administration costs reduced by 10% as overall headcount reduced from 443 to 396. Further cost reduction programmes are in place to deliver over £1.0m of fixed costs savings in the full year of 2013/14. The loss per share has been cut from 0.15p to 0.08p.
Optare’s banking arrangements were renegotiated by Barclays with a total bank facility of £23m now available. This includes additional facilities of £7m which has been put in place to meet the company’s liabilities as they fall due and investment in new products.
“I am pleased with the progress we have made to improve efficiency and reduce fixed costs,” said John. “We continue to invest in people, innovation and new product opportunities for the UK and export markets we look to the future of the company with increased confidence.”
The Board said it still anticipates an increase in UK demand in 2014, particularly for single deck buses as the larger operating Groups invest in new vehicles. Additionally, an increasing proportion of future sales are expected to come from export markets which will help to de-risk the Group’s current dependency on a cyclical UK market.