Optare releases interim results for financial half-year

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An Optare Versa diesel electric hybrid in two-door London specification
An Optare Versa diesel electric hybrid in two-door London specification

Optare has released its interim results for the sixth months ending June 30. Highlights include major investment in its Sherburn factory in North Yorkshire. Relocation to the facility began in August and is expected to be completed by the middle of this month.

There were six consecutive months of increasing output during the period, and significant progress was made in export markets, as the company worked collaboratively with Ashok-Leyland on potential major contracts. Investment in product development continued, particularly in target export markets to achieve local market testing and approvals.

With regards to financial highlights of the period, CEO Jim Sumner said: “Whilst the UK market in the first half of 2011 continued to be challenging, substantial progress was maintained against the three year turnaround plan with investment in a new factory to support planned growth in domestic and export markets. The business is also targeting to move back into profit following completion of the factory move.”

In its business and financial review, Optare noted its turnover for the half-year was £22.7m, a fall from the equivalent period last year of £27.1m. Optare puts this down to “a continuing reduction in UK demand,” and disruption to production from supply chain issues, which have now been resolved.

Optare also announced it was the preferred bidder for a 200-vehicle order through a partner in South Africa, with buses to be provided in kit form and assembled in the local market. Confirmation of the contract is said to be expected shortly and will be notified to the market in due course.

Optare’s outlook includes a predicted improvement in UK demand in the coming two years, “driven by an expected pre-buy of existing Euro 5 emission buses to avoid the additional cost burdens of Euro 6 legislation compliance due in 2013 and to comply with the Disability Discrimination legislation which is required for all singledecker buses by 2014.”

The manufacturer is looking confidently ahead to the third year of its “turnaround strategy,” which follows a phase of restructuring, debt reduction and investment in business. A strong order book moving into the second half of 2011 would help to propel sustained growth.