Optare heading towards profitability
In its preliminary results for the year ended 31 March 2013, Optare earned revenue of £75.9m, a growth of 6% over the 15 month period to 31 March 2012. Labour costs were down at 7.6% of revenue, a reduction of 6%. It ended the year with a market share of 36% in the eight to 13 tonne segment, which it states as its primary market. The results show a net loss of £7.4m compared to a loss of £13.4m in the previous period, an improvement of 45%.
During the year, the 11.7m Versa, Metrocity and Bonito were launched. The full benefits of these new products are expected to be seen in the 2013-14 financial year. Their launch is expected to offset the risks and help deliver volume and revenue. On 31 March 2013, Optare’s order book stood at £12.2m, whilst the current order book stands at £20.2m.
Now it has consolidated onto its new site, Optare believes it is time to deliver profitability, driven by the product pipeline, which includes a new double decker and other new vehicles for the export market in 2014. The Board believes the UK market will be flat for the near future, but has identified growing opportunities in the Middle East, south east Asia and African countries.
Interim CEO, PG Nilsson, said, ‘Despite challenging market conditions over the last twelve months, I am pleased to report that we are now seeing the positive rewards resulting from consolidating the manufacturing sites and the significant investment in our new facilities. We have made considerable progress in supply chain cost reduction, implementing manufacturing efficiencies and further improving the quality of our products, and we continue to focus on our processes to drive continuous improvement. We are confident that we have built solid foundations for stability and growth to meet future challenges, secure in the knowledge that we have the support and backing of Ashok Leyland.’