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London Cab Maker Hit By Accounting Blunder

(c) Sky News 2012

The maker of London’s famous black cabs has revealed a £3.9m accounting error, causing it to delay the release of its half-year results.

Following the news, Manganese Bronze’s share price slumped 32% during early morning trading.

The hole in its accounts comes after a difficult seven months. The company said it expects to report "substantially higher" net losses for the first-half, compared to the same period last year.

In a statement Manganese Bronze said: "Due to a combination of system and procedural errors, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly processed through the new IT system.

"The cumulative effect of these errors is an estimated £3.9m understatement of historical losses which go back over several years although the work to apportion the loss between previous years is not yet complete."

The company, which is 20% owned by China's largest private automaker Geely Automobile Holdings Ltd, has been forced to go back to its balance sheet to correct discrepancies.

As a result it will release its half-year results over a month later than expected on September 24.

Manganese Bronze said it has full support from its bankers and shareholders Geely and that as of the end of June it had £2.8m on its agreed banking facilities.

The company also said it expects higher sales in the second half of 2012, but did not know how the error would affect full-year results.