Black taxi cab manufacturer Manganese Bronze nearly doubled its profits after easing a supply problem caused by the collapse of MG Rover by sourcing more parts from China.
The company, which owns London Taxis International of Coventry, declared £3.7 million pretax for the year to July 31, 88 per cent up on the previous 12 months.
Finance director Mark Fryer said yesterday that LTI had been forced to look elsewhere for some components after a number of suppliers went down as a result of the collapse of MGR and problems last year at Birmingham vanmaker LDV.
The cabs, which are built at the rate of just under 60 a week, currently comprise 80 per cent British-sourced components but that will reduce as more flow in from the Far East.
Manganese, which is also fighting to cut costs after a £700,000-a-year rise in its steel bill, plans to source an increasing proportion of parts from China after opening an office in the country.
It recently agreed terms for a £53 million joint venture to supply its iconic London-style cabs to China and ultimately to build vehicles there.
A new factory due to open in Shanghai in mid-2008 will have the capacity to build 20,000 taxis a year for the China market. Manganese stressed at the time that the jobs of its 350 production workers in Coventry were not being put at risk by the deal with Chinese automotive group Zhejiang Geely.
A one per cent dip in taxi sales last year was reflected in revenues that sliped to £83.8 million from £87.2 million previously.
But Manganese has a strong balance sheet and is sitting on cash and the equivalent totalling £12.9 million - up from £9.6 million - and net assets of £21.5 million versus £19.7 million last time.
The business generated £9.3 million of positive cash-flow (compared with £6.2 million previously) despite investing £6.2 million in its new TX4 cab, launched yesterday, and a new, larger showroom in London. The results were flattered by a £1.1 million gain from the sales of surplus land in Birmingham and Ipswich.
Manganese is treating shareholders to a 1p per share special dividend, bringing the total for the year to 6p, an increase of 50 per cent. Earnings per share improved 37 per cent from 11p to 15p.
Chairman Tim Melville-Ross said: "These are a strong set of results, building on last year's turnaround to profit.
"The group's restructuring is complete with loss making businesses and surplus properties sold."
Overall, Manganese sold 2,388 cabs last year compared with 2,412 last time, although in London, where the company has had virtual monopoly since production stopped at rival Metrocab in Tamworth, volumes increased slightly.
Sales in the first two months of the current financial year were ahead of the same period last year, the company said yesterday.
There was no word yesterday on who will replace group chief executive Ian Pickering who left in August. Shares closed up 36p at 526.5p.