Titan Europe, the Kidderminister-based international manufacturer of wheels for off-road vehicles, has become bogged down by the recession.
The company, which recently axed about 1,000 jobs, predominantly in Italy, plunged to a loss before tax of £11.4 million in the six months to June 30 from a same basis profit of £4.4 million in the same period last year.
Earnings were also hit by a £3.4 million restructuring and rationalisation charge.
Revenue fell by more than a third (36.1 per cent) to £149.158 million in the first six months of the year as Titan’s customers stopped spending.
The company, identified as the Midlands’ biggest AIM-listed company in the recent Birmingham Post Companies Guide, makes steel wheels and undercarriages for specialist vehicles in the mining, construction and agricultural industries.
The fall in revenue at the half way stage was marginally worse than the 35 per cent decline declared by Titan in its market update in June.
Since then, however that it had secured a £120 million banking facility for its Italian undercarriage division.
Chief executive Mike Akers said in the interim results statement: “Trading conditions have been extremely difficult in all of our markets and for all of our product groups.
“The extent to which this has affected revenues and profitability has varied but only a few relatively smaller elements of the business have escaped virtually unscathed.”
All non-essential spending has been stopped, capital expenditure reduced to the minimum consistent with health and safety and key strategic business needs.
Mr Akers said Titan had renegotiated the debt element of its financing to reflect the changed operating environment and this had allowed it to defer capital repayments until January 2011.
The facilities provide covenant and liquidity headroom to support the company’s long term business plans.
“We believe that this reflects Titan Europe’s primary lenders’ commitment to, and the financial stability of, the business.
“The UK-based construction and mining wheel business has been very heavily affected by reductions in orders for articulated dump trucks and wheeled loaders, with some customers cutting consumption to virtually zero,” Mr Akers said.
“De-stocking has clearly been a major element in this dramatic decline.
“The market for mobile cranes has been less heavily affected, but this has still seen significant reductions.”
Outside the UK, Titan said its Australian wheels business continues to do well, both in agriculture and mining, adding, “we exepcted to achieve further inroads into the world market for our quick-change giant mining wheels in the near future.”
The company was also upbeat on the prospects facing its Brazilian undercarriage factory and also said it was developing operation in China.
The emphasis at the Kidderminister headquarters is on lowering inventory levels, reducing operating expenses and generating cash, Mr Akers went on to say.
