Shares in black cab-maker Manganese Bronze have plummeted after the Midland manufacturer revealed a £3.9 million black hole in its accounts.
Coventry-based Manganese Bronze, the maker of London's iconic cabs, saw the value of its shares fall from 25p to 17p this morning after it revealed the black hole would cause it to delay the release of its half-year results for over a month.
"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 company said in a statement.
"The cumulative effect of these errors is an estimated £3.9 million understatement of historical losses which go back over several years although the work to apportion the loss between previous years is not yet complete."
Manganese Bronze, which is 20 per cent owned by China's largest private automaker Geely Automobile Holdings, said its balance sheet at the end of last year, and the financial years for 2011 and prior years would have to be restated as a result. It intends to release its half-year results on or before September 24.
It also said trading in the first seven months of 2012 had been difficult and remained challenging, and that it expects to report net losses for the first half that are "substantially higher" than the corresponding period last year.
It added that it was expecting higher sales in the second half, but did not know yet if its full year results would be in line with market expectations.
Manganese Bronze said that as of end-June it had £2.8 million of headroom on its agreed banking facilities and continued to have the support of its bankers and Geely.
Shares in the company had fallen by more than 39 per cent in the space of a year by 9am on Tuesday morning.