Minorplanet CEO delivers financial lifeline

Terry Donovan, CEO of British-based IAP provider Minorplanet, is in Australia this week as news spreads ‘down under’ of the company’s deteriorating financial position

By Samantha Freestone | February 23, 2010

Terry Donovan, CEO of British-based Intelligent Access Program (IAP) provider Minorplanet, is in Australia this week as news spreads ‘down under’ of the company’s deteriorating financial position.

A filing with the London Stock Exchange just two weeks ago reveals Donovan himself has been forced to loan the business money "to assist the general working capital requirements".

In a related-party transaction, Donovan has loaned Minorplanet £300,000, repayable over 24 months, commencing on June 4. The facility bears an interest rate of 8 percent over Barclays Bank's base rate and is secured by a debenture over the assets of the company and certain of its subsidiaries.

The transaction, the company says, "is one of a series of proposed actions designed to return the group to financial stability and profitability" – further details of which will be provided as part of the 2009 preliminary announcement, which is expected later this month.

In the six months to February 28, 2009, Minorplanet posted a pre-tax loss of £2.5 million, compared with a profit of £0.3 million in the corresponding period of 2008, on turnover of £8.8 million, down from £11.3 million in the previous corresponding period.

Net assets fell to £1.7 million as at February 28, 2009, compared with £4.7 million at the start of the financial year – and its share price is more than 70 percent down over the past 52 weeks.

It attributed the result on "harsh trading conditions with severely restricted availability of lease finance for customers, causing large number of unfulfilled orders", especially in the SME space.

At the time, Donovan said despite the "undoubtedly challenging times for the group" the board was working hard to stabilise the group's financial position, including an "aggressive cost reduction program" and enhancements to its products to make them attractive to larger fleet operators

"The group's product is the best it has ever been and, as recent contract wins prove, its value is now being recognised by larger fleet operators, which remain our key target market," he said.

Australian CEO Steve Green says Donovan’s visit represents only "normal business planning" and adds that despite a difficult two-year stretch for the technology provider, it is "business as usual".

Minorplanet is one of four technology providers certified under Australia’s Intelligent Access Program.

"We are on track with our plans. We are a subsidiary of UK company but we run independently," he says.

"We have our own research and development. We are totally self-sufficient.

"I know [Donovan] is talking with various business partners this week while in Australia."

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