Matbro shaken as underpricing knocks profits
Matbro shaken as underpricing knocks profits
By Andy Collings
UNDERPRICING of products and other accounting anomalies by Matbro, have been stated as reasons for turning a projected £10m profit into a substantial loss for the Tetbury-based telehandler manufacturer.
And the financial effect on its parent company, Powerscreen, has been for the companys shares to tumble to less than half their value – writing almost £280m off their value – and the £46.7m provision to cover overvalued stock and overstated profits will result in a £10m loss for the year ending March 98.
Matbro was purchased by Powerscreen in 1991 for £3.3m. Senior personnel suggest severe competition induced Matbros management to cut prices excessively.
Matbro, understandably, has declined to comment on the situation but signs are that it is starting to get its house in order.
Since the appointment of a new managing director last December, excessive discounting has, according to several Matbro dealers, now ceased. Quality control is also reported to have improved.
It is also interesting to note that a high discounting policy has had its effect on other telescopic loader manufacturers. Several dealers reported that when pitching against a Matbro deal they have been forced to seek manufacturers "help" to enable them to match like with like. *