25th Apr 2014 16:28
LONDON (Alliance News) - Eco City Vehicles PLC Friday said it sold 83 new vehicles in the three months ended March 31, down from 189 in the same period last year.
The vehicle distributor said the decline in part reflected a strong first quarter in 2013 due to rival taxi business LTI Ltd ending sales during that period.
In a trading update for the three months ended March 31, the firm said earnings before interest tax depreciation and amortisation remained positive despite current market conditions.
Since the beginning of the year, new vehicle sales trading conditions have become challenging due to a combination of new entrants into the London taxi market and the recent Transport for London ambiguity regarding future changes to London taxi emissions requirements in 2018, Eco City said.
Eco City said used vehicle sales amounted to 74 units during the period, down from 89 units in the corresponding period.
The company also said that a One80 Ltd licensee has commenced proceedings against One80 for the cost of a potential vehicle-related upgrade programme. One80, which is majority owned by Eco City, is seeking legal advice and is in the process of finalising its defence and counter claim against a number of parties, it said.
Financially, the firm said it remains in a strong position following a VAT recovery transaction which improved its balance sheet. It expects to receive a total non-recurring benefit of GBP2.2 million to its account following a deal with taxi business Cabivision Network Ltd, a former related party that has the VAT claim against the UK tax authorities.
"The VAT recovery transaction materially improves the group's balance sheet and ECV will continue to monitor its cash position closely against the backdrop of challenging trading conditions," Chairman John Swingewood in a statement.
"In line with the group's stated strategy, the board and the management team continue to progress ECV's strategy of diversification through acquisition."
The stock closed at 1.20 pence Friday, down 0.02 pence or 2.0%.
By Anthony Tshibangu; [email protected];
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