Further losses to follow GEI’s accounting probe

Steeper than expected losses at GEI may result from accounting irregularities at a subsidiary, the company said. Shares dived in response to the news. Problems at the firm’s Autowrappers subsidiary were discovered a month ago and have prompted several managerial changes. Group managing director Stephen Rawlinson and finance director Michael Bissell stepped down last month. […]

Steeper than expected losses at GEI may result from accounting irregularities at a subsidiary, the company said. Shares dived in response to the news.

Problems at the firm’s Autowrappers subsidiary were discovered a month ago and have prompted several managerial changes. Group managing director Stephen Rawlinson and finance director Michael Bissell stepped down last month.

The company said that a detailed investigation by new finance director Ian Gray had found that a further `significant adjustment’ for the 12 months to the end of March was now necessary.

The warning follows an earlier statement in May when GEI said it would incur a £3m loss after accounting irregularities at the Autowrappers business in Norwich.

GEI shares dropped 5p to 17p when the announcement was made.

In November the group reported half-year profits of £2.51m on turnover of £45.6m.

Tough action to restore GEI to financial health will include a disposal – the group said it is planning to sell its pharmaceutical business and is hoping to receive offers soon.

GEI is also in talks with its bankers to arrange ongoing financing facilities.

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