Vehicle cab maker Airflow Streamlines of Northampton, in bid talks with a mystery buyer, has been hard hit by accounting irregularities at Midland engineering outfit Matbro, the Powerscreen subsidiary being investigated by the Serious Fraud Office.
The company last week revealed that profits for the year up to the end of March slumped by more than a quarter after Matbro was forced to cancel orders for the driver cabs it used on its construction equipment.
Airflow normally makes about 5,000 cabs a year, 70% for export. Cancellation of orders from Matbro has knocked back profits. The company described its annual figures as a ‘most unsatisfactory trading result’.
Exceptional provisions plus other restructuring costs pulled operating profits at Airflow down from £1.94m to £1.44m on turnover down from £105m to £93m.
Headline profits were boosted by disposals. The sale of Midland car dealerships and a contract hire business raised £4.26m, pushing pre-tax profits up from £2.1m to £5.63m.
Matbro has been sold by Powerscreen to US tractor maker John Deer. Airflow’s finance director Mike Schiel said he was hopeful that the orders lost from Matbro would come back once production restarts in earnest.
Airflow Streamlines has about 1,000 employees in Northampton.