Manganese Bronze shares plunge after accounting error

Manganese Bronze Holdings has delayed the release of its unaudited results for the half year ended June 30th after accounting errors on last year's results came to light.

Manganese blamed the errors on a system that was installed in 2010, saying that due to a combination of system and procedural errors, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly processed through the new IT system.

This problem led to the over-statement of stock and under-statement of liabilities in the financial statements of previous years, the cumulative effect of which is an estimated £3.9m understatement of historical losses which go back over several years, although the work to apportion the loss between previous years is not yet complete.

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The company also warned that trading in the first seven months of the year has been difficult and remains challenging, with the group continuing to trade at a loss. Although higher sales are expected in the second half the firm does not yet know if the results will be in line with market expectations.

At the period end the group had £2.8m of headroom on its agreed banking facilities and also retains the ongoing support of its bankers.

The results will now be released by September 24th at the latest.

The share price plunged 28% to 18p by 12:57.

NR