Leyland *hind the losses
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• The full extent of Leyland Vehicles' financial plight was highlighted this week, with the news that the Rover Group's ailing truck and bus subsidiary made a net loss of ,102.7 million during 1985, compared to 260 million suffered in the previous year.
Moreover, if the company's latest figures are anything to go by, it looks as if 1986 will be even worse.
Until now, the only indication of how Leyland vehicles performed last year was given by the Rover Group Men British Leyland), in its consolidated annual accounts published in May.
In the report, LV recorded a 7% rise in turnover to 2461 million, and reduced its operating losses to 251.8 million.
Although the Rover Group is not required to give complete profit and loss account details for its subsidiaries, including Leyland Vehicles, the full financial details for LV have to be submitted to Companies House within 12 months of the finish of the financial year.
Little more than a month before the end of the legal limit, LV has finally submitted its full trading figures — and they paint a far gloomier picture.
After making increased interest payments of 240.9 million (up 210 million on 1984), Leyland losses before tax during 1985 rose 21.2 million to 292.7 million.
The figures, however, are confused by the fact that the recent sale of Jaguar resulted in a tax credit of 238.8 million to Leyland, which finished 1984 with losses after tax of £52.7 million.
Although it paid no tax last year with no credit, Leyland's losses after tax climbed back to 292.7 million.
When extraordinary losses of £10 million relating to the restructuring of Leyland Buses are added, the final losses for 1985 end up at 2102.7 million.
Furthermore, if the latest interim figures for Leyland Vehicles are anything to go by (CM October 4) the company will be even further in the red by the end of 1986.
During the first six months of the year Leyland Vehicles' operating losses rose to £27.5 million, while its sales revenue fell by 14% to £174 million. In their report for 1985 Leyland Vehicles' directors say "despite measures previously taken to reduce costs at Leyland Bus, operating losses showed a significant worsening in 1985 and further redundancies (costing 21.1 million) were announced in November. A new management team was appointed during the year. It has concluded that more streamlining is necessary and provision has been made for further restructuring."
Leyland has so far called for 300 redundancies at its main vehicle assembly plant, along with 100 at its Albion axle plant in Glasgow, plus 100 voluntary redundancies at its Chorley Multipart centre.