Electric vehicles distributor Metroelectric has suffered difficulties with its supply chain and the quality of products from a former supplier, but a restructuring should improve the company's performance.
The situation has resulted in a high level of returns and stock write-offs. However, Metroelectric increased its revenues from £405,000 to £613,000 in the year to June 2011 despite the problems. The loss increased from £51,000 to £1.28 million. That figure does include a goodwill write-off of £432,000, but the underlying loss was still much higher with doubled admin costs and a much smaller EU grant.
The company had £15,000 in the bank at the end of June 2011. There are also convertible loan notes worth £190,000. Since the year end, Metroelectric has raised £230,000 and received an EU grant payment of £85,000. Some debt has been repaid and the convertibles redemption date has been extended.
Costs are being reduced. In December, Metroelectric appointed Eveport Ltd as its UK licensee for Powabyke in return for a licence fee. This means that Metroelectric will not incur sales and marketing costs, but it will receive ongoing royalties. Metroelectric is seeking international partners for Powabyke.
Market: Plus-quoted
Symbol: METP
Price: 0.27p
12-month high/low: 1.15p/0.27p
Market cap: £1.3 million
