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* Scraps 2008 final dividend
* Cuts 20 pct jobs; lowers salaries, production
* Says China JV production to bring down costs
* Sees challenging 2009 for volumes and margins
* Shares fall 15.6 pct (Recasts, adds CEO comments, details)
BANGALORE, March 5 (Reuters) - Manganese Bronze Holdings Plc (MNGS.L: Quote, Profile, Research), makers of London's black cabs, posted a loss for the full year on lower sales but said it was confident of its medium-term prospects helped by cost savings with the start of taxi production in China.
The company said it slashed costs by reducing 20 percent jobs, salaries and daily output to combat falling sales during the year to Dec. 31, 2008.
The company, which started commercial production of the London taxi in Shanghai in January, said it expected the production cost of Chinese made TX4 model to be about 15,000 pounds per car.
Savings for the UK-produced TX4, incorporating Chinese components, are expected to be 2,000 pounds per car by the end of 2009, Chief Executive John Russell told Reuters by phone.
The current price of TX4, its Euro IV-compliant model launched in 2006, is 28,000 pounds to 34,000 pounds.
"While sales and margins were under pressure in the UK, our Chinese joint venture passed significant milestones," Russell said.
Shanghai London Taxis International (SLTI), the company's joint venture with Chinese car maker Geely Automobile Holdings Ltd (0175.HK: Quote, Profile, Research), will supply more than 90 percent of individual components required for the London taxi production.
Manganese Bronze said it had an indicative order book of 8,000 vehicles over the next three years with delivery starting in mid 2009.
SCRAPS DIVIDEND
Manganese Bronze said it would not pay a final dividend for 2008 as it reported a pretax operating loss before special items 5.4 million pounds for the year.
Pretax loss before exceptional items stood at 6.1 million pounds, while it recorded exceptional costs of 8.1 million pounds on account of its TX4 product recall and accounting impairments.
Three analysts on average had expected the company to post a pretax loss before special items of 5.1 million pounds, according to Reuters Estimates.
For the 17 months ended Dec. 31, 2007, it had earned 5.6 million pounds. The longer comparative period was due to its move to align year-end with its Chinese joint venture partner. On a like for like basis, UK sales declined by 37.5 percent for the year.
The company, which has a 2.5 million pound overdraft facility with HSBC Bank Plc (HSBA.L: Quote, Profile, Research), said it had renewed the facility up to the end of 2009 and its talks with the bank for future borrowings had been positive.
Shares of the company were down 15.6 percent at 57 pence at 1455 GMT on the London Stock Exchange. (Reporting by Ramkumar; Editing by Kavita Chandran and Gopakumar Warrier)
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FAQ
but really, perspective needs to be shown. If you look athe billions wanted by Jaguar, GM, LDV, Ford, Toyota, Nissan etc etc want, the LTI situation is pocket money. A few million quid in guaranteed loans and the company can get through 18 months or so and guarantee British manufacturing jobs. No brainer methinks 