BOTH PETER JOHANSEN and black cab maker Manganese Bronze will be hoping for a period of stability in his appointment as group finance director, after what has been a less-than comfortable period for both parties.
Johansen previously served for six years as FD of long-standing carpetmaker Brintons, prior to it entering a pre-packaged administration in the summer.
For Manganese, it will hope that Johansen’s experience of working in China will help manage relations with its Beijing-based shareholder and business partner Geely, particularly in light of new ventures launched in recent weeks.
In August, Manganese signed an agreement for looking into distributing Geely cars and spare parts across the UK. The exclusivity deal effectively set out a year in which the two parties would look into formulating a business plan for the strategy. If a plan to take things forward can’t be settled then the agreement lapses on 1 August 2012.
Geely had initially invested in Manganese back in 2006, for licensing cab manufacturing in China for marketing to overseas territories.
Thankfully for the two companies, initial discussions and announcements seem positive. Thankfully the end of negotiations didn’t halt relations between the two, as was witnessed by the exclusivity agreement. “The signing of this agreement is a further example of the growing relationship between [Manganese] and Geely,” said CEO John Russell. Recent noises suggest that the details to be thrashed out behind the agreement are progressing.
Pressing issues for Johansen will not only include nailing down the car distribution deal with Geely, but growing international sales while improving home sales.
Manganese has had a turbulent year. Back in August 2010 the cab maker was set for a capital injection from Geely. However the £14m deal, which would have seen the Beijing shareholder take a bigger slice of the business for the funds, fell through. Tough market conditions saw Geely decide against the purchase, which saw Manganese’s shares slump 20% on its collapse.
Yet tough trading conditions have continued. Sales for July-to-October 2011 fell 8.6% on the corresponding period in 2010 at 426 vehicles. Year-to-date sales are 1,174 vehicles, down 7.5% from 1,269.
International sales are promising for Manganese, and its prospects of success improved in January when credit terms were extended with Geely-associated business Shanghai Maple Automotive Company, to 120 days. Improved cashflow hassled to higher sales. International sales are expected to hit more than 1,300.
Outside of the economy, legislative changes should also benefit the business. From 1 January 2012 the London fleet of taxis will be restricted to 15 years. All in all, the board expects progress in 2012.
Will Johansen be charged to try and bring Geely back to the table to discuss another share purchase? It can’t be ruled out. Long-serving FD Mark Fryer, who held the role between 2002 and 2010, was thanked by the board on his departure for securing the initial deal with Geely.
Group financial controller-turned-FD Tony Pearman spent two years running the finance function – but unfortunately that coincided with the failure of negotiations. Pinning the deal’s collapse on Pearman would be unfair, particularly as trading conditions were so bad.
But Johansen’s experience in establishing a factory for Brintons in Suzhou, China, is high on the list of his achievements – according to the statement issued by Manganese to the stock exchange on his appointment.
His background also contains other key features that would have proved attractive to Manganese. His MBA from the London Business School included a project that compared newly emerging Chinese businesses with Hong Kong Chinese companies. He has also served in manufacturing with S&A Food and Norwegian paint company Jotun.
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