Accounting errors hit Alumasc's profits
Board of Alumasc Group promises to strengthen management and processes to prevent another accounting mistake occurring
Building and engineering products firm
Alumasc Group said
profitability for its division which makes die cast components will be £1m lower
due to accounting errors.
An internal audit flagged up problems relating to Alumasc Precision’s
inventories which prompted management to commission Ernst & Young to conduct
an investigation.
The group said the work was now ‘largely complete’ and showed an
overstatement of inventories and other assets to the tune of £2m to £2.5 m but
said there was ‘no indication of theft or any personal gain’.
In an interim management statement the group said: ‘Whilst cash generation is
not affected, the run rate of profitability into the next financial year will be
lower by a similar amount.’
It added: ‘The Board is taking the necessary vigorous action to prevent
recurrence, strengthen management and processes, and to improve profitability.’
Group revenues for the nine months to March increased 26%, despite a
prolonged Easter break which impacted the third quarter this year. The group
said positive trading in the third quarter has continued into the fourth quarter
to date.