Accounting errors hit Alumasc’s profits

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.

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