‘Overstated’ assets cause Britax share dive

The revelation will come as a severe blow for the resurgent £400m engineering group, which in March won the contract to refurbish the interior of British Airways’ Concorde fleet.

Share prices on Thursday plummeted by 32.5p from 102p, although the price picked up today at lunchtime to 103p.

Chief executive Richard Marton said that accountants Deloitte & Touche had been called in to carry out an investigative audit after the board became aware that ‘the management information, systems and controls at Rumbold were weak.’

Marton said the Deloitte’s audit of Rumbold’s balance sheets as of 30 June is still in progress, but has found business assets ‘overstated’.

Britax now expects to take a £20m exceptional pre-tax charge to bridge the shortfall in operating assets – in addition to a £3m exceptional charge announced in June to cover the restructuring write-off of redundant assets.

Marton said: ‘It has become evident that in prior years the net assets of Rumbold had been overstated principally because of the failure to implement properly its contract counting procedures.’

Last December, Britax launched a major overhaul of its aircraft interiors division based around Britax Rumbold and a strategic withdrawal from the over-supplied automotive component market, which lead to the June sale of its car mirror division to German-owned Reitter & Schefenacker.

In April, the group acquired aircraft interior manufacturer Bellingham, for £73.5m and started work on a multi-million pound aircraft interior system plant in South Wales that will employ a 450 strong workforce.

Finance director Mark Ellsmore, a qualified management accountant, joined Britax in 1998 from the TI Group, the Oxfordshire-based international engineering specialists, where he was group finance director.

Britax are due to release interim results on September 19, when a full statement of the accounting failures is expected.

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