The financial foundations of the transport IT sector are under the spotlight again as telematics provider Minorplanet Systems reveals there is doubt over its ability to continue as a going concern.
This news follows the collapse of DBS in November 2008 and Causeway's rescue of GlobalLive last week (MT 28 May).
Minorplanet has announced a pre-tax loss of £2.5m for the six months to February 2009, compared with a profit of £300,000 in the same period in 2008. It also posted turnover of £8.8m, down 22% onthe same period last year.
A company statement says circumstances have cast "significant doubt" over the ability of the group and company to "continue as going concerns".
However, it adds that a cost-reduction programme, support from creditors and fundraising initiatives should ensure the company has adequate resources to continue.
The company has taken steps to reduce its cost base since November - including the loss of about 35 staff - and has also been talking to several potential new investors.
Terry Donovan, Minorplanet chief executive, blames the "unprecedented downturn" in the economy, as well as severely restricted availability of lease finance for customers.
He adds: "We don't have a particular target date or deadline for investment, but this could come from existing shareholders or new people taking a stake. Certainly we already have some finance promised and believe we can bring in more during June or July."
Minorplanet's directors have also negotiated a temporary increase in the company's overdraft facilities. Andy Walters, MD at telematics provider Quantix, believes two or three providers will go out of business this year. He says: "Our advice to operators is don't commit to a long-term lease."
