Manganese Bronze Holdings, the maker of London’s black cabs, saw its share price fall by 34 percent today after it revealed years of accounting errors caused by a change in an IT system.
The company has delayed the release of its half-year results because of the errors, which will now be revealed on or before 24 September.
In August 2010 the group introduced a new integrated IT system to help manage its global supply chain and in doing so uploaded the closing general ledger balances from the previous IT system.
However, “due to a combination of system and procedural errors”, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly processed through the new IT system.
The company said in a statement: “This problem led to the over-statement of stock and under-statement of liabilities in the financial statements of previous years.
“The cumulative effect of these errors is an estimated £3.9 million understatement of historical losses which go back over several years, although the work to apportion the loss between previous years is not yet complete.”
Computerworld UK contact Manganese to establish who supplied the IT systems and whether the problem was associated with the new or old system, but was told that no detail is being provided at this point.
The group has also said that trading in the first seven months of the year has been ‘difficult and remains challenging’, and it expects to report net losses for the first half that are substantially higher than reported last year.
This news follows a high profile IT failure at Royal Bank of Scotland in July, where millions of RBS customers couldn’t gain access to funds in their bank accounts after a botched upgrade that was made to batch processing software CA 7 from CA Technologies, which impacted some accounts for more than a month.
The bank has since revealed that it will suffer losses of at least £125 million, which will principally cover customer redress, such as waiver of interest and charges.