Eco City Vehicles has benefited from the troubles of its rival taxi supplier, doubling its share of the licensed London market to 40 per cent and increasing its revenues by more than a third.
While the number of new cabs licensed in the capital last year was fairly static at about 1,400 – keeping the total number on London’s streets at around 22,000 – sales of Eco City’s customised six-seater Mercedes-Benz Vito van picked up strongly, as competitor Manganese Bronze went into administration.
Manganese, which until five years ago enjoyed a monopoly in manufacturing the totemic London taxi, was brought low last year by IT problems and defects in steering boxes, which forced it to recall 400 cabs. The company was bought out of administration by Geely, the Chinese carmaker, in February but has yet to regain the momentum lost last year.
Eco City, whose £40,000 six-seaters still achieve the 25ft turning circle required by London’s Public Carriage Office, also gained from the introduction of a 15-year age limit on London taxis.
This sales boost has brought the company to the verge of profitability, its chief executive suggested on Tuesday. Trevor Parker was brought in by Eco City’s founders in April “to take the company to the next level”.
On the down side, however, the London market is expected to open up further next year as Nissan prepares to launch its version of a London cab with a 25ft turning circle. Ahead of this, Mr Parker has launched a strategic review to look at diversifying into new cities and new business opportunities – such as servicing “blue-light” emergency vehicles.
Eco City reduced its pre-tax loss of £2.7m in 2011 to £1m in the year to December, and sold a Coventry property for £2m to help cut net debt from £3.1m to £1m. It also raised £1.75m of working capital during the year, with Nigel Wray, owner of the Saracens rugby club, boosting his stake to just over 17 per cent.
Excluding one-offs, Eco City earned £800,000 before interest, tax, depreciation and amortisation in 2012, against a loss of £900,000 the year before. Revenues in the year to December rose to £30.5m.
The Aim-quoted shares, which reached a peak above 8p in 2008, rose 3.6 per cent to close at 2.15p on Tuesday, valuing the group at just under £10m.