Powerscreen's executive chairman Mr John Craig and his team have been engaged in a fire-fighting mission since news broke of a black hole in the accounts of Matbro last January.
But there are signs that the management team may at last be bringing things under control and can concentrate on developing the company's core business. Certainly, Mr Craig believes so.
"The fires are more or less out that raged in January," he said at the release of the company's annual results yesterday. Although the company racked up hefty losses last year as a result of the Matbro debacle and problems with its accounting procedures in previous years, the core business turned in a healthy operating profit of £25.6 million.
"The group remains strong and viable and has the ability to generate significant profit on a continuing basis," Mr Craig says.
Powerscreen is also getting to grips with its debt, paying it down with the proceeds from the disposal of non-core businesses. To date, it has agreed the sale of four subsidiaries, including US Truck Crane Inc (USTC), the latest company to be sold. The Pennsylvania-based firm was bought by Manitowoc Company Inc for $45 million cash and the assumption of $8 million in liabilities in a deal that was signed and sealed shortly before the results were released yesterday.
Since March, the beleaguered engineering company has also disposed of Universal Conveyor Company Ltd, Geith International and SDC Trailers along with certain assets of Matbro, raising a total of £40.5 million.
Following the USTC sale, Powerscreen's bank debt will be reduced by a further £18.8 million to £21.6 million from £53.4 million last March. Powerscreen says it is in discussions to sell two further non-core businesses CPV and Ludlow-Saylor but stresses it is under no pressure to sell them. A number of questions remain to be answered regarding what went wrong at Matbro. Powerscreen is reluctant to comment on this, as it is awaiting a report from its legal advisers Herbert Smith on what, if any, legal action can be taken against any party as a result of the troubles at Matbro.
Meanwhile, investigations by the Serious Fraud Office, Britain's Department of Trade and Industry and the London Stock Exchange continue. The various inquiries absorb management time and effort and continue to add to already hefty legal and other expenses. Matbro, it seems, has not yet gone away.
