TRANSPORT Systems, formerly Andaman plc, incurred a loss before tax of £1.3 million sterling in the 15 months ended March 31st, 1996. Halsey bluntly tells shareholders: "I cannot pretend that recent events have been anything but difficult".
The musical chairs in auditors reflects the difficulties. First, Price Waterhouse in Belfast resigned as auditors on completion of the 1994 accounts. Then Michael Finn & Company, auditors of Southern Road Markings, a subsidiary of the group, agreed to become group auditors for a "finite period".
The chairman now tells shareholders that "it was recognised at the time that the directors were likely in due course to appoint a firm with broader industrial knowledge and greater depth of experience in public interest companies and accordingly, Michael Finn & Company will not be offering themselves for re election as group auditors". Transport Systems is now proposing the appointment of Messrs Kidsons, Impey which has "consented to act as your auditors".
While conceding that "much remains to be done, at Southern Road Markings in particular" (it recorded a net loss of 0.3 million), the board is "actively examining a number of ways to strengthen the principal subsidiary's capital base and trading position". The directors, he says, "perceive a considerable future for the core business" and interim results out shortly are expected to confirm an improvement.
A write off of investments, in the latest results, brought the net loss up to £1.2 million. As a result, net assets fell from £3.47 million to £2.78 million.
Transport Systems emerged from a restructuring of Andaman which was incorporated in Northern Ireland in 1984 with the object of exploring for minerals. It moved into the road and public area marking business in 1994 through the purchase of Southern Road Marking. A year later it acquired 50 per cent of Somerset White Lining. It also acquired a 24.9 per cent stake in Fleet International, a designer and supplier of electronic general alarm systems.
This latter acquisition caused great difficulties because "Fleet failed consistently to provide the timely and accurate financial and commercial information which the board requested and to which it was entitled". Then the group agreed to sell its stake in Fleet to Investorcorp which owned the remaining stake. However, only the first of 12 scheduled payments as part of the consideration - was received.
Subsequently a receiver was put into Investorcorp and Fleet. The balance of the consideration has been written off. However, Mr Halsey says the group is considering the merits of seeking legal remedies against certain former directors and advisers of Fleet and Investorcorp.
The restructuring of Andaman led to the formation of Transport Systems, it took over the non exploration interests, and Andaman Resources which took over the natural resources activities.
