Mayflower admits accountancy hole

The accountancy error has hit Mayflower subsidiary TransBus

Automotive engineering firm Mayflower has seen its share price fall by a third after revealing an accountancy error that could cost the company £20m.

The share price fall from 9.25 pence to 6.25 pence by mid afternoon trading was also not helped by the firm announcing the departure of two senior managers.

It comes five weeks after Mayflower saw its value plummet by 80%, after it issued a share warning.

Investment firm Melrose has said it is interested in taking over Mayflower.

High Wycombe-based Mayflower said the accountancy errors had mainly been caused by delays in passing on customer payments to one of its finance providers, and involved its bus- making arm TransBus.

Takeover approach

MAYFLOWER STRUCTURE TransBus - bus-making Vehicle Systems - car and truck parts E3 Engines - engine components E3 Energy - wind turbine technology Mayflower's share price

It said putting the matter right would increase its debts by up to £20m.

The company's net debt was £176m by the end of 2003.

It announced on Monday that its chief executive John Simpson and finance director David Donnelly will leave the firm in April.

Mr Simpson will be replaced by the recently appointed chief restructuring officer Alan Jamieson, and Mr Donnelly by Bruce Wright.

In a separate matter Melrose announced it was interested in buying the company, but that it could not make a specific offer until it had seen Mayflower's books.

Melrose did however say that it intended to raise new equity to reduce Mayflower's debts.

In addition to buses, Mayflower makes parts for cars and trucks, and even equipment to install wind turbines.