MTM makes pounds 24m charge

MTM yesterday announced exceptional costs of pounds 23.8m when it introduced more conservative accounting policies as part of a programme to restore the troubled chemicals group's fortunes.

BDO Binder Hamlyn, the company's auditor, has resigned and been replaced by Price Waterhouse.

The exceptional item included an pounds 18.1m charge to cover expected losses on businesses and assets that are up for sale. After the exceptional charge, MTM made a pre-tax loss of pounds 28m in the six months to 30 June, against a pre-tax profit of pounds 10.3m a year earlier. MTM said the comparison was inappropriate because of the changed accounting policy.

Price Waterhouse qualified the results with the statement: 'The accounts have been drawn up on a going concern basis which is dependent upon adequate banking facilities continuing to be made available to the group for the foreseeable future.

'Should the facilities not be maintained, the group may not be able to continue to trade and adjustments would have to be made to reduce the value of assets to their recoverable amount, to provide for any liabilities which might arise and to reclassify fixed assets and long-term liabilities as current assets and current liabilities.'

A spokesman for MTM said that the company had the support of its bankers while it carried out disposals and drew up a refinancing plan.

The company's net assets have fallen from pounds 37.6m at the end of last year to pounds 15m on 30 June.

MTM hopes to raise about pounds 20m from the sale of its Colombus division in the US and the UK agrichemicals business. It said these sales should be completed before the year-end.

The group should be left, after the planned disposals, with core businesses that made an operating profit of pounds 2.3m on turnover of pounds 32.8m in the first half of this year.

The loss per share was 31.4p, down from earnings per share of 9.2p. There is no interim dividend (1.87p).

The shares rose 3p to 33p.