The firm has embarked on a new, two-year restructuring plan to "realign the group’, and the £42.1m exceptional provision will be used to fund it.
"Yes it’s a lot of money, but this is a big group, and closing and restructuring is expensive," said chief executive Barry Hibbert, who returned to Polestar a month before the financial year-end. "We have quietly taken out 25% of our capacity already."
Some restructuring has already taken place at Greaves, Specialist Colour, Chromoworks and Idle, where the workforce voted in favour of a proposed cost-reduction plan last week.
The exceptional charge includes £18.2m in asset write-downs, including over-valued spare parts and stock. It also includes provision for the multi-million pound "black hole" in the accounts at Chantry. "When you have an accounting system that hasn’t worked for two to three years, you agree on a figure with your auditors and that’s what we’ve done," said Hibbert.
Polestar made a £96m "technical" surplus on last year’s bond buyback, which will be recognised in this year’s figures.
Peter Johnston has stepped up to be interim finance director because of the continued absence due to ill health of group finance director Malcolm Robertson. Polestar also has a new chairman, Investcorp’s Philip Yea, who joined at the beginning of the year as a non-executive.
Story by Jo Francis
