Jobs are set to be lost at a Manchester-based push bike brand after racking up losses of almost £4m.
Insync Bikes is also planning to leave its headquarters, which it only moved into last year. The company has outlined restructure plans after saying the UK market suffered a 'huge erosion' of demand in 2022.
It is also seeking a £3m cash injection from its Indian parent company Hero Cycles by no later than the end of March next year.
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According to its newly-filed accounts with Companies House, the business made a pre-tax loss of £3.7m for the 12 months to March 31, 2022, compared to a loss of £769,822 in the prior year.
The Trafford Park firm also made a pre-tax loss of £4m in the year to March 2020 and last made a profit in the year to January 31, 2015.
The figures come after the company, in May 2022, outlined plans to double its UK market share to 20% by 2024 after it relocated to a new 60,000 sq ft headquarters at Centenary Link.
On its latest set of accounts, a statement signed off by the board said: "Post Covid-19 pandemic global supply chains presented some challenges.
"The company was able to procure stocks. This diluted any material impact on the sales throughout this period, unlike many organisations who suffered greatly in 2021. Sales were flat during the year as markets saw a return to normalcy.
"2022 saw the group incurring losses on account of high upstream and downstream inventories across bards and channels. This has resulted in serious margin erosion coupled with socio-economic factors.
"The group continues to receive unwavering support from the group, with £4.85m of equity being introduced by Hero Cycles during the financial period under review."
On its future, the company added: "The directors are focused on returning the group to profits. The aim was to capitalise on the substantial improvement in performance during 20/21.
"However the difficulties referred to above have somewhat slowed down this trajectory. Despite these challenges, there are substantial new business relationships being forged, all of which are currently live and trading, albeit in their infancy as we speak but regardless still substantial.
"There is much more to follow on these fronts and we hope to see the benefits of this hard work in months and years to follow.
"Great strides have also been made into securing higher value, more premium product lines, with e-bikes being a huge part of this positive step forward for the group. This will drive both revenue and contribution moving forward."
The company added that "due to UK bike markets experiencing huge erosion in demand during 2022, the operations of the group need to restructured to ensure that the group operate in profit and as a going concern".
As a result, the business said it would:
- Focus purely on its developed long-term strategic corporate accounts
- Reduce costs by up to £450,000 a year once it exits its existing facilities. It has also sought a formal surrender of the lease at Centenary Link
- Reduce its headcount "to that of a small, focused core team" that will save around £656,000 a year
- Hero Cycles to provide £3m to the company by no later than March 31, 2024
As of March 31, 2022, the company had a headcount of 48, up from 38 in the prior year.
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