Dundee’s Remploy factory is projected to lose more than £1m in the current financial year, according to a report by accountants KPMG.
Number crunchers say the closure-threatened textiles business will bring in only £131,000 in 2012/13 leaving an operating loss of £1,113,000.
The coalition Government wants to shut the factory on Dunsinane Avenue because it’s “not commercially viable”. More than 40 disabled people who work at the site are facing redundancy.
KPMG’s supplementary analysis of Remploy Enterprise Businesses was released to assist potential bidders.
Under the trading performance section it states: “Frontline (textiles) generates significant operating losses, with an operating loss of 120% in the year ended 31 March 2012. The business has been loss making for a number of years and is forecast to continue making a loss.”
However, the accountants admit that the bleak projection for Dundee’s Remploy factory could be unreliable.
The report goes on to say: “these data are misleading as the sites are not independent entities and so cannot be considered in isolation; as such the data cannot be regarded as a representation of standalone performance.”
A cross-party group, whose members include Dundee councillors, MSPs and MPs, as well as a representative of Remploy management and staff, are looking at alternative opportunities for the business.
But they are facing an uphill struggle because the KPMG report reveals that a “major supplier” has now pulled out.
The report says: “The major materials supplier to Frontline has confirmed it intends to exit the market, meaning Frontline will be unable to manufacture its main existing products without sourcing alternative materials.
“Frontline is at an advanced stage of development of a new range of replacement products. However, customer demand for these products remains unclear.”
Chairman of the cross-party committee, Lord Provost Bob Duncan, said: “We are working towards a bid but we are not making any details public at the moment.
“What I will say is, the people who work at Remploy Dundee are some of the most vulnerable I’ve come across and it’s very, very important that, as a city, we do all we can to resolve this problem.”
A spokesman for Remploy declined to comment.