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Innovate Logistics says it is consulting its lawyers with a view to starting legal action after a series of false rumours regarding financial problems at the company swept the CV Show last week. CEO Mike Young says it will take action against any individual or company it can prove to be spreading "malicious gossip" about Innovate. He largely blames former managers who were made redundant during a large-scale restructuring exercise in February, plus others in the industry that "bear a grudge" against  the Nottinghamshire-based firm.

Young, who only joined the company in January, says the redundancies, plus other measures, have saved the company around £8m in three months. "We took a lot of management out of the company that we didn't feel were contributing to the success of the business. We have built through acquisitions, but we have been very poor at taking the costs out." Young stresses that the company is in a strong financial position and that its next set of accounts, for the year ending October 2006, will show a turnover of around £175m and cash reserves of some £18m.

He adds: "The financial performance was satisfactory prior to January, but not where it needed to be or where it could be. We've made great strides in improving cashflow and profitability. "We've not been the most efficient company in the world, but we have still made a profit on the back of that. "I emphasise that we have a significant amount of cash on the balance sheet and, looking at our  competitors, none of them have that." Young also stresses that Innovate has the full support of Icelandic parent Eimskip.