Interim Results
Tanfield Group PLC
30 September 2005
Tanfield Group plc
Interim Results
Six months to June 30, 2005
Highlights
1. Turnover Growth £10.4 million from £5.1 million (6 months to June
2004)
2. Operating profit £332k compared to loss of (£5.2) million (year to
December 2004)
3. Strengthened Balance Sheet £8.3 million net assets from £1 million
(at Jan 1 2005)
4. Continued growth in order book
5. Launch of new products:
Aerial Access; and
Electric Vehicles
Tanfield Group Plc ('Tanfield') is pleased to announce its unaudited interim
results for the six month period to June 2005 and also takes the opportunity to
comment on recent trading performance and future prospects.
Following the large scale restructuring in 2004 the financial results for the
six months to June 2005 demonstrate strong growth, profitability and a robust
balance sheet.
Turnover for the six month period grew to £10.4m which compares to £11.8m for
the full year to December 2004 and £5.1m for the 6 months to June 2004. This
follows significant organic growth in Tanfield Holdings, our engineering
business, and the acquisition and subsequent growth of Smiths Electric Vehicles
(SEV).
Operating profit for the period of £332k compares favourably to the loss of £
(5.2)m in the year to December 2004 and the Group showed growth in its Gross
margin, up from 23% in 2004 to 26% for the period.
This profitable growth underlines the benefits of the strategy for the Group as
announced last year, to concentrate on value added engineering work with Blue
chip customers together with the expansion of the OEM product ranges of Electric
Vehicles and Aerial Access equipment. The results have been enhanced by the
success of the operational strategy at the Tanfield site which has significantly
reduced the unit cost of manufacture and improved output volumes. The Tanfield
site now operates as a single, efficient manufacturing unit covering all the
Group divisions.
The balance sheet has been significantly strengthened during the period with net
assets at the end of June of £8.3m compared to £1m at the end of December 2004.
We now have Net Current Assets of £2.8m compared to Net Current Liabilities of
£1.7m at December 2004, and debt has reduced by £2.3m to stand at £2.3m at June
2005.
During the period a new £4m Group bank facility was implemented which not only
increases the working capital facilities available to the Group but will also
significantly reduce the cost of borrowing. Furthermore the Group has raised
mortgage funding to allow it to acquire the long leasehold on two of its key
buildings on the Tanfield site for a consideration of £1.16m. The relocation of
the SEV manufacturing operation from its existing site at Gateshead to Tanfield
is now complete.
Trading Update
Smiths Electric Vehicles:
The prior year acquisition of SEV Group has proved to be a success which the
Directors believe has significantly increased the growth potential for the
Group. As noted above the SEV operation is now integrated into the Tanfield site
with consequent cost savings.
Aerial Access
The Aerial Access division has shown growth in both existing and new
markets. More aggressive marketing of what was already a well respected
product range has seen growth in both the United States and mainland
Europe. Better distribution channels, new agents and improvements to the
range have assisted this growth. Monthly output capacity of the Access
Vehicles has increased from 12 vehicles to over 70 vehicles in the 11
months since SEV was acquired. Furthermore a new range of Aerial Access
lifts based on a standardised build program with enhanced features and
telescopic booms were launched this month. This product range has been well
received by the market. We expect this will allow us to capture a larger
market share in our target regions. Distribution of the product range will
be increased over the next two months by appointing more agents in mainland
and Eastern Europe.
Electric Vehicle
The most exciting development has been the significant growth in the order
book for Electric Vehicles. The Group expects this division to demonstrate
substantial growth in the future. We have won increased orders for vehicles
in the airport, public and delivery sectors. A new electric delivery
vehicle and a new range of electric tugs are to be launched in October
2005. The control technology on these vehicles will allow the Group to
migrate into the 'donor vehicle' sector, whereby we use standard body
shells from the commercial vehicle automotive sector and build in our
electric drive and control systems, as well as continuing to promote the
Group's own range of vehicles. The Directors believe that this will present
a full electric delivery vehicle offering to the operators within closed
urban environments.
Service and Maintenance
We are continuing to see further growth potential in the Service and
Maintenance division based out of our nationwide chain of Depots. SEV
currently has over 80 people employed in servicing and maintaining electric
vehicles throughout the UK. As announced yesterday the potential for the
Dairy Crest business is to more than double the size of this division. This
gives existing and future buyers of electric vehicles the confidence that
there is a high level of support for their fleets.
Norquip:
The acquisition of the Norquip business for £280k in May is already starting to
bear fruit. This acquisition has increased our product offering, particularly in
the airport sector, and allows the Group to integrate this product range with
our Electric drive train. We have received orders for 4 vehicles and have a
level of enquiries which if converted would generate £5m of sales.
Tanfield Holdings:
As mentioned above we have seen significant organic growth within the Tanfield
Holdings engineering business. Concentration on the move away from simply
manufacturing components towards assemblies and turnkey solutions has proved
successful with a number of new Blue chip customers together with growth with
existing customers. In addition, these orders offer a significantly higher
proportion of value added work and hence higher margin. Tanfield Holdings
monthly run rate has grown significantly during the first half year and we are
confident of being able to grow further, particularly in the Health, Defence and
Off Highway markets.
Summary
Following a year of large scale restructuring in 2004 and the strategic
acquisitions of SEV Group and Norquip the Group is now demonstrating markedly
improved profitable growth. We have a number of exciting new products in the
Aerial Access and Electric Vehicle sectors which are soon to be launched and we
are seeing continuing organic growth in all our chosen target markets. We are
also now operating from a position of renewed financial strength.
I would like to take this opportunity to thank all our people for their efforts
over the past 12 months and for the continuing support of all our stakeholders.
Roy Stanley
Chairman Tanfield Group plc
Tanfield Group PLC
Consolidated Profit and Loss Account
For the six months ended 30th June 2005
Unaudited Unaudited Audited
6 Months to 6 Months to Year ended 31
Note 30th June 2005 30th June 2004 December 2004
£ £ £
TURNOVER
Existing Operations 10,273,809 5,099,812 10,686,989
Acquisitions 4 168,808 - -
-------------- -------------- --------------
Continuing operations 10,442,617 5,099,812 10,686,989
Discontinued operations 1,077,750
-------------- -------------- --------------
10,442,617 5,099,812 11,764,739
-------------- -------------- --------------
Cost of Sales
-Exceptional cost of sales 5 - - (252,760)
-Other cost of sales (7,738,591) (2,048,032) (8,766,955)
-------------- -------------- --------------
Total cost of sales (7,738,591) (2,048,032) (9,019,715)
-------------- -------------- --------------
-------------- -------------- --------------
Gross Profit 2,704,026 3,051,780 2,745,024
-------------- -------------- --------------
Administrative Expenses
-Exceptional administrative expenses 5 - (1,642,560) (1,859,000)
-Other administrative expenses (2,372,314) (3,624,232) (6,061,473)
-------------- -------------- --------------
Total administrative expenses (2,372,314) (5,266,792) (7,920,473)
-------------- -------------- --------------
OPERATING PROFIT/ (LOSS)
Existing Operations 332,807 (2,215,012) (4,815,487)
Acquisitions 4 (1,096) - -
-------------- -------------- --------------
Continuing operations 331,712 (2,215,012) (4,815,487)
Discontinued operations - - (359,962)
-------------- -------------- --------------
OPERATING PROFIT/(LOSS) 331,712 (2,215,012) (5,175,449)
Interest Receivable and similar income 97,938 15,216 18,916
Interest Payable and similar charges (377,959) (355,156) (848,117)
-------------- -------------- --------------
PROFIT/(LOSS) ON ORDINARY ACTIVITES BEFORE TAXATION 51,691 (2,554,952) (6,004,650)
Tax on loss on ordinary activities 2 - - 38,446
-------------- -------------- --------------
RETAINED PROFIT/(LOSS) FOR FINANCIAL YEAR/PERIOD 51,691 (2,554,952) (5,966,204)
============== ============== ==============
Basic Profit/(loss) per ordinary share 6 0.04p (4.14)p (4.49)p
============== ============== ==============
Diluted Earnings per share 6 0.04p - -
============== ============== ==============
Tanfield Group PLC
Consolidated Balance Sheet
As at 30th June 2005
Note Unaudited Unaudited Audited
30 June 2005 30 June 2004 31 December 2004
FIXED ASSETS £ £ £
Intangible Assets 5,591,208 4,425,751 5,236,731
Tangible Assets 3,752,421 1,415,801 2,332,537
-------------- -------------- --------------
9,343,629 5,841,552 7,569,268
-------------- -------------- --------------
CURRENT ASSETS
Stocks 3,921,418 769,277 2,417,395
Debtors 5,330,034 1,946,436 4,042,035
Cash at bank and in hand 1,015,972 3,188,503 8,745,702
-------------- -------------- --------------
10,267,424 5,904,216 15,205,132
CREDITORS: amounts falling due within one year (7,511,036) (10,665,383) (16,878,345)
-------------- -------------- --------------
NET CURRENT ASSETS/(LIABILITIES) 2,756,388 (4,761,167) (1,673,213)
-------------- -------------- --------------
TOTAL ASSETS LESS CURRENT LIABILITIES 12,100,017 1,080,385 5,896,055
CREDITORS: amounts falling due after more than one year
Convertible Debt (75,000) (1,831,880) (1,831,880)
Other Creditors (2,690,193) (1,270,901) (1,547,641)
PROVISIONS FOR LIABILITIES AND CHARGES 7 (1,012,452) (351,019) (1,487,532)
-------------- -------------- --------------
8,322,372 (2,373,415) 1,029,002
============== ============== ==============
CAPITAL AND RESERVES
Called Up
Share Capital 1,818,616 617,347 1,327,847
Shares to be issued 162,304 298,706 298,706
Other reserve - 111,150 111,150
Share Premium Account 25,301,685 12,528,605 18,631,774
Merger Reserve 1,614,740 1,533,740 1,533,740
Profit and Loss Account (20,574,973) (17,462,963) (20,874,215)
-------------- -------------- --------------
TOTAL EQUITY SHAREHOLDERS' FUNDS/(DEFICIT) 8,322,372 (2,373,415) 1,029,002
============== ============== ==============
Tanfield Group PLC
Consolidated Cash Flow Statement
For the six months ended 30th June 2005
Unaudited Unaudited Audited
6 Months to 6 Months to Year ended 31
Note 30th June 2005 30th June 2004 December 2004
£ £ £
Net cash outflow from operating activities 8 (2,354,329) (757,133) (2,614,290)
Returns on investments and servicing of finance (460,021) (339,939) (601,201)
Taxation 0 0 0
Acquisitions and disposals (328,818) 0 (2,541,354)
Capital expenditure & financial investment (1,681,350) 184,751 8,910
-------------- -------------- --------------
Cash Outflow before financing (4,824,518) (912,321) (5,747,935)
Financing 5,765,509 (483,090) 5,956,030
-------------- -------------- --------------
Increase/(Decrease) in cash in the period 940,991 (1,395,411) 208,095
============== ============== ==============
NOTES
1. Basis of preparation
The financial statements for the six months ended 30 June 2005 have been
neither audited nor reviewed, nor have the financial statements for the six
months ended 30 June 2004. They have been prepared on a consistent basis
using accounting policies set out in the Tanfield Group Plc statutory
accounts for the period ended 31 December 2004.
The figures for the year ended 31 December 2004 do not constitute the
company's statutory accounts for that period within the meaning of Section
240 of the Companies Act but have been extracted from the statutory
accounts, which have been filed with the Registrar of Companies. The
auditors have reported on those accounts and that report was unqualified
and did not contain a statement under Section 237(2) or Section 237(3)
of the Companies Act 1985.
2. Taxation
The tax charge in the period is based on the anticipated effective rate of
tax for the period to 31st December 2005.
3. Acquisitions
During the period the Group acquired the entire issued share capital of
Clickhere Limited for a total initial consideration of £120,000. This
comprised 900,000 ordinary shares with a nominal value of 1p each together
with cash of £30,000. The provisionally assessed fair value of the net
liabilities of the acquired company was £95,434 (including net overdraft
of £18,018) and goodwill of £215,434 arose after the application of merger
relief.
Also during the period the Group entered an agreement whereby it acquired
the trade and certain assets of both Norquip Limited and Saxon Specialist
Vehicles Limited from their parent Ennstone plc in exchange for cash
consideration of £280,000. The directors have not yet completed their
investigation into the fair value of all assets acquired although their
provisional assessment is that intellectual property acquired has a fair
value of £280,000, sundry stock items acquired have a fair value of £nil,
and that no goodwill arose on acquisition. This assessment will be
completed and updated as necessary within the annual accounts as allowed by
FRS 7.
4. Segmental Information
SEGMENT INFORMATION
Classes of business
£'000 Engineering Vehicle Hire Software Training Graphical Imaging Group
6 mths 12 mths 6 mths 12 mths 6 mths 12 mths 6 mths 12 mths 6 mths 12 mths
Jun-05 Dec-04 Jun-05 Dec-04 Jun-05 Dec-04 Jun-05 Dec-04 Jun-05 Dec-04
Turnover
Total Sales 10,553 11,483 927 406 171 34 12 134 11,662 12,057
Inter-segment
sales (1,220) (292) - - - - - - (1,220) (292)
Sales to Third
Parties 9,333 11,191 927 406 171 34 12 134 10,443 11,765
Finance charges
(net) (280) (829)
Segment Profit/
(Loss) before tax 368 (5,333) 118 143 (82) (54) (49) (760) 355
Common Costs (303)
-------
Group Profit/
(Loss before tax) 52 (6,004)
-----------------
Net assets/
(liabilities) 11,051 3,457 801 683 (728) (591) (2,802) (2,520) 8,322 1,029
Common costs include goodwill and legal & professional charges which the
directors do not believe can be allocated fairly across the segments.
The analyses presented above include the following amounts in respect of
operations acquired during the 6 months to June 2005. The figures are all
included within Software Training
Sales to third parties £168,808
Loss before tax £1,096
Net Liabilities £96,230
The geographical analysis of turnover by destination is:
6 Months to 30th Year ended 31st
June 2005 December 2004
£ £
United Kingdom 8,593,229 11,231,717
USA 1,374,812 271,757
Other European
Countries 474,576 261,265
---------------- ---------------
10,442,617 11,764,739
================ ===============
5. Exceptional Items
6 Months to 30th 6 Months to 30th Year ended 31st
June 2005 June 2004 December 2004
£ £ £
Exceptional cost of sales
Stock Provision - - 252,760
================ ================ ===============
Exceptional administrative costs
Impairment of fixed assets - 1,642,560 1,859,000
================ ================ ===============
6. Profit/(Loss) per ordinary share
Basic Profit/(Loss) per share has been calculated using weighted average
number of shares in issue during the relevant financial periods.
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
30 June 2005 30 June 2004 31 December 2004
Weighted average number of shares (no.) 146,563,869 61,734,716 72,209,946
Profit/(Loss) on ordinary activities after taxation (£) 51,691 (2,554,952) (5,966,204)
The calculation of diluted earnings per share for the period ending
30 June 2005 is based upon a weighted average number of shares in issue of
147,261,709 after adjusting for 697,840 potentially dilutive ordinary
shares arising from share options. No diluted loss per share was calculated
for the periods ending 30 June 2004 or 31 December 2004 as the effect of
outstanding share options and convertible debt was anti-dilutive.
7. Movement on provisions
PROVISIONS FOR LIABILITIES AND CHARGES
Group Warranty Legal Onerous
Provision Reserve Lease Total
£ £ £ £
As at 1st January 2005 155,160 584,126 748,246 1,487,532
Utilised in period (20,521) (20,521)
(Released)/charged to profit and loss account 28,876 (483,435) (454,559)
0
---------- ---------- ---------- ----------
As at 30th June 2005 155,160 592,481 264,811 1,012,452
---------- ---------- ---------- ----------
8. Net cash outflow from operating activities
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
30 June 2005 30 June 2004 31 December 2004
Operating profit/(loss) loss 331,712 (2,215,012) (5,175,449)
Depreciation on tangible fixed assets 373,662 237,936 570,013
Impairment of tangible fixed assets - 1,160,370 1,337,000
Amortisation of intangible fixed assets 140,957 154,791 235,548
Impairment of intangible fixed assets - - -
(Profit)/Loss on disposal of tangible fixed assets (104,586) - -
(Decrease)/ Increase in provisions (475,080) (192,750) 283,602
(Increase)/Decrease in stocks (1,504,023) 9,723 319,149
(Increase)/Decrease in debtors (1,251,025) (743,831) (997,592)
Increase/(Decrease) in creditors 134,054 831,640 813,437
-------------- -------------- --------------
Net cash outflow from operating activities (2,354,329) (757,133) (2,614,290)
============== ============== ==============
For further information call;
Tanfield Group PLC
Roy Stanley - Chief Executive - 01207 521111
Daniel Stewart & Company PLC
Ruari McGirr - 020 7776 6550
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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