Interim Results

RNS Number : 1734P
Tanfield Group PLC
30 September 2013
 



For immediate release

30 September 2013

 

The Tanfield Group Plc

 ("Tanfield", "Group", or "the Company")

 Interim Results for the six-month period to 30 June 2013

The Tanfield Group Plc, a leading manufacturer of aerial work platforms, announces its unaudited interim results for the six-month period ended 30 June 2013.

 

·     Continued recovery of global aerial lift market

·     Working Capital constraint limited revenues

·     Initiated Snorkel Disposal process

·     Cash conservation during M&A process

·     Turnover declined to £18.9m (H2 2012: £21m)

·     Improved margins and controlled overhead cost base

·     Net losses £8.4m (H2 2012: Operating loss: £8.2m)

 

Darren Kell, CEO of Tanfield, said:  "The Board are strongly recommending the recently announced proposed disposal of the Powered Access division, which de-risks the Tanfield Group, protecting the value inherent within the Snorkel business as well as the holding in Smith Electric Vehicle Corp . We believe the transaction will ultimately, significantly enhance the value of the Snorkel business and deliver far greater shareholder value in the medium term."

 

Further information:

  

Tanfield Group Plc

Darren Kell / Charles Brooks

 0845 155 7755

WH Ireland

James Joyce/Nick Field-Corporate Finance

Seb Wykeham / Ruari McGirr - Corporate Broking

 020 7220 1666

Buchanan

Charles Ryland /Helen Greenwood

www.buchanan.uk.com


020 7466 5000

 

 

 

 

 

 

Snorkel

 

Whilst demand increased, the Company was further constrained by the lack of working capital such that it could not benefit from the market recovery. As stated in previous financial statements the Company required the introduction of additional working capital to be able to return to sustained profitability. Given that growth requires investment of cash into working capital, the group has therefore not been able to fully respond to the opportunities in the market.  Following consultation with its major shareholders the Board initiated the disposal process of the Snorkel division and appointed an M&A advisor accordingly. Throughout the period the business was being managed to conserve cash through the M&A process and this further limited the opportunity.  

 

Smith Electric Vehicles

Smith Electric Vehicles Corporation, in which Tanfield holds 25%, continues to extend its bridge financing as it follows its ultimate strategy of seeking a listing on a public market.

 

Dividends

The Board has not declared a dividend for the period.

 Outlook

The Board are strongly recommending the proposed disposal of the Powered Access divison, which de-risks the Tanfield Group, protecting the value for shareholders inherent within the Snorkel business as well as the value of the holding in in the Smith Electric Vehicle Corp Investment. Furthermore we belive  the transaction will ultimately, significantly enhance the value of the Snorkel business and deliver far greater shareholder value in the medium term.

 

Global market opportunities for Snorkel remain strong driven by the on-going recovery in the equipment sector. Snorkel's product range, brand and reputation continue to generate strong demand in the market and to date the limited working capital within the business has been the only constraining factor. The Board are extremely encouraged therefore by the significant market opportunity presented by the proposed transaction addressing as it does the working capital issue plus bringing to bear a number of very important synergistic and strategic benefits. The proposed transaction should return Snorkel to its previous trajectory and allow the business to deliver upon its full potential as one of the leading global manufacturers.

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDING 30 JUNE 2013









Six months

Six months

Year to


to 30 Jun 13

to 30 Jun 12

31 Dec 12


(unaudited)

(unaudited)

(audited)


£000's

£000's

£000's

Continuing operations




Revenue

18,878

24,096

45,072

Changes in inventories of finished goods and WIP

(5,435)

(330)

2,889

Raw materials and consumables used

(7,531)

(16,450)

(34,243)

Staff costs

(8,892)

(9,109)

(18,760)

Depreciation and amortisation expense

(833)

(882)

(1,739)

Other operating expenses

(4,587)

(4,323)

(8,493)

Loss from continuing operations

(8,400)

(6,998)

(15,274)

Finance costs

(66)

(73)

(127)

Interest receivable

7

103

146

Net finance expense

(59)

30

19





Loss from continuing operations before tax and associate

 

(8,459)

 

(6,968)

(15,255)

Reassessment of carrying value of associate

 

-

-

1,280

One off costs directly associated with Smiths investment

-

-

(470)

Loss before taxation

(8,459)

(6,968)

(14,445)

Taxation

(1)

9

(79)

Net loss for the period

(8,460)

(6,959)

(14,524)









Other comprehensive income, net of tax:




Currency translation differences

(122)

(237)

(958)

Total comprehensive income for the year

(8,582)

(7,196)

(15,482)

















Loss for the period attributable to:




Owners of the parent

(8,460)

(6,976)

(14,543)

Non-controlling interest

-

17

19

Net loss for the period

(8,460)

(6,959)

(14,524)





Total comprehensive income for the period attributable to:



Owners of the parent

(7,213)

(15,501)

Non-controlling interest

-

17

19

Total comprehensive income for the year

(8,582)

(7,196)

(15,482)





Earnings per share from continuing operations



Basic  (pence)

Diluted (pence)

(6.3)

(6.1)

(12.0)









 

CONSOLIDATED BALANCE SHEET  

 

AS AT 30 JUNE 2013

 

 

30 Jun 13

30 Jun 12

31 Dec 12


(Unaudited)

(Unaudited)

(Audited)


£000's

£000's

£000's

Non current assets




Intangible assets

2,634

4,476

3,940

Property, plant and equipment

3,515

3,048

2,885

Associate

-

-

-

Deferred consideration receivable

-

-

-

Non current Investment

1,280

-

1,280


7,429

7,524

8,105

Current assets




Inventories

15,710

21,921

22,869

Trade and other receivables

9,139

11,330

9,063

Investments

462

513

474

Current tax assets

-

-

-

Deferred consideration receivable

339

345

339

Cash and cash equivalents

1,681

2,754

2,198


27,331

36,863

34,943





Total assets

34,760

44,387

43,048





Current liabilities




Trade and other payables

11,796

8,864

13,398

Provisions

477

714

577

Tax liabilities

-

-

15

Obligations under finance leases

69

65

70


12,342

9,643

14,060

Non-current liabilities




Obligations under finance leases

104

173

137

Deferred tax liabilities

375

375

375


479

548

512





Total liabilities

12,821

10,191

14,572





Equity




Share capital

6,975

6,193

6,450

Share premium

16,262

12,590

14,823

Share option reserve

1,966

1,809

1,885

Special reserve

66,837

66,837

66,837

Merger reserve

1,534

1,534

1,534

Translation reserve

11,046

11,889

11,168

Profit and loss account

(82,683)

(66,656)

(74,223)

Equity attributable to the owners of the parent

21,937

34,196

28,474

Non controlling interests

2

-

2

Total equity

21,939

34,196

28,476





Total equity and total liabilities

34,760

44,387

43,048

 

CONSOLIDATED CASH FLOW STATEMENT 

FOR THE SIX MONTHS ENDING 30 JUNE 2013









Six months

Six months

Year to


to 30 Jun 13

to 30 Jun 12

31 Dec 12


(unaudited)

(unaudited)

(audited)


£000's

£000's

£000's

Continuing operations




Loss before interest and taxation

(8,400)

(6,998)

(14,464)

Depreciation and amortisation

833

882

1,739

Loss on deferred consideration currency fluctuations

 -

 -

99

Loss on disposal of fixed assets

-

-

43

Gain on reassessment of carrying value of investment

 -

 -

(1,280)

Operating cash flows before movements in working capital

(7,567)

(6,116)

(13,863)

(Increase) decrease in receivables

(235)

(643)

3,239

(Decrease) increase in payables

(1,798)

(4,096)

788

Increase (decrease) in provisions

6

94

(44)

Decrease (increase) in inventories

7,305

(594)

(2,105)

Net cash used in operations

(2,289)

(11,355)

(11,985)





Interest paid

(66)

(73)

(127)

Income taxes paid

(10)

(170)

(222)

Net cash used in operating activities

(2,365)

(11,598)

(12,334)





Cash flow from Investing Activities




Purchase of property, plant and equipment

(45)

(82)

(310)

Deferred consideration received

 -

 -

-

Purchase of investments

(27)

(33)

(49)

Purchase of intangible fixed assets

-

(4)

(57)

Loan to Smith Electric Vehicles US Corp

-

-

(1,935)

Interest received

7

103

131

Net cash (used in) from investing activities

(65)

(16)

(2,220)





Cash flow from financing activities




Proceeds from issuance of ordinary shares net of costs

1,964

10,958

13,447

New obligations under finance leases in the period

 

-

-

-

Repayments of obligations under finance leases

(34)

(30)

(61)

Net cash (used in) from financing activities

1,930

10,928

13,386

Effect of exchange rate changes on cash and cash equivalents

(17)

(23)

(97)

Net increase (decrease) in cash and cash equivalents

(517)

(709)

(1,265)

Cash and cash equivalents at the start of year

2,198

3,463

3,463

Cash and cash equivalents at the end of the period

1,681

2,754

2,198





 

 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

 

 

 



Attributable to the owners of the parent





Share capital

Share premium

Shares option reserve

Merger reserve

Special reserve

Translation reserve

Retained earnings

Non-controlling interests

Total



£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

For the six month period ended 30 June 2013






















Balance at 1 January 2013


6,450

14,823

1,885

1,534

66,837

11,168

(74,223)

2

28,476

Comprehensive income











(Loss) profit for the period


-

-

-

-

-

-

(8,460)

-

(8,460)

Other comprehensive income











   Currency translation differences


-

-

-

-

-

(122)

-

-

(122)

Total other comprehensive income for the year


-

-

-

-

-

(122)

-

-

(122)

Total comprehensive income for the year


-

-

-

-

-

(122)

(8,460)

-

(8,582)

Transactions with owners in their capacity as owners:-











   Issue of shares


525

1,439

-

-

-

-

-

-

1,964

   Share based payments


-

-

81

-

-

-

-

-

81

At 30 June 2013


6,975

16,262

1,966

1,534

66,837

11,046

(82,683)

2

21,939












For the six month period ended 30 June 2012






















Balance at 1 January 2012


4,728

3,097

1,785

1,534

66,837

12,126

(59,680)

(17)

30,410

Comprehensive income











(Loss) profit for the period


-

-

-

-

-

-

(6,976)

17

(6,959)

Other comprehensive income











   Currency translation differences


-

-

-

-

-

(237)

-

-

(237)

Total other comprehensive income for the year


-

-

-

-

-

(237)

-

-

(237)

Total comprehensive income for the year


-

-

-

-

-

(237)

(6,976)

17

(7,196)

Transactions with owners in their capacity as owners:-











   Issue of shares


1,464

9,493

-

-

-

-

-

-

10,957

   Share based payments


1

-

24

-

-

-

-

-

25

At 30 June 2012


6,193

12,590

1,809

1,534

66,837

11,889

(66,656)

-

34,196












For the twelve month period ended 31 December 2012






















At 31 December 2011


4,728

3,097

1,785

1,534

66,837

12,126

(59,680)

(17)

30,410

Comprehensive income











Loss for the year


-

-

-

-

-

-

(14,543)

19

(14,524)

Other comprehensive income











   Currency translation differences


-

-

-

-

-

(958)

-

-

(958)

Total other comprehensive income for the year


-

-

-

-

-

(958)

-

-

(958)

Total comprehensive income for the year


-

-

-

-

-

(958)

(14,543)

19

(15,482)

Transactions with owners in their capacity as owners:-











   Issuance of new shares (note 21)


1,721

11,726

-

-

-

-

-

-

13,447

   Share based payments (note 25)


1

-

100

-

-

-

-

-

101

At 31 December 2012


6,450

14,823

1,885

1,534

66,837

11,168

(74,223)

2

28,476


1 Basis of preparation

The consolidated Interim Report of the Group for the six months ended 30 June 2013 has been prepared in accordance with AIM Rule 18 and not in accordance with IAS 34 "Interim Financial Reporting" therefore it is not fully in compliance with IFRS.

 

The half year report does not constitute financial statements as defined in Section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 31 December 2012 which is available on request from the Group's registered office, Vigo Centre, Birtley Road, Washington, Tyne and Wear NE38 9DA or can be downloaded from the corporate website www.tanfieldgroup.com.

 

2 Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2012, as described in those financial statements.  In particular, the accounts have been prepared on a going concern basis, and as set out on page 18 of those financial statements.  The directors believe that the proposed disposal of the Powered Access division addresses this condition.

 

LOSS PER SHARE








The calculation of the basic and diluted loss per share is based on the following data:

 

 




Six months

Six months

Year to


To 30 Jun 13

to 30 Jun 12

31 Dec 12





Number of shares




 

Weighted average number of shares in thousands








Basic

134,223

113,829

121,202

Potential dilutive ordinary shares from share options

2,891

3,042

2,736

Total diluted

137,114

116,871

123,938





Earnings








From continuing operations




Earnings for the purposes of earnings per share from continuing operations

(8,460)

(6,976)

(14,543)

Adjustment for one off items:




Reassessment of carrying value of investment

-

-

(1,280)

One off costs directly associated with Smiths IPO

-

-

470

Loss for the purposes of loss per share before one off items

(8,460)

(6,976)

(15,353)





Loss per share from continuing operations




Basic loss per share (pence)

(6.3)

(6.1)

(12.0)

Diluted loss per share (pence)

(6.3)

(6.1)

(12.0)





Loss per share from continuing operations before one off items 




Basic loss per share before one off items (pence)

(6.3)

(6.1)

(12.7)

Diluted loss per share before one off items (pence)

(6.3)

(6.1)

(12.7)





IAS33 defines dilution as a reduction in earnings per share or an increase in loss per share resulting from the assumption that options are exercised. As the potential dilutive ordinary shares from share options reduce the loss per share these share are omitted from the dilutive loss per share calculation. 

 


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