Tanfield investment Snorkel sees sales plunge amid pandemic

(Sharecast News) - Tanfield updated the market on its investment in aerial work platform company Snorkel International Holdings on Friday, reporting that its sales in the fourth quarter of 2019 were $51.3m (£40.76m) - up 7.4% year-on-year.
The AIM-traded firm said Snorkel's sales for the full year were ahead 10.1% to $220.8m, but noted that despite the sales increase, its EBITDA swung to a loss of $0.1m from earnings of $3m in the prior year.

It said that, as with a number of manufacturing businesses, Snorkel had been "materially impacted" by the Covid-19 pandemic, and as a result, sales in the first six months of 2020 totalled $60.2m - a reduction of 46.4% from the same period in 2019.

"The board is not able to determine how long Covid-19 will continue to impact Snorkel or when the market for Snorkel's equipment will regain momentum," Tanfield said in its statement.

"The board understands that Snorkel is working towards a phased opening of the UK facility in either July or August; that the US facilities are currently operating at a fraction of the usual operating levels; and the New Zealand facility, while previously ordered to close, recently restarted operations with plans to gradually return to some form of normality."

Tanfield is a 49% shareholder in Snorkel following the joint venture between itself and Xtreme Manufacturing, with the investment valued at £19.1m.

The outcome of proceedings in the US and the UK, however, could have an impact on that valuation, the board cautioned.

On 22 October, the company said it had received a summons and complaint, filed in Nevada, by subsidiaries of Xtreme, relating to the joint venture transaction.

Following that, on 24 October, it said it had become necessary to issue and serve a claim in the English High Court against Ward Hadaway - the solicitor acting for the company at the time of the joint venture transaction - in order to fully protect its rights pending the outcome of the US proceedings.

"As outlined in the update on 19 May, both the US proceedings and the UK proceedings are continuing to progress, with the board continuing to seek advice, and further updates will be provided to shareholders as and when appropriate," Tanfield said on Friday.