Tanfield sees 2011 as a transition year

Tanfield Group, the leading manufacturer of aerial work platforms, lost altitude after it promised nothing more than moving closer to break even in 2011.Its turnover in 2010 rose 0.9% to £43.5m, while its operating margin improved to 29%, from 26% previously. Despite the above, it suffered an operating loss before impairments of £15.8m, a slight improvement on 2009's loss of £16.02m. Its net cash position worsened at the end of last year to £3.6m, versus £5.4m at the end of 2009. By the end of the first quarter of 2011, however, it had improved to £4.8m.Not surprisingly, given the loss making nature of the business, the company preferred to focus on the improved outlook for this year. The company has seen a strong rise in orders for its main division in the first three months of 2011, but management has indicated that, "it is too early to say whether the current levels will be sustained as it is likely that some of the recent orders contain some short term replenishment of inventory at dealers". The firm also explained that, "the prolonged recession has severely impacted our supply chain's capabilities to react and ramp up production and this will restrict the pace of our growth during 2011". "As the market for aerial lifts is now beginning to return to growth, we expect that 2011 will be a transitional year, where we move closer to a break-even position. With a healthy cash balance and no debt, I believe Tanfield is on the right path to recovery and a secure future," said company chairman, Jon Pither.Shares fell as low as 35.75p in the morning session on the day of the results, giving back a good part of the year's gains so far. Of note, Digital Look technical analysts point out support at the 35 pence area. ab