Tanfield Regulatory News (TAN)

25 Sep 2007 07:03

Tanfield Group PLC25 September 2007 25 September 2007 THE TANFIELD GROUP PLC ("TANFIELD" OR THE "GROUP") INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2007 The Tanfield Group Plc, the leading manufacturer of zero emission electricvehicles and aerial work platforms, is pleased to announce its unaudited interimresults for the six month period to 30 June 2007. Highlights • Strong financial performance across the Group: •Turnover increased 120% to £36.8m (2006: £16.5m) •Pre tax profit increased 209% to £5.4m (2006: £1.7m) •EBIT 14.3% of sales (2006: 13.3%) •Net cash at 30 June of £4.7m - supporting further growth •Post Snorkel deal cash balance of £42m • Production lines for electric vehicles now installed and fully operational at Vigo, UK - on track to achieve a capacity of 30 new technology electric vehicles per week at the beginning of Q1 2008 • Volume order from major fleet operator for 50+ electric vehicles - customer requirements for 2008 already exceeds 600 vehicles • Partnership with Ford for electric vehicles for US market - US production to commence in December 2007 • The Board expects US production curve for electric vehicles in 2009 to be steeper than the UK • Completion of first stage of Snorkel integration - already achieved £20m cross-selling to existing EMEA customers • Third crane line for UpRight installed at Vigo, UK, further increasing output to 200 units per week capacity in September 2007 • Shipped first production electric vehicle fitted with lithium-ion phosphate battery pack - increasing addressable market Commenting, Darren Kell, Chief Executive of The Tanfield Group Plc, said: "Once again, Tanfield has delivered excellent results and achieved high growthin both core divisions of Powered Access and Zero Emission Vehicles. The integration of Snorkel International has progressed very smoothly and we cannow focus on growing global sales, while achieving significant cost savingsthrough supply chain synergies with our established powered access operation,UpRight. We have strengthened the management team, grown the forward order book andworked extensively with our supply chain to gear up for increased volume, inboth Powered Access and Zero Emission Vehicles. The foundations are now in placefor further strong, organic growth in the second half of 2007 and beyond." website: www.tanfieldgroup.co.uk For further information: The Tanfield Group Plc Tel: +44(0)20 7839 4321 on 25 September onlyDarren Kell, Chief Executive Tel: +44(0)845 1557 755 thereafterCharles Brooks, Finance Director Fishburn Hedges Tel: +44(0)20 7839 4321James Benjamin / Morgan Bone Mob: +44(0) 7747 113 930 / +44(0) 7767 622 967 tanfield@fishburn-hedges.co.uk Cenkos Securities plc Tel: +44(0)20 7397 8900Stephen Keys St. Helen's Capital plc Tel: +44(0)20 7628 5582Seb WykehamRuari McGirr Notes to editors The Tanfield Group Plc is the world's leading developer and manufacturer ofroad-going commercial electric vehicles and aerial work platforms. Tanfield isheadquartered in Newcastle with operations in both the North America and EMEAregions. It has two main divisions: Smith Electric Vehicles, was founded in 1920 and acquired by Tanfield in October2004. Following its acquisition, Smith is developing into a world leader in newtechnology electric vans and trucks with greatly enhanced performance, speed andrange capabilities. This makes them attractive for all fleet operators in largetowns, cities and closed industrial environment. For the first time, these fleetoperators have economically viable, zero emission alternatives to using dieselvans and trucks. Smith has an unrivalled UK-wide service and support network,which already maintains over 5,000 vehicles for major fleet operators. This coreelement of the business is beginning to fulfil its potential in terms ofaddressing the requirements of large urban fleet operators, who want to reducetheir operational costs and more importantly, greatly reduce their carbonfootprint. Smith's airport offering is complemented by two specialist airportvehicle sub-divisions; Jumbotugs and Norquip. www.smithelectricvehicles.com Powered Access, contains two of the world's most established aerial workplatform brands, UpRight Powered Access and Snorkel International. UpRight isfirmly established as the UK's biggest manufacturer of self-propelled aerialwork platforms (also known as "cherry-pickers", "mobile elevating workplatforms", "aerial lifts", etc). UpRight has assembly facilities in the UK andUSA, with products sold through a strong network of over 180 independent,full-service distributors across Europe, the Middle East and Asia-Pacificregions. Snorkel, acquired in July 2007, has significant manufacturingcapabilities along with strong sales and distribution, in the USA andAustralasia. Tanfield has been successful in extending its powered accessproduct range and is now one of only three "full line" aerial lift manufacturersto have a significant assembly footprint in both the North America and EMEAregions, in what is a $7bn global market. www.upright.com / www.snorkelusa.com THE TANFIELD GROUP PLC CHAIRMAN'S STATEMENT I am pleased to report another successful six months for the Group. We havedelivered an excellent performance across all of our key business measuresincluding turnover and profit, whilst continuing to invest to support our futureexpansion. The Tanfield Group Plc operates in two high growth markets - aerial workplatforms (also known as powered access, aerial lifts, cherry pickers, etc) androad-going commercial electric vehicles. Following the acquisition of Snorkel Holdings LLC ('Snorkel') for £50m,announced on 28 June 2007, the Group's Powered Access division is now one ofonly three "full line" manufacturers in the world that has a significantmanufacturing footprint in both the USA and EMEA territories. The aerial work platforms are sold both direct and via a global network of over180 independent distributors, who can provide a high level of local service andproduct support. The machines are deployed largely in repair and maintenanceapplications and in non-residential construction. Tanfield's zero emission vehicle brand Smith Electric Vehicles, is the world'slargest manufacturer of road-going commercial electric vehicles. The SmithNewton is the world's largest road-going electric truck, while the Smith Edisonis the world's first van-sized, high performance electric vehicle. The vehicles have a range of up to 150 miles on one battery charge, a top speedof 50mph and similar payload capabilities to the equivalent diesel-poweredvehicles. Designed specifically for intra-city operations, key markets includelogistics; retail distribution; mail/parcel delivery; and utilities. Financial Performance The first six months to 30 June 2007 once again demonstrated a high level ofprofitable growth. Turnover rose to £36.8m, an increase of 120% against thefirst half of 2006 and close to the full year figure for 2006, of £40.9m.Pre-tax profit further increased to £5.4m, up more than 200% compared to thefirst half of 2006 and more than 50% higher than the £3.5m achieved in the wholeof 2006. EBIT reached 14.3% of sales (13.3% for full year 2006) demonstrating ourcontinued control of margins while delivering strong growth. Similar financialcontrol continues to be exercised with regard to working capital. Net cash at 30June 2007 was £4.7m providing funds supporting further growth in line with ourexpectations for the second half of 2007. It was particularly pleasing to see strong organic growth in both of the Group'skey divisions - Powered Access and Zero Emission Vehicles, compared to theprevious six months at the end of 2006. The acquisition of Snorkel was completedafter the close of H1 2007. The Powered Access Division increased turnover 511% to £19.1m (2006: £3.1m),with profit margins materially improving to 18%. Turnover in the Zero Emission Vehicles Division rose 47% to £13.1m (2006:£8.9m), with the profit margins improving to 15.8% (2006: 13.6%). Working capital remains in line with expectations, at 36% of annual sales (42%at 31 Dec 06) reflecting both the Group's steep output growth curve and thepayment terms in advance of delivery of goods from our low-cost suppliers,particularly in the Far East. The pressure on working capital will reduce in the second half of 2007. Althoughthe absolute quarter-to-quarter growth forecast remains high, the ratio ofincremental sales to delivered sales does reduce. This means that cashgeneration will fund a higher proportion of the working capital increaserequired to support growth in the second half of the year. 41% of Powered Access payments in June 07 were payments in advance of receipt tolow cost base suppliers (4% at June 2006). The cost savings more than justifythe cash cost. For example, in re-introducing the UpRight AB46 boom lift,components from China are 55% of the cost of the previous US supply base,whereas the cash cost is circa 2%. Delivering Our Strategy The first half of 2007 saw the execution of a new strategy for Zero EmissionVehicles, with the Division moving away from small scale production towards astreamlined, efficient volume assembly line operation at our UK facility, VigoCentre. A large amount of time and resource went into understanding andimplementing this new culture and methodology, while also ensuring that thesupply chain was developed and demonstrated an ability to build in theadditional required capacity. I am delighted to say that this Division is now fully geared up for volumeproduction in 2008. It is also pleasing to note that during this period, theGroup has continued to successfully develop both new and existing markets forits unique electric vehicles. The third 90 metre crane line at Vigo Centre is installed and fully operational,providing enough headroom to increase output of UpRight Powered Access productsto 200 units per week. The growth plan for Powered Access of £250,000 per week in Q1 of 2007,increasing to £750,000 per week in Q2, was exceeded. This provides an excellentplatform for the Division to deliver its further planned sales growth in thethird and fourth quarters of this year. Snorkel Acquisition and £115m Placing On 28 June 2007, we announced the proposed acquisition of Snorkel Holdings LLCand the proposed placing to raise £115 million. These were both successfullycompleted on 1 August 2007. Tanfield acquired the entire share capital ofSnorkel for approximately £50.0m and assumed approximately £12.5m of debt,leaving the Group debt free. Snorkel is a worldwide supplier of high quality industrial aerial workplatforms. The products have a wide range of working at height applications andare supported by a comprehensive after-sales network. Snorkel has significant manufacturing capabilities, allied to strong sales anddistribution in the USA and Australasia. The Director's believe that Snorkel'sproduct range, which is focused on medium to large articulated and telescopicbooms, is proving to be an excellent complementary fit with the Group's existingUpRight product suite, which has a particularly strong small to medium sizedlift offering. This means Tanfield is now one of only three "full line" aeriallift manufacturers to have a significant assembly footprint in both the NorthAmerica and EMEA regions, in what is a $7bn global market. People As a high growth company and to help to service the growing demand for ourproducts, we are investing in additional staff and strengthening the managementteam further. Key appointments at UpRight Powered Access during the period include RichardTindale as Sales & Marketing Director and Martin Connolly as International SalesManager. Richard Tindale worked for UpRight during its initial growth phase in Europeduring the 1990s and has worked in the industry for over 20 years. MartinConnolly's principal role is to continue to develop UpRight's distributornetwork, and we are already noticing a step change. In addition to theaugmentation of the dealer network we have also continued the successfulstrategy of replacing and upgrading dealers in underperforming territories,providing the Division with stronger representation and better sales channels.The increased scale and credibility of the enlarged powered access division isbreeding further success as well-established dealers and distributors areattracted to our brands and seek out opportunities to represent us. In the Zero Emission Vehicles Division, we have appointed Doug MacAndrew asTechnical Director. Doug joins us from McLaren and has a wealth of experience inautomotive engineering. Doug has directed the transformation in Smith intovolume assembly and has also spearheaded the project to integrate lithium-ionphosphate battery packs into our new technology electric vehicles. The recent acquisition of Snorkel International also brings added experience andexpertise to the global management team; in particular Frank Scarborough,President of Snorkel, who has a superb track record in developing global salesfor aerial work platforms. Management continues its ongoing review of Group activities to ensure wemaintain focus on our core business. Board Changes We also welcome Colin Billiet as Non-Executive Director, who adds anotherdimension to the Board. Colin was previously Chief Executive of filtrationproduct manufacturer Domnick Hunter Group plc (1997 - 2006). He has vastexperience in developing a high growth, profitable, global manufacturingoperation. On 1st January 2008, I will step down as Executive Chairman, but will remainGroup Chairman in a non-executive capacity. The move to Non-Executive Directorwill allow me to concentrate on some of my other private business interests.However, as the founder of Tanfield, I remain dedicated to the Company and willcontinue to play a very active role in its future development. Outlook This has been another transformational period for the Group and I thank all ofour people for their sterling efforts over the past six months. I would alsolike to welcome those who joined the business during this period, including thepeople from Snorkel International in the USA, Australia, New Zealand and Europe,who officially became part of Tanfield in August 2007. Powered Access continues to make headway into new territories through thegrowing distributor network and the increasing interest from rental companies inour expanded and improved product range. Zero Emission Vehicles is now ready forvolume production and the level of interest from urban fleet operators continuesto be extremely high. We maintained or improved margins during another period of sales/productionramp-up and our cash position remains strong. The 66% turnover growth achieved against H2 2006 was entirely organic and thedevelopment of Vigo Centre during H1 2007 provides a springboard from whichoutput and sales can further increase, this year and beyond. Roy StanleyChairmanThe Tanfield Group Plc CHIEF EXECUTIVE'S REVIEW Smith Electric Vehicles Tanfield built and shipped 60 vehicles during the first half of 2007, in linewith internal targets, and the forward order book remains extremely healthy. Asof September 2007, the order book to the end of the calendar year stood at£6.1m. As outlined below, developments to the production line will enable us tosupply a further 200 vehicles in the second half of 2007. Feedback from customers who have purchased seed vehicles remains extremelypositive. We are now allocating volumes to major fleet operators, in line withour build capacity and their fleet replacement schedules. Customer requirementsfor 2008 are already exceeding 600 electric vehicles. In September 2007, the Group completed the installation at Vigo Centre of threenew assembly lines for the Edison van, which is now moving to volume production.Current capacity for Edison is 3 vehicles per week. Output will increase to 6per week by October 2007 and 18 per week by December 2007, providing a capacityfor 900 vehicles per annum in 2008. The production process for the Smith Newton truck is now fully prepared forvolume assembly. Current build capacity for Newton is 1 vehicle per day.Tanfield has increased the direct workforce employed on Newton by 150%, to growoutput to 2 vehicles per day by the end of 2007, providing a capacity for 500vehicles per annum in 2008. This will give us the capability to build 28 vehicles per week by December 2007,in line with our stated aim to achieve capacity of 30 new technology electricvehicles per week at the beginning of Q1 2008. Production of US-specific vehicles for North America will commence in the USA inDecember 2007. At the request of Ford, the Group will become the first companyin the world to introduce the Ford Transit to the US market, using its bodyshell for our Smith Edison model. Using the Transit body shell will further differentiate Smith Electric Vehiclesfrom other commercial diesel vehicle marques already available in North America,but it is not so different as to appear alien. It gives us instant access to thebenefits of hundreds of millions of dollars invested in vehicle chassis and cabdesign; while we have also developed a significant level of expertise inintegrating the Transit body shell with our electric drive train. Entering the USA with Transit further strengthens our relationship with Ford,which has already instructed its entire UK dealer network to direct all customerrequests for electric vehicles to Tanfield. Initially, vehicles will be assembled at the Group's existing facility inFresno, California. Our strategy will mirror that of the development of VigoCentre, with limited output in 2008 to establish the market, the productionprocesses and the localised supply chain. However, we expect the US productioncurve in 2009 to be even steeper than that of our UK facility. In September 2007, the Company built and shipped the first Smith ElectricVehicles production model fitted with a lithium-ion phosphate battery pack.Lithium-ion phosphate is a highly stable platform which provides an energydensity either equal or greater to the current battery technologies utilised inboth the Smith Newton truck and Smith Edison van. Moreover, lithium-ionphosphate batteries can be packaged in much smaller quantities, providing betterchassis weight distribution on both vehicle platforms and improved cubic volumecarrying capacity for the Edison marque. Our initial prototype and validation tests of Lithium-ion phosphate haveindicated that it is a very robust battery, offering a longer lifespan; with asignificantly shorter recharge time. It also does not require the heat-chargingneeded by the current battery technologies to maintain operating efficiency. The Group has negotiated supply agreements with 4 Lithium-ion battery packmanufacturers in North America, the Far East and Northern Europe/Scandinavia andis satisfied that there is more than sufficient supply chain capability to meetour Edison and Newton production requirements for 2008. Powered Access The integration of the customer-facing operations of Snorkel International isnow complete. We are on schedule to deliver substantial cost synergies throughongoing supply chain rationalisation. The Company is already realising the cross-selling opportunities presented bypushing the established UpRight products into the Snorkel customer base and viceversa - the Group has already achieved £20m of cross-selling to existing EMEAcustomers. A leading second-tier US rental company and established Snorkelcustomer, has already ordered 150 units from the UpRight electric lift range.During August, Snorkel Australasia set a new record for monthly sales, with anorder for 200 scissor lifts and 30 boom lifts. Snorkel has appointed two new distributors in the USA (Pennsylvania andMissouri) and two in Latin America (Nicaragua, Mexico). The US market forwardorder book for the remainder of the calendar year at Snorkel is at its highestlevel for over 5 years, rising from US$18.5m at the end of June 2007, toUS$26.7m as of 20th September 2007. The order book, to the end of the calendaryear, for UpRight Powered Access equipment produced at Vigo Centre, stands at£25.9m as of 20th September 2007. In order to fulfil the strong appetite from smaller rental companies and endusers in the USA, Tanfield is opening an additional 50,000sq ft (4,500sq m) ofassembly floor space at Snorkel's Kansas (USA) facilities. This is part of amodular plan to add up to 200,000sq ft of manufacturing footprint at Snorkel,over the next 12 months. Going forward, Snorkel will be the Group's lead Powered Access brand in theAmericas and Australasia. In these markets, key machines from the Group'sestablished UpRight range will be re-badged and sold as Snorkel products. Theseadditions to the Snorkel range will be wholly manufactured in Kansas, with thefirst products expected to be shipped in Q4 2007. This will free up our facilityin Fresno, California, to concentrate on assembly of Smith Electric Vehicles and"static" access platforms such as trailer mounted booms and push-around lifts. Snorkel's already strong management team and sales force will be augmented withminor tactical appointments and a wider recruitment drive is underway tofacilitate the ramp-up in US machine assembly. Demand for UpRight products will see output capacity at Vigo Centre furtherincreased by 33%, from 150 machines per week to 200 per week. This will beachieved by increasing throughput on the third 90 metre crane line, installedearlier in 2007. UpRight will be the Group's lead Powered Access brand in Europe, the MiddleEast, Africa and part of Asia. Within these markets, key machines from theSnorkel range will be sold as UpRight products, with certain lines to bemanufactured at Vigo Centre in the UK, the Group's 250,000sq ft (23,000sq m)global headquarters. In early September 2007, over 300 UpRight distributors, dealers, equipmentrental companies and interested parties attended a three-day sales conference inthe UK to examine both the established UpRight product portfolio and theproducts integrated from the Snorkel range. The Group sold 537 UpRight machines from this event, to the value of £20m, toexisting and new independent distributors, appointed either at the conference,or shortly afterwards. These sales consist almost entirely of the new, US andNew Zealand built, mid-range and large booms and scissor lifts integrated fromthe Snorkel portfolio. The average selling price of this newly added Snorkelequipment is significantly higher than that of the current UpRight portfolio. Market Outlook 1. Powered Access The global market for aerial work platforms remains extremely robust. The top 20aerial work platform manufacturers alone achieved sales of US$6.9bn in 2006; notincluding telehandlers (source: Access 20 study carried out by AccessInternational magazine, April 2007) and 2007 volumes will have increasedsignificantly. Legislation continues to drive growth in the EU region, with the Working atHeight regulations, introduced in 2005, still having a considerable impact onsales and market demand. UpRight has a well-regarded and established range oflow cost, entry-level machines, such as trailer-mounted platforms, push-aroundlifts and small personnel lifts. These machines are usually the first bought orhired by contractors or other end users who are moving away from ladders orscaffolding and into powered access. We are also seeing anecdotal evidence fromour distributor network that customers who took their first entry level machines6 to 12 months ago and are now familiar with the concept are returning to us forlarger and more sophisticated aerial work platforms. In addition we arewitnessing significant demand from the replacement market - the large installedbase of both UpRight and Snorkel is increasingly more aged, and customers arereplacing the equipment with product they know, product they understand andproduct that has served them well. Machines assimilated following the acquisition of Snorkel International, alliedto the UpRight portfolio, provide Tanfield with a full line of powered accessproducts. This is particularly attractive to larger scale independentdistributors of construction equipment or aerial work platforms. Up to now,UpRight distributors have had to dual source in order to provide a full range intheir territory and historically some distributors had moved away from UpRightin order to single source a full line from another manufacturer. The complete range also presents new opportunities in the rental sector. Over100 rental companies attended the UpRight 2007 Conference in September andinitial feedback confirms that the door is open to Tanfield to tender for fleetorders. We are carefully examining this opportunity and will only enter themarket for volume sales into the major European rental companies if we deem itto be commercially viable and sustainable. All the major rental companies are predicting further significant growth duringthe remainder of 2007 and into 2008, particularly in markets of Germany; Spain;the Middle East; and Russia and the Baltic States. Non-Residential Construction accounts for over 20% of all our Powered Accesssales, while Residential Construction accounts for less than 1% of total sales.The main product used in residential construction is the telehandler, known inNorth America as the rough terrain fork lift truck. This is a complementaryproduct to aerial work platforms and certain of the Group's competitors inPowered Access also manufacture telehandlers. Tanfield, however, does notmanufacture telehandlers and our exposure to the residential market is thereforevery limited. While there has been a reported softening in residential construction, both inthe US and Europe, this will have little impact on Tanfield's Powered AccessDivision. Evidence from the UpRight distributor network indicates that around75% of total sales are to the Repair & Maintenance sector. In the UK, Governmentfigures showed that R&M accounts for 44% of all construction equipment spend. 2. Zero Emission Vehicles In the UK, growth in van sales is outstripping that of any other vehicle type.UK Government figures show that light van traffic increased by 9 per cent in Q22007, the highest increase of any vehicle type. Light vans accounted for 13 percent of all motor vehicle traffic; goods vehicles 6 per cent; cars 79 per cent;and other vehicles 2 per cent (Source: National Statistics on Traffic in GreatBritain, 31.08.07). Government research also found that rigid light goods vehicles (LGVs) - such asthe Smith Newton - are the most common goods vehicle over 3.5t, accounting for39% of "freight miles" or 11.3bn vehicle km in 2006. Light van traffic has risenby 39% over the 10 year period 1996-2006; the highest growth rate of any vehicletype. 7% of all UK traffic is in London, which has 13% of the population(Source: Road Statistics 2006: Traffic, Speeds & Congestion) and we anticipatethat London will remain the principal market for Smith Electric Vehicles duringthe rest of 2007 and into 2008. The major market drivers for Smith's Edison vans and Newton trucks remain theeconomic benefit presented by the whole life cost savings of electric vehicles,along with growing governmental awareness for energy security and reducedreliance on foreign oil imports. Environmental market drivers remain carbon emissions, air pollution and noisepollution. These are increasingly motivating legislative change in favour ofelectric vehicles, such as the London Congestion Charge and Low Emission Zone.10 other urban UK regions are also introducing road pricing; Greater Manchesterhas already voted for a C-Charge, with Durham, the West Midlands, Tyne and Wear,Shrewsbury, Cambridgeshire and Bristol all still in the planning stages. Outside of the UK, Singapore, Stockholm and Oslo already operate congestioncharging schemes and many more cities will follow globally. China is introducinga C-Charge in downtown Shenzhen; while in the USA, the Federal Government hasawarded grants of US$350m to New York for a trial scheme in Manhattan andUS$180m for a pilot in San Francisco, around the Golden Gate Bridge. WashingtonDC is also considering introducing a similar trial. Current Trading & Prospects Once again, Tanfield has delivered excellent resuls and achieved high growth inboth core divisions of Powered Access and Zero Emission Vehicles. The integration of Snorkel International has progressed very smoothly and atthis early stage we are already demonstrating the cross-selling opportunity,with further global sales growth possible. The Snorkel integration will nowtarget significant cost savings through supply chain synergies with ourestablished powered access operation, UpRight. We have strengthened themanagement team, grown the forward order book and worked extensively with oursupply chain to gear up for increased volume, in both Powered Access and ZeroEmission Vehicles. The outlook for both key divisions remains extremely healthy. The Powered AccessDivision, significantly strengthened by the acquisition of SnorkelInternational, is poised for a new phase of sales growth, the profitability ofwhich will be underpinned by further cost savings from production synergies. OurZero Emission Vehicles Division remains a market leader, providing uniqueproducts that are attractive to major fleet operators in the UK, USA andmainland Europe. The financial benefits and environmental and energy securityissues that drive demand are gaining worldwide momentum and we anticipatefurther legislation that will positively discriminate for electric vehicles inall key markets. The foundations are now in place for further strong oprganic growth in thesecond half of 2007 and beyond. Darren KellChief ExecutiveThe Tanfield Group Plc Tanfield Group PLC Consolidated Income StatementFor the six months ending 30th June 2007 Unaudited Unaudited Audited 6 months 6 months Year ended to 30th to 30th 31 June 2007 June 2006 December 2006 £000's £000's £000's Revenue 36,826 16,494 40,913 Other operating income - - -Changes ininventories offinished goodsand WIP 257 2,593 1,222Raw materialsandconsumablesused (18,291) (10,184) (20,275)Reversal of previously impaired assets - - -Staff costs (8,563) (5,385) (11,290)Depreciationandamortisationexpense (827) 173 816Otheroperatingexpenses (4,135) (1,622) (5,946)Restructuringcosts - (211) (1,877) -------- -------- -------- Profit fromoperations 5,267 1,858 3,563 Finance costs 91 (126) (105) -------- -------- -------- Net Proft forYear 5,358 1,732 3,458 Income taxexpense (1,500) (485) (846) -------- -------- -------- Profit for theyear fromcontinuingoperations 3,858 1,247 2,612 Discontinued operationsLoss forperiod fromdiscontinuedoperations - - (108) Net profit forthe year 3,858 1,247 2,504 -------- -------- -------- Earnings per shareFrom continuing operationsBasic 1.32 p 0.80 p 1.10 pDiluted 1.26 p 0.78 p 1.03 p From continuing and discontinuedoperations Basic 1.32 p 0.80 p 1.05 p Diluted 1.26 p 0.78 p 0.99 p Tanfield Group PLC Consolidated Balance SheetAs at 30th June 2007 Unaudited Unaudited Audited 30 Jun 07 30 Jun 06 31 Dec 06 £000's £000's £000'sASSETS Non Current AssetsProperty, Plant and Equipment 4,389 4,113 3,734Goodwill 5,143 5,143 5,143Intangible Assets 7,417 4,183 5,792 -------- -------- -------- 16,949 13,440 14,669 -------- -------- --------Current AssetsInventories 21,936 14,307 14,158Trade and Other Receivables 23,568 8,191 13,833Investments 94 - 94Cash and Cash Equivalents 4,938 595 13,605 -------- -------- -------- 50,536 23,092 41,690 -------- -------- -------- -------- -------- --------TOTAL ASSETS 67,485 36,532 56,359 ======== ======== ========LIABILITIESCurrent liabilitiesTrade and Other Payables 13,373 7,957 6,801Tax Liabilities 2,678 784 1,178Obligations Under Finance Leases 402 366 421Bank Loans and Overdrafts 203 695 163Other Creditors 1,532 1,432 2,221Provisions - - - -------- -------- -------- 18,188 11,234 10,784 -------- -------- --------Non Current LiabilitiesBank Loans 931 1,022 948Other Creditors 288 198 310Deferred Tax Liability 19 45 19Obligations Under Finance Leases 384 653 549Convertible Loan Notes - 69 69Provisions 262 615 262 -------- -------- -------- 1,884 2,602 2,157 -------- -------- -------- -------- -------- --------TOTAL LIABILITIES 20,072 13,836 12,941 -------- -------- -------- EquityShare Capital 2,930 2,421 2,921Share Premium Account 29,646 10,690 29,578Share option reserve 255 308 255Loan Stock Equity Reserve - 6 6Merger Reserve 1,534 1,534 1,534Translation reserve 67 - 0Capital Reduction Reserve 7,228 7,228 7,228Profit And Loss Account 5,754 509 1,896 -------- -------- --------Total Equity 47,413 22,696 43,418 -------- -------- -------- -------- -------- --------Total Equity & Liabilities 67,485 36,532 56,358 ======== ======== ======== 0 0 0 Tanfield Group Plc Consolidated Cash Flow Statement For the six months ending 30th June 2007 6 months 6 months Year ended to 30th to 30th 31st June07 June06 December 2006 Note £000's £000's £000's Operating ActivitiesProfit beforetax andinterestexpense 5,267 1,858 3,455Depreciationof property,plant andequipment 437 450 825Write off ofnegativegoodwill - (860) (2,130)Impairment of property, plant and equipment - - -Amortisationof intangiblefixed assets 390 238 539(Profit)/Losson disposal offixed assets - - (7)(Increase)/decrease indebtors (9,657) (1,487) (7,031)(Decrease)/Increase increditors 6,539 1,957 1,708(Decrease)/Increase inprovisions (701) (46) (322)(Increase)/decrease ininventories (7,767) (4,434) (4,285)Cash used inoperations 6 (5,492) (2,324) (7,248)Interest paid (80) (126) (208)Tax paid (0) - - -------- ------- -------- Net Cash fromOperatingactivities (5,572) (2,450) (7,456) -------- ------- -------- Investing ActivitiesAcquisitions - (6,523) (6,851)Purchase ofproperty,plant andequipment (1,090) (548) (503)Proceeds fromsale ofproperty,plant andequipment - - 150Purchase ofinvestments - - (94)Purchase ofintangiblefixed assets (2,015) - (312)Interestreceived 171 - 34 -------- ------- -------- Net cash usedin investingactivities (2,935) (7,071) (7,576) -------- ------- -------- Financing ActivitiesIssue ofordinary sharecapital 1 9,696 29,055Increase inbank loans andotherborrowings 52 - -Repayment ofbank loans - (331) (870)Capitalelement offinance leases (183) (335) (567) -------- ------- --------Net cash usedin financing (130) 9,030 27,618 -------- ------- -------- NetIncrease/(Decrease) in Cashand CashEquivalents (8,637) (491) 12,586 Cash and cashEquivalents atbeginning ofYear 13,546 960 960 -------- ------- --------Cash and Cashequivalents atend of theyear 4,909 469 13,546 ======== ======= ======== Tanfield Group PLC Consolidated Statement of Changes in EquityFor the six month period ended 30th June 07 Attributable to equity holders of the company Share Share Share Capital Loan Merger Translation Profit and Total capital Option Premium Reduction Stock Reserve reserve Loss Equity Reserve Reserve Reserve Account £000's £000's £000's £000's £000's £000's £000's £000's £000's Balance at 1January 2007 2,921 255 29,578 7,228 6 1,534 - 1,896 43,418- prior period adjustments - - ------- ------- -------- -------- ------- ------- -------- --------- ---------- as restated 2,921 255 29,578 7,228 6 1,534 - 1,896 43,418 Exercise ofshare options 1 - - - - - - 1Net gains/(losses) not recognised in the incomestatementIssue of new share capital - - - - - - - -Capital Reduction - - - - - - -Conversion ofconvertibleloan notes 8 - 68 - (6) - - 70Re Translation 67 - 67of Shares issued for consideration - - - - - - - -Net profit forthe year - - - - - - 3,858 3,858Dividends ------- ------- -------- -------- ------- ------- -------- --------- ---------Balance at 30June 2007 2,930 255 29,646 7,228 - 1,534 67 5,754 47,413 ------- ------- -------- -------- ------- ------- -------- --------- --------- For the six month period ended 30th June 2006 Attributable to equity holders of the company Share Share Share Capital Loan Merger Translation Profit and Total capital Option Premium Reduction Stock Reserve reserve Loss Equity Reserve Reserve Reserve Account £000's £000's £000's £000's £000's £000's £000's £000's £000's Balance at 1January 2006 1,905 308 1,509 7,228 6 1,534 - (737) 11,753- prior period adjustments - - ------- ------- -------- -------- ------- ------- -------- --------- ---------- as restated 1,905 308 1,509 7,228 6 1,534 - (737) 11,753 Exercise ofshare options 15 - 14 - - - - 30Net gains/(losses) not recognised in the income statementIssue of newshare capital 500 9,166 - - - - 9,666Capital Reduction - - - - - -Conversion of convertible loan notes - - - - - - - -Shares issued for consideration - - - - - - -Net profit forthe year - - - - - 1,247 1,247Dividends - ------- ------- -------- -------- ------- ------- -------- --------- ---------Balance at 30June 2006 2,421 308 10,690 7,228 6 1,534 - 510 22,696 ------- ------- -------- -------- ------- ------- -------- --------- --------- 4 Business Segments For the six months ending 30.06.07 Powered Zero Engineering Consolidated Access Emmission Platforms Vehicles £000's £000's £000's £000's -------- -------- -------- --------- Revenue External Sales 19,124 13,085 4,617 36,826 Inter-segment sales -------- -------- -------- --------- Total revenue 19,124 13,085 4,617 36,826 -------- -------- -------- --------- Result Segment Result before restructuring 3,464 2,069 185 5,718 Unallocated corporate expenses - - - (451) Profit from operations 3,464 2,069 185 5,267 Finance costs 56 30 5 91 -------- -------- -------- --------- Profit before tax 3,520 2,099 190 5,358 -------- -------- -------- --------- Income tax expense 986 588 53 1,500 -------- -------- -------- --------- Profit after tax 2,534 1,511 137 3,858 -------- -------- -------- --------- Other information Capital additions 1,060 2,012 26 3,098 Depreciation and amortisation 303 387 156 846 Balance Sheet Assets: Segment assets 33,306 20,092 14,087 67,485 -------- -------- -------- --------- Consolidated total assets 33,306 20,092 14,087 67,485 -------- -------- -------- --------- Liabilities: Segment Liabilities 10,491 5,714 3,867 20,072 -------- -------- -------- --------- Consolidated total liabilities 10,491 5,714 3,867 20,072 -------- -------- -------- --------- For the six months ending 30.06.06 Powered Zero Engineering Consolidated Access Emmission Platforms Vehicles £000's £000's £000's £000's -------- -------- -------- --------- Revenue External Sales 3,128 8,883 4,483 16,494 Inter-segment sales -------- -------- -------- --------- Total revenue 3,128 8,883 4,483 16,494 -------- -------- -------- --------- Result Segment Result before restructuring 367 1,279 423 2,068 Restructuring costs 211 - - 211 Unallocated corporate expenses - - - Profit from operations 156 1,279 423 1,858 Finance costs (24) (68) (34) (126) -------- -------- -------- --------- Profit before tax 132 1,211 389 1,732 -------- -------- -------- --------- Income tax expense 37 339 109 485 -------- -------- -------- --------- Profit after tax 95 872 280 1,247 -------- -------- -------- --------- Other information Capital additions 1,243 415 68 1,726 Depreciation and amortisation (355) 433 94 173 Balance Sheet Assets: Segment assets 16,062 10,558 9,912 36,532 -------- -------- -------- --------- Consolidated total assets 16,062 10,558 9,912 36,532 -------- -------- -------- --------- Liabilities: Segment Liabilities 3,579 5,949 3,658 13,186 -------- -------- -------- --------- Consolidated total liabilities 3,579 5,949 3,658 13,186 -------- -------- -------- --------- For the twelve months ending 31.12.06 Powered Zero Engineering Consolidated Access Emmission Platforms Vehicles £000's £000's £000's £000's -------- -------- -------- --------- Revenue External Sales 11,330 19,966 9,617 40,913 Inter-segment sales -------- -------- -------- --------- Total revenue 11,330 19,966 9,617 40,913 -------- -------- -------- --------- Result Segment Result before restructuring 3,530 2,224 437 6,191 Restructuring costs (1,877) - - (1,877) Unallocated corporate expenses - - - (751) Profit from operations 1,653 2,224 437 3,563 Finance costs (10) (65) (30) (105) -------- -------- -------- --------- Profit before tax 1,643 2,159 407 3,458 -------- -------- -------- --------- Income tax expense 301 448 97 846 -------- -------- -------- --------- Profit after tax 1,342 1,711 310 2,612 -------- -------- -------- --------- Other information Capital additions 3,268 456 82 3,806 Depreciation and amortisation (1,905) 775 313 (816) Balance Sheet Assets: Segment assets 26,112 16,188 14,059 56,359 -------- -------- -------- --------- Consolidated total assets 26,112 16,188 14,059 56,359 -------- -------- -------- --------- Liabilities: Segment Liabilities 5,803 4,016 3,122 12,941 -------- -------- -------- --------- Consolidated total liabilities 5,803 4,016 3,122 12,941 -------- -------- -------- --------- Earnings per Share Including discontinuing operations The calculation of the basic and diluted earnings per share is based on the following data: 6 months ended 6 months ended Year Ended Earnings 30/06/07 30/06/06 31/12/2006 Earnings for the purposes of basic earnings per share 3,858 1,732 2,504 Effect of dilutive potential ordinary shares: - 14 14 - interest on convertible loan notes Earnings for the purposes of diluted earnings per share 3,858 1,718 2,490 Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 292,220,713 216,053,300 237,396,217 Convertible Loan Notes - 789,474 789,474 Share Options 14,353,671 2,928,671 14,453,671 Weighted average number of ordinary shares for the purposes of diluted 306,574,384 219,771,444 252,639,361 earnings per share From continuing operations The calculation of the basic and diluted earnings per share is based on the following data: 6 months ended Year Ended Year Ended Earnings 30/06/07 31/12/2006 31/12/2006 Earnings for the purposes of basic earnings per share 3,858 1,732 2,614 Effect of dilutive potential ordinary shares: - 14 14 - interest on convertible loan notes Earnings for the purposes of diluted earnings per share 3,858 1,718 2,600 From discontinued operations 6 months ended 6 months ended Year Ended 30/06/07 30/06/06 31/12/2006 Basic 1.32 0.80 1.10 p Diluted 1.26 0.78 1.03 p This information is provided by RNS The company news service from the London Stock Exchange