Last checked at 30 Sep 2013 07:00
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 | (8,582) | (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) | (6.3) | (6.1) | (12.0) |
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.
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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.
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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. | ||||