Tanfield Regulatory News (TAN)

17 Jul 2006 07:00

Tanfield Group PLC17 July 2006 Tanfield Group plc ("Tanfield" or the "Group") Trading Update The zero emission commercial vehicle and industrial products manufacturer Highlights: 1. Continued growth in sales and orders. a. Electric vehicles b. Service and maintenance c. Airport vehicles d. Powered platforms 2. Integration of assembly operations. 3. Launch of new vehicles. 4. Integration of Upright and Aerial Access. 5. Expansion of Upright The Board of Directors is pleased to report that trading for the first sixmonths of 2006 evidenced the continued strong progress of the Group. The growthin revenue and orders that was achieved during 2005 has continued, with alldivisions performing well. Trading for the first half of the year is in linewith expectations. Trading update Zero Emission Vehicles Smith Electric Vehicles ("Smith") The level of interest in Smith's next generation electric vehicles remains highand the order book is growing. Smith is continuing to adapt its zero emissiontechnology to produce more road-going commercial vehicles. Smith ElectricVehicles officially launched its Faraday chilled food distribution vehicle forSainsbury's Online, at the Commercial Vehicle Show 2006. This is the biggestindustry event of the year and the vehicle was well received. The Faraday hasbeen ordered by a range of operators including BAA, Enterprise plc, Co-operativeSociety and is proving popular in the traditional Dairy sector. Smith isdeveloping Newton, the first 7.5t goods vehicle in the world to incorporate zeroemission battery technology. The first Newton vehicles will be deployed inLondon by TNT Express in September 2006. This vehicle has experienced a highlevel of demand from home delivery operators. Smith has also launched Edison, asmaller electric vehicle with a 3500kg payload to compete in the conventionalvan market. This has been ordered by several parcel delivery companies. Service and Maintenance Division ("SEV") SEV, the service and maintenance division of Smith, continues to win newbusiness and consolidate its position as market leader for maintainingcommercial fleets of battery powered vehicles. The division has doubled itssales revenue in the past six months. SEV has implemented an extension to itsfleet maintenance contract with Dairy Crest, following Dairy Crest's acquisitionof Express Foodservice London and Midlands Co-op. This brings the total numberof Dairy Crest vehicles serviced by SEV to over 2,600 and the number of SEVmobile service engineers to 150 operating out of 14 depots around the countryservicing a total of well over 4000 vehicles. Jumbotug and Norquip Both these airport specialist vehicle divisions continue to enjoy increasingsales and order books with particularly strong export growth following thedevelopment of new zero emission vehicles. There is a growing demand in thissector as the airport industry comes to terms with tackling environmentalissues. The Group spent last year engineering the product range and thus thecontribution to sales of these companies was relatively low. This year has seena significant growth in sales. Powered Access Platforms UpRight Powered Access & Aerial Access The Directors believe that the global powered access industry has reactedfavourably to Tanfield's acquisition of UpRight. This is evident in the factthat the Group was successful in winning two large orders within three weeks ofcompletion of the acquisition. UpRight USA received an order from a major NorthAmerican rental company for 100 TM12 machines, worth in excess of USD1 million.A large European retailer has also ordered over 60 UpRight machines, with atotal value of more than Euro1 million. Total new orders since the acquisitionnow total in excess of GBP2 million which the Board believes demonstrates marketconfidence in Tanfield's ability to deliver quality products and service inUpRight. Upright Distribution Sales channels have been significantly increased in two important territories,with the appointment of exclusive master distributors for UpRight products inthe UK and Germany. International Parts and Service Ltd (IPS), Europe's leadingindependent provider of spare parts and service for aerial lifts, is nowUpRight's exclusive distributor for the UK. IPS will build a network ofindependent dealers across the UK and provide them with a comprehensiveafter-sales support package, including spare parts and maintenance. As part ofthe agreement, IPS will also undertake to buy all spare parts for UpRightmachines from Tanfield. Tanfield will retain direct control of all nationalaccounts, such as major rental companies. Power-Lift GmbH, based near Dusseldorf, becomes Master Distributor for Germany,in a similar agreement. These two distributors had been distributors for Uprightin the past had had generated significant sales before relationships broke downwith the previous management. The Board believes that there remains a significant latent demand for UpRightproducts and it anticipates winning further substantial orders in the nearfuture. The Group is implementing a strategy of integrating its Aerial Access productsinto the UpRight range. The Group's global network of independent dealers forpowered access products has risen from 15 at the start of 2005, to more than130. This is due to organic growth in Aerial, plus the acquisition of UpRightPowered Access. This offers the possibility in the medium term for more of theGroup's products being made available through this expanded distribution chain. New Assembly FacilityWe are making good progress with the consolidation of all product assemblyoperations onto one site. The Tanfield Group has acquired a long term lease on aflagship 250,000sq ft production facility in North East England. The factory, tobe named the Tanfield Centre, will house assembly lines for Smith ElectricVehicles, UpRight Powered Access, Jumbotug and Norquip. This means that allassembly operations will be consolidated from five buildings into one. Thisoffers the potential for cost savings and increased capacity to accommodate thegrowth of the Group. Comment: Roy Stanley, Chairman and CEO, said: "This has been an exciting six months forThe Tanfield Group. Our strategy to develop new products and sales channels forzero emission vehicles and industrial equipment continues to generate solidorganic growth. The acquisition of UpRight Powered Access consolidates ourposition as a leading global brand for aerial work platforms and has greatlyincreased our distribution network. The agreement with IPS instantly doubles thesize of the sales force in the UK. Germany is a mature market for powered accessand we are confident that the appointment of Power-Lift will have a similarimpact as that of IPS. The move to the Tanfield Centre will bring together all assembly operations toone site and will give us the facility to significantly ramp up production. Alldivisions continue to perform well and our progress continues." ENDS Enquiries: Roy Stanley, Group ExecutiveTanfield Group plc Tel: 01207 521111 Marc YoungDaniel Stewart & Co plc Tel: 020 7776 6550 This information is provided by RNS The company news service from the London Stock Exchange