20.02.2013

Tanfield confirms approach

Tanfield, owner of Snorkel aerial work platforms, has issued a trading statement for the second half of 2012.

The trading statement is thin on fact but says that it broke even in October 2012, its first month since 2008 in which it do not lose money.

The rest of the fourth quarter does not sound quite as positive, with the company claiming that it used the period to restock in its key markets of Australia and Japan in preparation for the upturn which it expects to see in the second quarter of 2013.

Overall it says that revenues and operating losses for the second half were in line with those in the first half, when it had revenues of £24.1 million with a loss of £7 million. In which case full year revenues are likely to be in the region of £49 million, with a loss of between £7 and £14 million

The statement says that the company has received significant order forecasts from its key customers, which supports a positive outlook for 2013, as a result it is predicting a return to profit in 2013, if so this will be its first profitable year since 2007.

Net cash on hand - £2.7 million at the end of June – was down to £2.2 million by the end of the year. However the company says that it has agreed a debt facility to help fund its working capital going forward.

Most significantly Tanfield has confirmed the rumours that it has received a number of approaches from "credible parties", who have expressed interest in acquiring Snorkel. It says that it is considering these approaches and will provide an update in due course.

Finally the statement addresses the Smith Electric Vehicle business in which it retains a 24 percent stake, the company has extended the maturity on its $3 million bridge loan to Smiths until June 2013, to support it while it seeks alternative funding.

Vertikal Comment

One has to read between the lines of this statement to gain any real insight, and it indicates that after a strong lead up to October, business softened towards year end, as it did for most aerial lift manufacturers.

As with others Snorkel is almost certainly facing a better, but still soft first quarter in 2013, while anticipating a stronger, replacement driven, upturn over the rest of the year as confidence begins to return again.

There have been a number of rumours circulating about the possible sale of Snorkel, with the most referring to Chinese producers, looking for a western brand to spearhead export sales.

The most named suitor among these is Sany, the crane and excavator company. While Sany is struggling with its own problems, the cost of acquiring Snorkel would hardly register in its books and yet would provide some good expansionist PR potential as this year’s big trade show approaches.

With Bauma less than two months away, you can expect this to be a focus date for any announcements in this area.

Interesting times.