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Emerson Crane Hire > News > Story
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Dismal update from Tanfield

March 14, 2014 | Comments (0)

Tanfield has issued an update prior to the publication of its annual results next month.

The company is now an investment company with a minority stake in two companies, Snorkel and Smiths Electric Vehicles.

Tanfield says that following an injection of significant working capital the Snorkel business is progressing well, with production increasing as the parts business has been built up. It claims that synergies between Xtreme and Snorkel has led to improved access to distribution which is proving beneficial.

However Smith Electric Vehicles has failed to secure further investment and warned that its survival is dependent upon the continued financial support of its existing investors, and the raising of further investment, for which it is in negotiations.

Tanfield acknowledges that there is a risk that Smith will fail to raise further investment funds. Such is the debt that Smiths has built up, if the company does eventually succeed in taking the business public or persuading investors to stump up more cash, Tanfield can expect to see its holding significantly diluted.

More information on the two businesses will be supplied when Tanfield publishes its result in April. In the meantime the shares crashed more than 25 percent to just over 13.5p.

Vertikal Comment

There is a real chance now that Tanfield will slowly run out of cash and expire, with Smith Electric Vehicles looking increasingly shaky, and the chances of extracting significant cash from Snorkel any time soon looking quite remote. ‘How to turn $300 million in cash into a few $100 worth of shares’ is a sentiment that springs to mind.

As to Snorkel, under Don Ahern it has a real chance, but needs to restructure its operations to closer match its current and likely future revenues.


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