02.06.2014

Tanfield results

Tanfield, now the minority owner of Snorkel, has issued its annual results for 2013, which morning and show a pre-tax profit.

The company is now an investment company with two passive minority holdings – Snorkel and Smith Electric Vehicles – Revenue for the year was £2.2 million while a third lower on a like for like basis staff costs increased from £2.1 to £2.6 million helping the business to a £1 million operating loss. After a re-evaluation of its investments and writing off its debts the company made a pre-tax profit of £7.4 million.

It now says that it may raise further funds and will look for new investment opportunities.

Chairman Jon Pither said: "It is with some mixed emotions that I review the past 12 months but with a certain optimism that I look to the future. Those 12 months need to be put into the context of the past five years. The context is that the company went through the most difficult trading period and the deepest recession ever experienced in its market for industrial products. It is a credit to all the people involved that the businesses, in their various guises, continue to operate and that Tanfield continues to be a shareholder in these businesses.

“Tanfield Group plc has gone through a radical structural change from being a strong manufacturing entity to being an investment company. This process of change is a response to the circumstances that the company faced during those five difficult years. We have managed to survive with a reasonable level of shareholder value intact and I am confident that our investments have the potential to provide a future return to shareholders."

Vertikal Comment

Whether Tanfield ever manages to recoup anything at all from the remnants of its takeover spree remains to be seen, the chances are probably against it as Smiths looks very shaky and Snorkel will initially consume its operating cash flow and is unlikely to generate the profits required to trigger any significant payments under the sale/transfer agreement, at least within the timescale laid out in that agreement.

We assume that the staff costs increased to such a level due to the transfer /sale activity? It will be interesting to see what they will be for the current trading year.