26.06.2016
Tanfield posts 2015 results
Tanfield, the owner of a 49 percent stake in Snorkel has issued its 2015 results and written off its Smith Electric Vehicle holding.
The company had no operating revenues and just £1,000 in interest income, against £54,000 in interest payments. It does however show £618,000 of income under staff costs, due to a positive accounting adjustment, and £268,000 in Other operating expenses. The company has revalued its holding in Smiths to zero and confirmed that it has three years more to run on the Snorkel agreement which will see it receive a pay-out IF the company meets certain profitability and cash flow criteria within that time frame.
As a result of the improving revenues at Snorkel, Tanfield has decided to retain the valuation of its holding in Snorkel at £36.3 million.
Vertikal Comment
Writing off the Smiths valuation is no surprise, and given the optimistic nature of Tanfield results declarations it is also not surprising that it is maintaining the valuation of its Snorkel holding, even though the formula may not trigger any return or value, given that Don Ahern is more interested in reinvesting and building the business than declaring a profit or even generating surplus cash.
The formula expires in 2018 and it looks unlikely that a pay off will be generated in that time frame, and there is little incentive for Ahern to buy Tanfield out. How a passive investment can continue to generate such operational costs is a mystery, but we will update as we learn more.
Barecat
Interest payments ? To whom ? Oh that 9% loan from a director. And
high salary costs: well as always, filling their pockets.
Isn't Tanfield just a way of letting the shareholders soak out the cash. I've never seen a positive statement released by Tanfield yet. And surely Don Ahern is smarter than that