TIDMTAN
RNS Number : 0212U
Tanfield Group PLC
20 November 2023
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement via a Regulatory Information Service ("RIS"), this
inside information is now considered to be in the public domain
Tanfield Group Plc
("Tanfield" or the "Company")
Snorkel Investment Update
The Board of Tanfield (the "Board") is pleased to update the
market on its investment in Snorkel International Holdings LLC
("Snorkel"), the aerial work platform business.
Investment Background
-- Tanfield is a 49% shareholder in the equity of Snorkel
following the joint venture between the Company and Xtreme
Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a
company owned by Don Ahern of Ahern Rentals Inc, relating to
Snorkel, in October 2013.
-- T he Snorkel investment is valued at GBP19.1m. The outcome of
the US Proceedings referenced below could have an impact on this
valuation.
-- On 22 October 2019, the Company announced that it had
received a Summons and Complaint, filed in Nevada (the "US
Proceedings") by subsidiaries of Xtreme, relating to the
Contemplated Transaction .
Highlights
-- In the third quarter of 2023, Snorkel's sales increased by
20.5% to US$51.1m (Q3 2022: US$42.4m). The EBITDA in the third
quarter of 2023 improved to a US$1.0m profit (Q3 2022: US$3.1m
loss).
-- Year to date sales for the first 9 months of 2023 saw an
increase of 10.8% to US$145.1m (YTD 2022: US$131.0m). Whilst the
increase in sales was US$14.1m in value, the EBITDA for the first 9
months of 2023 improved to a US$2.8m profit (YTD 2022: US$10.9m
loss), an improvement of some US$13.7m.
Business Update
Tanfield is a 49% shareholder in the equity of Snorkel following
the joint venture between the Company and Xtreme, a company owned
by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October
2013 .
In the third quarter of 2023, Snorkel's sales increased by 20.5%
to US$51.1m, compared to US$42.4m for the third quarter of 2022.
The EBITDA for the third quarter of 2023 was a profit of US$1.0m,
compared to a loss of US$3.1m in the third quarter of 2022, an
improvement of US$4.1m. This largely resulted from the ongoing
improvement in the gross profit margin, which in the third quarter
of 2023 was 12.9%, compared to 4.2% for the full year 2022.
This resulted in year-to-date sales for the first 9 months of
2023 increasing to US$145.1m, compared to US$131.0m for the same
period in 2022, an increase of 10.8%. Whilst the year-to-date
increase in sales was US$14.1m in value, the EBITDA for the first 9
months of 2023 was a profit of US$2.8m, compared to a loss of
US$10.9m for the same period in 2022, an improvement of some
US$13.7m. This largely resulted from the ongoing improvement in the
gross profit margin, which in the first 9 months of 2023 increased
to 12.9%, up from 4.2% for the full year 2022.
The Board is unaware of the reason behind the gross profit
margin improvement, but it continues to seek clarification and
access to information that is sufficient to fully investigate both
current and historic gross profit margins.
As previously reported, Don Ahern, the owner of the Company's
51% joint venture partner, sold the trade and assets of Ahern
Rentals for around US$2bn towards the end of 2022. Since the
Contemplated Transaction in 2013 through to the end of 2022, Ahern
Rentals was Snorkel's largest customer and therefore the Board are
pleased to see that Snorkel has still been able to increase its
sales in each quarter of 2023, and that overall the sales now
appear to be at vastly improved gross profit margins, despite Don
Ahern selling Ahern Rentals.
Below is a summary of the consolidated financial statement for
the third quarters of 2023 and 2022, along with the respective year
to date totals.
US$000's Q3 2023 YTD 2023 Q3 2022 YTD 2022
Net sales 51,122 145,123 42,422 130,976
Cost of goods sold (44,505) (126,414) (39,487) (125,001)
Gross profit 6,617 18,709 2,935 5,975
--------- ---------- --------- ----------
12.9% 12.9% 6.9% 4.6%
Selling, general & administrative
costs (5,611) (16,450) (4,945) (14,814)
Foreign currency exchange
gain/(loss) (16) 567 (1,125) (2,040)
EBITDA profit/(loss) 990 2,826 (3,135) (10,879)
Depreciation & non-operating
costs (352) (1,120) (650) (1,831)
Net profit/(loss) 638 1,706 (3,785) (12,710)
--------- ---------- --------- ----------
The Board views the increase in sales and gross profit margin in
2023 to be a continued positive development and is not aware of any
reason why this improving trend should not continue.
The Company is fully focussed on the US Proceedings which are
continuing and while the jury trial was previously scheduled to
take place in early 2024, in part as a result of Tanfield's amended
counterclaims earlier in the year, the Board now expects a new
trial date to be set around the end of 2024 instead. The Board
continues to believe that a positive outcome to the proceedings is
possible. So far as it is necessary, the Company will continue to
vigorously defend its position whilst continuing to seek
appropriate advice.
Further updates will be provided to Shareholders as and when
appropriate.
For further information:
Tanfield Group Plc 020 7220 1666
Daryn Robinson
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Andrew de Andrade 020 7220 1666
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END
UPDFEUFESEDSEIF
(END) Dow Jones Newswires
November 20, 2023 08:01 ET (13:01 GMT)
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