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.
·
The Snorkel investment is valued at
£19.1m. 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
·
Snorkel's sales for the first 9 months of 2024 saw
a decrease of 5.4% to US$137.3m (2023: US$145.1m), with EBITDA
dropping in the same period to a loss of USD$1.9m (2023: profit of
USD$2.8m).
· The
jury trial previously scheduled for March 2025 has been rescheduled
for a 5-week stack beginning in October 2025.
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 first 9 months of 2024,
Snorkel's sales decreased by 5.4%% to US$137.3m, compared to
US$145.1m for the same period of 2023. The EBITDA for the
first 9 months of 2024 was a loss of US$1.9m, compared to a profit
of US$2.8m for the same period of 2023.
Below is a summary of the
consolidated financial statement for the first 9 months of 2024,
2023 and 2022, along with the full year 2023 and
2022.
|
US$000's
|
9 months
2024
|
9 months
2023
|
9 months
2022
|
|
Full Year
2023
|
Full Year
2022
|
|
|
|
|
|
|
|
|
|
Net
sales
|
137,301
|
145,123
|
130,976
|
|
188,722
|
168,752
|
|
Cost of goods sold
|
122,549
|
126,414
|
125,001
|
|
161,963
|
161,677
|
|
Gross profit
|
14,752
|
18,709
|
5,975
|
|
26,759
|
7,075
|
|
|
10.7%
|
12.9%
|
4.6%
|
|
14.2%
|
4.2%
|
|
|
|
|
|
|
|
|
|
Selling, general &
administrative costs
|
16,320
|
16,450
|
14,814
|
|
20,920
|
19,393
|
|
Foreign currency exchange
gain/(loss)
|
(286)
|
567
|
(2,040)
|
|
436
|
(1,505)
|
|
|
|
|
|
|
|
|
|
EBITDA profit/(loss)
|
(1,854)
|
2,826
|
(10,879)
|
|
6,275
|
(13,823)
|
|
|
|
|
|
|
|
|
|
Depreciation & non-operating
costs
|
906
|
1,120
|
1,831
|
|
2,054
|
2,725
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before forgiveness
|
(2,760)
|
1,706
|
(12,710)
|
|
4,221
|
(16,548)
|
|
|
|
|
|
|
|
|
|
Related Party Forgiveness
|
-
|
-
|
-
|
|
-
|
31,809
|
|
|
|
|
|
|
|
|
|
Net
Profit/(loss)
|
(2,760)
|
1,706
|
(12,710)
|
|
4,221
|
15,261
|
The Board is unaware of the reason for the reduction
in sales during the first 9 months of 2024 but understands that
demand in the aerial work platform market continues to grow, with
that trend expected to continue into 2025 and beyond.
As previously reported on 7 August
2024, and as shown in the table above, both sales and EBITDA for
the full year 2023 increased by US$20m compared to 2022, which the
board believe resulted from improved selling prices since the end
of 2022. Also as previously reported, Don Ahern sold the
trade and assets of Ahern Rentals, Snorkel's largest customer since
the Contemplated Transaction in 2013, at the end of 2022. It
remains unclear whether there is any connection between these 2
events, but the Board continues to seek clarification and to fully
investigate the matter.
The Company continues to be fully focussed on
the US Proceedings which are continuing. As reported on 16
August 2024, due to the ongoing delays in obtaining discovery, the
jury trial scheduled for March 2025 needed to be rescheduled, and
the Board can now confirm this has been set for a 5-week stack
beginning in October 2025.
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
0203 829 5000
Daryn
Robinson
Zeus - Nominated Advisor / Broker
James Joyce / Andrew de
Andrade
0203 829 5000
