Tanfield Issues First Half 2008 Financial Statement
October 1, 2008 • The Tanfield Group's Chairman, Rob Stanley, admits that the company, which owns Snorkel and UpRight, has been through some difficult times. But Tanfield showed progress in the six months that ended June 30, 2008. In its first half 2008 financial statement, turnover during the period was up 152 percent to £92.8 million ($165 million) from the first half of 2007; profit from operations was £10.3m ($18.3 million); and turnover increased 36 percent on the pro-forma numbers, which were adjusted to account for the 2007 acquisition of Snorkel.
In the United States, Western Europe, and emerging markets, Tanfield made significant inroads with its aerial work platforms during the first five months of the year. Although emerging markets continued to remain steady, the company said credit availability has hindered the rate of growth in more developed markets. North America remains the most challenging market today, due to global macroeconomic conditions, the uncertainty of the upcoming election, and the amount of excess equipment.
June became a turning point for the U.K-based company. As the company hunkered down for slower growth, it restructured its business and reduced its ambitious growth plan earlier this summer.
On July 1, Tanfield revised its growth strategy to focus on cash conversion of profit and growing at a more moderate rate. As a result, the company has decided to withdraw from manufacturing the Norquip product range of airport equipment but will continue to provide spare parts and product support to existing Norquip customers. Additionally, Tanfield has reduced labor costs by 30 percent • in mid-September, 100 employees at Snorkel's Elwood, Kan., facility were laid off. In order to generate further cash, Tanfield is reducing finished goods stock levels and building new machines from existing inventory wherever possible. It also has cancelled or rescheduled all outstanding purchase orders to reduce raw material inventory and future liabilities.
While issuing its financial report for the first half of 2008, Tanfield's board reported they felt it was prudent to undertake an impairment review of its goodwill and other assets, particularly those arising from the acquisition of Snorkel, because of a market analysis and ongoing trading conditions. As a result, there were a series of impairments totaling £75 million ($133.5 million); £48m ($85.4 million) arose from the impairment of Powered Access goodwill and other intangible assets. These adjustments are non-cash items and result in loss after impairments of £65m ($115.7 million).
According to Tanfield, the balance sheet after the impairments remains strong with net assets of £98 million ($174.5 million) and excess of current assets over current liabilities of £82 million ($145.9 million). Cash on June 30 was £12 million ($21.4 million), and at the end of September, the cash figure was the same.
