TIDMTAN
RNS Number : 4528G
Tanfield Group PLC
15 November 2022
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 .
-- On 24 October 2019, the Company announced it had become
necessary to issue and serve a claim in the English High Court (the
"UK Proceedings") against its former solicitors acting for the
Company at the time of the Contemplated Transaction.
-- On 18 October 2022, the Company announced that it had fully
settled its claim in relation to the UK Proceedings on a no-fault
basis for a total of GBP6.9m.
Highlights
-- In the third quarter of 2022, Snorkel's sales increased
slightly to US$42.4m, compared to US$42.2m for the third quarter of
2021. This resulted in sales for the first 9 months of 2022 being
US$131.0m, compared to US$113.9m for the same period in 2021, an
increase of 15.0%.
-- The EBITDA for the third quarter of 2022 was a loss of
US$3.1m, compared to a loss of US$2.8m for the third quarter of
2021. Despite the 15% increase in sales for the first 9 months of
2022, which amounted to GBP17.1m of additional sales, the EBITDA
loss for the first 9 months of 2022 increased to US$10.9m, compared
to US$5.3m for the same period in 2021.
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 2022, Snorkel's sales increased slightly
to US$42.4m, compared to US$42.2m for the third quarter of 2021.
While Snorkel's recovery from the impact of the global COVID-19
pandemic has slowed in the third quarter, sales for the first 9
months of 2022 increased to US$131.0m, compared to US$113.9m for
the same period in 2021, an increase of 15.0%.
The EBITDA for the third quarter of 2022 was a loss of US$3.1m,
compared to a loss of US$2.8m for the third quarter of 2021.
Despite the 15% increase in sales for the first 9 months of 2022,
which amounted to GBP17.1m of additional sales, the EBITDA loss for
the first 9 months of 2022 increased to US$10.9m, compared to
US$5.3m for the same period in 2021. While the Board note that the
gross profit margin has increased slightly in the third quarter of
2022 to 6.9%, compared to 2.8% in the second quarter of 2022, the
gross profit margin for the first 9 months of 2022 is only 4.6%.
The Board continues to believe that the gross profit margins are
not in line with the industry averages and work to investigate this
is ongoing.
Below is a summary of the consolidated financial statement for
the third quarter and year to date of 2022, including comparative
figures for 2021:
US$000's Q3 2022 YTD 2022 Q3 2021 YTD 2021
Net sales 42,422 130,976 42,203 113,920
Cost of goods sold 39,487 125,001 40,120 106,246
Gross profit 2,935 5,975 2,083 7,674
-------- --------- -------- ---------
6.9% 4.6% 4.9% 6.7%
Selling, general & administrative
costs 4,945 14,814 4,865 12,722
Foreign currency exchange
(gain)/loss 1,125 2,040 36 248
EBITDA profit/(loss) (3,135) (10,879) (2,818) (5,296)
Depreciation & non-operating
costs 650 1,831 671 1,829
Net profit/(loss) (3,785) (12,710) (3,489) (7,125)
-------- --------- -------- ---------
The Board views the year-to-date increase in sales as a positive
development.
The Company are now focussing on the US Proceedings which are
continuing, with a jury trial currently expected to take place
around the summer of 2023.
The Board continue to believe that a positive outcome to the US
Proceedings is possible. So far as it is necessary, the Company
will continue to vigorously defend its position, whilst continuing
to seek 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 / Megan Liddell 020 7220 1666
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