This AIM listed engineering group of companies is based in Washington, Country of Durham. With the shares standing at 34p each (29.10.09) and close on 72m issued ordinary shares, it has a market capitalisation of £25.2m. These bald facts only begin to tell a story which has become something of a business school case study.
A little over two years ago (23 July 2007), TAN’s ordinary shares were trading at £10 per share to descend just over a year later (September 2008) to 6p per share. Matters are clouded by the rights issue mentioned below which played a part in this price adjustment. In share price terms, the last fourteen months have been relatively tranquil – up to 85p and now nudging along in the mid thirties.
What happened? Well, firstly the business turbulence is ongoing (see below) and, if everyone had time to catch breath, then the business text-books might be in course of preparation. Still, a condensed version of the turbulent events is set out below:
Current Profile and Prospects
Tanfield Group now has two main divisions:
Powered Access was the origin of TAN and still accounts for some 75% of group turnover. It contains two of the world’s most well known global brands in aerial work platforms, Upright Powered Access and Snorkel International. The worldwide market for this division is very dependent on the construction industry and this continues to be a source of weakness.
Snorkel was acquired in August 2007 for £50m, a price which on close examination of Snorkel’s balance sheet was subsequently found to be excessive and mostly written off during the following year’s accounts.
The shareholders who contributed 163p per share in the June 2007 rights issue, raising a total of £115m, to pay for this acquisition and pay down other group debt must have felt very sore when all that unfolded. Even this share issue was clouded as shortly afterwards some 8.5m of Roy Stanley’s shares were sold at 163p to reduce his holding. [2]
Tanfield now have a very significant presence, throughout Europe, Middle East and Africa in addition to the USA in the powered access market which globally is worth over $1bn p.a. [1]
Zero Emission Vehicles is the area occupied by Smith Electric Vehicles – founded in 1920 and acquired by TAN in October 2004. Most of the older generation remember Smith’s…
