Executive Summary
Tanfield Group Plc (LON:TAN) is a AIM listed group of specialised engineering businessesbased in Tyne & Wear. It is involved in manufacturing electric and diesel powered access equipment (it produces two brands of aerial lifts, UpRight and Snorkel, ranging from 4m to 40m). Tanfield also produces commercial electric vehicles (vans and trucks) under the Smith Electric Vehicles brand. Its shares, previously trading high on the 'green' story, fell back dramatically after the company released a poor trading statement.
Company History
Tanfield was founded by Roy Stanley, an entrepreneur, initially as a sub-contracting engineering business. In 2000, it spun off Comeleon, which manufactured mobile phone covers, but collapsed following the dot-com bust. Stanley used the Comeleon shell to take over Tanfield, and bought Aerial Access, UpRight, and Smith Electric Vehicles [1] .
Current Events
Tanfield has just won federal funding of USD 10m for its US joint venture, Smith Electric Vehicles US Corporation, and is working with Ford on producing Ford Transit Connect BEV vans for the North American market [2] .
Business Model
Tanfield has two major divisions, together with a legacy engineering parts business which accounts for a small percentage of income.
powered access
This business manufactures powered access platforms which sell mainly to the construction industry. Many customers are equipment rental companies, rather than end users. It was created by the acquisition of Aerial Access and UpRight, and later of Snorkel, an American aerial access business.
Revenue increased from £ 90m to £ 114m in 2008, but the segment result before restructuring costs was a loss of £ 83m, against a previous year profit of £ 8m.
zero emission vehicles
This division designs, manufactures and maintains electric vehicles. It has n agreement with Ford to develop the Ford Transit Connect battery electric vehicle in the US and Europe, which will be produced from 2010, and plans to ship the first electric trucks from Smith Newton in Q3 2009. It is also shortlisted for the Department of Transport's Low Carbon Vehicle procurement programme.
Revenue was slightly down in 2008 to £ 25m, and the division made a loss of just over £ 1m (against a 2m profit in 2007).
Market & Competition
US firm Oshkosh (NYSE:OSK) is Tanfield's major competitor in powered access with JLG, which it acquired in 2006 for USD 3bn. It is the world leader…
