Tanfield Group (LON:TAN) , the group that manufacturers aerial work platforms and commercial electric vehicles, endured a sales slump of 60% to £58m last year as the effects of the economic downturn continued to impact on the group. Pre-tax losses were cut by 74% to £22.4m, helped by a 42% reduction in staff costs following an aggressive restructuring programme. Jon Pither, Tanfield’s chairman, said: “As we predicted, 2009 was a tough year for the group and we expect 2010 will also be challenging. The management team has executed a plan to sustain the business during the economic recession and to prepare it for the eventual upturn. We continue to prudently manage cash and implement cost reduction programmes, while retaining core employee skills and competencies.”

Tanfield’s problems were two-fold during the year, with no improvement in the significant depression in global demand for aerial work platforms and muted sales of electric commercial vehicles, caused by lack of credit. In Powered Access, sales tumbled to £42m from £114m in 2008, while sales in the Zero Emission Vehicles business slumped to £15m from £25m. Nevertheless, towards the end of the year, there were signs of improvement in the Zero Emission Vehicles division and this business has continued to improve in early 2010. It has not been so good for the Powered Access division, however, where there is little or no expectation of improvement until 2011 at the earliest.

In March this year, Tanfield received a £37m cash offer for its US associate company Smith Electric Vehicle division from Smith Electric Vehicles US Inc and a four month exclusivity period is currently underway. Mr Pither said today that discussions with SEVUS were continuing and that progress was being made in line with the proposed offer timelines. Shares in Tanfield fell by more than 21% to 26p in early trading.

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