Tanfield (LON:TAN) , the manufacturing group that makes aerial work platforms, said this morning that its trading performance last year had been in line with expectations. As predicted by the company, the market for aerial work platforms stabilised in the second half of 2010 after a very difficult and prolonged period of recession. The trading update is the first since Tanfield sold off the business and assets of its Smith Electric Vehicles division at the end of last year. The business was sold to Tanfield’s US associate company Smith Electric Vehicles US in return for US$15m and a 49% retained equity stake in the enlarged business.
Tanfield said it had spent last year continuing to execute its strategy of cash preservation and net cash at 31 December 2010 was £3.6m, up from £2.2m on June 30. The company has consolidated all its powered access products into the Snorkel brand which has been well received by customers. General activity in the construction industry remains low; however, the company said it had been encouraged by positive sentiments emanating from the equipment rental sector, and was therefore cautiously optimistic that stabilisation may evolve into a return to growth in the mid-term. The Tanfield share price responded with a 1.8% fall to 27p during morning trading. However, the shares are well off the 10.25p low they reached last September when uncertainty over the schedule for completing the Smith Electric deal forced it to launch a deeply discounted open offer for shares at 10p each in order to raise £2.0m.
Darren Kell, Tanfield’s chief executive, said: “The return of stability in the aerial lift industry in the second half of 2010 allowed Tanfield to focus on enhancing its Snorkel product range and global sales channels. Entering 2011, Tanfield remains debt-free, with a positive cash balance, a very strong product portfolio in powered access and an excellent international distribution network.”
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