REG - Tanfield Group PLC - Annual Financial Report
17/04/2025 07:00
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RNS Number : 3689F Tanfield Group PLC 17 April 2025
The Tanfield Group Plc
("Tanfield" or "the Company")
Final Results and Annual Accounts for the year ended 31 December 2024 and
Notice of AGM
Tanfield Group Plc, a passive investing company as defined by AIM Rules,
announces its final results and annual accounts for the year ended 31 December
2024. Posting of the Annual Report & Accounts to shareholders who have
not elected to receive them electronically will take place today and will be
made available on the Company website at www.tanfieldgroup.com
(http://www.tanfieldgroup.com) shortly.
Tanfield announces that its Annual General Meeting will be held at 12:30p.m.
(UK) time on 26 June 2025 at Weightmans LLP, 1 St James' Gate, Newcastle upon
Tyne, NE1 4AD. Posting to shareholders of the Notice of Annual General Meeting
circular, including information on the resolutions, take place today and will
be made available on the Company website at www.tanfieldgroup.com
(http://www.tanfieldgroup.com) shortly.
For further information:
Tanfield Group
Plc
Daryn Robinson
0203 829
5000
Zeus Capital Limited- Nominated Advisor / Broker
James Joyce / Andrew de
Andrade
0203 829 5000
HIGHLIGHTS
· The valuation of the Company's 49% interest in Snorkel
International is maintained at £19.1m.
· The US Proceedings (described further below) are ongoing with a
jury trial expected to commence in October 2025.
· At 31 December 2024, the Company had cash and short-term deposits
of £3.2m and approximately £3.0m as at the date of this report.
STRATEGIC REPORT
CHAIRMAN'S STATEMENT
The Company's main investment, Snorkel International Holdings LLC ("Snorkel
International"), has seen a slight reduction in sales of around 5% for the
first 9 months of 2024, when compared to the same period in 2023. This is
the first reduction experienced since the impact of Covid-19 in 2020. The
Board is unaware of the reason for the slight reduction and will continue to
closely monitor performance, hopeful that 2025 will, as a minimum, see sales
levels maintained.
Following Tanfield's 51% joint venture partner Xtreme Manufacturing LLC
("Xtreme"), via its subsidiary SKL Holdings LLC ("SKL") and Snorkel
International, filing a Summons and Complaint (the "US Proceedings") against
the Company and its subsidiary HBWP Inc ("HBWP"), the Board remains
disappointed that an amicable resolution has not been possible. The US
Proceedings are therefore ongoing, and the Board continues to seek advice and
vigorously defend its position.
The investment in Smith Electric Vehicles Corp. ("Smith") continues to be held
at nil value.
NON-EXECUTIVES' REVIEW
Background
The Company is defined as an investment company with two passive investments.
This definition resulted from the disposal of the controlling interest in
Smith in 2009 and the formation of a joint venture between Tanfield and Xtreme
relating to the Snorkel division in October 2013 (the "Joint Venture").
Tanfield currently owns 5.76% of Smith and 49% of Snorkel International.
OVERVIEW
Snorkel International
Tanfield continues to retain an investment in Snorkel International (currently
valued at £19.1m, 2023: £19.1m) consisting of a 49% interest and a preferred
interest position, incorporating a Priority Amount and a Preferred Return
(collectively the "Preferred Interest"), which it has held since the Joint
Venture was established in October 2013.
Since the injection of working capital following the Joint Venture, Snorkel
achieved increased year on year sales levels however, during 2020 the impact
of the Covid-19 pandemic saw the first reduction of sales. Since then, Snorkel
has once again seen year on year sales increases, with a noticeable increase
in operating profitability in the 2023 financial year. A summary of sales
(unaudited) and the operating profit/(loss) (unaudited), excluding
depreciation since 2018 is shown below:
Operating profit/ (loss) excluding depreciation
Year Sales Increase/ (decrease)
2023 $188.7m 12% $5.8m
2022 $168.8m 9% ($12.3m)
2021 $155.0m 40% ($9.1m)
2020 $110.8m (50%) ($12.3m)
2019 $220.8m 10% $0.3m
2018 $200.5m 21% $2.9m
However, in the first 9 months of 2024, Snorkel saw its sales slightly
decrease by 5% to $137m compared to the same period in 2023 (first 9 months of
2023: $145m), with an operating loss, excluding depreciation of $1.6m (first 9
months of 2023: profit of $2.3m). The Board is unaware of the reason for the
reduction and will continue to monitor future performance closely.
The Board is not aware of any market factors and have not been made aware of
any specific reason why sales and gross profit margin for the full 2024 year
should not follow a similar trajectory as that in the first 9 months. The
Board is also not aware of any reason why 2025 should not see similar
performance being achieved.
In October 2019, the Board received the US Proceedings, in which Xtreme, via
its subsidiary SKL and Snorkel International, allege that Tanfield has refused
to comply with its contractual obligations by not agreeing to sign over its
interest in Snorkel International for £nil consideration. It is the Board's
belief that the intent of Tanfield, its non-conflicted directors at the time
and its shareholders, as well as the contractual terms, require that the
Preferred Interest is paid to the Company before its 49% holding in Snorkel
International can be acquired. Notwithstanding that, in the Board's opinion,
payment of the Preferred Interest is a clear requirement described in the
Circular that was distributed to shareholders in advance of shareholders
approving the transaction, Xtreme allege that this was not their intent or
understanding of the transaction despite both they, and their advisers,
reviewing and commenting on the Circular prior to its distribution. They
also allege that they do not believe payment of the Preferred Interest is a
requirement of the contractual agreements.
The position of Xtreme, which is the premise of the US Proceedings, is that
while they accept that Tanfield received a 49% interest in Snorkel
International and an adjusted priority amount of $22.5m (adjusted from the
headline $50m value detailed in the Circular, and with interest accruing) in
exchange for contributing the entire Snorkel division, including all its
assets and intellectual property, to the Joint Venture, and gave Xtreme a 51%
controlling interest, they allege that because Snorkel International, under
Xtreme's control, failed to achieve a 12 month EBITDA of $25m prior to 30
September 2018, that Tanfield's $22.5m adjusted Priority Amount, plus accrued
interest, simply disappeared; allowing Xtreme to acquire Tanfield's 49%
interest for £nil consideration.
In summary, it is alleged by Xtreme that the terms of the transaction were
such that after (a) Tanfield contributed all of the assets and intellectual
property of its Snorkel division to the Joint Venture, which Snorkel's own tax
returns declare as having a net fair market value of $45.5m, (b) Tanfield
conceded management control of the Snorkel division to Xtreme, (c) Xtreme ran
the business as it saw fit for approximately 5 years and Snorkel International
failed to achieve an annualized $25m EBITDA, (d) Tanfield's value disappears
completely and Xtreme can take 100% ownership of Snorkel International without
paying any consideration to Tanfield.
The Board vigorously deny that this was the intent of the parties, or the
meaning of the contractual agreements. It would have made no commercial
sense to contribute the considerable value, trade and assets of the Snorkel
division, which both parties agreed from the outset was fundamentally a viable
company, while also relinquishing control of the division, to then receive no
consideration for the considerable value contributed to the Joint Venture,
because the controlling party failed to achieve the target. The Board
therefore continues to seek advice and vigorously defend its position.
Despite the allegations, which the Board believe are without merit, the Board
is currently of the opinion that the investment in Snorkel International will
result in a return to shareholders in the future but would like to draw your
attention to the "Valuation of Snorkel International holding" below and the
critical accounting estimates and key judgments which further explain the
potential risks.
The US Proceedings have continued to progress during 2024 and a jury trial is
currently expected to commence in late 2025.
Further updates in relation to progress and timing will be provided as and
when appropriate.
Valuation of Snorkel International holding: £19.1 million (2023: £19.1
million)
On 30 September 2018 the fixed terms of the agreement came to an end. In
summary, if the trailing 12 month EBITDA had reached $25m by 30 September
2018, this would have triggered payment of the Preferred Interest, valued at
£19.1m, which once paid, would have allowed the Company to exercise its put
option, compelling the purchase / sale of Tanfield's remaining holding in
Snorkel International. As a $25m trailing 12 month EBITDA was not reached by
the deadline, the put option expired. Tanfield retains a 49% interest in
Snorkel International and, in the Board's opinion, the Preferred Interest, but
it can no longer compel Xtreme to pay the Preferred Interest and acquire its
49% interest. The Board therefore remains of the opinion that the Preferred
Interest is the minimum payment required under the terms of the contractual
agreements for Xtreme to acquire Tanfield's interest and that this is
therefore an appropriate basis for determining the value the investment is to
be carried at.
As the US Proceedings have been brought against Tanfield, it is evident that
Don Ahern, the owner of Xtreme, wishes to own 100% of Snorkel International.
However, based on statements within the US Proceedings, it is evident that Don
Ahern does not believe he should have to pay anything in order to acquire
Tanfield's 49% of Snorkel International. One possible outcome is that
Tanfield continues to hold its 49% interest for the foreseeable future
however, the Board does not believe such a scenario would be in the best
interest of shareholders given the action taken by Don Ahern against the
Company and, should it become necessary, would consider options that may
assist in moving from this position.
Due to the risks involved with the ongoing different opinions regarding the
contractual agreements, it is possible the actual realisation of value could
be less, or more, than the current valuation. A number of factors could
influence the valuation of Snorkel International between now and a potential
realisation date, including the outcome of all relevant legal proceedings,
Xtreme's negotiating stance and the exchange rate at the time of any
realisation.
Due to these inherent uncertainties, the Board is unable to determine whether
the actual outcome will be less than the current valuation of £19.1m, which
it believes is underpinned by the value of the Preferred Interest, so feel the
valuation of £19.1m should be maintained. This valuation has been assessed
against various criteria, including exchange rate fluctuations. The Board
would like to draw the reader's attention to the critical accounting estimates
and key judgments which further explain the uncertainty.
Smith
In October 2014 Smith completed a restructuring exercise that saw it convert
debt to equity. As a result of this, they informed the Company that its
equity shareholding had reduced from 24% to 5.76% (excluding warrants).
Since then, Smith has sought to raise funds which would allow it to implement
its strategic plan. To date, no significant fundraise has been completed and
the Board of Tanfield does not foresee this happening in the immediate future.
Valuation of Smith holding
In 2015, the Board of Directors carried out a review of the investment in
Smith resulting in a decision to impair the investment value to £nil.
The Board understand that Smith has not been trading in recent years and as
Smith are unable to provide any certainty on its future, the Board maintains
its opinion that the investment value should be held at £nil.
Strategy of Tanfield Board of Directors in relation to its Investments
The Board believes its investment in Snorkel International will result in a
return of value to shareholders but cannot predict the timeframe for such a
return. With regard to Smith, due to the ongoing uncertainty, the Board is
unable to say, at this time, whether it will result in a return of value to
shareholders. The Directors will update shareholders should this view change.
The strategy of the Company in relation to these investments is to return as
much as possible of any realised value to shareholders as events occur and
circumstances allow, subject to compliance with any legal requirements
associated with such distributions. The Board will continue to fulfil its
obligation to its shareholders in seeking to optimise the value of its
investments.
The investments are defined as passive investments and in line with this
definition as Tanfield does not hold Board seats in either Snorkel
International or Smith. There is no limit on the amount of time the existing
investments may be held by the Company.
Finance expense and income
Interest income of £132k (2023: £123k) was received on bank balances.
Loss from operations
The loss from operations was £403k (2023: £454k) with no change in key items
of expenditure year on year.
Loss per share
Loss per share from continuing operations was 0.17 pence (2023: 0.20 pence).
No dividend has been declared (2023: £nil).
Cash
At 31 December 2024, the Company had cash and short-term deposits of £3.2m
(2023: £3.5m) and approximately £3.0m as at the date of this report.
Risks and uncertainties
There is no guarantee if and when a realisation of value from one of the
investments will happen, or of the costs associated in securing a realisation,
and the Board will closely monitor progress. It recognises that its
investments have a level of risk associated with them and is somewhat reliant
on their continued performance within their markets. However, the Board
believes that the Company has sufficient cash reserves to fully defend its
position in the US Proceedings.
Section 172: Companies Act Statement
The Board takes seriously its duties towards a wide range of stakeholders and
acts in a way to ensure that its decision making promotes the success of the
Company for the benefit of these stakeholders in accordance with Section 172.
The Board's ability to do this is as a result of the Company status - as an
investment Company it has no employees, other than the directors, or customers
and its activities have no impact on the wider community and environment. The
statements below provide further information as to how the directors have had
regard to the relevant matters.
The likely consequences of decisions in the long term. As discussed earlier
in this report, the sole aim of the Board is to maximise the return to
shareholders through its investment holdings. This is of necessity a
short-term focus, and the financial outcome will determine the future position
and strategy of the Company.
The need to foster the Company's business relationships with suppliers and the
desirability of the Company to maintain a reputation for high standards of
business conduct. Engagement with suppliers is a key part of the business as
the Board looks to bring a resolution to its investment position. Therefore,
we are selective in the suppliers we choose to work with, demonstrating the
Board's commitment to maintaining high standards of business conduct and
professionalism.
The Annual General Meeting is the principal forum for shareholders, and we
encourage all shareholders to attend and participate. The notice of the
meeting is sent at least 21 days before the meeting. The Chairman of the Board
and other directors, where possible, are present and are available to answer
questions raised by shareholders. The Board ensure regular communications are
made to all shareholders via periodic RNS announcements.
KPI's
The Board do not use any KPI's to monitor the performance of the business.
Approved by the Board of Directors and signed on behalf of the Board
Daryn Robinson
Chairman
16 April 2025
DIRECTORS' REPORT
The directors submit their report and the financial statements of Tanfield
Group Plc for the year ended 31 December 2024. Tanfield Group Plc is a public
listed company incorporated and domiciled in England and quoted on AIM.
PRINCIPAL ACTIVITIES
The Company's principal activity is that of an investment company.
INVESTING POLICY
The holdings in Snorkel International Holdings LLC and Smith Electric Vehicles
Corp. are passive investments. It is the intention that where distributions or
realisations of such holdings are made (or there is a receipt of marketable
securities) that these are distributed to shareholders, subject to compliance
with any legal requirements associated with such distributions. There is
presently no anticipated limit on the amount of time the holdings are to be
held by the Company. The Company does not have and will not make any cross
holdings and does not have a policy on gearing.
RESULTS AND DIVIDENDS
The financial result for the year to 31 December 2024 reflects the principal
activity of the company being that of an investment company.
Turnover for the year was £nil (2023: £nil). The loss from operations in the
year of £403k (2023: £454k) arose from operating costs.
The statement of financial position shows total assets at the end of the year
of £22.4m (2023: £22.6m). Net Current Assets were £3.2m (2023: £3.5m) with
cash and short-term deposits of £3.2m (2023: £3.5m). The directors believe
that the Company has sufficient cash to allow it to continue for a period of
more than 12 months from the date of this report.
No dividend has been paid or proposed for the year (2023: £nil). The loss of
£271k (2023: £331k) has been transferred to reserves.
FINANCIAL INSTRUMENTS
The Company's financial instruments comprise cash, non-current investments,
current receivables and current payables arising from its operations. The
principal financial instruments used by the Company during the year are cash
balances. The Company has not established a formal policy on the use of
financial instruments but assesses the risks faced by the Company as economic
conditions and the Company's operations develop.
DIRECTORS
The present membership of the Board is set out on the company website.
The directors' do not currently have a right to acquire shares in the company
via the exercise of options as all past options have either been exercised or
lapsed. Details of the directors' remuneration and incentives are set out in
the Directors' Remuneration Report.
POLICY ON PAYMENT OF CREDITORS
It is Company policy to agree and clearly communicate the terms of payment as
part of the commercial arrangements negotiated with suppliers and then to pay
according to those terms based on the timely receipt of an accurate invoice.
The Company supports the CBI Prompt Payers Code. A copy of the code can be
obtained from the CBI at Centre Point, 103 New Oxford Street, London WC1A 1DU.
Trade creditor days based on trade payables at 31 December 2024 were 12 days
(2023: 12 days).
SUBSTANTIAL SHAREHOLDINGS
On 31 December 2024 the following held substantial shares in the company. No
other person has reported an interest of more than 3% in the ordinary shares.
No. %
HSBC GLOBAL CUSTODY NOMINEE (UK) 59,050,183 36.25%
CHASE NOMINEES LIMITED 30,741,672 18.87%
AURORA NOMINEES LIMITED 19,775,103 12.14%
THE BANK OF NEW YORK (NOMINEES) 9,918,358 6.09%
INTERACTIVE BROKERS LLC 9,491,966 5.83%
VIDACOS NOMINEES LIMITED 8,059,650 4.95%
LYNCHWOOD NOMINEES LIMITED 4,983,595 3.06%
DIRECTORS' INTEREST IN CONTRACTS
No director had a material interest at any time during the year in any
contract of significance, other than a service contract, with the Company or
any of its subsidiary undertakings.
AUDITOR
A resolution to reappoint RSM UK Audit LLP as auditor will be put to the
members at the annual general meeting. RSM UK Audit LLP has indicated its
willingness to continue in office.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
The directors in office on the date of approval of the financial statements
have confirmed that, as far as they are aware, there is no relevant audit
information of which the auditor is unaware. Each of the directors has
confirmed that they have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information
and to establish that it has been communicated to the auditor.
DIRECTORS INDEMNITY
Every Director shall be indemnified by the Company out of its own funds.
Approved by the Board of Directors and signed on behalf of the Board
Daryn Robinson
Chairman
16 April 2025
CORPORATE GOVERNANCE
All members of the board believe strongly in the value and importance of good
corporate governance and in our accountability to all of Tanfield's
stakeholders, including shareholders and suppliers.
The corporate governance framework which the company operates, including board
leadership and effectiveness, board remuneration, and internal control is
based upon practices which the board believes are proportional to the size,
risks, complexity and operations of the business and is reflective of the
company's values. Of the two widely recognised formal codes, we have adopted
the Quoted Companies Alliance's (QCA) Corporate Governance Code for small and
mid-size quoted companies (revised in April 2018 to meet the new requirements
of AIM Rule 26).
The QCA Code is constructed around ten broad principles and a set of
disclosures. The QCA has stated what it considers to be appropriate
arrangements and asks companies to provide an explanation about how they are
meeting the principles through the prescribed disclosures. We have considered
how we apply each principle to the extent that the board judges these to be
appropriate in the circumstances.
Principle 1
Business Model and Strategy
Tanfield Group is a passive investment Company with investments in Snorkel
International and Smith. As a passive investment Company, we do not have
operational control or input into these investments. It is the intention that
where distributions or realisations are made that these are distributed to
shareholders, subject to compliance with any legal requirements associated
with such distributions.
Principle 2
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication with its shareholders
and the Company endeavours to keep shareholders informed via its public
announcements. The Board believes that it has successfully engaged with
shareholders to date, keeping them abreast of the Company's strategy and
progress.
Principle 3
Stakeholder and Social Responsibilities
As a passive investment Company, the Board recognises that its stakeholders
are limited to external stakeholders (which includes its investments), with
the exception of the Directors, and are therefore not as extensive as many
operational businesses. The Company maintains a dialogue with its external
stakeholders as appropriate and as the need arises. Whilst we are a passive
investment Company, we still consider it important that our behaviour is
socially responsible and we will endeavour to be accountable for our actions,
be transparent about our activities, operate in an ethical, professional and
responsible manner, be mindful of our stakeholder interests, respect the rule
of law and respect human rights in whatever we do.
Principle 4
Risk Management
The Board is mindful of and monitors its corporate risks. The main risks the
business faces are that the investments may not achieve their operational
goals, resulting in no realisation event and the potential for disputes with
the controlling shareholders as to the terms of a realisation event should one
occur. As a passive investment company, the Board is not able to influence the
decision making or strategy of the investment companies and so its ability to
mitigate some risks Is limited.
Principle 5
Board Structure
The Company operates as a passive investment company and has put in place a
board structure that can best provide the strategic advice, leadership and
continuity required. The board structure consists of two non-executive
directors, Daryn Robinson and Martin Groak, both sitting on the PLC Board.
During the year there were four board meetings, all fully attended, that took
place.
Principle 6
Board Composition, Experience and Dynamics
The Board considers the Board composition in terms of skills, experience and
balance. Its committees seek external expertise and advice where required.
With only two Board members, due to the limited activities of the Company,
Board cohesion is paramount and this is regularly reviewed. The Board members
have held roles and directorships in other publicly listed companies where
they have gained a wealth of financial and public market experience which
collectively has provided them with the balance of skills and expertise to
deliver the business strategy.
Principle 7
Board Evaluation
The Board considers evaluation of its committees and individual directors to
be an integral part of corporate governance to ensure it has the necessary
skills, experience and abilities to fulfil its responsibilities. To ensure the
skills and knowledge of the Board are kept up to date, it works with its
Nominated Advisor & Broker, Auditor and Solicitor to ensure that any
relevant new or amended accounting standards and interpretations, AIM rules or
Companies Act legislation are fully understood and implemented.
Principle 8
Corporate Culture
The Board recognises that a corporate culture based on sound ethical values
and behaviours is an asset. In accordance with the Company's stated social
responsibilities it endeavours to conduct its business in an ethical,
professional and responsible manner. As the Company has no control over
operational matters relating to its investments, it is unable to influence the
values and behaviours directly but it supports a culture of dealings with both
shareholders and investee companies with integrity and respect.
Principle 9
Governance Structure
The PLC Board, which as a passive investment Company consists of two
non-executive directors, have the responsibility of monitoring the Company
investments to ensure that, where distributions or realisations are made,
these can be distributed to shareholders, subject to compliance and any legal
requirements associated with such distributions. Due to the nature of the
business, executive directors and an operational Board are not deemed
necessary and therefore the non-executive directors are deemed not to be
independent.
Principle 10
Stakeholder Communication
The Board is committed to maintaining good communication and having
constructive dialogue with all of its stakeholders, including shareholders,
providing them with access to information to enable them to come to informed
decisions about the Company. The Company's website provides all required
regulatory information as well as additional information shareholders may find
helpful.
An explanation of the approach taken in relation to each of the QCA Code
principles can also be found on the Company's website
www.tanfieldgroup.com/about#governance
(https://www.tanfieldgroup.com/about#governance) .
The board considers that it does not depart from any of the principles of the
QCA Code.
Going Concern
The directors are satisfied that the Company has sufficient cash to continue
for a period of 12 months from the date of this report. For this reason,
they continue to adopt the going concern basis in preparing the financial
statements.
Daryn Robinson
Chairman
16 April 2025
DIRECTORS' REMUNERATION REPORT
Remuneration committee
The company has established a Remuneration Committee which is constituted in
accordance with the recommendations of the QCA Code. The members of the
committee during the year were D Robinson and M Groak and the committee was
chaired by D Robinson.
Remuneration policy
There were four main elements of the remuneration packages for directors:
· Basic annual salary (including directors' fees) and benefits;
· Annual bonus payments;
· Share option incentives; and
· Pension arrangements.
Basic salary
The basic salary of the directors is reviewed annually having regard to the
commitment of time required and the level of fees in similar companies.
Non-Executive Directors are employed on renewable fixed term contracts not
exceeding three years.
Annual bonus
The committee established the objectives which must be met for each financial
year if a cash bonus was to be paid. The purpose of the bonus was to reward
directors for achieving above average performance which also benefits
shareholders.
Share options
The directors do not hold any share options as at the date of this report.
Pension arrangements
One director was a member of a money purchase pension scheme to which the
company contributed.
Directors interests
The interests of directors holding office at the year end in the company's
ordinary 5p shares at 31 December 2024 and 31 December 2023 are shown below:
Number of shares
2024 2023
D Robinson 942,785 942,785
M Groak 40,000 40,000
Total 982,785 982,785
The directors, as a group, beneficially own 0.6% of the company's shares.
As at the date of this report, no director has any remaining right to acquire
shares in the company via the exercise of options granted under the terms of
their service contracts, copies of which may be inspected by shareholders upon
written application to the company secretary.
Remuneration review
Directors emoluments for the financial year were as follows:
Salary Bonus Total Total Pension Pension
£000's £000's 2024 2023 2024 2023
£000's £000's £000's £000's
M Groak 24 - 24 30 - -
D Robinson 120 - 120 145 15 13
Total 144 - 144 175 15 13
The directors held no share options at 31 December 2024 (2023: nil).
Approval
This report was approved by the board of directors and authorised for issue on
16 April 2025 and signed on its behalf by:
Daryn Robinson
Chairman
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the
Directors' Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law and the AIM Rules of the London Stock
Exchange the directors have elected to prepare the financial statements of the
company in accordance with applicable law and UK-adopted International
Accounting Standards.
The financial statements are required by law and UK-adopted International
Accounting Standards to present fairly the financial position and performance
of the company. The Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their achieving a
fair presentation.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the company and of the profit or loss of the company for that
period.
In preparing the financial statements, the directors are required to:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and accounting estimates that are reasonable
and prudent;
c. state whether they have been prepared in accordance with
UK-adopted International Accounting Standards;
d. prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Tanfield Group Plc
website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Notes £000's £000's
Revenue - -
Staff costs 1 (159) (190)
Other operating income 16 23
Other operating expenses 3 (260) (287)
Loss from operations (403) (454)
Finance expense 2 - -
Finance income 2 132 123
Loss before tax (271) (331)
Taxation 4 - -
Loss & total comprehensive income for the year attributable (271) (331)
to equity shareholders
Loss per share
Loss per share
Basic and diluted (p) 5 0.17 0.20
STATEMENT OF FINANCIAL POSITION (Company registration number 04061965)
AS AT 31 DECEMBER 2024
2024 2023
Notes £000's £000's
Non-current assets
Non-current Investments 6 19,100 19,100
19,100 19,100
Current assets
Trade and other receivables 8 44 58
Cash 7 2,909 3,473
Short-term deposits 7 300 -
3,253 3,531
Total assets 22,353 22,631
Current liabilities
Trade and other payables 9 65 72
65 72
Total liabilities 65 72
Equity
Share capital 10 8,145 8,145
Share premium 10 17,336 17,336
Special reserve 66,837 66,837
Merger reserve 1,534 1,534
Retained earnings (71,564) (71,293)
Total equity attributable to equity shareholders 22,288 22,559
Total equity and liabilities 22,353 22,631
The financial statements were approved by the board of directors and
authorised for issue on 16 April 2025 and are signed on its behalf by:
Daryn Robinson
Chairman
STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY
SHAREHOLDERS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share capital Share premiuma Merger reserveb Special reservec Retained earningsd Total
£000's £000's £000's £000's £000's £000's
At 1 January 2023 8,145 17,336 1,534 66,837 (70,962) 22,890
Comprehensive income
Loss for the year - - - - (331) (331)
Total comprehensive income for the year - - - - (331) (331)
At 31 December 2023 8,145 17,336 1,534 66,837 (71,293) 22,559
Comprehensive income
Loss for the year - - - - (271) (271)
Total comprehensive income for the year - - - - (271) (271)
At 31 December 2024 8,145 17,336 1,534 66,837 (71,564) 22,288
a The share premium account represents amounts subscribed for share capital
in excess of nominal value, net of directly attributable share issue costs.
b The merger reserve has arisen on the legal acquisition of subsidiary
companies.
c The special reserve relates to a previous reclassification of the share
premium account.
d The retained earnings represents the accumulated retained profits and
losses less dividend payments.
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Notes £000's £000's
Loss before tax (271) (331)
Adjustment for:
Finance income 2 (132) (123)
Changes in operating assets and liabilities / working capital:
Decrease/(increase) in receivables 8 14 (28)
(Decrease)/increase in payables 9 (7) 8
Net cash used in operating activities (396) (474)
Cash flow from Investing Activities
Interest received 2 132 123
Short-term deposits (300) -
Net cash (used in)/from investing activities (168) 123
Cash flow from financing activities
Proceeds from borrowings - -
Repayment of borrowings - -
Net cash used in financing activities - -
Net decrease in cash (564) (351)
Cash at the start of year 3,473 3,824
Cash at the end of the year 2,909 3,473
ACCOUNTING POLICIES
(i) Basis of preparation of the financial statements
Tanfield Group Plc is a public company incorporated in England and quoted on
AIM. These financial statements have been prepared on the going concern basis
in accordance with applicable law and UK-adopted International Accounting
Standards. The financial statements have been prepared under the historical
cost convention, except for the revaluation of certain financial assets and
liabilities measured at fair value.
The financial statements present the company accounts only and have not been
consolidated as the company is deemed to be an investment entity under IFRS
10. The financial statements are prepared in sterling, which is the functional
currency of the company. Monetary amounts in these financial statements are
rounded to the nearest thousand.
The preparation of the financial statements requires management to exercise
its judgement in the process of applying the company's accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are
disclosed below in "Critical accounting estimates and key judgements".
The financial information does not include all information required for full
annual financial statements and therefore does not constitute statutory
accounts within the meaning of section 435(1) and (2) of the Companies Act
2006 or contain sufficient information to comply with the disclosure
requirements of UK-adopted International Accounting Standards. These should be
read in conjunction with the Financial Statements of the Company for the year
ended 31 December 2024 which were approved by the Board of Directors on 16
April 2025. The report of the auditors for the year ended 31 December 2024 was
(i) unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
(ii) Going concern
The financial statements have been prepared on the going concern basis, which
assumes that the Company will continue to be able to meet its liabilities as
they fall due for the foreseeable future. At 31 December 2024 the Company had
cash and short-term deposits of £3.2m (2023: £3.5m) and approximately £3.0m
as at the date of this report.
The Board believes that it has sufficient cash funds to continue for more than
12 months from the date of this report. While there is no guarantee if and
when a realisation of value from one of the investments will happen, the Board
believes it has sufficient cash funds to see the US Proceedings reach a
conclusion at some point in the future. Having taken the uncertainties into
account the Board believes it is appropriate to prepare the financial
statements on the going concern basis.
(iii) Foreign currencies
Transactions in currencies other than sterling, the functional currency of the
company, are recorded at the rates of exchange prevailing on the dates of the
transactions. At each statement of financial position date, monetary assets
and liabilities that are denominated in foreign currencies are retranslated at
the rates prevailing on the statement of financial position date.
Non-monetary assets and liabilities carried at fair value that are denominated
in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined.
Gains and losses arising on retranslation are included in the income statement
for the period, except for exchange differences on non-monetary assets and
liabilities, which are recognised directly in retained earnings.
(iv) Retirement benefit cost
The company operates a defined contribution pension scheme and pays
contributions to an externally administered pension plan. The company has no
further payment obligations once the contributions have been paid. The
contributions are recognised as an employee benefit expense in the period in
which they fall due.
(v) Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the Company's
statement of financial position when the Company has become a party to the
contractual provisions of the instrument.
Financial assets
Investments
Investments in equity instruments are included at fair value with fair value
gains and losses recognised in profit or loss.
Trade and other receivables
Financial assets within trade and other receivables are initially recognised
at fair value, which is usually the original invoiced amount and are
subsequently carried at amortised cost less provisions made for impairment.
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable
amounts.
An impairment loss is recognised for the expected credit losses on receivables
when there is an increased probability that the counterparty will be unable to
settle an instrument's contractual cash flows on the contractual due dates, a
reduction in the amounts expected to be recovered, or both.
Impairment losses and any subsequent reversals of impairment losses are
adjusted against the carrying amount of the receivable and are recognised in
profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand less short-term bank
overdrafts.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities.
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction
from the proceeds received.
Trade and other payables
Financial liabilities within trade and other payables are initially recorded
at fair value, which is usually the original invoiced amount, and subsequently
carried at amortised cost.
(vi) Segmental reporting
In accordance with IFRS 8 operating segments are determined on the basis of
information reported to the chief operating decision-maker for decision-making
purposes. The Company considers that it only has one segment and that the
role of chief operating decision-maker is performed by the Tanfield Group
Plc's board of directors.
Accounting standards, interpretations and amendments to published accounts
During the year ended 31 December 2024, the Company has not adopted any new
IFRS, IAS or amendments issued by the IASB, and interpretations by the IFRS
Interpretations Committee, which have had a material impact on the Company's
financial statements.
New and amended standards and interpretations effective from 1 January 2025
not yet adopted by the Company.
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2024 reporting periods and have not been
early adopted by the group. These standards and interpretations are not
expected to have a material impact on the financial statements of the Company
in the current or future reporting periods.
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
The preparation of financial statements in conformity with UK-adopted IAS
requires the use of accounting estimates and assumptions. It also requires
management to exercise judgement in the process of applying the Company's
accounting policies. We continually evaluate our estimates, assumptions and
judgements based on the most up to date information available.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Investments
Smith
The status of the Company's holding in Smith Electric Vehicles US Corp was
reviewed during the year. The Board previously advised that the company had
ceased operations and did not feel that Smith had made sufficient progress
towards achieving its plan of obtaining a public listing to maintain the
previous valuation and had therefore decided to impair the investment in Smith
to £nil. Subsequently, no progress has since been made that gives rise to an
expectation of a realisation in value. As such, the Board is maintaining its
view that the investment currently has £nil value.
Nevertheless, the Board acknowledges that there is a chance the investment
could result in a return to Shareholders and will continue to monitor the
investment. Should progress be made in the future the valuation of the
investment will be revisited.
Snorkel International
The status of the Company's holding in Snorkel International Holdings LLC was
reviewed during the year. The Board has concluded that, while Tanfield
continues to retain an investment in Snorkel International (currently carried
at £19.1m), consisting of a 49% interest and the Preferred Interest, under
the terms of the Joint Venture, they are unable to exercise significant
influence over the activities and strategic direction of Snorkel International
and therefore holding the investment as a trade investment, as opposed to
applying equity accounting, continues to be the correct treatment.
Since the injection of working capital following the Joint Venture, Snorkel
achieved increased year on year sales levels however, during 2020 the impact
of the Covid-19 pandemic saw the first reduction of sales. Since then, Snorkel
has once again seen year on year sales increases, with a noticeable increase
in operating profitability in the 2023 financial year. A summary of sales
(unaudited) and the operating profit/(loss) (unaudited), excluding
depreciation since 2018 is shown below:
Operating profit/ (loss) excluding depreciation
Year Sales Increase/ (decrease)
2023 $188.7m 12% $5.8m
2022 $168.8m 9% ($12.3m)
2021 $155.0m 40% ($9.1m)
2020 $110.8m (50%) ($12.3m)
2019 $220.8m 10% $0.3m
2018 $200.5m 21% $2.9m
However, in the first 9 months of 2024, Snorkel saw its sales slightly
decrease by 5% to $137m compared to the same period in 2023 (first 9 months of
2023: $145m), with an operating loss, excluding depreciation of $1.6m (first 9
months of 2023: profit of $2.3m). The Board is unaware of the reason for the
reduction and will continue to monitor future performance closely.
The Board is not aware of any market factors and have not been made aware of
any specific reason why sales and gross profit margin for the full 2024 year
should not follow a similar trajectory as that in the first 9 months. The
Board is also not aware of any reason why 2025 should not see similar
performance being achieved.
Under the terms of the Joint Venture, the level of financial information
available to the Board to assess the fair value of the investment in Snorkel
International is limited to quarterly historical financial information,
incorporating a consolidated operating statement, balance sheet and cashflow.
In 2018, the Board impaired Tanfield's investment value in Snorkel
International down to £19.1m, from the previous valuation of £36.3m. The
valuation of £19.1m is based on the value of the Preferred Interest which is
made up of the priority amount, set in 2013 based upon the assets of the
Snorkel division contributed to the Joint Venture, plus the preferred return,
being interest accruing on the priority amount. This is the basis of
valuation that was set out in the Circular issued to Shareholders at the time
of the Joint Venture. The Board have not included the effect of discounting
for the timing of a future realisation as they do not believe this materially
impacts on the valuation.
The previous valuation of £36.3m was originally calculated in 2013 and
assumed the $25m EBITDA trigger, compelling the payment of the Preferred
Interest and the purchase of Tanfield's interest in Snorkel International by
Xtreme, would be reached within the predefined period ending 30 September
2018. As Snorkel International, under Xtreme's control, failed to achieve the
EBITDA trigger, Tanfield retains a 49% interest in Snorkel International and
the Preferred Interest, but it can no longer compel Xtreme to pay the
Preferred Interest and acquire its 49% interest.
In November 2018, the Board received a call option notice in which Xtreme, via
its subsidiary SKL, requested to exercise a call option to acquire Tanfield's
interest in Snorkel International. In the request, SKL stated that the
option price to acquire Tanfield's holding was $0 (nil) and that payment of
the Preferred Interest was not required.
The Board did not agree with this statement and does not believe that the
contractual agreements, or the Circular distributed to shareholders to fully
explain the terms of the transaction - and thereby seek their authority to
enter into the transaction - allow for a call option whereby Xtreme can
acquire Tanfield's interest in Snorkel International for a nil value. The
Board therefore rejected the call option notice and sought to amicably resolve
the dispute with Tanfield's 51% joint venture partner, Xtreme. As announced on
22 October 2019, Xtreme (via its subsidiary SKL and Snorkel International)
filed the US Proceeding against Tanfield and its subsidiary HBWP.
As the US Proceedings have been brought against Tanfield, it is evident that
Don Ahern, the owner of Xtreme, wishes to own 100% of Snorkel International.
However, based on statements within the US Proceedings, it is evident that Don
Ahern does not believe he should have to pay anything in order to acquire
Tanfield's 49% interest in Snorkel International. One possible outcome is
that Tanfield continues to hold its 49% interest for the foreseeable future
however, the Board do not believe such a scenario would be in the best
interest of shareholders and, should it become necessary, would consider
options that may assist in moving from this position.
The Board has reviewed the historic financial information, along with the
global industrial and aerial work platform market conditions and has concluded
it is appropriate to value Tanfield's investment in Snorkel International
based on what the Board understands are the contractual arrangements and so at
an amount based on the Preferred Interest amount of £19.1m.
This valuation has been assessed against various criteria, including past
performance (including but not limited to a growth in sales, bill of material
costs and improved operating profitability), production capacity, market
conditions, the capability of the business to increase output and exchange
rate fluctuations. In coming to this opinion, the Board has considered the
trends within the business and their consistency; in particular:
· the rate of sales growth being more or less than that recently
achieved by Snorkel International.
· the level of operating profitability improvement being more or
less than that recently achieved by Snorkel International.
· The impact of exchange rate movements given that any proceeds
will be received in USD, considering current, historic and average exchange
rates.
Between 1 January 2024 to 31 December 2024, the range of the GBP to USD
exchange rate has a low of 1.2345 and a high of 1.3410, the average being
1.2779. If £19.1m is assumed to represent the average exchange rate, then
based on the low of 1.2345 the valuation increases by approximately 4% to
£19.8m and based on the high of 1.3410 the valuation reduces by approximately
5% to £18.2m giving a potential movement of 9% in the valuation. Whilst the
Board is not in a position to mitigate any potential exchange rate variation,
until such time as the realisation of the Snorkel International investment is
known, it will continue to consider such means as may be possible to maximise
the GBP return to shareholders.
As the future performance of both Snorkel International and the wider global
market conditions are unknown, the Board note that the valuation could
potentially increase beyond the £19.1m which is underpinned by the Preferred
Interest element. However, the Board has considered various Snorkel
International trading scenarios, based around historic sales growth trends and
does not believe the valuation is likely to materially increase from £19.1m
in the near future.
The Board, however, caveat that a number of factors could influence the
valuation and performance of Snorkel International between now and a potential
realisation date, including Xtreme's opinion of the contractual agreements
which has resulted in the US Proceedings (see Strategic Report for further
information). Due to the risks involved with the ongoing different opinions
regarding the contractual agreements, it is possible the actual realisation of
value could be less than the current valuation, potentially as low as £nil as
alleged by Xtreme and depending on the outcome of ongoing US Proceedings.
Given the risks, the Board has considered whether a further impairment loss
should be recognised but have concluded that based on their understanding of
the contractual agreements in place, no further impairment is required at this
time.
Whilst the timing and quantum of realisation of the investment remains
unclear, the Board is currently of the opinion that the investment in Snorkel
International will result in a return to shareholders in the future, that the
current value of the investment of £19.1m remains appropriate and there is
not an alternative, more reliable valuation of the investment than the current
estimate.
NOTES TO THE ACCOUNTS
1. Staff costs
2024 2023
Aggregate remuneration comprised £000's £000's
Wages and salaries 144 175
Social security costs - 2
Other pension costs 15 13
Total staff costs 159 190
2024 2023
Average monthly number of employees No. No.
Directors 2 2
Total 2 2
All staff costs relate to Directors' remuneration. Details of Directors'
fees and salaries, bonuses, pensions, benefits in kind and other benefit
schemes together with details in respect of Directors' share option plans are
given in the Directors' Remuneration Report.
2. Finance expense and finance income
2024 2023
Finance expense £000's £000's
Interest and borrowing cost - -
Total finance expense - -
2024 2023
Finance income £000's £000's
Interest on cash, cash equivalents & financial instruments 132 123
Total finance income 132 123
3. Other operating expenses
2024 2023
£000's £000's
Property related expenses 21 30
Auditor's remuneration (see below) 25 25
Legal and professional fees 193 204
Other operating expenses 21 28
Total operating expenses 260 287
Auditor's remuneration
Amounts payable to RSM UK Audit LLP and their associates in respect of both
audit and non-audit services are as follows:
2024 2023
£000's £000's
Audit Services
· statutory audit of accounts 25 25
4. Taxation
Analysis of and factors affecting taxation charge
The taxation charge on the loss for the year differs from the amount computed
by applying the corporation tax rate to the loss before taxation as a result
of the following factors:
2024 2023
£000's £000's
(Loss)/profit before taxation (271) (331)
Notional taxation charge at UK rate of 19% (2023: 19%) (52) (63)
Effects of:
Non-deductible expenses 27 30
Deferred tax asset not recognised in the period 25 33
Total taxation charge in the income statement - -
The Company has tax losses of approximately £5.8m (2023: £5.7m) available to
carry forward against future profits of the same trade. No deferred tax asset
has been recognised due to the uncertainty of future profitability of the
Company.
5. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity
shareholders by the weighted average number of shares in issue during the
period. The average share price during the year was 3.78p (2023: 3.49p).
2024 2023
No. No.
Number of shares 000's 000's
Weighted average number of ordinary shares for the purposes of earnings per 162,907 162,907
share
Loss
2024 2023
From operations £000's £000's
Loss for the purposes of earnings per share (271) (331)
Loss per share
Basic and diluted earnings per share (p) (0.17) (0.20)
6. Non-current investments
A summary of the non-current investments is shown below:
2024 2023
£000's £000's
Investment in Smith Electric Vehicles US Corp - -
Investment in Snorkel International Holdings LLC 19,100 19,100
Total non-current investments 19,100 19,100
Smith Electric Vehicles US Corp
At 31 December 2024, the Company held a 5.76% (2023: 5.76%) share of the
issued share capital of Smith Electric Vehicles US Corp, a company registered
in the US. In 2015 the Board decided to impair the investment in Smith to
£nil and they continue to maintain this position. However, the Board will
continue to monitor the investment.
Snorkel International Holdings LLC
At 31 December 2024, the Company held a 49% (2023: 49%) share of the issued
share capital of Snorkel International Holdings LLC, a company registered in
the US. This shareholding is being held as a non-current investment at fair
value (2024: £19.1m, 2023: £19.1m). The cumulative impairment provision
against this investment is £17.2m (2023: £17.2m). See Strategic Report and
critical accounting estimates and judgements for further considerations.
7. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits held by the
Company. The carrying amount of these assets approximates their fair value.
The Company primarily holds cash and cash equivalents in Sterling bank
accounts.
2024 2023
£000's £000's
Cash and cash equivalents 3,209 3,473
8. Trade and other receivables
2024 2023
£000's £000's
Receivable within one year
Other debtors and prepayments 44 58
44 58
The directors consider that the carrying amounts of trade and other
receivables, recognised at amortised cost, approximates to their fair value.
9. Trade and other payables
The directors consider that the carrying amounts of trade and other payables
approximates to their fair value.
2024 2023
£000's £000's
Payable within one year
Trade payables 9 10
Social security and other taxes 3 3
Accrued expenses 53 59
65 72
12
Average credit period taken on trade purchases (days)a 12
a Creditor days have been calculated as trade payables over other operating
expenses multiplied by 365 days.
10. Share capital and share premium
The Company has one class of ordinary shares which carry no right to fixed
income. All shares are fully paid up.
Nominal share value Number of shares Share capital £000's Share premium £000's
At 1 January 2023 5p 162,906,850 8,145 17,336
-
At 31 December 2023 5p 162,906,850 8,145 17,336
At 31 December 2024 5p 162,906,850 8,145 17,336
11. Financial risk management
The Company's operations are exposed to various financial risks which are
managed by various policies and procedures. The main risk and their related
management are discussed below:
Credit risk management
The Company's exposure to credit risk arises from its trade and other
receivables and cash deposits with financial institutions.
The Company's maximum exposure to credit risk is summarised below:
2024 2023
£000's £000's
Trade and other receivables 2 2
Cash 2,909 3,473
Short-term deposits 300 -
3,211 3,475
Liquidity risk management
The Company is exposed to liquidity risk arising from having insufficient
funds to meet the Company's future financing needs. The Company's liquidity
management process includes projecting cash flows and considering the level of
liquid assets available to meet future cash requirements along with monitoring
statement of financial position liquidity. The Board reviews forecasts,
including cash flow forecasts on a quarterly basis.
Maturity analysis
The table below analyses the Company's financial liabilities on a contractual
gross undiscounted cash flow basis into maturity groupings based on amounts
outstanding at the statement of financial position date up to the contractual
maturity date.
Within 1 year 1 to 5 years Over 5 years Total
£000's £000's £000's £000's
2024
Trade and other payables 65 - - 65
65 - - 65
2023
Trade and other payables 72 - - 72
72 - - 72
Foreign exchange risk management
The Company is exposed to movements in foreign exchange rates due to any
realisation of its investment in Snorkel International being denominated in
foreign currencies. The carrying amount of the company's investment in
Snorkel International at 31 December 2024, which is denominated in USD, is
£19.1m (2023: £19.1m). During 2024, the GBP to USD exchange rate averaged
1.2779 with a low of 1.2345 and a high of 1.3410. See critical accounting
estimates and key judgements for further details of the impact of changes in
the exchange rates. The company has no other material assets or liabilities
denominated in foreign currencies. If appropriate the Company can use
currency derivative financial instruments such as foreign exchange contracts
to reduce exposure. These were not used in the period.
Capital management
The Company's main objective when managing capital is to protect returns to
shareholders. The Company also aims to maximise its capital structure of
debt and equity so as to minimise its cost of capital. The Company manages
its capital with regard to risks inherent in the business and the sector in
which it operates by monitoring its gearing ratio on a regular basis. The
Company considers its capital to include share capital, share premium, special
reserve, share option reserve, merger reserve and retained earnings. No
gearing is currently calculated as the Company had no borrowings during the
year.
12. Contingencies
Authorised Guarantee Agreement
At the time of the Joint Venture between Tanfield Group Plc and Xtreme
Manufacturing LLC relating to Snorkel International in October 2013, Tanfield
Group Plc was the tenant of the Vigo Centre manufacturing facility from which
the Snorkel division carried out its UK manufacturing operations. In order to
gain permission to assign the lease to Snorkel Europe Limited, Tanfield Group
Plc entered into an authorised guarantee agreement on the 25-year lease which
commenced 27 June 2006.
13. Related party transactions
Remuneration of key personnel
The remuneration of the key management personnel, which includes Directors, is
set out below in aggregate for each of the categories specified in IAS 24
Related Party Disclosures. Further information about the remuneration of
individual directors is provided in the Directors' Remuneration Report.
2024 2023
£000's £000's
Salaries and short-term benefits including NI 144 177
Post employment benefits 15 13
159 190
14. Retirement benefits
The Company operates a defined contribution retirement benefit plan for all
qualifying employees. The total cost charged to income of £15k (2023: £13k)
represents contributions payable to that scheme by the Company at rates
specified in the rules of the scheme. As at 31 December 2024, contributions of
£nil (2023: £nil) due in respect of the current reporting period had not
been paid over to the scheme.
15. Financial instruments recognised in the statement of financial position
2024 2023
Assets Amortised cost Fair value through profit and loss Total Amortised cost Fair value through profit and loss Total
£000's £000's £000's £000's £000's £000's
Current financial assets
Trade and other receivables 2 - 2 2 - 2
Investments - 19,100 19,100 - 19,100 19,100
Cash and cash equivalents 3,209 - 3,209 3,473 - 3,473
Total 3,211 19,100 22,311 3,475 19,100 22,575
2024 2023
Liabilities Amortised cost Fair value through profit and loss Total Amortised cost Fair value through profit and loss Total
£000's £000's £000's £000's £000's £000's
Current liabilities
Trade and other payables 65 - 65 69 - 69
Total 65 - 65 69 - 69
Financial assets and liabilities measured at fair value are measured using a
fair value hierarchy that reflects the significance of the inputs used in
making the fair value measurements, as follows:-
· Level 1 - Unadjusted quoted prices in active markets for
identical asset or liabilities ('quoted prices');
· Level 2 - Inputs (other than quoted prices in active markets for
identical assets or liabilities) that are directly or indirectly observable
for the asset or liability ('observable inputs'); or
· Level 3 - Inputs that are not based on observable market data
('unobservable inputs').
All of the company's financial assets and liabilities measured at fair value
are measured using level 3 valuations in both the year ended 31 December 2024
and the year ended 31 December 2023.
The fair value investment is measured against the contractual terms of the
Joint Venture with Xtreme, as detailed in the circular distributed to
shareholders to fully explain the terms of the transaction - and thereby seek
their authority to enter into the transaction. Further details are provided
in the strategic report and in the critical accounting estimates and key
judgements.
16. Investments
The tables below give brief details of the Company's investments at 31
December 2024. The Company had no operating subsidiaries as of 31 December
2024.
Investments Principal activity Group Interest in allotted capital & voting rights Country of incorporation
Smith Electric Vehicles US Corp Electric vehicle manufacture 5.76% US
HBWP Inc Holding Company 100.00% US
Snorkel International Holdings LLC Holding Company 49.00% US
Tanfield Engineering Systems US (Inc) a Powered Access 49.00% US
Snorkel Europe Ltd a Powered Access 49.00% UK
Snorkel International Inc a Powered Access 49.00% US
Snorkel New Zealand Limited a Powered Access 49.00% NZ
a The Company's interest is held indirectly through HBWP Inc, a wholly owned
subsidiary, and its investment in Snorkel International Holdings LLC
Liquidity risk management
The Company is exposed to liquidity risk arising from having insufficient
funds to meet the Company's future financing needs. The Company's liquidity
management process includes projecting cash flows and considering the level of
liquid assets available to meet future cash requirements along with monitoring
statement of financial position liquidity. The Board reviews forecasts,
including cash flow forecasts on a quarterly basis.
Maturity analysis
The table below analyses the Company's financial liabilities on a contractual
gross undiscounted cash flow basis into maturity groupings based on amounts
outstanding at the statement of financial position date up to the contractual
maturity date.
Within 1 year 1 to 5 years Over 5 years Total
£000's £000's £000's £000's
2024
Trade and other payables 65 - - 65
65 - - 65
2023
Trade and other payables 72 - - 72
72 - - 72
Foreign exchange risk management
The Company is exposed to movements in foreign exchange rates due to any
realisation of its investment in Snorkel International being denominated in
foreign currencies. The carrying amount of the company's investment in
Snorkel International at 31 December 2024, which is denominated in USD, is
£19.1m (2023: £19.1m). During 2024, the GBP to USD exchange rate averaged
1.2779 with a low of 1.2345 and a high of 1.3410. See critical accounting
estimates and key judgements for further details of the impact of changes in
the exchange rates. The company has no other material assets or liabilities
denominated in foreign currencies. If appropriate the Company can use
currency derivative financial instruments such as foreign exchange contracts
to reduce exposure. These were not used in the period.
Capital management
The Company's main objective when managing capital is to protect returns to
shareholders. The Company also aims to maximise its capital structure of
debt and equity so as to minimise its cost of capital. The Company manages
its capital with regard to risks inherent in the business and the sector in
which it operates by monitoring its gearing ratio on a regular basis. The
Company considers its capital to include share capital, share premium, special
reserve, share option reserve, merger reserve and retained earnings. No
gearing is currently calculated as the Company had no borrowings during the
year.
12. Contingencies
Authorised Guarantee Agreement
At the time of the Joint Venture between Tanfield Group Plc and Xtreme
Manufacturing LLC relating to Snorkel International in October 2013, Tanfield
Group Plc was the tenant of the Vigo Centre manufacturing facility from which
the Snorkel division carried out its UK manufacturing operations. In order to
gain permission to assign the lease to Snorkel Europe Limited, Tanfield Group
Plc entered into an authorised guarantee agreement on the 25-year lease which
commenced 27 June 2006.
13. Related party transactions
Remuneration of key personnel
The remuneration of the key management personnel, which includes Directors, is
set out below in aggregate for each of the categories specified in IAS 24
Related Party Disclosures. Further information about the remuneration of
individual directors is provided in the Directors' Remuneration Report.
2024
2023
£000's
£000's
Salaries and short-term benefits including NI
144
177
Post employment benefits
15
13
159
190
14. Retirement benefits
The Company operates a defined contribution retirement benefit plan for all
qualifying employees. The total cost charged to income of £15k (2023: £13k)
represents contributions payable to that scheme by the Company at rates
specified in the rules of the scheme. As at 31 December 2024, contributions of
£nil (2023: £nil) due in respect of the current reporting period had not
been paid over to the scheme.
15. Financial instruments recognised in the statement of financial position
2024 2023
Assets Amortised cost Fair value through profit and loss Total Amortised cost Fair value through profit and loss Total
£000's £000's £000's £000's £000's £000's
Current financial assets
Trade and other receivables 2 - 2 2 - 2
Investments - 19,100 19,100 - 19,100 19,100
Cash and cash equivalents 3,209 - 3,209 3,473 - 3,473
Total 3,211 19,100 22,311 3,475 19,100 22,575
2024 2023
Liabilities Amortised cost Fair value through profit and loss Total Amortised cost Fair value through profit and loss Total
£000's £000's £000's £000's £000's £000's
Current liabilities
Trade and other payables 65 - 65 69 - 69
Total 65 - 65 69 - 69
Financial assets and liabilities measured at fair value are measured using a
fair value hierarchy that reflects the significance of the inputs used in
making the fair value measurements, as follows:-
· Level 1 - Unadjusted quoted prices in active markets for
identical asset or liabilities ('quoted prices');
· Level 2 - Inputs (other than quoted prices in active markets for
identical assets or liabilities) that are directly or indirectly observable
for the asset or liability ('observable inputs'); or
· Level 3 - Inputs that are not based on observable market data
('unobservable inputs').
All of the company's financial assets and liabilities measured at fair value
are measured using level 3 valuations in both the year ended 31 December 2024
and the year ended 31 December 2023.
The fair value investment is measured against the contractual terms of the
Joint Venture with Xtreme, as detailed in the circular distributed to
shareholders to fully explain the terms of the transaction - and thereby seek
their authority to enter into the transaction. Further details are provided
in the strategic report and in the critical accounting estimates and key
judgements.
16. Investments
The tables below give brief details of the Company's investments at 31
December 2024. The Company had no operating subsidiaries as of 31 December
2024.
Investments Principal activity Group Interest in allotted capital & voting rights Country of incorporation
Smith Electric Vehicles US Corp Electric vehicle manufacture 5.76% US
HBWP Inc Holding Company 100.00% US
Snorkel International Holdings LLC Holding Company 49.00% US
Tanfield Engineering Systems US (Inc) a Powered Access 49.00% US
Snorkel Europe Ltd a Powered Access 49.00% UK
Snorkel International Inc a Powered Access 49.00% US
Snorkel New Zealand Limited a Powered Access 49.00% NZ
a The Company's interest is held indirectly through HBWP Inc, a wholly owned
subsidiary, and its investment in Snorkel International Holdings LLC
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. END FR UNRARVNUSAURRecent news on Tanfield
See all newsREG - Tanfield Group PLC - Annual Financial Report
AnnouncementREG - Tanfield Group PLC - Snorkel Investment Update
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