REG - Tanfield Group PLC - Interim Results <Origin Href="QuoteRef">TAN.L</Origin>
RNS Number : 6784PTanfield Group PLC21 August 2014The Tanfield Group Plc
("Tanfield", or "the Company")
Interim Results for the six-month period to 30 June 2014
Tanfield Group Plc, an investing company as defined by AIM Rules, announces its half year results for the period ending 30 June 2014. The unaudited financial statements are available on the Company website atwww.tanfieldgroup.com.
Summary
Positive update on Snorkel
o Valuation of holding in Snorkel: 36.28 million ($60.1 million)
Smith Electric Vehicles:
o Acquisition of OTCBB target completed
o Planned OTCBB listing and subsequent planned US National Exchange flotation
o Planned completion of Series E funding
o Valuation of holding in Smith: 1.28 million ($2.11 million) equity and 2.78 million ($4.75 million) debt
Based on revised, positive outlook for short-term realisation of value:
o No requirement for an Open Offer to shareholders
o No current proposed change in investment strategy
Date of AGM 30 September 2014
Background
The Company is currently defined as an investing company that has two passive investments. This status resulted from the disposal of Smith Electric Vehicles in 2010 and the disposal of Snorkel Europe Limited in October 2013. Tanfield Group Plc currently owns 24% of Smith Electric Vehicles Corp. ("Smith") and 49% of Snorkel International Holdings LLC ("Snorkel"). The Directors believe that these investments have the potential to provide a return of value to shareholders over time.
The strategy of the company in relation to these investments is to return as much of the realised value in these investments as soon possible to shareholders as and when they occur. The way that value will be returned to shareholders is under review.
Overview of current investments
Snorkel
The Snorkel business continues to progress well. The new entity in which Tanfield holds its interest is an LLC organised under US law with Tanfield owning 49%. Both production and the order book continue to increase. The annualised run rate of sales currently exceeds $100 million. Significant new working capital of in excess of $30m has been introduced into the business. Restructuring has taken place to reduce the breakeven of the business. The Board of Tanfield is confident that the Snorkel business continues to move towards meaningful profitability.
The carrying value of Tanfield's investment in Snorkel is 36.28 million. This represents a value per share of 25.6p.
Smith Electric Vehicles
Smith has executed the acquisition of American Business Services, Inc (ABSR), an OTCBB company, by acquiring 85% of the common stock of ABSR. Smith is in the process of completing its Series E funding round, expected to raise up to $20 million. On the closing of this funding round Smith then intends to complete the merger with ABSR and become a publicly traded company on the OTCBB
Proposed subsequent flotation on a US National Exchange
As previously announced on 20 May 2014, following the completion of the merger with ABSR Smith intends to apply for a Listing on a US national exchange. Subject to meeting the applicable listing requirements, it is proposed that Smith will apply to list on NYSE or NASDAQ upon completion of a subsequent underwritten offering. This is in order to satisfy the waiver of the one year seasoning requirement, a regulation relating primarily to applicant companies that have previously been traded on another exchange, and the reporting of information.
Realisation of Smith Investment
It is currently anticipated that Tanfield Group could have tradable NYSE or NASDAQ listed stock in ABSR after 180 day lock in expires from the date that Smith becomes a publicly traded company on the OTCBB.
Strategy of the Board of Directors' in relation to its current investment status
The Tanfield Group Board has now decided that in the light of the potential realisation of its investment in Smith Electric Vehicles, it will not pursue an open offer to shareholders, as previously indicated in its announcement of 2 June 2014. In addition the Board has also decided not to seek to change its current investment strategy, but feels it prudent to keep this under review.
It is the aim of the Board to return any value realisation from its investments in Smith and Snorkel to shareholders as soon as these events occur and circumstances allow. If and when opportunities arise, the methods of return of value will be decided on the basis of the most cost effective and efficient ways available at the time.
AGM
The Company's AGM will be held at 10:00am on 30 September 2014 at the Company's registered office, Sandgate House, 102 Quayside, Newcastle upon Tyne, NE1 3DX. A notice of AGM will be sent out in due course and will be available on the Company website www.tanfieldgroup.com.
For further information:
Tanfield Group Plc
Roy Stanley - Non-executive Director0845 155 7755
WH Ireland Limited
James Joyce / Nick Field 020 7220 1666
Peterhouse Corporate Finance
Peter Greensmith/Duncan Vasey/Lucy Williams 020 7469 0930
STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDING 30 JUNE 2014
Six months to
30 Jun 14 (unaudited)
Six months to 30 Jun 13 (unaudited)
Year to
31 Dec 13
(audited)
000's
000's
000's
Revenue
-
1,270
2,223
Staff costs
(56)
(909)
(2,606)
Depreciation and amortisation expense
-
-
Other operating income
9
-
-
Other operating expenses
(82)
(443)
(679)
Loss from operations before impairments
(129)
(82)
(1,062)
Impairment of Investments
-
-
(1,357)
Intercompany loan forgiveness
-
-
(17,141)
Adjustment to fair value of investments
-
-
26,984
Profit/(loss) from operations after impairments
(129)
(82)
7,424
Finance expense
(139)
-
(80)
Finance income
7
22
48
Net finance (expense) income
(132)
22
(32)
Profit/(loss) from operations before tax
(261)
(60)
7,392
Taxation
-
-
-
Profit/(loss) & total comprehensive income for the year attributable to equity shareholders
(261)
(60)
7,392
Earnings/(loss) per share
Earnings/(loss) per share from operations
Basic (p)
(0.18)
(0.04)
5.40
Diluted (p)
(0.18)
(0.04)
5.29
BALANCE SHEET
AS AT 30 JUNE 2014
30 Jun 14
(unaudited)
30 Jun 13
(unaudited)
31 Dec 13
(audited)
000's
000's
000's
Non current assets
Non current Investments
37,563
-
37,563
Investments in subsidiaries
-
11,965
-
37,563
11,965
37,563
Current assets
Trade and other receivables
2,574
19,719
2,902
Deferred consideration
341
339
349
Cash and cash equivalents
257
380
375
3,172
20,438
3,626
Total assets
40,735
32,403
41,189
Current liabilities
Trade and other payables
1,581
624
1,885
1,581
624
1,885
Non-current liabilities
Deferred tax liabilities
-
-
-
-
-
-
Total liabilities
1,581
624
1,885
Equity
Share capital
7,086
6,975
6,975
Share premium
16,262
16,262
16,262
Share option reserve
862
1,966
1,904
Special reserve
66,837
66,837
66,837
Merger reserve
1,534
1,534
1,534
Retained earnings
(53,427)
(61,796)
(54,208)
Total equity
39,153
31,778
39,304
Total equity and total liabilities
40,735
32,402
41,189
STATEMENT OF CHANGES IN EQUITY
Share capital
Share premium
Share option reserve
Merger reserve
Special reserve
Retained earnings
Total
000's
000's
000's
000's
000's
000's
000's
For the 6 month period ended 30 June 2014
At 1 January 2014
6,975
16,262
1,904
1,534
66,837
(54,208)
39,304
Comprehensive income
Loss for the year
-
-
-
-
-
(261)
(261)
Total comprehensive income for the year
-
-
-
-
-
(261)
(261)
Transactions with owners in their capacity as owners:-
Share options exercised
111
-
(1,042)
-
-
1,042
111
At 30 June 2014
7,086
16,262
862
1,534
66,837
(53,427)
39,154
For the 6 month period ended 30 June 2013
At 1 January 2013
6,450
14,823
1,885
1,534
66,837
(61,736)
29,793
Comprehensive income
Loss for the year
-
-
-
-
-
(60)
(60)
Total comprehensive income for the year
-
-
-
-
-
(60)
(60)
Transactions with owners in their capacity as owners:-
Issuance of new shares
525
1,439
-
-
-
-
1,964
Share based payments
-
-
81
-
-
-
81
At 30 June 2013
6,975
16,262
1,966
1,534
66,837
(61,796)
31,778
For the year ended 31 December 2013
At 1 January 2013
6,450
14,823
1,885
1,534
66,837
(61,736)
29,793
Comprehensive income
Profit for the year
-
-
-
-
-
7,392
7,392
Total comprehensive income for the year
-
-
-
-
-
7,392
7,392
Transactions with owners in their capacity as owners:-
Issuance of new shares
525
1,439
-
-
-
-
1,964
Share based payments
-
-
19
-
-
136
155
At 31 December 2013
6,975
16,262
1,904
1,534
66,837
(54,208)
39,304
CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDING 30 JUNE 2014
Six months to 30 Jun 14 (unaudited)
Six months to 30 Jun 13 (unaudited)
Year to
31 Dec 13
(audited)
000's
000's
000's
Profit/(loss) before interest and taxation
(129)
(82)
7,424
Loss on current asset currency fluctuations
(95)
-
27
Adjustment to fair value of investment
-
-
(26,650)
Loss on intercompany loan write off
-
-
17,141
Loss on impairment of investments
-
-
1,357
Operating cash flows before movements in working capital
(224)
(82)
(701)
(Increase)/decrease in receivables
337
(2,132)
(1,513)
Increase/(decrease) in payables
(305)
207
270
Net cash (used in) operations
(192)
(2,007)
(1,944)
Interest paid
(44)
-
(80)
Net cash used in operating activities
(236)
(2,007)
(2,024)
Cash flow from Investing Activities
Purchase of investments
-
-
-
Loan to Smith Electric Vehicles US Corp
-
-
-
Interest received
7
22
34
Net cash from/(used in) investing activities
7
22
34
Cash flow from financing activities
Proceeds from issuance of ordinary shares net of costs
111
1,963
1,963
Net cash from financing activities
111
1,963
1,963
Net decrease in cash and cash equivalents
(118)
(22)
(27)
Cash and cash equivalents at the start of year
375
402
402
Cash and cash equivalents at the end of the year
257
380
375
1 Basis of preparation
The Interim Report of the Company for the six months ended 30 June 2014 has been prepared in accordance with AIM Rule 18 and not in accordance with IAS34 "Interim Financial Reporting" therefore is not fully in compliance with IFRS.
The half year report does not constitute financial statements as defined in Section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 31 December 2013 which is available on request from the Company's registered office, Sandgate House, 102 Quayside, Newcastle upon Tyne NE1 3DX or can be downloaded from the corporate website www.tanfieldgroup.com.
2 Accounting Policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2013, as described in those financial statements. In particular, the accounts have been prepared on a going concern basis, and as set out on page 17 of those financial statements.
3 Earnings/(loss) per share
The calculation of the basic and diluted (loss)/earnings per share is based on the following data:
Number of shares
Six months
Six months
Year to
to 30 Jun 14
to 30 Jun 13
31 Dec 13
000's
000's
000's
Weighted average number of ordinary shares for the purposes of basic earnings per share
141,427
134,223
136,879
Effect of dilutive potential ordinary shares from share options
720
2,891
2,883
Weighted average number of ordinary shares for the purposes of diluted earnings per share
142,147
137,114
139,762
Earnings
Six months
Six months
Year to
to 30 Jun 14
to 30 Jun 13
31 Dec 13
From operations
000's
000's
000's
Earnings/(loss) for the purposes of basic earnings per share being net profit attributable to owners of the parent
(261)
(60)
7,392
Potential dilutive ordinary shares from share options
-
-
-
Earnings/(loss) for the purposes of diluted earnings per share
(261)
(60)
7,392
Earnings/(loss) per share from operations
Basic (p)
(0.18)
(0.04)
5.40
Diluted (p)a
(0.18)
(0.04)
5.29
aIAS33 defines dilution as a reduction in earnings per share or an increase in loss per share resulting from the assumption that options are exercised. As the potential dilutive ordinary shares from share options reduce the loss per share these shares are omitted from the dilutive loss per share calculation in 2012.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIR SEIEFSFLSESA
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