REG - Tanfield Group PLC - Snorkel Investment Update

TanfieldAnnouncement

07/02/2025 07:00

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RNS Number : 3273W  Tanfield Group PLC  07 February 2025

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014. Upon the publication of this announcement via a Regulatory
Information Service ("RIS"), this inside information is now considered to be
in the public domain

 

 

Tanfield Group Plc

("Tanfield" or the "Company")

 

Snorkel Investment Update

 

 

The Board of Tanfield (the "Board") is pleased to update the market on its
investment in Snorkel International Holdings LLC ("Snorkel"), the aerial work
platform business.

 

 

Investment Background

 

·    Tanfield is a 49% shareholder in the equity of Snorkel following the
joint venture between the Company and Xtreme Manufacturing LLC ("Xtreme") (the
"Contemplated Transaction"), a company owned by Don Ahern of Ahern Rentals
Inc, relating to Snorkel, in October 2013.

 

·    The Snorkel investment is valued at £19.1m.  The outcome of the US
Proceedings referenced below could have an impact on this valuation.

 

·    On 22 October 2019, the Company announced that it had received a
Summons and Complaint, filed in Nevada (the "US Proceedings") by subsidiaries
of Xtreme, relating to the Contemplated Transaction.

 

 

Highlights

 

·    Snorkel's sales for the first 9 months of 2024 saw a decrease of 5.4%
to US$137.3m (2023: US$145.1m), with EBITDA dropping in the same period to a
loss of USD$1.9m (2023: profit of USD$2.8m).

 

·    The jury trial previously scheduled for March 2025 has been
rescheduled for a 5-week stack beginning in October 2025.

 

 

Business Update

 

Tanfield is a 49% shareholder in the equity of Snorkel following the joint
venture between the Company and Xtreme, a company owned by Don Ahern of Ahern
Rentals Inc, relating to Snorkel, in October 2013.

 

In the first 9 months of 2024, Snorkel's sales decreased by 5.4%% to
US$137.3m, compared to US$145.1m for the same period of 2023.  The EBITDA for
the first 9 months of 2024 was a loss of US$1.9m, compared to a profit of
US$2.8m for the same period of 2023.

 

Below is a summary of the consolidated financial statement for the first 9
months of 2024, 2023 and 2022, along with the full year 2023 and 2022.

 

 US$000's                                     9 months  9 months  9 months      Full Year 2023  Full Year

                                              2024      2023      2022                          2022

 Net sales                                    137,301   145,123   130,976       188,722         168,752
 Cost of goods sold                           122,549   126,414   125,001       161,963         161,677
 Gross profit                                 14,752    18,709    5,975         26,759          7,075
                                              10.7%     12.9%     4.6%          14.2%           4.2%

 Selling, general & administrative costs      16,320    16,450    14,814        20,920          19,393
 Foreign currency exchange gain/(loss)        (286)     567       (2,040)       436             (1,505)

 EBITDA profit/(loss)                         (1,854)   2,826     (10,879)      6,275           (13,823)

 Depreciation & non-operating costs           906       1,120     1,831         2,054           2,725

 Profit/(loss) before forgiveness             (2,760)   1,706     (12,710)      4,221           (16,548)

 Related Party Forgiveness                    -         -         -             -               31,809

 Net Profit/(loss)                            (2,760)   1,706     (12,710)      4,221           15,261

 

 

The Board is unaware of the reason for the reduction in sales during the first
9 months of 2024 but understands that demand in the aerial work platform
market continues to grow, with that trend expected to continue into 2025 and
beyond.

 

As previously reported on 7 August 2024, and as shown in the table above, both
sales and EBITDA for the full year 2023 increased by US$20m compared to 2022,
which the board believe resulted from improved selling prices since the end of
2022.  Also as previously reported, Don Ahern sold the trade and assets of
Ahern Rentals, Snorkel's largest customer since the Contemplated Transaction
in 2013, at the end of 2022.  It remains unclear whether there is any
connection between these 2 events, but the Board continues to seek
clarification and to fully investigate the matter.

 

The Company continues to be fully focussed on the US Proceedings which are
continuing.  As reported on 16 August 2024, due to the ongoing delays in
obtaining discovery, the jury trial scheduled for March 2025 needed to be
rescheduled, and the Board can now confirm this has been set for a 5-week
stack beginning in October 2025.

 

The Board continues to believe that a positive outcome to the proceedings is
possible.  So far as it is necessary, the Company will continue to vigorously
defend its position whilst continuing to seek appropriate advice.

 

Further updates will be provided to Shareholders as and when appropriate.

 

 

 

For further information:

 

Tanfield Group
Plc
0203 829 5000

Daryn
Robinson

 

Zeus - Nominated Advisor / Broker

James Joyce / Andrew de Andrade
                                0203 829 5000

 

 

 

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