Aerial lift maker Tanfield Group has closed the gap on its losses thanks to global demand for its platform products, which last year saw it struggle to keep up its supply
Aerial lift maker Tanfield Group has closed the gap on its losses thanks to global demand for its platform products, which last year saw it struggle to keep up its supply.
The Washington-based manufacturer reduced its pre-tax losses to £14.4m for the year to December 31, from£16.3m the previous year, on sales of £45.1m which were down 6.6% from £48.3m.
The firm, which increased its headcount from 469 to 506 over the 12-month period, said supply chain constraints put additional strain on its working capital, forcing it to rein in production during the final quarter of the year, slowing the speed of the company’s recovery.
Equipment rental and plant hire companies revitalised their ageing fleets of aerial work platforms over the year too, bringing in more business for Tanfield, which continued working with key distribution channels in key markets, including both Latin America and North America, with Scandinavia and Japan remaining particularly buoyant.
Demand grew for powered access products in 2012, outstripping capability to supply, and the company said it is planning for the future with the development of two new products.
The board also said it has received a substantial number of approaches from parties interested in purchasing Tanfield’s Powered Access division and the Snorkel brand, prompting them to appoint an M&A advisory firm to further explore and manage this process to optimise value for shareholders.
Further announcements are due soon, the company said.
Chairman Jon Pither: “As we predicted, global demand for aerial work platforms continued to grow significantly throughout 2012.
“We were able to capitalise on this returning market after successfully raising £11m, net of costs, in March 2012, via a share placing.
“In the ensuing six months we achieved monthly incremental gains in output and sales, leading to our first break-even month since 2008.
However, the extended cash-to-cash cycle of key markets in the Asia-Pacific region, combined with supply chain constraints put additional strain on our working capital, so we reined in production during the final quarter in order to rebalance inventory and maintain cash.
“Global demand for our Snorkel range of aerial lifts remains strong, pricing has improved and margins increased.”
The directors’ report accompanying the financial statements said: “We expect global demand for aerial work platforms will continue to grow during 2013 and beyond, although there remains some level of economic uncertainty in the key markets of North America and the Eurozone.”
Tanfield is not proposing to pay a dividend for the period.
As we predicted, global demand for aerial work platforms continued to grow significantly through 2012