North East firm Tanfield Group is looking forward to a strong future for its shareholders following a year in which it switched from being a manufacturing entity to an investment company.
Tanfield is now classified as a “passive investment” company having disposed of Tanfield Engineering Services in January and by disposing of its Snorkel business last October.
A total of 68 roles were retained at the engineering division’s 97-strong workforce when heavy transport industry manufacturer Tinsley Special Projects, which has premises in Eagescliffe and Peterlee, bought out the firm.
It had been placed into administration in November last year, after posting losses of £732,000 for year ended December 31, 2012.
The move saw Washington-based Tanfield Group undergo a complete transformation into an investment firm, owning 24% of Smith Electric Vehicles and 49% of Snorkel International Holdings.
Its financial results for the year ending December 31 2013 now details how it plans to move forward, by ring fencing current funds to preserve the value and continuity of its investments, and raising further cash through share placings.
The company plans to raise money to acquire and fund new investments, using a small proportion of its shares and cash to acquire or invest in businesses in the technology sector, with any new fundraising subject to shareholder approval.
Directors said they believe this approach will increase shareholder value but also spread risk in relation to the realisation of current investments.
Full year results show the current value of Tanfield’s holding in Snorkel equates to £36.28m, or 26.0p per share, while its holding in Smith is £1.2m
The estimated value of Tanfield’s holding in Smiths post merger was £7.41 million ($12.37 million), or 5.3p per share (excluding warrants).
Jon Pither, chairman of Tanfield, said: “It is with some mixed emotions that I review the past twelve months but with a certain optimism that I look to the future. “Those twelve months need to be put into the context of the past five years. The company went through the most difficult trading period and the deepest recession ever experienced in its market for industrial products. It is a credit to all the people involved that the businesses, in their various guises, continue to operate and that Tanfield continues to be a shareholder in these businesses.
“Tanfield Group plc has gone through a radical structural change from being a strong manufacturing entity to being an investment company.
“This process of change is a response to the circumstances that the company faced during those five difficult years.
“We have managed to survive with a reasonable level of shareholder value intact and I am confident that our investments have the potential to provide a future return to shareholders.”