13.02.2012

Tanfield raises £12 million

Tanfield, owner of Snorkel aerial work platforms has raised £12 million through the issue and placing of 29,268,293 new ordinary shares at a price of 41p per share. The shares were sold to “institutional and other investors”.

The new shares include 9,407,720 issued under existing authorities and a further 19,860,573 shares, the issue of which is conditional on the approval of existing shareholders.

Chief executive Darren Kell said: "The additional working capital raised by this placing will help to alleviate the bottlenecks within our supply chain allowing us to increase throughput, reduce lead times for customers and generate purchasing efficiencies. As a result, we believe it should accelerate our return to profitability and help to cement our position as one of the leading global manufacturers in the aerial work platform industry."
The shares this morning were around 46p

Vertikal Comment

This is something of a surprise from Tanfield but follows its traditional method of raising capital, through equity rather than borrowings. In fact in spite of the challenges the company has faced through the current recession, it has come maintained its no debt status. Although at times it has had to use supplier credit to make this happen.

The company currently sits on around £3 million of cash – roughly the same as this time last year. With the ramp up in production it does now need the additional working capital. We had assumed that this might come from the flotation of the SEV US electric vehicle business of which it owns a 27 percent stake.

This move will help ensure that Snorkel takes advantage of the current upturn in the aerial lift market. The other significant fact to emerge from this is that institutional investors are once again interested in investing in Tanfield.