30.09.2013

Snorkel slips 21%

Snorkel/Tanfield has reported its first half results with revenues dropping over 21 percent as the company conserves cash while seeking a sale of the business.

Total revenues for the first six months were £18.9 million, more than 21 percent lower than at this time last year, while pre-tax losses increased from a loss of £6.97 million last year to £8.5 million this year.

The company has agreed a rescue deal with Don Ahern’s Xtreme Manufacturing which goes to a shareholder vote next Monday – October 7th.

Chief executive Darren Kell said: "The Board are strongly recommending the recently announced proposed disposal of the Powered Access division, which de-risks the Tanfield group, protecting the value inherent within the Snorkel business as well as the holding in Smith Electric Vehicle Corporation. We believe the transaction will ultimately, significantly enhance the value of the Snorkel business and deliver far greater shareholder value in the medium term."

Vertikal Comment

There is nothing more to say on this subject except that the only hope of survival for Snorkel, which incorporates UpRight, is the deal with Ahern. However even with a substantial cash injection to fund working capital this is not going to be an easy turnaround job – at least if the management plans on trying to maintain Snorkel’s global production and management team.

However one never knows – the market is improving and Snorkel still has a good distribution network, but every week that passes makes any recovery substantially harder. Watch this space.