25.09.2007

Tanfield up 120%

Tanfield, owner of UpRight and Snorkel aerial lifts has released its first half results for 2007. Revenues increased by 120 percent to £36.8 million while profits before tax and interest increased 284 percent to £5.3 million.

Tanfield has no borrowings and sits on a significant cash pile, so its pre tax profits showed even stronger growth, more than tripling to £5.36 million.

Of the total Aerial lifts, purely UpRight for the period we are looking at, reported sales of £19.1 million a six fold increase from last years revenues of £3.1 million.

Pre tax profits from aerial lifts more than doubled to £3.5 million from £1.6 million in the same period 2006.

Order books.

The backlog at Snorkel is apparently at at its highest level for more than five years, rising from $18.5 million at the end of June when its acquisition occurred, to $26.7 million as of last week. Much of this has been fueled by orders from UpRight distributors in Europe as the company reports over £20 million of cross selling.

The order book for UpRight and its UK plant stands at £25.9 million.

Production expansion

Tanfield says that with its third production line now installed at its UK facility production is now touching 200 units a week.

In the USA a further 50,000 sqft (4,500 sq m) of assembly floor space at Snorkel's Kansas facility will be opened, while the group has plans to add a further 200,000 sqft (18,000 Sq m) of manufacturing space at Snorkel, over the next 12 months.

Darren Kell, Tanfield’s chief executive said: "Once again, Tanfield has delivered excellent results and achieved high growth in both core divisions of Powered Access and Zero Emission Vehicles.

“The integration of Snorkel International has progressed very smoothly and we can now focus on growing global sales, while achieving significant cost savings through supply chain synergies with our established powered access operation, UpRight.”

“We have strengthened the management team, grown the forward order book and worked extensively with our supply chain to gear up for increased volume, in both Powered Access and Zero Emission Vehicles. The foundations are now in place for further strong, organic growth in the second half of 2007 and beyond."

Vertikal Comment

The growth of Tanfield marches on at a seemingly relentless pace. Kell’s ability to scoop attractive acquisitions out from under the noses of the big players without over paying for them, combined with the groups ability to raise funds through equity sales is giving the group a strong base.

On top of this Tanfield appears able to structure and continually expand its operational team without poaching major players from the competition.

This is particularly true in the UK where in 12 months it has grown from a niche player with £3 million in revenues in the first half or 2006 to a $40 million full line producer in the first half of 2007.

It is easy to forget that he UpRight deal was only completed 12 months ago. The group now sits on a £39 million order book, roughly double its first half revenues.

The next big challenge for Tanfield will be the quality and design of the first new models under its stewardship. Due in 2008 the market will look to these as indicators of the company's ability to expand organically from its acquired base and maintain growth over the long term.