Snorkel buyout on the cards
By Euan Youdale20 February 2013
Tanfield has been approached by a number of parties interested in buying Snorkel, its aerial work platform business.
The company made the announcement in a trading update ahead of its end of its end of year results to be published in April. Snorkel currently makes up 100% of the Tanfield business.
It said, “The company has received a number of approaches from credible parties, who have expressed interest in making a strategic acquisition of our global aerial work platform business division in order to enter this recovering market.”
Rumours circulating at the Rental Show in Las Vegas last week suggest at least one of the interested parties is from China.
“The board is considering these approaches and will provide an update in due course. Any disposal of this business would be subject to shareholder approval. There can be no certainty that any negotiations will result in an agreement to dispose of this business. We will keep shareholders informed of any further developments,” the statement continued.
The company confirmed revenues in the third quarter of the last financial year, ending 31 December 2012, grew month-on-month resulting in revenue breaking even in October 2012 - the first time since 2008.
“Given the need to restock the key markets of Australia and Japan, the lower end of year shipments, and the focus on inventory management to minimise working capital, the company took steps during the fourth quarter to maintain its position to respond to the improving opportunities in 2013,” said a company spokesman. “Overall revenues and operating losses for the second half were in line with those in the first half.”
This, added the company, put it into a strong position to respond to the 2013 buying season in the second quarter. “The end markets continue to recover on the back of replacement demand and the company has received significant order forecasts from key customers, supporting a positive outlook for 2013 and the Board's confidence in the ability in 2013, subject to continued favourable market conditions, to achieve its first full year profit since 2007,” continued the spokesman.
Net cash at the end of June 2012 was UK£2.7.m and at the end of December 2012 was £2.2m. In addition, the company has agreed a debt facility to help fund working capital growth.