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Loss-making Tanfield pins hopes on electric vehicle deal
Thu, 09 Feb, 2012
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Loss-making Tanfield pins hopes on electric vehicle deal
Wed, 18 Aug 2010, 15:09:00
Commercial electric vehicles and powered access equipment manufacturer
Tanfield Group
reported a decline in revenues and loss in the first half of 2010 but it is still making a substantial loss. Group revenues fell from £29.9m to £28.1m in the six months to June 2010, although the electric vehicles division improved its revenues from £8.1m to £8.44m. The overall loss fell from £11.4m to £10m, with electric vehicles contributing a slightly higher loss of £2.16m. Smiths Electric Vehicles has been delivering vehicles to the UK government and Sainsbury's as well as the German government. Most of the revenues and the loss come from the powered access division and there is no real sign of a recovery in this market. The main hope is that rental companies will have to replace aging fleets of equipment at some point. Tanfield is hopeful that could happen next year. The net cash figure has declined from £4.77m to £1.81m over the six months to June 2010. Tanfield needs to stem this cash outflow or it will require further funding. It talks about needing to fund alternative ways to fund the cash outflow until a deal is completed for its electric vehicles business but these negotiations have dragged on. Tanfield has signed non-binding heads of agreement with its US-based associate Smiths Electric Vehicles US (SEV US), which could lead to Tanfield's UK-based subsidiary Smiths Electric Vehicles merging with its US counterpart. SEV US is considering a Nasdaq flotation as part of the deal to merge with UK-based Smiths Electric Vehicles. This is unlikely to happen until the first half of 2011. Tanfield says that it would retain a "significant stake" in the combined group although it also expects to generate cash from the deal. Tanfield argues that the government incentives in the US mean that the market will grow faster than in Europe.
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