TANFIELD GROUP PLC

Interim / Quarterly Report • Aug 21, 2014

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 6784P

Tanfield Group PLC

21 August 2014

The Tanfield Group Plc

("Tanfield", or "the Company")

Interim Results for the six-month period to 30 June 2014

Tanfield Group Plc, an investing company as defined by AIM Rules, announces its half year results for the period ending 30 June 2014. The unaudited financial statements are available on the Company website at www.tanfieldgroup.com.

Summary

•    Positive update on Snorkel

o   Valuation of holding in Snorkel: £36.28 million ($60.1 million)

•    Smith Electric Vehicles:

o   Acquisition of  OTCBB target completed

o   Planned OTCBB listing and subsequent planned US National Exchange flotation

o   Planned completion of Series E funding 

o   Valuation of holding in Smith: £1.28 million ($2.11 million) equity and £2.78 million ($4.75 million) debt

•    Based on revised, positive outlook for short-term realisation of value:

o   No requirement for an Open Offer to shareholders

o   No current proposed change in investment strategy

•    Date of AGM 30 September 2014

Background

The Company is currently defined as an investing company that has two passive investments. This status resulted from the disposal of Smith Electric Vehicles in 2010 and the disposal of Snorkel Europe Limited in October 2013.  Tanfield Group Plc currently owns 24% of Smith Electric Vehicles Corp. ("Smith") and 49% of Snorkel International Holdings LLC ("Snorkel"). The Directors believe that these investments have the potential to provide a return of value to shareholders over time.

The strategy of the company in relation to these investments is to return as much of the realised value in these investments as soon possible to shareholders as and when they occur. The way that value will be returned to shareholders is under review. 

Overview of current investments

Snorkel

The Snorkel business continues to progress well.  The new entity in which Tanfield holds its interest is an LLC organised under US law with Tanfield owning 49%.  Both production and the order book continue to increase. The annualised run rate of sales currently exceeds $100 million. Significant new working capital of in excess of $30m has been introduced into the business.  Restructuring has taken place to reduce the breakeven of the business.  The Board of Tanfield is confident that the Snorkel business continues to move towards meaningful profitability.

The carrying value of Tanfield's investment in Snorkel is £36.28 million. This represents a value per share of 25.6p.

Smith Electric Vehicles

Smith has executed the acquisition of American Business Services, Inc (ABSR), an OTCBB company, by acquiring 85% of the common stock of ABSR.  Smith is in the process of completing its Series E funding round, expected to raise up to $20 million.  On the closing of this funding round Smith then intends to complete the merger with ABSR and become a publicly traded company on the OTCBB

Proposed subsequent flotation on a US National Exchange

As previously announced on 20 May 2014, following the completion of the merger with ABSR Smith intends to apply for a Listing on a US national exchange. Subject to meeting the applicable listing requirements, it is proposed that Smith will apply to list on NYSE or NASDAQ upon completion of a subsequent underwritten offering.  This is in order to satisfy the waiver of the one year seasoning requirement, a regulation relating primarily to applicant companies that have previously been traded on another exchange, and the reporting of information.

Realisation of Smith Investment

It is currently anticipated that Tanfield Group could have tradable NYSE or NASDAQ listed stock in ABSR after 180 day lock in expires from the date that Smith becomes a publicly traded company on the OTCBB.

Strategy of the Board of Directors' in relation to its current investment status

The Tanfield Group Board has now decided that in the light of the potential realisation of its investment in Smith Electric Vehicles, it will not pursue an open offer to shareholders, as previously  indicated in its announcement of 2 June 2014.  In addition the Board has also decided not to seek to change its current investment strategy, but feels it prudent to keep this under review. 

It is the aim of the Board to return any value realisation from its investments in Smith and Snorkel to shareholders as soon as these events occur and circumstances allow. If and when opportunities arise, the methods of return of value will be decided on the basis of the most cost effective and efficient ways available at the time.

AGM

The Company's AGM will be held at 10:00am on 30 September 2014 at the Company's registered office, Sandgate House, 102 Quayside, Newcastle upon Tyne, NE1 3DX. A notice of AGM will be sent out in due course and will be available on the Company website www.tanfieldgroup.com.

For further information:

Tanfield Group Plc

Roy Stanley - Non-executive Director                                    0845 155 7755

WH Ireland Limited

James Joyce / Nick Field                                                               020 7220 1666

Peterhouse Corporate Finance

Peter Greensmith/Duncan Vasey/Lucy Williams               020 7469 0930

STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDING 30 JUNE 2014
					Six months to 30 Jun 14 (unaudited)				Six months to 30 Jun 13 (unaudited)			Year to  31 Dec 13  (audited)
					£000's				£000's			£000's
Revenue						-			1,270		2,223
Staff costs						(56)			(909)		(2,606)
Depreciation and amortisation expense									-		-
Other operating income						9			-		-
Other operating expenses						(82)			(443)		(679)
Loss from operations before impairments						(129)			(82)		(1,062)
Impairment of Investments						-			-		(1,357)
Intercompany loan forgiveness						-			-		(17,141)
Adjustment to fair value of investments						-			-		26,984
Profit/(loss) from operations after impairments						(129)			(82)		7,424
Finance expense						(139)			-		(80)
Finance income						7			22		48
Net finance (expense) income						(132)			22		(32)
Profit/(loss) from operations before tax						(261)			(60)		7,392
Taxation						-			-		-
Profit/(loss) & total comprehensive income for the year attributable to equity shareholders						(261)			(60)		7,392
Earnings/(loss) per share
Earnings/(loss) per share from operations
Basic (p)						(0.18)			(0.04)		5.40
Diluted (p)						(0.18)			(0.04)		5.29

BALANCE SHEET
AS AT 30 JUNE 2014
					30 Jun 14 (unaudited)		30 Jun 13 (unaudited)		31 Dec 13 (audited)
					£000's		£000's		£000's
Non current assets
Non current Investments					37,563		-		37,563
Investments in subsidiaries					-		11,965		-
					37,563		11,965		37,563
Current assets
Trade and other receivables					2,574		19,719		2,902
Deferred consideration					341		339		349
Cash and cash equivalents					257		380		375
					3,172		20,438		3,626
Total assets					40,735		32,403		41,189
Current liabilities
Trade and other payables					1,581		624		1,885
					1,581		624		1,885
Non-current liabilities
Deferred tax liabilities					-		-		-
					-		-		-
Total liabilities					1,581		624		1,885
Equity
Share capital					7,086		6,975		6,975
Share premium					16,262		16,262		16,262
Share option reserve					862		1,966		1,904
Special reserve					66,837		66,837		66,837
Merger reserve					1,534		1,534		1,534
Retained earnings					(53,427)		(61,796)		(54,208)
Total equity					39,153		31,778		39,304
Total equity and total liabilities					40,735		32,402		41,189

STATEMENT OF CHANGES IN EQUITY

		Share capital				Share premium			Share option reserve			Merger reserve			Special reserve			Retained earnings			Total
		£000's				£000's			£000's			£000's			£000's			£000's			£000's
For the 6 month period ended 30 June 2014
At 1 January 2014		6,975				16,262			1,904			1,534			66,837			(54,208)			39,304
Comprehensive income
Loss for the year		-				-			-			-			-			(261)			(261)
Total comprehensive income for the year		-				-			-			-			-			(261)			(261)
Transactions with owners in their capacity as owners:-
Share options exercised		111				-			(1,042)			-			-			1,042			111
At 30 June 2014		7,086				16,262			862			1,534			66,837			(53,427)			39,154
For the 6 month period ended 30 June 2013
At 1 January 2013		6,450				14,823			1,885			1,534			66,837			(61,736)			29,793
Comprehensive income
Loss for the year		-				-			-			-			-			(60)			(60)
Total comprehensive income for the year		-				-			-			-			-			(60)			(60)
Transactions with owners in their capacity as owners:-
Issuance of new shares		525				1,439			-			-			-			-			1,964
Share based payments		-				-			81			-			-			-			81
At 30 June 2013		6,975				16,262			1,966			1,534			66,837			(61,796)			31,778
For the year ended 31 December 2013
At 1 January 2013		6,450				14,823			1,885			1,534			66,837			(61,736)			29,793
Comprehensive income
Profit for the year		-				-			-			-			-			7,392			7,392
Total comprehensive income for the year		-				-			-			-			-			7,392			7,392
Transactions with owners in their capacity as owners:-
Issuance of new shares		525				1,439			-			-			-			-			1,964
Share based payments		-				-			19			-			-			136			155
At 31 December 2013		6,975				16,262				1,904			1,534			66,837			(54,208)		39,304

CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDING 30 JUNE 2014
			Six months to 30 Jun 14 (unaudited)	Six months to 30 Jun 13 (unaudited)		Year to  31 Dec 13  (audited)
			£000's	£000's		£000's
Profit/(loss) before interest and taxation			(129)	(82)		7,424
Loss on current asset currency fluctuations			(95)	-		27
Adjustment to fair value of investment			-	-		(26,650)
Loss on intercompany loan write off			-	-		17,141
Loss on impairment of investments			-	-		1,357
Operating cash flows before movements in working capital			(224)	(82)		(701)
(Increase)/decrease in receivables			337	(2,132)		(1,513)
Increase/(decrease) in payables			(305)	207		270
Net cash (used in) operations			(192)	(2,007)		(1,944)
Interest paid			(44)	-		(80)
Net cash used in operating activities			(236)	(2,007)		(2,024)
Cash flow from Investing Activities
Purchase of investments			-	-		-
Loan to Smith Electric Vehicles US Corp			-	-		-
Interest received			7	22		34
Net cash from/(used in) investing activities			7	22		34
Cash flow from financing activities
Proceeds from issuance of ordinary shares net of costs			111	1,963		1,963
Net cash from financing activities			111	1,963		1,963
Net decrease in cash and cash equivalents			(118)	(22)		(27)
Cash and cash equivalents at the start of year			375	402		402
Cash and cash equivalents at the end of the year			257	380		375

1  Basis of preparation The Interim Report of the Company for the six months ended 30 June 2014 has been prepared in accordance with AIM Rule 18 and not in accordance with IAS34 "Interim Financial Reporting" therefore is not fully in compliance with IFRS. The half year report does not constitute financial statements as defined in Section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for full annual statements.  It should be read in conjunction with the annual report and financial statements for the year ended 31 December 2013 which is available on request from the Company's registered office, Sandgate House, 102 Quayside, Newcastle upon Tyne NE1 3DX or can be downloaded from the corporate website www.tanfieldgroup.com. 2  Accounting Policies The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2013, as described in those financial statements.  In particular, the accounts have been prepared on a going concern basis, and as set out on page 17 of those financial statements.
	3  Earnings/(loss) per share
The calculation of the basic and diluted (loss)/earnings per share is based on the following data:
Number of shares							Six months					Six months			Year to
							to 30 Jun 14					to 30 Jun 13			31 Dec 13
							000's					000's			000's
Weighted average number of ordinary shares for the purposes of basic earnings per share											141,427	134,223			136,879
Effect of dilutive potential ordinary shares from share options											720	2,891			2,883
Weighted average number of ordinary shares for the purposes of diluted earnings per share											142,147	137,114			139,762
Earnings							Six months					Six months			Year to
							to 30 Jun 14					to 30 Jun 13			31 Dec 13
From operations							£000's					£000's			£000's
Earnings/(loss) for the purposes of basic earnings per share being net profit attributable to owners of the parent											(261)	(60)			7,392
Potential dilutive ordinary shares from share options										-		-			-
Earnings/(loss) for the purposes of diluted earnings per share										(261)		(60)			7,392
Earnings/(loss) per share from operations
Basic (p)						(0.18)						(0.04)			5.40
Diluted (p)a						(0.18)						(0.04)			5.29
aIAS33 defines dilution as a reduction in earnings per share or an increase in loss per share resulting from the assumption that options are exercised. As the potential dilutive ordinary shares from share options reduce the loss per share these shares are omitted from the dilutive loss per share calculation in 2012.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR SEIEFSFLSESA