Tanfield Share Discussion Threads

[donemyhomework2] 30/6/2017 07:17

Even the auditors appear to worry about the value of Snorkel!!

[dave224] 02/6/2017 21:48

I'm thinking Ahern may make an offer this being the preferred interest of $50m and the bod will want to accept this just hope sooner rather than later before sterling goes back up!

[grabster] 02/6/2017 20:46

The last full 12 month period in which Snorkel might generate earnings sufficient to activate the trigger for Ahern's purchase of Tanfield's 49% holding, begins 120 days from now. It sounds as if the Tanfield directors doubt that it will happen - and that there is no plan in place for what happens thereafter!

They make the point that the main customer for Snorkel products in the US is Ahern Rentals; Ahern therefore can timetable purchases to fall outside the period of the existing agreement - if it suits him to do so - and Tanfield directors are reminding UK shareholders that there's nowt the Tanfield directors can do about it, except shrug their shoulders and twiddle their thumbs. I imagine however that they will continue to help themselves to a salary payment each month?

If (as yesterday's announcement appears to indicate) there is no formal agreement between Tanfield and Ahern regarding what happens next, Ahern is in a position to suggest some new arrangement with Tanfield 16 months from now. I am inclined to presume that whatever deal he suggests might not be one that the Tanfield directors are clever enough to outplay.

[spudders] 02/6/2017 18:42

Rns, not sure about this one !

[the stigologist] 01/6/2017 21:22

LVD

Mkt Cap £459m for 'Profit' of £8m !

[the stigologist] 01/6/2017 21:18

Bottom line for me is that TAN (we) own 49% share of a recovery business with strong growth potential with current revenue of over £100m+

In my book TAN 49% should be valued at least at about 1x sales level and so the see through value to TAN should be 49% of the Sales (£100m+) i.e. £49m+

Lavendon got a takeover offer valuing it at about 2x sales and 2x book value ?

[the stigologist] 01/6/2017 21:12

A cynical person might run away with the idea that the TAN statement set out to deliberately mislead the gullible and unwary. Surely a pertinent point of information in determining EBITDA is the DA bit (Depreciation and Amortisation)

In these sort of businesses the DA is very high. e.g. LVD from a few years ago had Op Profit of c.£40m but EBITDA of c.£80m because the DA was c.£40m on a £200m revenue base

[boboty] 01/6/2017 20:59

So the calculated realisation value of £36 m is at a discount to what Ahern would have to pay (if ebitar gets to 25m)
I wonder why

[the stigologist] 01/6/2017 20:05

Intriguing. It's almost like they tried to put a negative spin on what is actually a positive situation.

[multiplural] 01/6/2017 18:14

Boboty.the 91Musd is derived from the agreement issued back in 2013 when the deal was struck. It comprises of a 50 M USD note that will buy the first 19% of the 49 owned by Tanfield. The remaining 30 percent can be bought by Ahern or sold by Tanfield at a 5.5 times multiple of EBITDA. And if that reaches 25M on a 12 month trailing basis , the price for the remaining 30% would be 5.5X25X30% or 41.25 MUSD. If Ebitda is higher the price will rise accordingly. But remember the buy/sell option is only triggered if the 25M EBITDA is reached. If not reached before sept 2018, we just keep owning 49% of a nicely growing company. I can't imagine Ahern would take the chance and not buy in the period until sept 2018, as after that he is no longer in control. Please note that many of the Snorkel and Xtreme operations are already totally mixed together, and also note that Ahern at many situations have expressed his commitment to buy Snorkel in total. His relationship with Art Moore will further secure this imo.

[boboty] 01/6/2017 16:26

"the calculated realisation value (which is the basis of the £36.3 million balance sheet value) comes to an end ..." This would imply the minimum would be 36.3 million and not 70 million.

Multiplural I hope you are correct - where did you get your figures from.

[multiplural] 01/6/2017 15:35

It would have been nice that they had mentioned that if the trigger event happens, the minimum value for Tanfields 49% will be 91M USD or some 70M £ or some 45 p per share.
I find it quite comforting to hear Snorkel is in positive territory and growing nicely. I am sure Ahern will want the rest.

[boboty] 01/6/2017 15:34

I would like to know what they are spending all that money on. With sales of $130m and making a loss before depreciation of over $2m - the margins must be very small or they have Xtremely large overheads.

Is our board doing any due diligence and if so then what exactly?

Who audits these figures and are the auditors independent of Xtreme or do they audit both.

[orange1] 01/6/2017 11:59

A day after the Chairman departs this:

RNS Number : 8628G

Tanfield Group PLC

01 June 2017

Tanfield Group Plc

('Tanfield' or 'the Company')

Snorkel Investment Update

The Board of Tanfield is pleased to update the market on its investment in Snorkel International Holdings LLC ('Snorkel'), the aerial work platform ('AWP') business.

Investment Background

-- Tanfield is a 49% shareholder in the equity of Snorkel, following the disposal of 51% of the Snorkel business in 2013.

-- The carrying value, as set out in the Company's interim accounts, is GBP36.3 million. This represents approximately 23.2p per share.

-- The trigger event for the calculated realisation of the preferred interest holding in Snorkel is dependent upon Snorkel achieving an annualised trailing EBITDA of $25 million in any 12 month period by 30 September 2018.

-- After 30 September 2018, should the above event not be met, the calculated realisation value (which is the basis of the GBP36.3 million balance sheet value) comes to an end, Tanfield remain a 49% shareholder but the outcome then becomes uncertain and the return could be more or could be less than the calculated realisation value.

Business Update

Tanfield continues to own 49% of Snorkel, which it has held since the disposal of the business in October 2013. Sales levels have continued to grow during 2016 and sales for the year have increased by 19% to $130.5m (2015: $109.9m / 2014: $85.3m). Despite market conditions continuing to be challenging, Snorkel have been able to achieve improved market share in targeted regions allowing them to also create a broader and more diverse customer base. This is expected to help to underpin further growth that is expected for 2017, including some large rental companies who have not purchased Snorkel product for a number of years. This is testament to the progress Snorkel have made in recent years and the improvements to the product range, build quality and customer service.

The Snorkel 2016 year end accounts report an operating loss, excluding depreciation, of $2.8m (2015: $10.6m / 2014: $14.9m) with $1.9m of this loss being incurred in the first quarter of the year and the business operationally breaking even during some of the later periods. The significantly reduced operating loss is partially linked to the increased sales levels but is mainly as a result of the focused cost down activity that has taken place during 2015 and 2016 coming to fruition, thereby reducing the bill of material costs and lowering the break-even sales point.

Despite the challenging trading conditions, the Board understands Snorkel are again targeting double digit growth in 2017 from their UK manufacturing facility which mainly provides product to the European marketplace. Given the extent to which the US manufacturing facility is dependent upon Ahern Rentals as its principal customer, Tanfield are unsure at this point whether there will be growth in that facility in 2017. That said, as a result of the success of the cost down activity and the double digit European growth expectation, the Board believe Snorkel could still achieve combined growth, as evidenced in the March 2017 quarterly accounts, and are expecting to be profitable for the 2017 year.

Should economic conditions materially change in the latter stages of 2017, this may have an impact on the expected outcome but the Tanfield Board is currently of the opinion that the investment in Snorkel will result in a return to shareholders in the future and it should be noted that, this may not materialise until after 30 September 2018 when the outcome then becomes uncertain and could be more or could be less than the calculated realisation value.

[multiplural] 31/5/2017 17:37

I guess Pither is leaving simply because of his age, I believe he is in the mid 80's. He might have health issues.
I agree that it would be nice to hear some info on Snorkel, and I am equally worried about the distribution of cost between Xtreme and Snorkel.

[boboty] 31/5/2017 16:53

Rat leaving a sinking ship. I feel the board should be doing more for us shareholders - provide us with some information and reassurance that we are not being disadvantaged by Ahern with his close business interests and lack of scrutiny. Extreme and Snorkel are so close that costs and revenues and who's is who is a moot point - no body is covering our back. Big risk

[orange1] 31/5/2017 13:18

Jon Pither has decided to step down from the Board with immediate effect and has resigned his position as a director of the Company.

He will now be a regular contributor to this board and will be remunerated at a rate of £ 100 a word.

[multiplural] 25/5/2017 10:30

Snorkel keeps adding new employees, must be growing the business nicely:

[multiplural] 24/5/2017 08:07

Judging from Ahern Australia's linkedin page they are selling Snorkel equipment pretty fast these days:

[multiplural] 24/5/2017 07:59

New products from Snorkel:

[joseph moran] 23/5/2017 23:30

Please remember this is Tanfield you should be talking about.

[the stigologist] 23/5/2017 14:53

Absolutely destroyed cretin steve on the PROX thread

he bought in at 1.20p

went 'all in' at 0.40p

and it's now at 0.20p