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Tanfield Group PLC - Interim Results for the six months to 30 June 2020

RNS Number : 8904W
Tanfield Group PLC
24 August 2020
 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain

 

 

Tanfield Group Plc

 

("Tanfield", or "the Company")

 

Interim Results for the six-month period to 30 June 2020

 

 

Tanfield, an investing company as defined by AIM Rules, announces its half year results for the period ending 30 June 2020. The unaudited financial information will shortly be available on the Company website at www.tanfieldgroup.com.

 

Background

 

·    Tanfield is a 49% shareholder in the equity of Snorkel International Holdings LLC ("Snorkel") following the joint venture between the Company and Xtreme Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a company owned by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October 2013.

 

·    The Snorkel investment is valued at £19.1m.  The outcome of the US and UK Proceedings referenced below could have an impact on this valuation.

 

·    On 22 October 2019, the Company announced that it had received a Summons and Complaint, filed in Nevada (the "US Proceedings") by subsidiaries of Xtreme, relating to the Contemplated Transaction.

 

·    On 24 October 2019, the Company announced it had become necessary to issue and serve a claim in the English High Court against Ward Hadaway (the "UK Proceedings"), the solicitor acting for the Company at the time of the Contemplated Transaction, in order to fully protect the Company's rights pending the outcome of the US Proceedings. 

 

·    The Company's operating loss in H1 2019 increased to £333k (H1 2019: £127k) as a consequence of additional legal fees during the period, with the retained loss for the period being £369k (H1 2018: £127k).

 

·    As announced on 30 July 2020, the Company put in place a second loan note instrument of up to £1,000,000.  An initial sum of £500,000 was subscribed to.

 

 

Overview of investments

 

As with many manufacturing businesses around the world, Snorkel has been significantly impacted by the global COVID-19 pandemic and many of its manufacturing locations have been closed for substantial periods in order to protect both the workforce as well as other stakeholders and to comply globally with a number of stay at home orders. 

 

Consequently, the first 6 months of 2020 have been materially impacted with sales of US$60.2m, down 46.4% compared to the same period in 2019 (H1 2019: US$112.5m).  This resulted in an EBITDA loss of US$6.2m in the first 6 months of 2020 (H1 2019: US$1.0m profit).  The increasing impact of the pandemic is further evident when comparing the first and second quarter of 2020 with the corresponding quarters in 2019 which saw the first quarter sales reduced by 15.9% to US$43.4m (Q1 2019: US$51.6m) whereas the second quarter sales reduced by 72.4% to only US$16.8m (Q2 2019: US$60.8m). 

 

Due to the ongoing impact of the COVID-19 pandemic, the Board expect that the remainder of 2020 will likely see ongoing reductions in sales when compared to 2019 but it is unable to provide an opinion at this juncture on the level of reduction in sales. 

 

The Board can confirm that both the US Proceedings and the UK Proceedings are continuing to progress, with the Board continuing to seek advice and further updates will be provided to shareholders as and when appropriate.

 

 

For further information:

 

Tanfield Group Plc                                                                          020 7220 1666

Daryn Robinson                                                                                                 

 

WH Ireland Limited - Nominated Advisor / Broker

James Joyce / Lydia Zychowska                                                    020 7220 1666

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDING 30 JUNE 2020

 

 

 

 

 

 

 

 

 

Six months to

30 Jun 20 (unaudited)

Six months to

30 Jun 19 (unaudited)

Year to

 31 Dec 19

 (audited)

 

 

 

 

£000's

£000's

£000's

 

 

 

 

 

 

 

 

Revenue

 

 

-

-

-

 

Staff costs

 

 

(37)

(32)

(74)

 

Other operating income

 

 

9

11

23

 

Other operating expenses

 

 

(305)

(106)

(267)

 

Loss from operations

 

 

(333)

(127)

(318)

 

Finance expense

 

 

(36)

-

-

 

Finance income

 

 

-

-

1

 

Net finance expense

 

 

(36)

-

1

 

 

 

 

 

 

Loss from operations before tax

 

 

(369)

(127)

 

(317)

 

Taxation

 

 

-

-

-

 

Loss & total comprehensive income for the period attributable to equity shareholders

(369)

(127)

(317)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share from operations

 

 

 

 

 

 

Basic and diluted (p)

 

 

(0.23)

(0.08)

 

(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                               
 

 

BALANCE SHEET

AS AT 30 JUNE 2020

 

 

 

 

 

30 Jun 20

(unaudited)

30 Jun 19

(unaudited)

31 Dec 19

(audited)

 

 

 

 

£000's

£000's

£000's

 

Non current assets

 

 

 

 

 

Non current Investments

 

 

19,100

19,100

19,100

 

 

 

 

19,100

19,100

19,100

 

Current assets

 

 

 

 

 

Trade and other receivables

 

 

28

35

 

23

 

Cash and cash equivalents

 

 

109

273

 

136

 

 

 

 

137

308

 

159

 

 

 

 

 

 

 

 

Total assets

 

 

19,237

19,408

19,259

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

 

59

63

104

 

 

 

 

59

63

104

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Other payables

 

 

392

-

-

 

 

 

 

392

-

-

 

 

 

 

 

 

 

 

Total liabilities

 

 

451

63

 

104

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

 

 

8,145

 

8,145

8,145

 

Share premium

 

 

 

17,336

 

17,336

17,336

 

Share option reserve

 

 

 

331

 

331

331

 

Special reserve

 

 

 

66,837

 

66,837

66,837

 

Merger reserve

 

 

 

1,534

 

1,534

1,534

 

Retained earnings

 

 

 

(75,397)

 

(74,838)

(75,028)

 

Total equity

 

 

 

18,786

 

19,345

19,155

 

 

 

 

 

 

 

 

Total equity and total liabilities

 

 

19,237

19,408

19,259

 

 

 

 

 

 

 

 

 

                       

 

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

Six months to 30 June 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2020

 

8,145

17,336

331

1,534

66,837

(75,028)

19,155

Comprehensive income

 

 

 

 

 

 

 

 

Loss for the period

 

-

-

-

-

-

(369)

(369)

Total comprehensive income for the year

 

-

-

-

-

-

(369)

(369)

At 30 June 2020

 

8,145

17,336

331

1,534

66,837

(75,397)

18,786

 

 

 

 

 

 

 

 

 

 

Six months to 30 June 2019 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2019

 

7,920

17,336

331

1,534

66,837

(74,711)

19,247

Comprehensive income

 

 

 

 

 

 

 

 

Loss for the period

 

-

-

-

-

-

(127)

(127)

Total comprehensive income for the year

 

-

-

-

-

-

(127)

(127)

Transactions with owners in their capacity as owners:-

 

 

 

 

 

 

 

 

   Issuance of new shares

 

225

-

-

-

-

-

225

At 30 June 2019

 

8,145

17,336

331

1,534

66,837

(74,838)

19,345

 

 

 

 

 

 

 

 

 

 

Year to December 2019 (audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2019

 

7,920

17,336

331

1,534

66,837

(74,711)

19,247

 

Comprehensive income

 

 

 

 

 

 

 

 

 

Loss for the year

 

-

-

-

-

-

(317)

(317)

 

Total comprehensive income for the year

 

-

-

-

-

-

(317)

(317)

 

Transactions with owners in their capacity as owners:-

 

 

 

 

 

 

 

 

 

   Share based payments

 

225

-

-

-

-

-

225

 

At 31 December 2019

 

8,145

17,336

331

1,534

66,837

(75,028)

19,155

 

                                                       

 

 

CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDING 30 JUNE 2020

 

 

 

 

Six months to 30 Jun 20 (unaudited)

Six months to 30 Jun 19 (unaudited)

Year to

 31 Dec 19

 (audited)

 

 

 

£000's

£000's

£000's

 

 

 

 

 

 

 

Loss before interest and taxation

 

(333)

(127)

(318)

 

Operating cash flows before movements in working capital

 

(333)

(127)

(318)

 

Increase in receivables

 

(16)

(24)

(12)

 

Increase in payables

 

358

11

52

 

Net cash from/(used in) operations

 

9

(140)

(278)

 

 

 

 

 

 

 

Interest paid

 

(36)

-

-

 

Net cash used in operating activities

 

(27)

(140)

(278)

 

 

 

 

 

 

 

Cash flow from Investing Activities

 

 

 

 

 

Interest received

 

-

-

1

 

Net cash from investing activities

 

-

-

1

 

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

Proceeds from issuance of ordinary shares net of costs

 

-

225

225

 

Net cash from financing activities

 

-

225

225

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(27)

85

(52)

 

Cash and cash equivalents at the start of period

 

136

188

188

 

Cash and cash equivalents at the end of the period

 

109

273

136

 

               
 

 

1  Basis of preparation

The Interim Report of the Company for the six months ended 30 June 2020 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 2019 which is available on request from the Company's registered office, c/o Weightmans LLP, 1 St James' Gate, Newcastle upon Tyne, NE99 1YQ or can be downloaded from the corporate website www.tanfieldgroup.com.

 

 

2  Accounting Policies

There are no mandatory new and amended standards and interpretations effective from 1 January 2020 that are expected to have a material impact on the entity in the current or future reporting periods.  Given the operational status of the company, the Directors do not think this new standard, nor any of the matters raised in the Annual Improvements projects 2014 - 2016 and 2015 - 2017, nor the amendments to IAS1 and IAS8, will have a material impact on the interim results.  Therefore, the accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2019, 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  Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

 

 

Number of shares

 

Six months

Six months

Year to

 

 

 

to 30 Jun 20

to 30 Jun 19

31 Dec 19

 

 

 

000's

000's

000's

 

Weighted average number of ordinary shares for the purposes of basic earnings per share

 

162,907

159,004

160,971

 

Effect of dilutive potential ordinary shares from share options

 

-

-

-

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

 

162,907

159,004

160,971

 

 

 

Loss

 

Six months

Six months

Year to

 

 

 

to 30 Jun 20

to 30 Jun 19

31 Dec 19

 

From operations

 

£000's

£000's

£000's

 

Loss for the purposes of basic earnings per share being net profit attributable to owners of the parent

 

(369)

(127)

(318)

 

Potential dilutive ordinary shares from share options

 

-

-

-

 

Loss for the purposes of diluted earnings per share

 

(369)

(127)

(318)

 

 

 

 

 

 

 

Loss per share from operations

 

 

 

 

 

Basic and diluted (p)

 

(0.23)

(0.08)

 

(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

 

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