Snorkel revenues fall ahead of sale

Tanfield Group, owner of UK-based Snorkel, saw second quarter revenue drop to UK£18.9 million, compared to £21 million in the same period last year.

There were also net losses of £8.4 million, compared to £8.2 million in the second quarter 2012.

The results follow the announcement on 20 September that majority ownership of Snorkel, Tanfield’s primary business segment, will be transferred to Las Vegas, US based Xtreme Manufacturing, with Tanfield retaining a 49% share. The deal will see Xtreme invest US$35 to $50 million on a recovery plan. The shareholders will vote on the proposal at a general meeting on 7 October.

Xtreme is the telehandler manufacturer owned by Don Ahern, also owner of Ahern Rentals in Las Vegas.

While demand increased, the lack of working capital meant it could not take advantage of a general market recovery, said a company spokesperson. “As stated in previous financial statements the company required the introduction of additional working capital to be able to return to sustained profitability.”

Tanfield announced that it wished to sell Snorkel in February this year, and since then has worked to conserve cash during the mergers and acquisitions process.

Darren Kell, Tanfield CEO, said, "The board are strongly recommending the recently announced proposed disposal of the powered access division, which de-risks the Tanfield Group, protecting the value inherent within the Snorkel business.

“We believe the transaction will ultimately, significantly enhance the value of the Snorkel business and deliver far greater shareholder value in the medium term."