Tanfield Group PLC, parent company of UpRight Inc. and Snorkel aerial work platforms, reported first-half volume of £29.9 million (about U.S. $47.7 million), a 67.8-percent year-over-year decline compared with £92.8 million for the first half of 2008. Operating loss for the first half was £11 million, compared with operating profit of £10.3 million for the first half of 2008.
The Tanfield Group has two divisions — powered access and zero-emission electric vehicles. Tanfield’s board of directors is currently engaged in a strategic review of the business, considering splitting the two divisions into separate companies to enhance shareholder value.
Throughout the period, the Washington, Tyne & Ware, U.K.-based company experienced volatility in all its market sectors as a result of the worldwide recession. Market pricing continued to decline in the period, particularly in the powered access division. Access to credit for capital goods purchases remained the most significant challenge faced by the company’s customers in both divisions.
The company said it took decisive action to reduce its cost base and improve business efficiency in the beginning of 2009, including measures such as shorter working hours and periods of unpaid leave.
In its powered access division, Tanfield expanded its global dealer network with the appointment of new distributors in Latin America, North Africa and Europe. It also appointed a national network of sales agents in North America, to target smaller, family-owned rental companies. The company said the “almost blanket cessation of fleet purchases by equipment rental companies seen in the second half of 2008 continued throughout this period. This has fueled increased competition for the end user market, resulting in heavy discounting from all the company’s major competitors.”
The company said the short-term outlook for powered access remains challenging. “Major rental companies have applied a capital expenditure moratorium on new equipment and are actively reducing inventory,” the company said. “This has resulted in a large number of used machines entering the market, which has in turn impacted on new product sales and pricing. Rental customers, that globally account for over two-thirds of all powered access sales, are indicating that their ‘purchasing holiday’ could extend throughout 2010.”
The board, nonetheless, expects that strong customer relationships and product support capabilities of UpRight’s distributor network will sustain sales, albeit at reduced levels and lower pricing. It expects market conditions in the second half of 2009 to be similar to the first half.
