Tanfield reports losses
ELECTRIC van designer Tanfield has plunged into the red as customers think twice about buying new vehicles in the teeth of the recession and its aerial lifts division was knocked by the slowdown in the construction industry.
The Washington-based group, which has slashed around 170 jobs in two rounds of redundancies and put staff on a short working week, made a pre-tax loss of £88.5m for the year to December 31.
Without the one-off impairment charges it faced last year, Tanfield would have been in the black with a pre-tax profit of £1.7m, compared to £12.8m the year before. But its turnover was up by 18% at £146m.
Tanfield operates Smith Electric Vehicles and its Upright Powered Access aerial lifts divisions from its Washington headquarters. It recently unveiled a US joint venture to assemble eco-friendly vans in Kansas City from parts made in the North East and it has also teamed up with Ford to produce an electric version of the Ford Transit van.
Chairman and founder Roy Stanley said the profitable first half of the year was dragged down by the effects of the economic downturn later in 2008, which meant customers postponed a number of orders.
Its aerial lifts division suffered from a widespread suspension of fleet replacement and expansion programmes by the major equipment rental companies. Globally, there was was an almost complete withdrawal financing for new areial work platforms.
But he said: “However, we are a business that is lean, nimble and focused, with a highly experienced management team, which reacted promptly and decisively to the adverse market conditions.
“Tanfield is well placed to trade through the downturn and to move rapidly when its end markets improve. I have great faith in the ability of all our people.”
The 170 redundancies at the Washington plant, which employs around 230 people, helped to reduce Tanfield’s wages bill by £11m across the group and it has cut costs by 30%. The group’s executive directors also volunteered to take a 20% pay cut.
Chief executive Darren Kell said: “The swift and decisive steps taken to downsize the business have substantially mitigated the risk. This prompt action means that we can operate the business at a much lower break-even level than previously.”
But he warned: “Changes in the conditions of our end markets are constantly monitored, and we will take further actions, if necessary.”
