This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, 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 2022
Tanfield, an investing company as defined by AIM Rules, announces its half year results for the period ending 30 June 2022. 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.
· On 26 February 2021, Ward Hadaway was granted permission to join Foulston Siefkin, Tanfield's US based law firm who were retained in 2013 to draft the documents governed by US law relating to the Contemplated Transaction, into the UK Proceedings. As a result, the Company amended its claim to include Foulston Siefkin as a second defendant.
· The Company's operating loss in H1 2022 increased to £311k (H1 2021: £187k) as a consequence of increased legal fees during the period, with the retained loss for the period increasing further to £499k (H1 2021: £268k) as a consequence of increased finance expense.
· The Board believe that further loan funding may be necessary to ensure that the Company continues to protect its investment in Snorkel. As announced on 24 August 2022, the Company continues to receive the support of its Shareholders via loan note subscriptions in order to provide the necessary funding for its day-to-day running costs, including the ongoing costs of the US and UK Proceedings, and the Board are of the opinion that further funding will be made available.
Overview of investments
As announced on 24 August 2022, during the first 6 months of 2022 Snorkel has continued to recover from the impact of the global COVID-19 pandemic and has seen sales in the first 6 months increase to US$88.6m, up from US$71.7m for the same period in 2021. Further information relating to the recent performance of Snorkel can be found in the 24 August 2022 announcement.
The Board confirm that both the US and UK Proceedings are continuing to progress and that the Board believes a positive outcome to either/both proceedings is possible. So far as it is necessary, the Company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice.
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 / Megan Liddell 020 7220 1666
| STATEMENT OF COMPREHENSIVE INCOME | |||||||||||||||
| FOR THE SIX MONTHS ENDING 30 JUNE 2022 | | | |||||||||||||
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| | Six months to 30 Jun 22 (unaudited) | Six months to 30 Jun 21 (unaudited) | Year to 31 Dec 21 (audited) |
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| | | £000's | £000's | £000's |
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| Revenue | | | - | - | - |
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| Staff costs | | | (52) | (51) | (93) |
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| Other operating income | | | 10 | 9 | 19 |
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| Other operating expenses | | | (269) | (145) | (295) |
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| Loss from operations | | | (311) | (187) | (369) |
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| Finance expense | | | (188) | (81) | (145) |
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| Finance income |
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| - | - | - |
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| Net finance expense | | | (188) | (81) | (145) |
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| Loss from operations before tax | | | (499) | (268) | (514) |
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| Taxation | | | - | - | - |
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| Loss & total comprehensive income for the period attributable to equity shareholders | (499) | (268) | (514) |
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| Loss per share from operations | |
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| Basic and diluted (p) | | | (0.31) | (0.16) | (0.32) |
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| BALANCE SHEET | |||||||||||
| AS AT 30 JUNE 2022 | | | |||||||||
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| 30 Jun 22 (unaudited) | 30 Jun 21 (unaudited) | 31 Dec 21 (audited) |
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| £000's | £000's | £000's |
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| Non current assets | | | | | |
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| Non current Investments | | | 19,100 | 19,100 | 19,100 |
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| | | | 19,100 | 19,100 | 19,100 |
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| Current assets | | | | | |
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| Trade and other receivables | | | 67 | 36 | 23 |
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| Cash and cash equivalents | | | 1,368 | 739 | 588 |
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| | | | 1,435 | 775 | 611 |
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| Total assets | |
| 20,535 | 19,875 | 19,711 |
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| Current liabilities | | | | | |
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| Trade and other payables | | | 132 | 54 | 72 |
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| | | 132 | 54 | 72 |
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| Non-current liabilities | | | | | |
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| Other payables | | | 2,958 | 1,631 | 1,695 |
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| | | 2,958 | 1,631 | 1,695 |
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| Total liabilities |
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| 3,090 | 1,685 | 1,767 |
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| Equity | | | | | |
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| Share capital | | | 8,145 | 8,145 | 8,145 |
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| Share premium | | | 17,336 | 17,336 | 17,336 |
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| Share option reserve | | | - | 331 | - |
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| Special reserve | | | 66,837 | 66,837 | 66,837 |
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| Merger reserve | | | 1,534 | 1,534 | 1,534 |
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| Retained earnings | | | (76,407) | (75,993) | (75,908) |
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| Total equity | |
| 17,445 | 18,190 | 17,944 |
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| Total equity and total liabilities | |
| 20,535 | 19,875 | 19,711 |
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| STATEMENT OF CHANGES IN EQUITY |
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| CASH FLOW STATEMENT | |||||||
| FOR THE SIX MONTHS ENDING 30 JUNE 2021 | | | |||||
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| Six months to 30 Jun 22 (unaudited) | Six months to 30 Jun 21 (unaudited) | Year to 31 Dec 21 (audited) |
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| £000's | £000's | £000's |
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| Loss from operations | | (499) | (268) | (514) |
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| Adjustment for: |
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| Finance costs | | 188 | 81 | 145 |
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| Changes in operating assets and liabilities / working capital: | | | | |
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| (Increase)/decrease in receivables | | (44) | (12) | 1 |
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| Increase/(decrease) in payables | | 60 | (36) | (18) |
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| Net cash used in operating activities |
| (295) | (235) | (386) |
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| Cash flow from financing activities | | | | |
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| Proceeds from borrowings | | 1,075 | 450 | 450 |
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| Net cash generated by financing activities |
| 1,075 | 450 | 450 |
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| Net increase in cash and cash equivalents |
| 780 | 215 | 64 |
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| Cash and cash equivalents at the start of period | | 588 | 524 | 524 |
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| Cash and cash equivalents at the end of the period |
| 1,368 | 739 | 588 |
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| 1 Basis of preparation The Interim Report of the Company for the six months ended 30 June 2022 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 2021 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 Impact of accounting standards to be applied in future periods There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 December 2022 that the Group has decided not to adopt early. The Group does not believe these standards and interpretations will have a material impact on the financial statements once adopted.
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| 3 Loss per share |
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| The calculation of the basic and diluted loss per share is based on the following data: |
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| | Six months | Six months | Year to |
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| | to 30 Jun 22 | to 30 Jun 21 | 31 Dec 21 |
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| Number of shares | | 000's | 000's | 000's |
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| Weighted average number of ordinary shares for the purposes of basic earnings per share |
| 162,907 | 162,907 | 162,907 |
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| Loss From operations | | £000's | £000's | £000's |
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| Loss for the purposes of basic earnings per share being net profit attributable to owners of the parent | | (499) | (268) | (514) | ||||||||||
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| Loss per share from operations |
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| Basic and diluted (p) |
| (0.31) | (0.16) | (0.32) |
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