TANFIELD GROUP PLC FINANCIAL STATEMENTS
TANFIELD GROUP PLC
REPORT AND FINANCIAL
STATEMENTS 2024
Registered in England & Wales
Company number 04061965
TANFIELD GROUP PLC FINANCIAL STATEMENTS
1
REPORT AND FINANCIAL STATEMENTS 2024
SUMMARY OF CONTENTS
Directors and Advisors
2
Strategic Report
3
Directors’ Report
6
Corporate Governance
7
Directors’ Remuneration Report
9
Statement of Directors’ Responsibilities
10
Report of the Independent Auditor
11
Statement of Comprehensive Income
14
Statement of Financial Position
15
Statement of Changes in Equity Attributable to Equity Shareholders
16
Cash Flow Statement
17
Accounting Policies
18
Critical Accounting Estimates and Key Judgements
20
Notes to the Accounts
22
TANFIELD GROUP PLC FINANCIAL STATEMENTS
2
DIRECTORS AND ADVISORS
DIRECTORS
NON-EXECUTIVE
D Robinson
Chairman
M Groak
Non-Executive Director
SECRETARY
D Robinson
REGISTERED OFFICE AND ADVISORS
REGISTERED OFFICE
NOMINATED ADVISOR
c/o Weightmans LLP
Zeus Capital Limited
1 St James’ Gate
Stock Exchange Tower
Newcastle upon Tyne
125 Old Broad St
Tyne and Wear
London
NE1 4AD
EC2N 1AR
AUDITOR
NOMINATED BROKER
RSM UK Audit LLP
Zeus Capital Limited
Third Floor, Centenary House
Stock Exchange Tower
69 Wellington Street
125 Old Broad St
Glasgow
London
G2 6HG
EC2N 1AR
SOLICITOR
Weightmans LLP
1 St James’ Gate
Newcastle upon Tyne
Tyne and Wear
NE1 4AD
REGISTRAR
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
TANFIELD GROUP PLC FINANCIAL STATEMENTS
3
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
The Company’s main investment, Snorkel International Holdings
LLC ("Snorkel International"), has seen a slight reduction in sales of
around 5% for the first 9 months of 2024, when compared to the
same period in 2023. This is the first reduction experienced since
the impact of Covid-19 in 2020. The Board is unaware of the
reason for the slight reduction and will continue to closely monitor
performance, hopeful that 2025 will, as a minimum, see sales
levels maintained.
Following
Tanfield’s
51%
joint venture
partner
Xtreme
Manufacturing LLC (“Xtreme”), via its subsidiary SKL Holdings LLC
(“SKL”) and Snorkel International, filing a Summons and Complaint
(the “US Proceedings”) against the Company and its subsidiary
HBWP Inc (“HBWP”), the Board remains disappointed that an
amicable resolution has not been possible. The US Proceedings are
therefore ongoing, and the Board continues to seek advice and
vigorously defend its position.
The investment in Smith Electric Vehicles Corp. ("Smith") continues
to be held at nil value.
NON-EXECUTIVES' REVIEW
Background
The Company is defined as an investment company with two
passive investments. This definition resulted from the disposal of
the controlling interest in Smith in 2009 and the formation of a
joint venture between Tanfield and Xtreme relating to the Snorkel
division in October 2013 (the “Joint Venture”). Tanfield currently
owns 5.76% of Smith and 49% of Snorkel International.
OVERVIEW
Snorkel International
Tanfield continues to retain an investment in Snorkel International
(currently valued at £19.1m, 2023: £19.1m) consisting of a 49%
interest and a preferred interest position, incorporating a Priority
Amount and a Preferred Return (collectively the “Preferred
Interest”), which it has held since the Joint Venture was
established in October 2013.
Since the injection of working capital following the Joint Venture,
Snorkel achieved increased year on year sales levels however,
during 2020 the impact of the Covid-19 pandemic saw the first
reduction of sales. Since then, Snorkel has once again seen year on
year sales increases, with a noticeable increase in operating
profitability in the 2023 financial year. A summary of sales
(unaudited) and the operating profit/(loss) (unaudited), excluding
depreciation since 2018 is shown below:
Year
Sales
Increase/
(decrease)
Operating profit/
(loss) excluding
depreciation
2023
$188.7m
12%
$5.8m
2022
$168.8m
9%
($12.3m)
2021
$155.0m
40%
($9.1m)
2020
$110.8m
(50%)
($12.3m)
2019
$220.8m
10%
$0.3m
2018
$200.5m
21%
$2.9m
However, in the first 9 months of 2024, Snorkel saw its sales slightly
decrease by 5% to $137m compared to the same period in 2023 (first
9 months of 2023: $145m), with an operating loss, excluding
depreciation of $1.6m (first 9 months of 2023: profit of $2.3m). The
Board is unaware of the reason for the reduction and will continue to
monitor future performance closely.
The Board is not aware of any market factors and have not been made
aware of any specific reason why sales and gross profit margin for the
full 2024 year should not follow a similar trajectory as that in the first
9 months. The Board is also not aware of any reason why 2025 should
not see similar performance being achieved.
In October 2019, the Board received the US Proceedings, in which
Xtreme, via its subsidiary SKL and Snorkel International, allege that
Tanfield has refused to comply with its contractual obligations by not
agreeing to sign over its interest in Snorkel International for £nil
consideration. It is the Board’s belief that the intent of Tanfield, its
non-conflicted directors at the time and its shareholders, as well as
the contractual terms, require that the Preferred Interest is paid to
the Company before its 49% holding in Snorkel International can be
acquired. Notwithstanding that, in the Board’s opinion, payment of
the Preferred Interest is a clear requirement described in the Circular
that was distributed to shareholders in advance of shareholders
approving the transaction, Xtreme allege that this was not their intent
or understanding of the transaction despite both they, and their
advisers, reviewing and commenting on the Circular prior to its
distribution. They also allege that they do not believe payment of the
Preferred Interest is a requirement of the contractual agreements.
The position of Xtreme, which is the premise of the US Proceedings, is
that while they accept that Tanfield received a 49% interest in Snorkel
International and an adjusted priority amount of $22.5m (adjusted
from the headline $50m value detailed in the Circular, and with
interest accruing) in exchange for contributing the entire Snorkel
division, including all its assets and intellectual property, to the Joint
Venture, and gave Xtreme a 51% controlling interest, they allege that
because Snorkel International, under Xtreme’s control, failed to
achieve a 12 month EBITDA of $25m prior to 30 September 2018, that
Tanfield’s $22.5m adjusted Priority Amount, plus accrued interest,
simply disappeared; allowing Xtreme to acquire Tanfield’s 49%
interest for £nil consideration.
In summary, it is alleged by Xtreme that the terms of the transaction
were such that after (a) Tanfield contributed all of the assets and
intellectual property of its Snorkel division to the Joint Venture, which
Snorkel’s own tax returns declare as having a net fair market value of
$45.5m, (b) Tanfield conceded management control of the Snorkel
division to Xtreme, (c) Xtreme ran the business as it saw fit for
approximately 5 years and Snorkel International failed to achieve an
annualized $25m EBITDA, (d) Tanfield’s value disappears completely
and Xtreme can take 100% ownership of Snorkel International
without paying any consideration to Tanfield.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
4
STRATEGIC REPORT (Continued)
The Board vigorously deny that this was the intent of the parties,
or the meaning of the contractual agreements. It would have
made no commercial sense to contribute the considerable value,
trade and assets of the Snorkel division, which both parties agreed
from the outset was fundamentally a viable company, while also
relinquishing control of the division, to then receive no
consideration for the considerable value contributed to the Joint
Venture, because the controlling party failed to achieve the target.
The Board therefore continues to seek advice and vigorously
defend its position.
Despite the allegations, which the Board believe are without merit,
the Board is currently of the opinion that the investment in Snorkel
International will result in a return to shareholders in the future
but would like to draw your attention to the “Valuation of Snorkel
International holding” below and the critical accounting estimates
and key judgments on pages 20 and 21 which further explain the
potential risks.
The US Proceedings have continued to progress during 2024 and a
jury trial is currently expected to commence in late 2025.
Further updates in relation to progress and timing will be provided
as and when appropriate.
Valuation of Snorkel International holding: £19.1
million (2023: £19.1 million)
On 30 September 2018 the fixed terms of the agreement came to
an end. In summary, if the trailing 12 month EBITDA had reached
$25m by 30 September 2018, this would have triggered payment
of the Preferred Interest, valued at £19.1m, which once paid,
would have allowed the Company to exercise its put option,
compelling the purchase / sale of Tanfield's remaining holding in
Snorkel International. As a $25m trailing 12 month EBITDA was not
reached by the deadline, the put option expired. Tanfield retains a
49% interest in Snorkel International and, in the Board’s opinion,
the Preferred Interest, but it can no longer compel Xtreme to pay
the Preferred Interest and acquire its 49% interest. The Board
therefore remains of the opinion that the Preferred Interest is the
minimum payment required under the terms of the contractual
agreements for Xtreme to acquire Tanfield’s interest and that this
is therefore an appropriate basis for determining the value the
investment is to be carried at.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own 100%
of Snorkel International. However, based on statements within the
US Proceedings, it is evident that Don Ahern does not believe he
should have to pay anything in order to acquire Tanfield’s 49% of
Snorkel International. One possible outcome is that Tanfield
continues to hold its 49% interest for the foreseeable future
however, the Board does not believe such a scenario would be in
the best interest of shareholders given the action taken by Don
Ahern against the Company and, should it become necessary,
would consider options that may assist in moving from this
position.
Due to the risks involved with the ongoing different opinions
regarding the contractual agreements, it is possible the actual
realisation of value could be less, or more, than the current valuation.
A number of factors could influence the valuation of Snorkel
International between now and a potential realisation date, including
the outcome of all relevant legal proceedings, Xtreme’s negotiating
stance and the exchange rate at the time of any realisation.
Due to these inherent uncertainties, the Board is unable to determine
whether the actual outcome will be less than the current valuation of
£19.1m, which it believes is underpinned by the value of the Preferred
Interest, so feel the valuation of £19.1m should be maintained. This
valuation has been assessed against various criteria, including
exchange rate fluctuations. The Board would like to draw the reader’s
attention to the critical accounting estimates and key judgments on
pages 20 and 21 which further explain the uncertainty.
Smith
In October 2014 Smith completed a restructuring exercise that saw it
convert debt to equity. As a result of this, they informed the Company
that its equity shareholding had reduced from 24% to 5.76%
(excluding warrants).
Since then, Smith has sought to raise funds which would allow it to
implement its strategic plan. To date, no significant fundraise has
been completed and the Board of Tanfield does not foresee this
happening in the immediate future.
Valuation of Smith holding
In 2015, the Board of Directors carried out a review of the investment
in Smith resulting in a decision to impair the investment value to £nil.
The Board understand that Smith has not been trading in recent years
and as Smith are unable to provide any certainty on its future, the
Board maintains its opinion that the investment value should be held
at £nil.
Strategy of Tanfield Board of Directors in relation to its
Investments
The Board believes its investment in Snorkel International will result
in a return of value to shareholders but cannot predict the timeframe
for such a return. With regard to Smith, due to the ongoing
uncertainty, the Board is unable to say, at this time, whether it will
result in a return of value to shareholders. The Directors will update
shareholders should this view change.
The strategy of the Company in relation to these investments is to
return as much as possible of any realised value to shareholders as
events occur and circumstances allow, subject to compliance with any
legal requirements associated with such distributions. The Board will
continue to fulfil its obligation to its shareholders in seeking to
optimise the value of its investments.
The investments are defined as passive investments and in line with
this definition as Tanfield does not hold Board seats in either Snorkel
International or Smith. There is no limit on the amount of time the
existing investments may be held by the Company.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
5
STRATEGIC REPORT (Continued)
Finance expense and income
Interest income of £132k (2023: £123k) was received on bank
balances.
Loss from operations
The loss from operations was £403k (2023: £454k) with no change
in key items of expenditure year on year.
Loss per share
Loss per share from continuing operations was 0.17 pence (2023:
0.20 pence). No dividend has been declared (2023: £nil).
Cash
At 31 December 2024, the Company had cash and short-term
deposits of £3.2m (2023: £3.5m) and approximately £3.0m as at
the date of this report.
Risks and uncertainties
There is no guarantee if and when a realisation of value from one
of the investments will happen, or of the costs associated in
securing a realisation, and the Board will closely monitor progress.
It recognises that its investments have a level of risk associated
with them and is somewhat reliant on their continued
performance within their markets. However, the Board believes
that the Company has sufficient cash reserves to fully defend its
position in the US Proceedings.
Section 172: Companies Act Statement
The Board takes seriously its duties towards a wide range of
stakeholders and acts in a way to ensure that its decision making
promotes the success of the Company for the benefit of these
stakeholders in accordance with Section 172. The Board’s ability to
do this is as a result of the Company status – as an investment
Company it has no employees, other than the directors, or
customers and its activities have no impact on the wider
community and environment. The statements below provide
further information as to how the directors have had regard to the
relevant matters.
The likely consequences of decisions in the long term. As discussed
earlier in this report, the sole aim of the Board is to maximise the
return to shareholders through its investment holdings. This is of
necessity a short-term focus, and the financial outcome will
determine the future position and strategy of the Company.
The need to foster the Company’s business relationships with
suppliers and the desirability of the Company to maintain a
reputation for high standards of business conduct. Engagement
with suppliers is a key part of the business as the Board looks to
bring a resolution to its investment position. Therefore, we are
selective in the suppliers we choose to work with, demonstrating
the Board’s commitment to maintaining high standards of business
conduct and professionalism.
The Annual General Meeting is the principal forum for shareholders,
and we encourage all shareholders to attend and participate. The
notice of the meeting is sent at least 21 days before the meeting. The
Chairman of the Board and other directors, where possible, are
present and are available to answer questions raised by shareholders.
The Board ensure regular communications are made to all
shareholders via periodic RNS announcements.
KPI's
The Board do not use any KPI's to monitor the performance of the
business.
Approved by the Board of Directors and signed on behalf of the Board
Daryn Robinson
Chairman
16 April 2025
TANFIELD GROUP PLC FINANCIAL STATEMENTS
6
DIRECTORS’ REPORT
The directors submit their report and the financial statements of
Tanfield Group Plc for the year ended 31 December 2024. Tanfield
Group Plc is a public listed company incorporated and domiciled in
England and quoted on AIM.
PRINCIPAL ACTIVITIES
The Company’s principal activity is that of an investment company.
INVESTING POLICY
The holdings in Snorkel International Holdings LLC and Smith
Electric Vehicles Corp. are passive investments. It is the intention
that where distributions or realisations of such holdings are made
(or there is a receipt of marketable securities) that these are
distributed to shareholders, subject to compliance with any legal
requirements associated with such distributions. There is presently
no anticipated limit on the amount of time the holdings are to be
held by the Company. The Company does not have and will not
make any cross holdings and does not have a policy on gearing.
RESULTS AND DIVIDENDS
The financial result for the year to 31 December 2024 reflects the
principal activity of the company being that of an investment
company.
Turnover for the year was £nil (2023: £nil). The loss from
operations in the year of £403k (2023: £454k) arose from operating
costs.
The statement of financial position shows total assets at the end
of the year of £22.4m (2023: £22.6m). Net Current Assets were
£3.2m (2023: £3.5m) with cash and short-term deposits of £3.2m
(2023: £3.5m). The directors believe that the Company has
sufficient cash to allow it to continue for a period of more than 12
months from the date of this report.
No dividend has been paid or proposed for the year (2023: £nil).
The loss of £271k (2023: £331k) has been transferred to reserves.
FINANCIAL INSTRUMENTS
The Company’s financial instruments comprise cash, non-current
investments, current receivables and current payables arising from
its operations. The principal financial instruments used by the
Company during the year are cash balances. The Company has not
established a formal policy on the use of financial instruments but
assesses the risks faced by the Company as economic conditions
and the Company’s operations develop.
DIRECTORS
The present membership of the Board is set out on page 2.
The directors’ do not currently have a right to acquire shares in the
company via the exercise of options as all past options have either
been exercised or lapsed. Details of the directors’ remuneration
and incentives are set out in the Directors’ Remuneration Report
on page 9.
POLICY ON PAYMENT OF CREDITORS
It is Company policy to agree and clearly communicate the terms of
payment as part of the commercial arrangements negotiated with
suppliers and then to pay according to those terms based on the
timely receipt of an accurate invoice. The Company supports the CBI
Prompt Payers Code. A copy of the code can be obtained from the
CBI at Centre Point, 103 New Oxford Street, London WC1A 1DU.
Trade creditor days based on trade payables at 31 December 2024
were 12 days (2023: 12 days).
SUBSTANTIAL SHAREHOLDINGS
On 31 December 2024 the following held substantial shares in the
company. No other person has reported an interest of more than 3%
in the ordinary shares.
No.
%
HSBC GLOBAL CUSTODY NOMINEE (UK)
59,050,183
36.25%
CHASE NOMINEES LIMITED
30,741,672
18.87%
AURORA NOMINEES LIMITED
19,775,103
12.14%
THE BANK OF NEW YORK (NOMINEES)
9,918,358
6.09%
INTERACTIVE BROKERS LLC
9,491,966
5.83%
VIDACOS NOMINEES LIMITED
8,059,650
4.95%
LYNCHWOOD NOMINEES LIMITED
4,983,595
3.06%
DIRECTORS’ INTEREST IN CONTRACTS
No director had a material interest at any time during the year in any
contract of significance, other than a service contract, with the
Company or any of its subsidiary undertakings.
AUDITOR
A resolution to reappoint RSM UK Audit LLP as auditor will be put to
the members at the annual general meeting. RSM UK Audit LLP has
indicated its willingness to continue in office.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
The directors in office on the date of approval of the financial
statements have confirmed that, as far as they are aware, there is no
relevant audit information of which the auditor is unaware. Each of
the directors has confirmed that they have taken all the steps that
they ought to have taken as directors in order to make themselves
aware of any relevant audit information and to establish that it has
been communicated to the auditor.
DIRECTORS INDEMNITY
Every Director shall be indemnified by the Company out of its own
funds.
Approved by the Board of Directors and signed on behalf of the Board
Daryn Robinson
Chairman
16 April 2025
TANFIELD GROUP PLC FINANCIAL STATEMENTS
7
CORPORATE GOVERNANCE
All members of the board believe strongly in the value and
importance of good corporate governance and in our
accountability to all of Tanfield’s stakeholders, including
shareholders and suppliers.
The corporate governance framework which the company
operates, including board leadership and effectiveness, board
remuneration, and internal control is based upon practices which
the board believes are proportional to the size, risks, complexity
and operations of the business and is reflective of the company’s
values. Of the two widely recognised formal codes, we have
adopted the Quoted Companies Alliance’s (QCA) Corporate
Governance Code for small and mid-size quoted companies
(revised in April 2018 to meet the new requirements of AIM Rule
26).
The QCA Code is constructed around ten broad principles and a set
of disclosures. The QCA has stated what it considers to be
appropriate arrangements and asks companies to provide an
explanation about how they are meeting the principles through
the prescribed disclosures. We have considered how we apply
each principle to the extent that the board judges these to be
appropriate in the circumstances.
Principle 1
Business Model and Strategy
Tanfield Group is a passive investment Company with investments
in Snorkel International and Smith, as described in the Investing
Policy on page 6. As a passive investment Company, we do not
have operational control or input into these investments. It is the
intention that where distributions or realisations are made that
these are distributed to shareholders, subject to compliance with
any legal requirements associated with such distributions.
Principle 2
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication with
its shareholders and the Company endeavours to keep
shareholders informed via its public announcements. The Board
believes that it has successfully engaged with shareholders to date,
keeping them abreast of the Company's strategy and progress.
Principle 3
Stakeholder and Social Responsibilities
As a passive investment Company, the Board recognises that its
stakeholders are limited to external stakeholders (which includes
its investments), with the exception of the Directors, and are
therefore not as extensive as many operational businesses. The
Company maintains a dialogue with its external stakeholders as
appropriate and as the need arises. Whilst we are a passive
investment Company, we still consider it important that our
behaviour is socially responsible and we will endeavour to be
accountable for our actions, be transparent about our activities,
operate in an ethical, professional and responsible manner, be
mindful of our stakeholder interests, respect the rule of law and
respect human rights in whatever we do.
Principle 4
Risk Management
The Board is mindful of and monitors its corporate risks. The main
risks the business faces are that the investments may not achieve their
operational goals, resulting in no realisation event and the potential
for disputes with the controlling shareholders as to the terms of a
realisation event should one occur. As a passive investment company,
the Board is not able to influence the decision making or strategy of
the investment companies and so its ability to mitigate some risks Is
limited.
Principle 5
Board Structure
The Company operates as a passive investment company and has put
in place a board structure that can best provide the strategic advice,
leadership and continuity required. The board structure consists of
two non-executive directors, Daryn Robinson and Martin Groak, both
sitting on the PLC Board. During the year there were four board
meetings, all fully attended, that took place.
Principle 6
Board Composition, Experience and Dynamics
The Board considers the Board composition in terms of skills,
experience and balance. Its committees seek external expertise and
advice where required. With only two Board members, due to the
limited activities of the Company, Board cohesion is paramount and
this is regularly reviewed. The Board members have held roles and
directorships in other publicly listed companies where they have
gained a wealth of financial and public market experience which
collectively has provided them with the balance of skills and expertise
to deliver the business strategy.
Principle 7
Board Evaluation
The Board considers evaluation of its committees and individual
directors to be an integral part of corporate governance to ensure it
has the necessary skills, experience and abilities to fulfil its
responsibilities. To ensure the skills and knowledge of the Board are
kept up to date, it works with its Nominated Advisor & Broker, Auditor
and Solicitor to ensure that any relevant new or amended accounting
standards and interpretations, AIM rules or Companies Act legislation
are fully understood and implemented.
Principle 8
Corporate Culture
The Board recognises that a corporate culture based on sound ethical
values and behaviours is an asset. In accordance with the Company’s
stated social responsibilities it endeavours to conduct its business in
an ethical, professional and responsible manner. As the Company has
no control over operational matters relating to its investments, it is
unable to influence the values and behaviours directly but it supports
a culture of dealings with both shareholders and investee companies
with integrity and respect.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
8
CORPORATE GOVERNANCE (continued)
Principle 9
Governance Structure
The PLC Board, which as a passive investment Company consists of
two non-executive directors, have the responsibility of monitoring
the Company investments to ensure that, where distributions or
realisations are made, these can be distributed to shareholders,
subject to compliance and any legal requirements associated with
such distributions. Due to the nature of the business, executive
directors and an operational Board are not deemed necessary and
therefore the non-executive directors are deemed not to be
independent.
Principle 10
Stakeholder Communication
The Board is committed to maintaining good communication and
having constructive dialogue with all of its stakeholders, including
shareholders, providing them with access to information to enable
them to come to informed decisions about the Company. The
Company’s website provides all required regulatory information as
well as additional information shareholders may find helpful.
An explanation of the approach taken in relation to each of the
QCA Code principles can also be found on the Company’s website
www.tanfieldgroup.com/about#governance.
The board considers that it does not depart from any of the
principles of the QCA Code.
Going Concern
The directors are satisfied that the Company has sufficient cash
to continue for a period of 12 months from the date of this
report. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
Daryn Robinson
Chairman
16 April 2025
TANFIELD GROUP PLC FINANCIAL STATEMENTS
9
DIRECTORS’ REMUNERATION REPORT
Remuneration committee
The company has established a Remuneration Committee which is
constituted in accordance with the recommendations of the QCA
Code. The members of the committee during the year were D
Robinson and M Groak and the committee was chaired by D
Robinson.
Remuneration policy
There were four main elements of the remuneration packages for
directors:
•
Basic annual salary (including directors’ fees) and
benefits;
•
Annual bonus payments;
•
Share option incentives; and
•
Pension arrangements.
Basic salary
The basic salary of the directors is reviewed annually having regard
to the commitment of time required and the level of fees in similar
companies. Non-Executive Directors are employed on renewable
fixed term contracts not exceeding three years.
Annual bonus
The committee established the objectives which must be met for
each financial year if a cash bonus was to be paid. The purpose of
the bonus was to reward directors for achieving above average
performance which also benefits shareholders.
Share options
The directors do not hold any share options as at the date of this
report.
Pension arrangements
One director was a member of a money purchase pension scheme to
which the company contributed.
Directors interests
The interests of directors holding office at the year end in the
company’s ordinary 5p shares at 31 December 2024 and 31 December
2023 are shown below:
Number of shares
2024
2023
D Robinson
942,785
942,785
M Groak
40,000
40,000
Total
982,785
982,785
The directors, as a group, beneficially own 0.6% of the company’s
shares.
As at the date of this report, no director has any remaining right to
acquire shares in the company via the exercise of options granted
under the terms of their service contracts, copies of which may be
inspected by shareholders upon written application to the company
secretary.
Remuneration review
Directors emoluments for the financial year were as follows:
Salary
£000's
Bonus
£000's
Total
2024
£000's
Total
2023
£000's
Pension
2024
£000’s
Pension
2023
£000's
M Groak
24
-
24
30
-
-
D Robinson
120
-
120
145
15
13
Total
144
-
144
175
15
13
The directors held no share options at 31 December 2024 (2023: nil).
Approval
This report was approved by the board of directors and authorised for issue on 16 April 2025 and signed on its behalf by:
Daryn Robinson
Chairman
TANFIELD GROUP PLC FINANCIAL STATEMENTS
10
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report,
the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law and the AIM
Rules of the London Stock Exchange the directors have elected
to prepare the financial statements of the company in
accordance with applicable law and UK-adopted International
Accounting Standards.
The financial statements are required by law and UK-adopted
International Accounting Standards to present fairly the
financial position and performance of the company. The
Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the company and of
the profit or loss of the company for that period.
In preparing the financial statements, the directors are required
to:
a.
select suitable accounting policies and then apply them
consistently;
b.
make judgements and accounting estimates that are
reasonable and prudent;
c.
state whether they have been prepared in accordance
with UK-adopted International Accounting Standards;
d.
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Tanfield Group Plc
website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
11
REPORT OF THE INDEPENDENT AUDITOR
Independent auditor's report to the members of Tanfield Group Plc
Opinion
We have audited the financial statements of Tanfield Group Plc
(the ‘company’) for the year ended 31 December 2024 which
comprise the statement of comprehensive income, statement
of financial position, statement of changes in equity attributable
to equity shareholders, cash flow statement and notes to the
financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted International
Accounting Standards.
In our opinion the financial statements:
•
give a true and fair view of the state of the company’s
affairs as at 31 December 2024 and of its loss for the year
then ended;
•
have been properly prepared in accordance with UK-
adopted International Accounting Standards; and
•
have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Summary of our audit approach
•
Key audit matters - Carrying value of non-current
investments
•
Materiality - Overall materiality: £473,000 (2023:
£468,000), Performance materiality: £355,000 (2023:
£351,000)
•
Scope - Our audit procedures covered 100% of total assets
and 100% of profit before tax.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most
significant assessed risks of material misstatement (whether or
not due to fraud) we identified, including those which had the
greatest effect on the overall audit strategy, the allocation of
resources in the audit and directing the efforts of the
engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Carrying value of non-current investment
Key audit matter description
Included in the Statement of Financial Position are non current asset
investments with a carrying value of £19.1m (2023: £19.1m). This
represents the Company’s 49% holding in Snorkel International Holdings
LLC (‘Snorkel’). Note 6 and the Critical Accounting Estimates and Key
Judgements of the financial statements describe the judgements made
by the Board with regards to the need for an impairment to be
recognised in respect of each of the investments and, in particular, the
significant uncertainty concerning the £19.1m carrying value of the
investment in Snorkel.
The investment in Snorkel represents the sole significant asset held
within the Statement of Financial Position of the company. As described
on pages 20 and 21 there are significant uncertainties over the timing of
any realisation, and the amount that might ultimately be realised on this
investment, that could have a material effect on the recoverable
amount. The realisation of this investment for either more or less than
its carrying value could have a material impact on the financial
statements.
The Board has limited financial and non-financial information upon
which to calculate/base its estimate of the realisation value and timing
thereof. The Critical Accounting Estimates and Key Judgements
disclosures on pages 20 and 21 set out the basis of the Directors
consideration of the fair value of the investment, based on its expected
recoverable amount, and the assumptions made therein. The
assessments and conclusion of the directors are based on the
Investment Circular setting out the Proposed Transaction issued to
Shareholders in September 2013, the legal advice obtained at the time
and subsequent to that date along with the information received in
respect of the financial performance and position of Snorkel. The
assessment made by the Directors as to the sums falling due under the
Investment Circular differs to the assessment made by Xtreme, which
has led to legal proceedings by Xtreme against the company to obtain
control of the remaining 49% of Snorkel. The directors have concluded
that the most appropriate basis for determining the carrying amount
continues to be the amount represented by the Preferred Interest
element, which was established at the time of the Transaction, and was
the value the investment in Snorkel was impaired to following the expiry
of the put option in 2018.
As explained in the Critical Accounting Estimates and Key Judgements
section on pages 20 and 21, the timing of realisation and the sum to be
realised are dependent on definitive clarification as to the legal position
of the call option still held by Xtreme. The eventual amount realised is
also dependent on the applicable rate of exchange at the time that any
US$ proceeds are converted into GBP.
As a result, there remains significant doubt over the timing and value at
which this asset will be realised.
How the matter was addressed in the audit
Our audit work has considered the nature of the financial and other
information held by management described above, the assumptions
used by management to assess the estimated timing and realisable value
of the investment, and such other audit evidence as was available, to
form a view on the reasonableness of these assumptions, estimates and
calculations.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
12
REPORT OF THE INDEPENDENT AUDITOR (CONTINUED)
In carrying out our audit work we have considered and
challenged the range of outcomes considered by the directors,
the conclusion the directors have reached about the reliability
of any alternative valuation and the disclosures made,
specifically in the Critical Accounting Estimates and Key
Judgements disclosures and in Note 6. We also communicated
with the Company’s legal advisors in the United States on this
matter.
Our application of materiality
When establishing our overall audit strategy, we set certain
thresholds which help us to determine the nature, timing and
extent of our audit procedures. When evaluating whether the
effects of misstatements, both individually and on the financial
statements as a whole, could reasonably influence the
economic decisions of the users we take into account the
qualitative nature and the size of the misstatements. Based on
our professional judgement, we determined materiality as
follows:
•
Overall materiality - £473,000 (2023: £468,000).
•
Basis for determining overall materiality – 2.0% of total
assets.
•
Rationale for benchmark applied - Consistent with the
prior year, the company’s principal activity continues to be
that of an investment company. As such, we deemed total
assets to be the key benchmark for users of the financial
statements.
•
Performance materiality - £355,000 (2023: £351,000).
•
Basis for determining performance materiality - 75% of
overall materiality.
•
Materiality levels for those classes of transaction where
materiality levels are lower than overall materiality - The
statement of comprehensive income was tested to the
lower Performance Materiality figure of £10,000 (2023:
£13,000) to ensure adequate coverage of these values. This
has been calculated as 3.6% (2023: 3.9%) of profit before
tax.
•
Reporting of misstatements to the Audit Committee -
Misstatements in excess of £5,000 (2023: £5,000) and
misstatements below that threshold that, in our view,
warranted reporting on qualitative grounds.
An overview of the scope of our audit
The company has been subject to a full scope audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the company’s ability
to continue to adopt the going concern basis of accounting
included:
•
checking the integrity and accuracy of the cashflow
forecasts prepared by management;
•
assessing the reasonableness of assumptions and
explanations provided by management to supporting
information, where available;
•
reviewing the forecast funding requirements and assessing the
directors’ opinion of the entity’s ability to obtain future funding;
and
•
reviewing the accuracy and consistency of disclosures made in the
financial statements in respect of principal risks and going concern.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the company’s ability to
continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the
audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’
Report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
•
the Strategic Report and the Directors’ Report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
•
adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
•
the financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of directors’ remuneration specified by law are
not made; or
•
we have not received all the information and explanations we
require for our audit.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
13
REPORT OF THE INDEPENDENT AUDITOR (CONTINUED)
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, set out on page 10, the directors are responsible for
the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company’s ability to continue as a
going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
The extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements, to
perform audit procedures to help identify instances of non-
compliance with other laws and regulations that may have a
material effect on the financial statements, and to respond
appropriately to identified or suspected non-compliance with
laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify
and assess the risk of material misstatement of the financial
statements due to fraud, to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement
due to fraud through designing and implementing appropriate
responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
However, it is the primary responsibility of management, with
the oversight of those charged with governance, to ensure that
the entity's operations are conducted in accordance with the
provisions of laws and regulations and for the prevention and
detection of fraud.
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud, the audit engagement team:
•
obtained an understanding of the nature of the industry and sector,
including the legal and regulatory framework that the company
operates in and how the company is complying with the legal and
regulatory framework;
•
inquired of management, and those charged with governance,
about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or alleged
instances of fraud;
•
discussed matters about non-compliance with laws and regulations
and how fraud might occur including assessment of how and where
the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as: UK-
adopted IAS; Companies Act 2006 and AIM listing rules. Additional audit
procedures performed by the audit engagement team included:
•
Review of the financial statement disclosures and testing these to
supporting documentation; and
•
Completion of disclosure checklists to identify areas of non-
compliance.
The area that we identified as being susceptible to material
misstatement due to fraud were: the risk of management override of
controls. The audit procedures performed by the audit engagement
team included:
•
Testing the appropriateness of journal entries and other
adjustments;
•
Assessing whether the judgements made in making accounting
estimates are indicative of a potential bias; and
•
Evaluating the business rationale of any significant transactions that
are unusual or outside the normal course of business.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
http://www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.
ALAN AITCHISON (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Third Floor, 69 Wellington Street, Glasgow, G2 6HG
16 April 2025
TANFIELD GROUP PLC FINANCIAL STATEMENTS
14
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024
2023
Notes
£000's
£000's
Revenue
-
-
Staff costs
1
(159)
(190)
Other operating income
16
23
Other operating expenses
3
(260)
(287)
Loss from operations
(403)
(454)
Finance expense
2
-
-
Finance income
2
132
123
Loss before tax
(271)
(331)
Taxation
4
-
-
Loss & total comprehensive income for the year attributable
to equity shareholders
(271)
(331)
Loss per share
Loss per share
Basic and diluted (p)
5
0.17
0.20
TANFIELD GROUP PLC FINANCIAL STATEMENTS
15
STATEMENT OF FINANCIAL POSITION (Company registration number 04061965)
AS AT 31 DECEMBER 2024
2024
2023
Notes
£000's
£000's
Non-current assets
Non-current Investments
6
19,100
19,100
19,100
19,100
Current assets
Trade and other receivables
8
44
58
Cash
7
2,909
3,473
Short-term deposits
7
300
-
3,253
3,531
Total assets
22,353
22,631
Current liabilities
Trade and other payables
9
65
72
65
72
Total liabilities
65
72
Equity
Share capital
10
8,145
8,145
Share premium
10
17,336
17,336
Special reserve
66,837
66,837
Merger reserve
1,534
1,534
Retained earnings
(71,564)
(71,293)
Total equity attributable to equity shareholders
22,288
22,559
Total equity and liabilities
22,353
22,631
The financial statements on pages 14 to 26 were approved by the board of directors and authorised for issue on 16 April 2025 and
are signed on its behalf by:
Daryn Robinson
Chairman
TANFIELD GROUP PLC FINANCIAL STATEMENTS
16
STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY
SHAREHOLDERS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share
capital
Share
premiuma
Merger
reserveb
Special
reservec
Retained
earningsd
Total
£000's
£000's
£000's
£000's
£000's
£000's
At 1 January 2023
8,145
17,336
1,534
66,837
(70,962)
22,890
Comprehensive income
Loss for the year
-
-
-
-
(331)
(331)
Total comprehensive income for
the year
-
-
-
-
(331)
(331)
At 31 December 2023
8,145
17,336
1,534
66,837
(71,293)
22,559
Comprehensive income
Loss for the year
-
-
-
-
(271)
(271)
Total comprehensive income for
the year
-
-
-
-
(271)
(271)
At 31 December 2024
8,145
17,336
1,534
66,837
(71,564)
22,288
a The share premium account represents amounts subscribed for share capital in excess of nominal value, net of directly attributable share issue costs.
b The merger reserve has arisen on the legal acquisition of subsidiary companies.
c The special reserve relates to a previous reclassification of the share premium account.
d The retained earnings represents the accumulated retained profits and losses less dividend payments.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
17
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024
2023
Notes
£000's
£000's
Loss before tax
(271)
(331)
Adjustment for:
Finance income
2
(132)
(123)
Changes in operating assets and liabilities / working capital:
Decrease/(increase) in receivables
8
14
(28)
(Decrease)/increase in payables
9
(7)
8
Net cash used in operating activities
(396)
(474)
Cash flow from Investing Activities
Interest received
2
132
123
Short-term deposits
(300)
-
Net cash (used in)/from investing activities
(168)
123
Cash flow from financing activities
Proceeds from borrowings
-
-
Repayment of borrowings
-
-
Net cash used in financing activities
-
-
Net decrease in cash
(564)
(351)
Cash at the start of year
3,473
3,824
Cash at the end of the year
2,909
3,473
TANFIELD GROUP PLC FINANCIAL STATEMENTS
18
ACCOUNTING POLICIES
(i) Basis of preparation of the financial statements
Tanfield Group Plc is a public company incorporated in England and
quoted on AIM. These financial statements have been prepared on
the going concern basis in accordance with applicable law and UK-
adopted International Accounting Standards. The financial
statements have been prepared under the historical cost
convention, except for the revaluation of certain financial assets
and liabilities measured at fair value.
The financial statements present the company accounts only and
have not been consolidated as the company is deemed to be an
investment entity under IFRS 10. The financial statements are
prepared in sterling, which is the functional currency of the
company. Monetary amounts in these financial statements are
rounded to the nearest thousand.
The preparation of the financial statements requires management
to exercise its judgement in the process of applying the company’s
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed
below in “Critical accounting estimates and key judgements”.
(ii) Going concern
The financial statements have been prepared on the going concern
basis, which assumes that the Company will continue to be able to
meet its liabilities as they fall due for the foreseeable future. At 31
December 2024 the Company had cash and short-term deposits of
£3.2m (2023: £3.5m) and approximately £3.0m as at the date of this
report.
The Board believes that it has sufficient cash funds to continue for
more than 12 months from the date of this report. While there is
no guarantee if and when a realisation of value from one of the
investments will happen, the Board believes it has sufficient cash
funds to see the US Proceedings reach a conclusion at some point
in the future. Having taken the uncertainties into account the
Board believes it is appropriate to prepare the financial statements
on the going concern basis.
(iii) Foreign currencies
Transactions in currencies other than sterling, the functional
currency of the company, are recorded at the rates of exchange
prevailing on the dates of the transactions. At each statement of
financial position date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the statement of financial position date.
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined.
Gains and losses arising on retranslation are included in the income
statement for the period, except for exchange differences on non-
monetary assets and liabilities, which are recognised directly in
retained earnings.
(iv) Retirement benefit cost
The company operates a defined contribution pension scheme
and pays contributions to an externally administered pension
plan. The company has no further payment obligations once
the contributions have been paid. The contributions are
recognised as an employee benefit expense in the period in
which they fall due.
(v) Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the
Company’s statement of financial position when the Company
has become a party to the contractual provisions of the
instrument.
Financial assets
Investments
Investments in equity instruments are included at fair value
with fair value gains and losses recognised in profit or loss.
Trade and other receivables
Financial assets within trade and other receivables are initially
recognised at fair value, which is usually the original invoiced
amount and are subsequently carried at amortised cost less
provisions made for impairment.
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
An impairment loss is recognised for the expected credit
losses on receivables when there is an increased probability
that the counterparty will be unable to settle an instrument’s
contractual cash flows on the contractual due dates, a
reduction in the amounts expected to be recovered, or both.
Impairment losses and any subsequent reversals of
impairment losses are adjusted against the carrying amount of
the receivable and are recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand less short-
term bank overdrafts.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the Company after
deducting all of its liabilities.
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds received.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
19
ACCOUNTING POLICIES (continued)
Trade and other payables
Financial liabilities within trade and other payables are initially
recorded at fair value, which is usually the original invoiced amount,
and subsequently carried at amortised cost.
(vi) Segmental reporting
In accordance with IFRS 8 operating segments are determined on
the basis of information reported to the chief operating decision-
maker for decision-making purposes. The Company considers that
it only has one segment and that the role of chief operating
decision-maker is performed by the Tanfield Group Plc's board of
directors.
Accounting
standards,
interpretations
and
amendments to published accounts
During the year ended 31 December 2024, the Company has not
adopted any new IFRS, IAS or amendments issued by the IASB, and
interpretations by the IFRS Interpretations Committee, which have
had a material impact on the Company’s financial statements.
New and amended standards and interpretations
effective from 1 January 2025 not yet adopted by the
Company.
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2024 reporting
periods and have not been early adopted by the group. These
standards and interpretations are not expected to have a material
impact on the financial statements of the Company in the current
or future reporting periods.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
20
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
The preparation of financial statements in conformity with UK-
adopted IAS requires the use of accounting estimates and
assumptions. It also requires management to exercise judgement
in the process of applying the Company’s accounting policies. We
continually evaluate our estimates, assumptions and judgements
based on the most up to date information available.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
Investments
Smith
The status of the Company’s holding in Smith Electric Vehicles US
Corp was reviewed during the year. The Board previously advised
that the company had ceased operations and did not feel that Smith
had made sufficient progress towards achieving its plan of
obtaining a public listing to maintain the previous valuation and had
therefore decided to impair the investment in Smith to £nil.
Subsequently, no progress has since been made that gives rise to
an expectation of a realisation in value. As such, the Board is
maintaining its view that the investment currently has £nil value.
Nevertheless, the Board acknowledges that there is a chance the
investment could result in a return to Shareholders and will
continue to monitor the investment. Should progress be made in
the future the valuation of the investment will be revisited.
Snorkel International
The status of the Company’s holding in Snorkel International
Holdings LLC was reviewed during the year. The Board has
concluded that, while Tanfield continues to retain an investment in
Snorkel International (currently carried at £19.1m), consisting of a
49% interest and the Preferred Interest, under the terms of the
Joint Venture, they are unable to exercise significant influence over
the activities and strategic direction of Snorkel International and
therefore holding the investment as a trade investment, as
opposed to applying equity accounting, continues to be the correct
treatment.
Since the injection of working capital following the Joint Venture,
Snorkel achieved increased year on year sales levels however,
during 2020 the impact of the Covid-19 pandemic saw the first
reduction of sales. Since then, Snorkel has once again seen year on
year sales increases, with a noticeable increase in operating
profitability in the 2023 financial year. A summary of sales
(unaudited) and the operating profit/(loss) (unaudited), excluding
depreciation since 2018 is shown below:
Year
Sales
Increase/
(decrease)
Operating profit/
(loss) excluding
depreciation
2023
$188.7m
12%
$5.8m
2022
$168.8m
9%
($12.3m)
2021
$155.0m
40%
($9.1m)
2020
$110.8m
(50%)
($12.3m)
2019
$220.8m
10%
$0.3m
2018
$200.5m
21%
$2.9m
However, in the first 9 months of 2024, Snorkel saw its sales
slightly decrease by 5% to $137m compared to the same period
in 2023 (first 9 months of 2023: $145m), with an operating loss,
excluding depreciation of $1.6m (first 9 months of 2023: profit
of $2.3m). The Board is unaware of the reason for the
reduction and will continue to monitor future performance
closely.
The Board is not aware of any market factors and have not
been made aware of any specific reason why sales and gross
profit margin for the full 2024 year should not follow a similar
trajectory as that in the first 9 months. The Board is also not
aware of any reason why 2025 should not see similar
performance being achieved.
Under the terms of the Joint Venture, the level of financial
information available to the Board to assess the fair value of
the investment in Snorkel International is limited to quarterly
historical financial information, incorporating a consolidated
operating statement, balance sheet and cashflow.
In 2018, the Board impaired Tanfield’s investment value in
Snorkel International down to £19.1m, from the previous
valuation of £36.3m. The valuation of £19.1m is based on the
value of the Preferred Interest which is made up of the priority
amount, set in 2013 based upon the assets of the Snorkel
division contributed to the Joint Venture, plus the preferred
return, being interest accruing on the priority amount. This is
the basis of valuation that was set out in the Circular issued to
Shareholders at the time of the Joint Venture. The Board have
not included the effect of discounting for the timing of a future
realisation as they do not believe this materially impacts on the
valuation.
The previous valuation of £36.3m was originally calculated in
2013 and assumed the $25m EBITDA trigger, compelling the
payment of the Preferred Interest and the purchase of
Tanfield's interest in Snorkel International by Xtreme, would be
reached within the predefined period ending 30 September
2018. As Snorkel International, under Xtreme’s control, failed
to achieve the EBITDA trigger, Tanfield retains a 49% interest
in Snorkel International and the Preferred Interest, but it can
no longer compel Xtreme to pay the Preferred Interest and
acquire its 49% interest.
In November 2018, the Board received a call option notice in
which Xtreme, via its subsidiary SKL, requested to exercise a
call option to acquire Tanfield's interest in Snorkel
International. In the request, SKL stated that the option price
to acquire Tanfield’s holding was $0 (nil) and that payment of
the Preferred Interest was not required.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
21
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS (continued)
The Board did not agree with this statement and does not believe
that the contractual agreements, or the Circular distributed to
shareholders to fully explain the terms of the transaction - and
thereby seek their authority to enter into the transaction - allow for
a call option whereby Xtreme can acquire Tanfield’s interest in
Snorkel International for a nil value. The Board therefore rejected
the call option notice and sought to amicably resolve the dispute
with Tanfield’s 51% joint venture partner, Xtreme. As announced
on 22 October 2019, Xtreme (via its subsidiary SKL and Snorkel
International) filed the US Proceeding against Tanfield and its
subsidiary HBWP.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own 100%
of Snorkel International. However, based on statements within the
US Proceedings, it is evident that Don Ahern does not believe he
should have to pay anything in order to acquire Tanfield’s 49%
interest in Snorkel International. One possible outcome is that
Tanfield continues to hold its 49% interest for the foreseeable
future however, the Board do not believe such a scenario would be
in the best interest of shareholders and, should it become
necessary, would consider options that may assist in moving from
this position.
The Board has reviewed the historic financial information, along
with the global industrial and aerial work platform market
conditions and has concluded it is appropriate to value Tanfield’s
investment in Snorkel International based on what the Board
understands are the contractual arrangements and so at an amount
based on the Preferred Interest amount of £19.1m.
This valuation has been assessed against various criteria, including
past performance (including but not limited to a growth in sales, bill
of material costs and improved operating profitability), production
capacity, market conditions, the capability of the business to
increase output and exchange rate fluctuations. In coming to this
opinion, the Board has considered the trends within the business
and their consistency; in particular:
•
the rate of sales growth being more or less than that recently
achieved by Snorkel International.
•
the level of operating profitability improvement being more or
less than that recently achieved by Snorkel International.
•
The impact of exchange rate movements given that any
proceeds will be received in USD, considering current, historic
and average exchange rates.
Between 1 January 2024 to 31 December 2024, the range of the
GBP to USD exchange rate has a low of 1.2345 and a high of 1.3410,
the average being 1.2779. If £19.1m is assumed to represent the
average exchange rate, then based on the low of 1.2345 the
valuation increases by approximately 4% to £19.8m and based on
the high of 1.3410 the valuation reduces by approximately 5% to
£18.2m giving a potential movement of 9% in the valuation. Whilst
the Board is not in a position to mitigate any potential exchange
rate variation, until such time as the realisation of the Snorkel
International investment is known, it will continue to consider such
means as may be possible to maximise the GBP return to
shareholders.
As the future performance of both Snorkel International and
the wider global market conditions are unknown, the Board
note that the valuation could potentially increase beyond the
£19.1m which is underpinned by the Preferred Interest
element. However, the Board has considered various Snorkel
International trading scenarios, based around historic sales
growth trends and does not believe the valuation is likely to
materially increase from £19.1m in the near future.
The Board, however, caveat that a number of factors could
influence the valuation and performance of Snorkel
International between now and a potential realisation date,
including Xtreme’s opinion of the contractual agreements
which has resulted in the US Proceedings (see Strategic Report
on pages 3 to 5 for further information). Due to the risks
involved with the ongoing different opinions regarding the
contractual agreements, it is possible the actual realisation of
value could be less than the current valuation, potentially as
low as £nil as alleged by Xtreme and depending on the
outcome of ongoing US Proceedings.
Given the risks, the Board has considered whether a further
impairment loss should be recognised but have concluded that
based on their understanding of the contractual agreements in
place, no further impairment is required at this time.
Whilst the timing and quantum of realisation of the investment
remains unclear, the Board is currently of the opinion that the
investment in Snorkel International will result in a return to
shareholders in the future, that the current value of the
investment of £19.1m remains appropriate and there is not an
alternative, more reliable valuation of the investment than the
current estimate.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
22
NOTES TO THE ACCOUNTS
1. Staff costs
2024
2023
Aggregate remuneration comprised
£000's
£000's
Wages and salaries
144
175
Social security costs
-
2
Other pension costs
15
13
Total staff costs
159
190
2024
2023
Average monthly number of employees
No.
No.
Directors
2
2
Total
2
2
All staff costs relate to Directors’ remuneration. Details of Directors’ fees and salaries, bonuses, pensions, benefits in kind and
other benefit schemes together with details in respect of Directors’ share option plans are given in the Directors’ Remuneration
Report on page 9.
2. Finance expense and finance income
2024
2023
Finance expense
£000's
£000's
Interest and borrowing cost
-
-
Total finance expense
-
-
2024
2023
Finance income
£000's
£000's
Interest on cash, cash equivalents & financial instruments
132
123
Total finance income
132
123
3. Other operating expenses
2024
2023
£000's
£000's
Property related expenses
21
30
Auditor's remuneration (see below)
25
25
Legal and professional fees
193
204
Other operating expenses
21
28
Total operating expenses
260
287
Auditor's remuneration
Amounts payable to RSM UK Audit LLP and their associates in respect of both audit and non-audit services are as follows:
2024
2023
£000's
£000's
Audit Services
•
statutory audit of accounts
25
25
TANFIELD GROUP PLC FINANCIAL STATEMENTS
23
4. Taxation
Analysis of and factors affecting taxation charge
The taxation charge on the loss for the year differs from the amount computed by applying the corporation tax rate to the loss
before taxation as a result of the following factors:
2024
2023
£000's
£000's
(Loss)/profit before taxation
(271)
(331)
Notional taxation charge at UK rate of 19% (2023: 19%)
(52)
(63)
Effects of:
Non-deductible expenses
27
30
Deferred tax asset not recognised in the period
25
33
Total taxation charge in the income statement
-
-
The Company has tax losses of approximately £5.8m (2023: £5.7m) available to carry forward against future profits of the same
trade. No deferred tax asset has been recognised due to the uncertainty of future profitability of the Company.
5. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of
shares in issue during the period. The average share price during the year was 3.78p (2023: 3.49p).
2024
2023
No.
No.
Number of shares
000’s
000’s
Weighted average number of ordinary shares for the purposes of earnings per share
162,907
162,907
Loss
2024
2023
From operations
£000's
£000's
Loss for the purposes of earnings per share
(271)
(331)
Loss per share
Basic and diluted earnings per share (p)
(0.17)
(0.20)
6. Non-current investments
A summary of the non-current investments is shown below:
2024
2023
£000’s
£000’s
Investment in Smith Electric Vehicles US Corp
-
-
Investment in Snorkel International Holdings LLC
19,100
19,100
Total non-current investments
19,100
19,100
Smith Electric Vehicles US Corp
At 31 December 2024, the Company held a 5.76% (2023: 5.76%) share of the issued share capital of Smith Electric Vehicles US
Corp, a company registered in the US. In 2015 the Board decided to impair the investment in Smith to £nil and they continue to
maintain this position. However, the Board will continue to monitor the investment.
Snorkel International Holdings LLC
At 31 December 2024, the Company held a 49% (2023: 49%) share of the issued share capital of Snorkel International Holdings LLC,
a company registered in the US. This shareholding is being held as a non-current investment at fair value (2024: £19.1m, 2023:
£19.1m). The cumulative impairment provision against this investment is £17.2m (2023: £17.2m). See Strategic Report on pages
3 to 4 and critical accounting estimates and judgements on pages 20 to 21 for further considerations.
7. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits held by the Company. The carrying amount of these assets
approximates their fair value. The Company primarily holds cash and cash equivalents in Sterling bank accounts.
2024
2023
£000's
£000's
Cash and cash equivalents
3,209
3,473
TANFIELD GROUP PLC FINANCIAL STATEMENTS
24
8. Trade and other receivables
2024
2023
£000's
£000's
Receivable within one year
Other debtors and prepayments
44
58
44
58
The directors consider that the carrying amounts of trade and other receivables, recognised at amortised cost, approximates to
their fair value.
9. Trade and other payables
The directors consider that the carrying amounts of trade and other payables approximates to their fair value.
2024
2023
£000's
£000's
Payable within one year
Trade payables
9
10
Social security and other taxes
3
3
Accrued expenses
53
59
65
72
Average credit period taken on trade purchases (days)a
12
12
a Creditor days have been calculated as trade payables over other operating expenses multiplied by 365 days.
10. Share capital and share premium
The Company has one class of ordinary shares which carry no right to fixed income. All shares are fully paid up.
Nominal share
value
Number of shares
Share capital
£000’s
Share premium
£000’s
At 1 January 2023
5p
162,906,850
8,145
17,336
-
At 31 December 2023
5p
162,906,850
8,145
17,336
At 31 December 2024
5p
162,906,850
8,145
17,336
11. Financial risk management
The Company’s operations are exposed to various financial risks which are managed by various policies and procedures. The main
risk and their related management are discussed below:
Credit risk management
The Company’s exposure to credit risk arises from its trade and other receivables and cash deposits with financial institutions.
The Company’s maximum exposure to credit risk is summarised below:
2024
2023
£000's
£000's
Trade and other receivables
2
2
Cash
2,909
3,473
Short-term deposits
300
-
3,211
3,475
Liquidity risk management
The Company is exposed to liquidity risk arising from having insufficient funds to meet the Company’s future financing needs. The
Company’s liquidity management process includes projecting cash flows and considering the level of liquid assets available to meet
future cash requirements along with monitoring statement of financial position liquidity. The Board reviews forecasts, including
cash flow forecasts on a quarterly basis.
Maturity analysis
The table below analyses the Company’s financial liabilities on a contractual gross undiscounted cash flow basis into maturity
groupings based on amounts outstanding at the statement of financial position date up to the contractual maturity date.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
25
11. Financial risk management (continued)
Within 1 year
1 to 5 years
Over 5 years
Total
£000's
£000's
£000's
£000's
2024
Trade and other payables
65
-
-
65
65
-
-
65
2023
Trade and other payables
72
-
-
72
72
-
-
72
Foreign exchange risk management
The Company is exposed to movements in foreign exchange rates due to any realisation of its investment in Snorkel International
being denominated in foreign currencies. The carrying amount of the company’s investment in Snorkel International at 31 December
2024, which is denominated in USD, is £19.1m (2023: £19.1m). During 2024, the GBP to USD exchange rate averaged 1.2779 with a
low of 1.2345 and a high of 1.3410. See critical accounting estimates and key judgements on page 21 for further details of the impact
of changes in the exchange rates. The company has no other material assets or liabilities denominated in foreign currencies. If
appropriate the Company can use currency derivative financial instruments such as foreign exchange contracts to reduce exposure.
These were not used in the period.
Capital management
The Company’s main objective when managing capital is to protect returns to shareholders. The Company also aims to maximise
its capital structure of debt and equity so as to minimise its cost of capital. The Company manages its capital with regard to risks
inherent in the business and the sector in which it operates by monitoring its gearing ratio on a regular basis. The Company considers
its capital to include share capital, share premium, special reserve, share option reserve, merger reserve and retained earnings. No
gearing is currently calculated as the Company had no borrowings during the year.
12. Contingencies
Authorised Guarantee Agreement
At the time of the Joint Venture between Tanfield Group Plc and Xtreme Manufacturing LLC relating to Snorkel International in
October 2013, Tanfield Group Plc was the tenant of the Vigo Centre manufacturing facility from which the Snorkel division carried
out its UK manufacturing operations. In order to gain permission to assign the lease to Snorkel Europe Limited, Tanfield Group Plc
entered into an authorised guarantee agreement on the 25-year lease which commenced 27 June 2006.
13. Related party transactions
Remuneration of key personnel
The remuneration of the key management personnel, which includes Directors, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual directors is
provided in the Directors’ Remuneration Report on page 9.
2024
2023
£000’s
£000’s
Salaries and short-term benefits including NI
144
177
Post employment benefits
15
13
159
190
14. Retirement benefits
The Company operates a defined contribution retirement benefit plan for all qualifying employees. The total cost charged to income
of £15k (2023: £13k) represents contributions payable to that scheme by the Company at rates specified in the rules of the scheme.
As at 31 December 2024, contributions of £nil (2023: £nil) due in respect of the current reporting period had not been paid over to
the scheme.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
26
15. Financial instruments recognised in the statement of financial position
2024
2023
Assets
Amortised
cost
Fair value
through profit
and loss
Total
Amortised
cost
Fair value
through profit
and loss
Total
£000’s
£000’s
£000’s
£000’s
£000’s
£000’s
Current financial assets
Trade and other receivables
2
-
2
2
-
2
Investments
-
19,100
19,100
-
19,100
19,100
Cash and cash equivalents
3,209
-
3,209
3,473
-
3,473
Total
3,211
19,100
22,311
3,475
19,100
22,575
Liabilities
Amortised
cost
2024
Fair value
through profit
and loss
Total
Amortised
cost
2023
Fair value
through profit
and loss
Total
£000’s
£000’s
£000’s
£000’s
£000’s
£000’s
Current liabilities
Trade and other payables
65
-
65
69
-
69
Total
65
-
65
69
-
69
Financial assets and liabilities measured at fair value are measured using a fair value hierarchy that reflects the significance of the
inputs used in making the fair value measurements, as follows:-
•
Level 1 – Unadjusted quoted prices in active markets for identical asset or liabilities (‘quoted prices’);
•
Level 2 – Inputs (other than quoted prices in active markets for identical assets or liabilities) that are directly or indirectly
observable for the asset or liability (‘observable inputs’); or
•
Level 3 – Inputs that are not based on observable market data (‘unobservable inputs’).
All of the company’s financial assets and liabilities measured at fair value are measured using level 3 valuations in both the year
ended 31 December 2024 and the year ended 31 December 2023.
The fair value investment is measured against the contractual terms of the Joint Venture with Xtreme, as detailed in the circular
distributed to shareholders to fully explain the terms of the transaction – and thereby seek their authority to enter into the
transaction. Further details are provided in the strategic report on pages 3 to 5 and in the critical accounting estimates and key
judgements on pages 20 and 21.
16. Investments
The tables below give brief details of the Company’s investments at 31 December 2024. The Company had no operating subsidiaries
as of 31 December 2024.
Investments
Principal activity
Group Interest in allotted
capital & voting rights
Country of
incorporation
Smith Electric Vehicles US Corp
Electric vehicle manufacture
5.76%
US
HBWP Inc
Holding Company
100.00%
US
Snorkel International Holdings LLC
Holding Company
49.00%
US
Tanfield Engineering Systems US (Inc) a
Powered Access
49.00%
US
Snorkel Europe Ltd a
Powered Access
49.00%
UK
Snorkel International Inc a
Powered Access
49.00%
US
Snorkel New Zealand Limited a
Powered Access
49.00%
NZ
a The Company’s interest is held indirectly through HBWP Inc, a wholly owned subsidiary, and its investment in Snorkel International Holdings LLC