You are here:

Has Tanfield run out of power?

Created:
14 May 2008
Written by:
Jonathan Eley

Tanfield is a company that, for a while, captured the imagination of investors like few others. Its electric vehicle business, which adapts standard van and truck bodies to run on electric power, seemed to have found a sweet spot in today's eco-conscious vehicle market. Its shares soared from around 20p at the start of 2006 to over 200p by the middle of last year. Then, things started to unravel.

Advertising

The shares have now halved from those heady peaks and are bouncing about at 90p or so. Recent full-year results showed worse-than-expected cash generation, and the market is clearly worried about its exposure to a flagging US economy, especially in its powered access division, which makes 'cherry pickers' and other working-at-height equipment.

Looking at the share price chart, it's clear the rot set in with the group's acquisition of Snorkel, a privately-owned US powered-access equipment maker. This was a major deal requiring additional capital from equity markets, and Snorkel subsequently soaked up extra working capital too. A statement issued yesterday, providing more detail about the order book at Smith Electric Vehicles, has not done a great deal to reinvigorate the shares.

IC VIEW:

FairlyPriced

Tanfield shares are modestly rated, and the company is making efforts to reassure investors that slower economic conditions have not impacted its order book - at least, not yet. But the market has moved onto the next big thing, and the shares have lost all momentum. Fairly priced.

Market data

Comprehensive UK stock market data - who's up, who's down, stocks hitting new highs, best yielders and much more!

Click here for data!