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"The most impressive growth occurred in the Powered Access division, as 2007 was the first full year to benefit from our reinvigoration of the UpRight brand. We grew its independent distributor network during 2007 from 45 to over 180 companies and this drove a significant increase in sales." I am delighted once again to report a record set of results, achieved in another transformational year for the Group. The Board remains committed to creating value for our shareholders through the growth of our core divisions. We have again delivered a superb financial performance, demonstrating Tanfield’s successful execution of its strategy for high growth, while maintaining profitability. This illustrates that the Company as a whole has taken another significant step towards becoming an established world leader in its chosen markets. Financial Performance Sales in the Zero Emission Vehicles division grew 37%, from £19m in 2006 to £26m in 2007. The Powered Access Division grew sales from £11m in 2006 to £90m in 2007, an increase of 718%. Delivering Our Strategy The most impressive growth occurred in the Powered Access division, as 2007 was the first full year to benefit from our reinvigoration of the UpRight brand (acquired in June 2006). We grew its independent distributor network during 2007 from 45 to over 180 companies and this drove a significant increase in sales. To meet this higher demand from our customer base, we also increased output tenfold at Vigo Centre, our UK headquarters, from 20units per week at the close of 2006 to 200 per week at the end of 2007. The acquisition of Snorkel International Inc on 1 August 2007 is delivering the intended benefits. It accelerated the Group’s growth in aerial work platforms, through immediate access to new geographical markets complementary to those already served by Tanfield. It also instantly added a range of larger, proven products that would have taken us many years to develop. As a result, the Group is now one of four “full line” manufacturers in the powered access market and one of only three with a truly global footprint. The Zero Emission Vehicles Division also enjoyed unprecedented growth, as two next-generation electric vehicles went into full production and achieved strong sales. Edison is the world’s first higher function electric van with a Gross Vehicle Weight (GVW) of under 3,500kg. This is critical to domestic sales, as anyone with a standard UK driving licence can operate vehicles under this GVW. Vehicles of a higher weight require drivers to have a commercial vehicle licence - and qualified drivers command higher wages. Newton is the world’s first higher function electric truck and remains the world’s largest commercial electric vehicle, offered in GVWs from 7,500kg to 12,000kg. It uses a truck chassis cab from Avia in the Czech Republic. We launched the Smith Newton in December 2006 and this generated significant sales throughout 2007, as we added further variants up to a Gross Vehicle Weight (GVW) of 12,000kg, based on the same chassis cab configuration. Newton was followed by the Smith Edison, utilising the Ford Transit shell. We launched Edison in April 2007 at the Commercial Vehicle Show, one of the largest annual events for vans and trucks in Europe. The addressable market for vans is considerably larger than that of truck-sized goods vehicles and Edison is already outselling Newton 2:1. Sales of these vehicles in 2007 confirmed Tanfield’s position as the world’s largest manufacturer of road-going, commercial electric vehicles and maintained our market leading position. We successfully capitalised on market drivers that increasingly influence operators of urban vans and trucks. The most obvious benefit is reducing the environmental impact of a customer’s commercial vehicle fleet, by providing 100% reduction in greenhouse gas (GHG) emissions and air pollutants, at the point of use. This can manifest as an economic benefit, as worldwide, zero emission vehicles are almost always exempt from road pricing such as congestion charges or highway tolls. For third party logistics providers, adopting zero emission vehicles can also provide a competitive edge, as a growing number of environmentally-conscious blue chip companies are demanding that their supply chain also reduces its carbon footprint. With only a relatively small number of moving parts in the electric drive train and greatly reduced “fuel” costs, operating overheads for our EVs are significantly lower than those of the equivalent diesel vehicles. Finally, the driver experience is much more pleasant, as urban drivers do not have to endure the countless gear changes or cab vibration, noise and smell associated with diesel vehicles. During 2007, the growth achieved by this division was chiefly as a result of increases in vehicle sales, underpinned by our EV service and maintenance operations. Our People This programme has had a tangible impact on the shop floor. By the end of 2007, we had achieved a significant increase in productivity on the main Powered Access assembly lines. Board Changes On 23 May 2007 Colin Billiet joined the Board as Non-Executive Director. His experience as former Chief Executive of high growth, multinational, filtration product manufacturer Domnick Hunter will be extremely valuable as Tanfield continues to grow globally. In January 2008, I became non-executive Chairman. Summary We have increased our global presence in sizeable markets, which continue to present significant opportunities for growth. We remain a market leader in commercial electric vehicles and the Group’s strategy continues to focus on growing its two core divisions, both organically and – where opportunities arise – through acquisition. I would like to thank all our people for their efforts and for the continued support of all our stakeholders.
Roy Stanley |
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