Companies: TAN ��

Zero-emission electric vehicle and aerial work platform maker Tanfield Group has increased pre-tax profits 235 per cent to �12.4 million.

Based in Washington, Tyne & Weir, the AIM-quoted company pushed up turnover threefold to �123.2 million last year, after making and shipping 260 road vehicles, most of them in the second six months. Chairman Roy Stanley says Tanfield finished 2007 with an order book of 387 units, which rose to 523 by the end of March, and has also launched the ‘Smith Ampere’, a new zero-emission electric product for the light van market, in collaboration with Ford.

According to Stanley, last year’s growth was ‘primarily organic’, building on acquisitions made in 2006. The company closed 2007 with inventories up from �14 million to �60 million, net cash up from �4.9 million to �28 million and trade and other payables increased from �6.8 million to �26.4 million.

Stanley says Tanfield’s launch last year of the world’s first ‘higher function’ electric minibus and the first high-performance electric light van have ‘further consolidated’ its market leadership in zero-emission commercial vehicles. Chief executive Darren Kell maintains that the company’s aerial work platform arm, Snorkel, is beginning to exploit its ‘brand equity’, especially in the US construction sector.

While conceding that the current outlook for this sector overall is ‘mixed’, Kell argues that non-residential construction, where Snorkel is focused, will continue to grow, ‘albeit at a reduced rate’. Concern over these markets, coupled with occasional criticisms of management style, could help explain why the shares, which soared from 16.75p to 203.5p between 2005 and last July, have worse than halved since then to 95.75p, down 22.75p this morning, valuing the company at �354.5 million.

Save 50% off your first year’s subscription to Growth Company Investor magazine, and gain immediate access to all the recommendations online. Click here.