Tanfield, parent company of aerial work platform manufacturer Snorkel, has conditionally raised gross proceeds of approximately £12 million (about U.S. $18.9 million) by placing more than 29 million new ordinary shares at 5 pence each at a price of 41 pence per share.
The placement was driven by a 25-percent increase in the first half of fiscal 2011 to £24.6 million (about U.S. $38.8 million), with the outstanding order book rising 170 percent to £20.9 million. However, the ability to meet orders has been restricted by working capital constraints and supply chain bottlenecks. Additional volume commitments and other incentives are required in order to prime the supply chain and accelerate delivery of particular parts. The additional working capital will allow the company to place larger orders with its suppliers, make strategic investments in key supply channels and where necessary offer incentives to prioritize supply chain commitments from key partners.
“The additional working capital raised by this placing will help to alleviate the bottlenecks within our supply chain allowing us to increase throughput, reduce lead times for customers and generate purchasing efficiencies,” said Tanfield chief executive Darren Kell. “As a result, we believe it should accelerate our return to profitability and help to cement our position as one of the leading global manufacturers in the aerial work platform industry.”
Tanfield plc is based in Washington, Tyne and Wear, U.K. Snorkel is based in Elwood, Kan.