Shares of Tanfield Group plunged a staggering 83 percent July 2 from 26.22 pence to 5.53 pence after the company reported a sharp decrease in global demand for aerial work platforms as well as production problems with its electric vehicles. Tanfield, which owns the UpRight and Snorkel aerial work platform brands, said in a trading update last week that profits growth would be “at a significantly lower level than previously forecast.”
Tanfield’s shares had already dropped 40 percent after Oshkosh Corp., parent company of JLG Industries, had announced lower profit expectations for 2008.
St. Helen’s Capital, Tanfield’s broker, cut its pre-tax profit forecast for 2008 from £43.3 million to £14 million, and slashed its 2009 forecast from £54.5 million to £17.5 million.
Despite the dire forecasts, the company said first half volume still rose 36 percent to £91 million (about U.S. $180.4 million) on a pro-forma basis after acquisition. Still analysts had predicted full-year sales of about £250 million.
Tanfield said its distributors and customers have reported a drop in demand as access to credit has dried up, resulting in postponement of purchases of replacement inventories.
The report of lowered expectations comes days after the news broke that Frank Scarborough, president of St. Joseph, Mo.-based Snorkel Inc., was no longer with the company.