The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain

Tanfield Group Plc

("Tanfield", or "the Company")

Interim Results for the six-month period to 30 June 2021

Tanfield, an investing company as defined by AIM Rules, announces its half year results for the period ending 30 June 2021. The unaudited financial information will shortly be available on the Company website at www.tanfieldgroup.com.

Background

·    Tanfield is a 49% shareholder in the equity of Snorkel International Holdings LLC ("Snorkel") following the joint venture between the Company and Xtreme Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a company owned by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October 2013.

·    The Snorkel investment is valued at £19.1m.  The outcome of the US and UK Proceedings referenced below could have an impact on this valuation.

·    On 22 October 2019, the Company announced that it had received a Summons and Complaint, filed in Nevada (the "US Proceedings") by subsidiaries of Xtreme, relating to the Contemplated Transaction.

·    On 24 October 2019, the Company announced it had become necessary to issue and serve a claim in the English High Court against Ward Hadaway (the "UK Proceedings"), the solicitor acting for the Company at the time of the Contemplated Transaction, in order to fully protect the Company's rights pending the outcome of the US Proceedings. 

·    The Company's operating loss in H1 2021 reduced to £187k (H1 2020: £333k) as a consequence of lower legal fees during the period, with the retained loss for the period reducing to £268k (H1 2020: £369k).

·    As announced on 3 June 2021, the Company continues to receive the support of its Shareholders via loan note subscriptions in order to provide the necessary funding for the ongoing US and UK Proceedings and other day to day costs.

Overview of investments

During the first 6 months of 2021, Snorkel appears to be recovering from the impact of the global COVID-19 pandemic which impacted its ability to operate as normal and required many of its global facilities to close for substantial periods.

As the recovery from the pandemic continues, Snorkel has seen sales in the first 6 months of 2021 increase to US$71.7m, up from US$60.2m for the same period in 2020.  More recently, as announced on 24 August 2021, Snorkel saw a 140% increase in sales for the second quarter of 2021, achieving sales of US$40.3m compared to US$16.8m for the same period in 2020. 

Also as announced on 24 August 2021, the Board remain of the opinion that gross profit margins generally do not appear to have been in line with the industry averages.  Accordingly, steps to investigate the historic margins, which includes ensuring all related party transactions have taken place at an arm's length basis, have commenced and are ongoing.

The Board confirm that both the US and UK Proceedings are continuing to progress and that the Board believes a positive outcome to either/both proceedings is possible.  So far as it is necessary, the Company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice. 

Further updates will be provided to Shareholders as and when appropriate.

For further information:

Tanfield Group Plc                                                                          020 7220 1666

Daryn Robinson                                                                                                 

WH Ireland Limited - Nominated Advisor / Broker

James Joyce                                                                                      020 7220 1666