North-East Business
Tanfield's £12m share placing will help address supply chain bottlenecks
11:01am Tuesday 14th February 2012
A CHERRY PICKER manufacturer that has struggled to keep up with demand has raised £12m through a share placing to help free up bottlenecks in its supply chain.
Last week the North-East based Tanfield Group said global demand for aerial work platforms continued to build as rental operators replaced their fleets and its order book continued to grow.
In September the firm, which employs 230 people in this region, said it was securing so many orders as the global market starts to recover that its supply chain, which had cut back operations during the recession, was struggling to keep up.
During the first half of 2011, the company's outstanding order book rose 170per cent to £20.9m, compared to £7.7m in December 2010, with its ability to meet orders restricted by working capital constraints and supply chain bottlenecks
Last week Darren Kell, chief executive of the firm based in Washington, Wearside, said: "The Company is examining ways that will allow it to respond to that increased global demand and to reduce its lead times accordingly."
Yesterday the firm, which has not posted an annual profit for the last three years, told the London Stock exchange that it had raised £12m by a placing of 29,268,293 new shares.
Yesterday Mr Kell said: "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.
"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."
In October the group received a £3.5m cash injection as part of the deal which saw it sell its electric van division to its US partner Smith Electric Vehicles US (Sevus) earlier last year.