North East-based cherry picker firm Snorkel has reported a return to profit in a trend part owner Tanfield Group hopes will continue.
Ahead of a looming US court case in which Tanfield is battling for control of the access equipment maker, investors on the London Stock Exchange were given an update showing Snorkel's sales had increased 7.7% to $50m (£39.2m) in the second quarter of 2023, as Ebitda was converted to a $1.6m (£1.2m) profit compared with a $4.3m (£3.3) loss over the same period last year.
Tanfield, which owns a 49% stake in Snorkel, said the results were down to a marked improvement in profit margin which had increased to 13%, up from 2.8% a year ago. Tanfield's board has been investigating Snorkel's performance for more than year and had expressed concern that its gross profit margin was below industry average.
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The numbers come as Tanfield is still locked in a dispute with US-based Xtreme Manufacturing LLC, belonging to Don Ahern, over ownership of Snorkel. The issue involves a staged acquisition deal in 2013, in which Tanfield sold 51% of the company to Xtreme, in order to save it.
Evidence is being prepared to value Snorkel at the time of the proposed deal which included performance-related terms that would allow Tanfield to sell its remaining shares to Xtreme. However, Xtreme claims these targets were not met and that it has the right to acquire Tanfield's 49% stake in the firm for free.
For some time, Snorkel's largest customer has been another of Don Ahern's businesses, Ahern Rentals, which was sold to new owners last year in a $2bn deal. Tanfield said it was pleased that sales have continued to increase despite the change of ownership.
In its latest update, the group said: "The board views the increase in sales and gross profit margin in 2023 to be a continued positive development and is not aware of any reason why this improving trend should not continue. The company is now focussed on the US proceedings which are continuing, with a jury trial currently scheduled to take place in early 2024.
"However, as reported on 24 July 2023, the board expect the trial date will be rescheduled to around the summer of 2024. The board continue to believe that a positive outcome to those proceedings is possible. So far as it is necessary, the company will continue to vigorously defend its position whilst continuing to seek advice."
