TANFIELD (TAN)

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These companies are all previous recommendations from the Red Hot Portfolio that I have subsequently recommended and then sold from the portfolio at a later date. By no means are these companies intended to be buy recommendations for you to go out and invest money towards their shares. For the opportunity to start making serious money from the recommendations I am making now, just start your no obligation trial!

A 747% profit! A red-hot record! July 2007

RHPS Recommendation - SELL

Dear Reader,
I am not one to boast and brag. So quietly, and with due humility and fully conscious of the fact that pride comes before a fall, let me simply say that in June 2007 we sold out of Tanfield, booking a 747% gain. Whoopee! This was a Red Hot record, but hopefully not for long because I am hoping to see Myhome International surpass it soon!

Now you may well ask why I have not tipped more Tanfields, and not bothered with some of the others. But I must be honest and say that if you had asked me a year ago to predict which share would achieve such a stunning return, I am by no means sure that Tanfield would have been my choice. One reason for this is simply that any share is basically a moving target. In other words, the company that we bought into in the past is not the same as it is today. All companies evolve from day to day. They innovate, they win or lose customers, competition springs up or disappears, and the company's staff may change as well. This is why it is very important to monitor shares regularly, and not simply assume that because a company is successful at one point in time that it will always be so. However, Tanfield has clearly had some specific attributes and we can try to learn from these.

First of all, the company certainly has not stood still. Since it went into the Red Hot Portfolio it has made acquisitions, opened a new factory and raised new finance through issuing new shares. These initiatives have brought it to the attention of the City, but none of them necessarily creates value or propels a share price. What have been more important are the announcements of actual business. Tanfield has won a series of new contracts, proof that its products are in demand, and enough to convince investors that it can achieve a rapid growth of sales. These new business wins have been announced boldly and in detail, providing a constant diet of good news. And to make even more certain that the message has got home, Tanfield has shown City analysts around its Durham headquarters, and demonstrated its electric vehicles in London. In other words, it has had plenty of good PR, and given that share prices of small companies tend to react to "newsflow" one cannot deny that this has been effective.

These have been positive factors, but it has not been plain sailing all the way. Tanfield has made a couple of other announcements that at the time set some alarm bells ringing. Last summer it changed its Finance Director, and in April 2006 Tanfield's Chairman and Chief Executive Roy Stanley sold five million shares, representing about one-sixth of his holding. He would probably rather forget this. He sold these shares for 19.32p each, and from that very moment the ascent of the share price got under way.

April 2006 was exactly one year after I recommended Tanfield in Red Hot Penny Shares. So we had to sit and wait patiently for 12 months before anything happened. This is a good illustration of the importance of being patient. Many small companies have great ideas and exciting potential but investors are understandably wary until they can "see the beef" - otherwise known as evidence of profitable growth. So in the early stage, when a company is building its business platform, it is important to keep the faith. But two things have really made Tanfield such a great investment. The first is the sheer scale of the opportunity that it is addressing. The value of the market for low emission vehicles will one day run into the billions, so if we ignore the eventual certainty of increasingly fierce competition, there is no real ceiling to Tanfield's growth potential.

The second is the "X Factor". This is the excitement that can only be generated by a company that captures the mood of the moment. By offering a product, the electric vehicle, which improves the environment and saves fuel as well, Tanfield is apparently providing answers to two of today's most important and most widely debated issues. The simple proposition of electric vehicles has been well understood and has had immense appeal. And so Tanfield's market value has risen from £26m at the time of my recommendation to a very demanding £500m+ today.

TANFIELD (TAN): Gains in the bank

Tanfield now needs to make an annual profit of at least £30m in order to justify its market capitalisation of over £500m. This is asking a lot, especially with possible bottlenecks in its supply chain. We took our 747% profit on 7 June.

TANFIELD (TAN): A Credible 250p - Jun 2007

RHPS Recommendation - HOLD

Broker Morgan Stanley, which does not usually cover smaller companies, has published research on Tanfield setting a share price target of 160p, but also outlining a "credible bull case" that would make the shares worth 250p.

The main variables are sales of electric vehicles and the share of the US market for powered access vehicles (basically platforms on hydraulic lifts) achieved by subsidiary Upright. Morgan Stanley's central case assumes that Tanfield will sell 250 electric vehicles in 2007, rising to 1,500 by 2012. The bull case assumes 2,500 per year in 2012.

Upright used to have a 10% share of the $7bn US market for powered access; it now has 1%. Morgan Stanley assumes that it lifts its market share to 4.5% by 2012. The bull case assumes 6.8%. The main risks are the failure of Tanfield's suppliers to be able to deliver the necessary volumes; a severe downturn in the US economy; or failures on Tanfield's part to manage its growth. If you have not already done so my advice is to take part of your profit at this stage, but with the shares still showing good momentum the price could yet go higher.

TANFIELD (TAN): Electric Vans for Sainsbury's - May 2007

RHPS Recommendation - HOLD

TNT Express has ordered fifty battery-powered Newton 7.5t trucks for use in the UK, and now intends to trial both the Newton and the smaller Edison electric vehicle on the Continent. This followed news of initial orders from CEVA Logistics, Scottish & Southern Energy and Sainsbury's. Scottish & Southern has a fleet of 6,000 vehicles, while Sainsbury's has said that it plans to switch its entire home shopping fleet to electric vehicles by 2010.

At the end of April Tanfield hosted a visit by a group of analysts to its Vigo Centre at Tyne & Wear. With very strong order books for Upright Access and good interest shown at a recent construction and mining machinery trade fair in Munich, broker Daniel Stewart has raised its profit estimate for 2008 from £25m to £28m. On this basis earnings per share would be 7.2p. The shares have surged through my 120p target, but with such strong momentum in the business, I have raised this to 150p.

TANFIELD (TAN): More Good News To Come? - Apr 2007

RHPS Recommendation - HOLD

Results from Tanfield were up to expectations, and trials of its electric vehicles with both TNT and Starbucks are going well. The forward order book for Upright Powered Access, which stood at £3m last June when Tanfield acquired the business, is now at £35m. This year Tanfield will be introducing a 12 ton electric vehicle, which will suit transporters of chilled foods, while Upright has also broadened its product range.

After the dramatic rise of the shares, Tanfield has plenty to live up to. So my advice is to take part of your gain at this point, but to hang on to some of your shares because more good news should soon come along. I have set a new target of 120p.

TANFIELD (TAN): More New Orders - Mar 2007

RHPS Recommendation - HOLD

Business is booming at Tanfield. Subsidiary UpRight Powered Access has won new orders for over 1,200 aerial work platforms, with a total value in excess of 14m Euros. Production is being increased to 100 per week, and at that rate UpRight Powered Access would have annual sales of some £40m.

Meanwhile, Marks & Spencer is to use Tanfield's "Newton" zero emission electric vehicles for its city centre deliveries, and intends to use them to replace its urban diesel fleet "where pertinent". As Marks & Spencer points out, zero emission vehicles are not only clean but also quiet, so improve the environment in more ways than one. Where Marks & Spencer leads others will follow.

TANFIELD (TAN): Powering Ahead - Feb 2007

RHPS Recommendation - HOLD

Sharecall: (0906 812 1210) 7619
Enova is to work in partnership with Tanfield to develop an electric drive train for a 12 ton version of the Smith Newton, specifically designed for the North American market. These vehicles expand the market opportunity and confirm Tanfield's position as the world's leading commercial electric vehicle manufacturer - a remarkable achievement for a small UK company.

Meanwhile, UpRight Powered Access has transferred production to Tyne & Wear, and with a buoyant order book expects to be delivering 100 machines per week by the end of February. The shares are still going strong and I have set a new target of 100p

TANFIELD (TAN): TNT trials - Jan 2007

RHPS Recommendation - HOLD

TNT is to conduct trials in London of two delivery trucks supplied by Smith Electric Vehicles. These are the world's first high performance 7.5 tonne electric, zero emission vehicles. One of these will be deployed for eco-friendly Starbucks, and if the trials are successful TNT will want at least 200 such vehicles in the UK alone. TNT reckons that these vehicles will save it "millions of pounds" as well as being kind to the environment.

Meanwhile Tanfield's UpRight Powered Access division has secured its largest order to date, to supply 160 machines worth €3.5m to a European customer. With earnings per share of 4.9p forecast for 2007, the shares are still modestly valued, and I have raised my target to 60p.

TANFIELD (TAN): Collaboration with Enova - Dec 2006

RHPS Recommendation - HOLD

An American company, Enova Systems, has announced a project with Tanfield subsidiary, Smith Electric Vehicles. Enova will supply its 120kw Electric Drive System to power Smith vehicles on a trial basis. The first operational Smith vehicle fitted with Enova's system is expected to be complete in December 2006. Smith is expected to complete final evaluation of Enova's system by early 2007. Describing the Enova product as an "improved drive train", Smith believes that this collaboration will consolidate its position as the market leader for road-going commercial electric vehicles. Tanfield shares hit another new high.

TANFIELD (TAN): Raises £20m to finance growth - Nov 2006

RHPS Recommendation - HOLD

Sharecall: (0906 812 1210) 7619
Tanfield is raising £20m through a placing of shares at 40p, in order to finance its growth. Tanfield needs working capital in order to deal with the "exceptional" order intake of its Powered Access Division. For the last six weeks it has received orders in excess of £1m, which compares to the £500,000 per week assumed in analysts' forecasts.

TANFIELD (TAN): Shares powering ahead - Oct 2006

RHPS Recommendation - HOLD

Sharecall: (0906 812 1210) 7619
Tanfield has announced an interim profit before tax of £1.94m, and a new reporting structure which will divide the group into "Zero Emissions Specialist Vehicles" and "Powered Access". Supporting these brands will be a large final assembly operation on Teesside. Assuming that Tanfield hits this year's profit forecast of £5.5m and next year's of £9.7m, then earnings per share will be 2.5p and 4p respectively. Admittedly Tanfield pays no tax, but all the same it has a strong balance sheet and the rating of the shares is quite low.

TANFIELD (TAN): Shares Can Double - Aug 2006

RHPS Recommendation - BUY

Subsidiary Smith Electric Vehicles has a growing order book from customers such as Dairy Crest, BAA and Enterprise plc. It has just launched a chilled food distribution vehicle for Sainsbury's Online and is developing the world's first 7.5 tonne goods vehicle to incorporate zero-emission battery technology. Smith's service and maintenance division is a market leader and now looks after over 4,000 battery powered vehicles.

Airport specialist vehicle makers Jumbotug and Norquip are increasing sales as airports worldwide get to grips with their environmental responsibilities. Meanwhile, subsidiaries UpRight Powered Access and Aerial Access, which produces powered access platforms, have won large orders, and appointed new distributors in the UK and Germany.

Having built a strong position in this growing industry through a series of acquisitions, Tanfield is now consolidating all product assembly on to one site. With the shares standing on a 2007 p/e ratio of just 6, they can easily double over the next year.

TANFIELD (TAN): New Contract for US Subsidiary - Jul 2006

RHPS Recommendation - BUY

Sharecall: (0906 812 1210): 7619
UpRight Inc, the US company acquired in April, has won its first significant new order for powered aerial platform equipment. This is for a type of truck called a mast lift machine, and is estimated to be worth over $1m.

In a separate development Tanfield has replaced its finance director, Tim Robinson, with 43-year-old Charles Brooks. Brooks has been finance and operations director at a company called Agility Systems, and has already worked with Tanfield on the acquisition of Upright. Despite this, the shares hit a new high last month.

TANFIELD (TAN): New contracts, new target - Jun 2006

RHPS Recommendation - BUY

Sharecall: (0906 812 1210): 7619
TNT, the parcels delivery business, is to trial Tanfield's electric vehicles in London later this year. And Dairy Crest, which has its fleet of electric vehicles maintained and serviced by Tanfield subsidiary Smith's Electric Vehicles, has acquired the Midlands Co-op and the Express Foodservice, London, door step delivery business. As a result the size of the fleet has expanded by 400 to 2,600. Brokers are now forecasting earnings per share of 2.3p for 2006 rising to 3.8p in 2007. This makes the shares look very good value, and I am raising my buy limit to 28p and my target to 50p.

TANFIELD GROUP (TAN): Results and new acquisition boost share price - May 2006

RHPS Recommendation - BUY

Sharecall: (0906 812 1210) 7619
In 2005 Tanfield more than doubled its turnover and made an operating profit of £2m. It has strong order books for its various businesses. Tanfield is also buying UpRight Inc, which manufactures powered access platforms and scaffolding at its factory in Dublin, for €10.5m, and has placed 50 million new shares at 20p.

Although UpRight has seen its turnover and profits decline in recent years from 2000 sales of over $200m to currently about $50m Tanfield has an excellent record of turning around struggling businesses, and the prospects for electric-powered vehicles have never been better.

TANFIELD (TAN) - Mar 2006

RHPS Recommendation - BUY

Tanfield has said that it will meet market forecasts for 2005. It reports good order books and 'buoyant' interest for its electric vehicles - RHPS favourite Azure Dynamics supplies the hybrid engines.

TANFIELD (TAN) - Feb 2006

RHPS Recommendation - BUY

Tanfield will meet market forecasts for 2005, and reports good order books, in particular for electric vehicles - good news for supplier and RHPS tip, Azure Dynamics.

TANFIELD (TAN): New Contracts - Jan 2006

RHPS Recommendation - BUY

Sharecall code: 7619
Tanfield is to supply electric vehicles to the Deepstore document storage facility in the former salt mines at Winsford, Cheshire. It will also supply zero emission vehicles to Airbus at Filton to ferry goods and personnel around this vast site. These replace diesel vehicles which could only go as far as the factory door. Overseas, airport access subsidiary Norquip has won its first order, for a Middle Eastern airline for an 'Ambulift', a truck-mounted, scissor lift unit that is used for terminal-to-aircraft passenger transfers at airports.

And its digital imaging subsidiary has signed a two year supply deal with a Central American manufacturer, worth $500,000. To finance this growth Tanfield has raised £1.82m through a placing of shares at 20p.

TANFIELD (TAN): Distributors Appointed in Central Europe - Dec 2005

RHPS Recommendation - BUY

Tanfield has appointed distributors for its Aerial Access division in Russia, Turkey, Lithuania, Latvia, Greece and Cyprus, and is already receiving orders. Tanfield also reports high interest in its new range of airport baggage tractors.

TANFIELD (TAN): Expecting 'Substantial Growth' - Nov 2005

RHPS Recommendation - BUY

With newly acquired Smiths Electric Vehicles (SEV) Tanfield has reported first half turnover of £10.4m, compared to £11.8m for all of 2004. After relocation to Tanfield's own site SEV is now producing 70 access vehicles per month compared to just 12 when it was acquired. Tanfield expects 'substantial growth' from its electric vehicle division, and will supply 800 delivery vehicles to Dairy Crest over the next three years. Broker, Daniel Stewart, is now forecasting a profit of £3.9m next year, for earnings per share of 2.2p.

TANFIELD (TAN): Working on Airport Tugs - Aug 2005

RHPS Recommendation - BUY

Tanfield's subsidiary Smiths Electric Vehicles Limited is to work with Azure Dynamics to develop the global market for airport tugs. Azure has given Smiths an exclusive agreement to supply the drive and control systems for a period of three years. Tanfield's Chief Executive, Roy Stanley, has bought 150,000 shares at 19.78p each, and now holds 20.55% of the company.

TANFIELD (TAN): Buys Two Businesses - Jul 2005

RHPS Recommendation - BUY

Tanfield is buying two businesses, Norquip Limited and Saxon Limited for £280,000. Norquip makes highlifts for the airport sector. Saxon makes fire-fighting and rescue vehicles. Both companies provide a national service and maintenance capability. This gives Tanfield the chance to increase sales of zero or low emission vehicles. Chief Executive Roy Stanley has bought 200,000 shares at 17.25p.

TANFIELD GROUP (TAN): Growth Opportunities - May 2005

RHPS Recommendation - BUY

Tanfield is to raise £5.5m through a placing of 27.5m shares at 20p. Encouragingly, this is a slim discount to the current market price, and the cash will boost Tanfield's balance sheet. However, Tanfield has referred to 'certain strategic growth opportunities', and when I met its Chief Executive, Roy Stanley, in March, he alluded to some very interesting acquisition possibilities.

With an oil 'super-spike' on the horizon, electric vehicles will become big business - here's how to make 94% gains - Apr 2005

RHPS Recommendation - BUY

If I tell you that Roy Stanley looks like an older and more grizzled version of Ian Botham, you will probably understand that this is a man to have on your side. Roy owns 38% of the share capital of Tanfield Group, and is Chief Executive. That stake is now worth £10m. So is it time to retire, I asked him? He looked puzzled. Glancing at his colleague Darren Kell, he replied: "I don't think so. We're not that type of people, are we?"

So I reckon that Roy's fortune will swell plenty further in the next few years. Especially if the number of times my doorbell rings is anything to go by. Diesel-driven refuse vans do more harm than good to the environment. Have you noticed how many deliverymen are in your neighbourhood every day? If they're not delivering parcels, they're carrying groceries or something ordered over the Internet.

And then there are the refuse collectors. With so many different bins, collecting waste seems to require not one but several pick-ups. But guess what? Someone has worked out that all these diesel-driven refuse vans do more damage to the environment than is actually saved by recycling.

Fortunately, there is an answer to this: battery-powered vehicles. When Roy talks about them he becomes quite evangelical. What better than to have emission-free vehicles trundling silently around town? Okay, so they cannot go too fast, and they cannot go too far, but so what. They can do a day's work and then literally recharge their batteries overnight.

Milk floats have been doing this for decades, and it was partly thanks to the post-war growth of doorstep pint deliveries that a company called Smiths became the largest manufacturer of electric vehicles in the world. There are some splendid old photographs of the milk float factory on Smith's website (www.sev.co.uk/general/history.htm).

Commercial customers and governments are getting greener and greener.

But now electric vehicles are enjoying a revival. For one thing, they run at a cost of between just one and two pence per mile, compared to 18p for a diesel engine. But with a recent Goldman Sachs report predicting oil prices entering a 'super-spike', rising towards $105 a barrel, be sure that prices at the pumps are set to rise and rise. Electric vehicles will soon become an even more viable alternative. And thanks to our environmental concerns, governments and commercial customers are now specifying them. For instance, from 2006 BAA will only license zero emission vehicles to operate on its airfields.

Recently, Smiths won new orders for electric baggage handling vehicles from Liverpool Airport, while Express Food Services bought six electric vehicles for deliveries in London, where they are exempt from the congestion charge. Tanfield will soon be expanding the market with the introduction of vehicles with speeds of up to 45 mph and a range doubled to 80 miles. Tanfield's clever acquisition of Smiths shows that it means business.

So Smiths has a bright future.

And it has become a lot brighter since Roy took over. Roy's company, Tanfield Holdings, was a supplier to Smiths, and he came close to buying it 10 years ago, but the deal fell through. Last year he was invited back to Newcastle to take a second look - and was amazed to find that the business was stuck in a time warp. Manufacturing was inefficient, little effort was being made to find new customers and staff morale was at rock bottom.

So last October Tanfield Group acquired Smiths for £2.2m in cash, 1m Tanfield shares, then valued at 10p, and the assumption of £600,000 of Smith's debt. In 2003 Smiths made a post-tax profit of £131,000, 'after directors' drawings'. Roy said that Smiths was run as a 'lifestyle business' - a polite way of saying that the directors were doing very nicely, thank you.

Those directors are no longer there so, in the absence of their drawings, Tanfield acquired a business that, inefficient though it was, was making £500,000 after tax. That was a smart deal by any standards, but all the more so in view of the transformation wrought upon Smiths in the six months since.

Enhanced productivity + reduced manufacturing times + motivated staff = enormous potential!

Production has been moved to Tanfield's own site, and productivity has been enhanced dramatically. Apart from electric vehicles, Smiths makes powered aerial access equipment, also enjoying a boom because none of us are allowed to climb up ladders any more.

It used to take Smiths 50 hours to make a K13, which, in case you are unfamiliar with the terminology of the aerial access business, is essentially a 'cherry picker' with a reach of 13 metres. Now Tanfield has cut the manufacturing time down to just 16 hours. Smiths was making 20 aerial access vehicles each month. That number is now 60. And with a properly motivated marketing team now in place, Tanfield is having no difficulty selling them, having boosted Smiths order book from £5m to £9m in just six months. With each sale comes a stream of revenue from the service contracts. Tanfield now provides maintenance cover for 4,000 vehicles from depots in Sheffield, Manchester and Bishop's Stortford. Straight-talking boss has eyes set on a £100m turnover. This year Tanfield will have a turnover of between £25m and £30m, about half of which will come from the Smiths acquisition.

The rest comes from Tanfield's original business, which assembles integrated electrical, hydraulic, electronic and pneumatic sub-systems. For instance, it makes man baskets for Caterpillar dumper trucks, buckets for earth-moving equipment and filtration equipment. It also makes canopy shells for the army's field electric generator, and is now negotiating a possible £10m per annum, 10-year contract for the US armed forces. 2004's pre-tax loss of £5.97m carried all the costs of reorganising. But the interims in September will show the real extent of Smith's revival and the potential of the group. Roy has his eyes on a turnover of £100m before too long, and may pay a dividend for the 2005 financial year. He is looking at further acquisitions and, after the success of Smith, is sure to get City backing.

RHPS Verdict: Last month Tanfield announced an order to supply at least 40 aerial access vehicles to a customer in Eastern Europe, and it has won further export business to North America and Australia. This is evidence of real momentum in the business, and with the rising price of diesel underlining the attractions of electric vehicles, the future is very bright.

To take advantage of the recommendations RHPS is making today, start your no obligation trial now!

The figures refer to the past and past performance is not a reliable indicator of future results. The past recommendation highlighted here is a small company share.By their nature, such investments can be relatively illiquid and, as a result, hard to trade. This makes such shares more risky than other investments. Please seek independent financial advice if necessary. These figures do not include the bid-offer spread, unless otherwise stated. Since the service began on 01/12/98 running through to 31/07/07, the average overall performance of the shares recommended is up 19.91%.All gains exclude dividend payments and dealing costs, unless otherwise stated. Profits from share dealing are a form of income and subject to taxation. Levels and bases of, and reliefs from, taxation are subject to change, and depend on individual circumstances. Full portfolio available on request. Fleet Street Publications Ltd is authorised and regulated by the Financial Services Authority. FSA No. 115234.

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