Tanfield’s 2025 results: court win underpins £19.1m Snorkel valuation and sets up a pivotal 2026
Tanfield Group has published its final results for the year to 31 December 2025 alongside a significant development in its long-running US dispute over Snorkel International. The US court has confirmed Tanfield’s interpretation of the 2013 joint venture terms and ruled that when Snorkel International exercised its call option in November 2018, it triggered a contractual obligation to pay Tanfield the Priority Amount and Preferred Return (together, the “Preferred Interest”) as well as an Option Price.
In plain English: the court says Tanfield is owed money. That confirmation is the foundation for maintaining the Snorkel investment at £19.1 million. Other issues – including how much the Option Price is worth – now head to a jury trial expected sometime after summer 2026. Snorkel has filed a notice of appeal on the rulings, but Tanfield’s board says it has no reason to believe the supreme court will not uphold the district court’s decisions.
What exactly did the court confirm, and why it matters
Key terms explained:
- Call option – a contractual right for Snorkel/Xtreme to acquire Tanfield’s 49% membership interest in Snorkel International.
- Preferred Interest – the Priority Amount plus the Preferred Return interest that accrued from the 2013 joint venture; the court says this must be paid if the call option is exercised.
- Option Price – an additional amount payable for Tanfield’s 49% interest; the value will be decided at trial.
The court confirmed two core points: the terms of the 2013 agreements require payment of the Preferred Interest if the call is exercised, and that Snorkel International did exercise the call in November 2018. As a result, Tanfield says it stands ready to transfer its 49% interest once the amounts due – including the Option Price – are paid. The Option Price will be valued as at November 2018 and, per the RNS, could be as low as £nil (as alleged by Xtreme) or a positive amount on top of the Preferred Interest.
Strategically, this is big. It means the current operating ups and downs at Snorkel should “no longer directly impact” Tanfield’s valuation because the liability was crystallised in 2018. The investment is now being carried on the minimum contractual value – the court-backed Preferred Interest – rather than current trading multiples.
Why £19.1 million is the anchor valuation today
Tanfield keeps its Snorkel investment at £19.1 million, the sterling value of the Preferred Interest at the time the call was exercised. The board notes two important swing factors:
- Foreign exchange risk – the Preferred Interest is denominated in USD (the court-confirmed value is $25.3 million). Using 2025’s GBP/USD range, the implied sterling value spans roughly £18.4 million to £20.8 million – around a 12% swing.
- Upside from Option Price and potentially statutory interest – the Option Price could add to the Preferred Interest, but is not yet known. The board will not increase the carrying value until there is a court outcome.
On the downside, the board says – based on the court rulings – the contractual value cannot be less than the Preferred Interest, other than movements from exchange rates.
2025 financials: higher legal spend drives the loss
There is no operating business here – Tanfield is a passive investing company. The P&L and cash flow mainly reflect the cost of running the listed shell and prosecuting/defending the US case. Legal costs rose sharply in 2025, pushing the group deeper into the red.
| Metric | 2025 | 2024 |
|---|---|---|
| Snorkel valuation (fair value) | £19.1m | £19.1m |
| Loss from operations | £1.8m | £0.4m |
| Legal and professional fees | £1.489m | £0.193m |
| Finance income (interest) | £85k | £132k |
| Loss before tax | £1.673m | £0.271m |
| Basic loss per share | 1.03 pence | 0.17 pence |
| Cash and short-term deposits (year-end) | £2.1m | £3.2m |
| Cash and short-term deposits (at report date) | approximately £1.5m | – |
| Total assets | £21.2m | £22.4m |
| Total equity | £20.6m | £22.3m |
No dividend is declared. The company reiterates it aims to return as much as possible of any realisations to shareholders, subject to legal constraints, as and when events occur.
Snorkel trading backdrop: tougher conditions, but less relevant now
Snorkel saw sales and profitability weaken from late 2024 onwards, which the board links to tougher market conditions in the US, such as high interest rates and tariffs. The board is not aware of any material change to these conditions in 2026 so far. However, because the court has found the call option was exercised in 2018, current trading should not directly affect Tanfield’s carrying value any more.
Smith Electric Vehicles: still valued at £nil
Tanfield retains a 5.76% holding in Smith Electric Vehicles Corp. Smith ceased operations some time ago and the board continues to value the stake at £nil. There is no expectation of a near-term realisation.
Cash runway and going concern
Cash and deposits were £2.1 million at 31 December 2025 and approximately £1.5 million at the date of the report. The board states it has sufficient cash to continue for more than 12 months and believes it has enough to see the US Proceedings through to a conclusion. Trade creditor days rose to 106 days, reflecting the timing of legal and other payables.
AGM and timetable to watch
- AGM – 3:30 p.m. on 21 May 2026 in Newcastle upon Tyne.
- US Proceedings – jury trial expected sometime after summer 2026 to decide the Option Price and Tanfield’s counterclaims.
- Appeal – Snorkel International has filed a notice of appeal against the rulings; Tanfield expects the rulings to be upheld.
What this means for shareholders
The bull case
- Court confirmation that the Preferred Interest is payable – this underpins the £19.1 million valuation.
- Further upside is possible from the Option Price and potentially statutory interest.
- Snorkel’s current trading no longer directly drives valuation, reducing operational uncertainty.
The bear case
- Timing remains uncertain – trial after summer 2026 and an appeal process introduce delays.
- Cash has reduced to approximately £1.5 million at the report date; legal spend is significant.
- GBP/USD moves can shift the realised sterling value by c. 12% either way.
Josh’s take: a cleaner line of sight, but patience still required
This update moves Tanfield from “if” to “how much and when”. The court has validated the core economics Tanfield believed it agreed back in 2013, and that is a material de-risking of the investment thesis. The £19.1 million valuation looks well anchored by the Preferred Interest, with the Option Price acting as a free option on additional value.
The flip side is the wait. A jury trial after summer 2026, an appeal in play, and ongoing legal costs mean this remains a slow-burn special situation rather than a quick catalyst. With cash at approximately £1.5 million at the report date, I’ll be watching the pace of spend and any interim procedural milestones closely.
Net-net, it is a positive step: the valuation is maintained, the legal framework is now favourable, and the board reiterates its intention to return as much as possible of any realised value to shareholders. If you can tolerate the timetable risk and FX noise, the path to recovery looks clearer than it has for years.
