Tanfield Group PLC
25 September 2006





The Tanfield Group Plc

Interim Results

Six months to 30 June 2006

Tanfield Group is pleased to announce its unaudited interim results for the 6
month period to June 2006, and also takes the opportunity to comment on recent
trading performance and future prospects.

Highlights:

Financial

   •Turnover increased by almost 60% against H1 2005
   •Significant pre-tax profit increase against H1 2005
   •Net current assets quadrupled against year end 2005
   •High organic growth in both key divisions
   •Net assets doubled against year end 2005
   •Gross profit margin maintained

Business

   •Increase in rate of order intake
   •Increase in acceptance of new electric vehicles.
   •Restructuring of business divisions.
   •Public sector assisted funding programme for fleet demonstration
    vehicles.
   •Board changes
   •New assembly facility


Chairman's Statement

The financial results for the six months to June 2006 demonstrate how the Group
is building strongly on its improved performance in 2005, with an exceptional
level of growth and maintained profitability.

Turnover for the six months grew by almost 60% to £16.5m from £10.4m in the
equivalent period in 2005. This is almost entirely organic growth from
continuing operations. The acquisition during this period (see UpRight below)
was completed on June 9th 2006 and had limited impact on sales figures.

The highest growth area was the Zero Emission Vehicle division, where turnover
for the six month period was £8.8m, against a full year figure in 2005 of £9.6m.

For the Powered Access segment, turnover rose to £3.1m in the 6 months to June,
against a full year figure in 2005 of £4.4m.

The increase in turnover has been achieved while maintaining gross profit at
54%, (55% in the first 6 months of 2005). Profit before tax was £1.94m before
restructuring costs, after goodwill write-off and depreciation, compared with
£0.19m in the first half of 2005 and £1.69m for the full year ending December
31st 2005.

The balance sheet reflects the full impact of the acquisition of the Powered
Access Division of Upright International Manufacturing Limited. The acquisition
was structured as an Asset Purchased Agreement.

The assets purchased were current assets such as stock, WIP and debtors. The
increases in those balances since December 31st 2005 largely result from the
acquisition that took place at the end of the period. The net assets at the end
of the period were £23.2m (£11.7m as at December 31st 2005). Net Current Assets
were £12.3m (£2.5m at December 31st 2005).

At June 30th 2006, the company had £0.6m of cash balances while utilising only
£0.7m of the £4m Group Banking facility. This headroom will be required to
support the growth forecast. The gearing at June 30th was 9.2% (19.7% at
December 31st 2005). Interest Cover at June 30th was 16 times (1.7 times at June
2005).


Trading Update:

Restructuring

To reflect the changes in the operational activities of certain areas of the
business and maximise the synergies that exist within these areas, the Group is
restructuring its activities into two specific business divisions, namely Zero
Emission Specialist Vehicles and Powered Access equipment.

The Zero Emission Specialist Vehicles division will incorporate all of the
Group's vehicle operations: Smith Electric Vehicles, Norquip, Jumbotugs and the
SEV service network. The lead brand in this division will be Smith Electric
Vehicles.

The Powered Access division will encompass the operations of Aerial Access,
along with the newly-acquired UpRight Powered Access. The lead brand will be
UpRight.

This strategy will allow us to focus on and invest in building on the strong
brand equity that already exists in the customer bases for these lead brands,
while also clearly defining the two main operational areas of the Group.

The Group's existing Engineering Division will increasingly become the key
supplier to the two divisions and their sub-brands. We are already seeing a
significant increase in the percentage of throughput from engineering destined
for the group's OEM operations.

The acquisition of Upright brought Tanfield access to a supply chain utilising
high volume supply from low cost regions. The Group will seek to exploit this in
conjunction with the flexibility provided by its Engineering Division.

Zero Emission Specialist Vehicles

I am pleased to report continued growth in both the order book for this division
and indeed greater market awareness and demand. The market drivers for the
adoption of these products are stronger than ever.

This, allied to a further rise in oil pricing and the implementation of further
congestion and pollution charging, is creating significant interest in the
division's product portfolio.

Throughout the first six months of the year we have delivered vehicles to the
airport, delivery and waste collection sectors, plus the public sector. These
vehicles are all based on our Faraday platform, which has proved tremendously
successful and has been well received by the end users.

Engineering and project work is progressing well on the complimentary products
to Faraday, namely Edison our 3.5t electric van platform and Newton our 7.5t
electric truck.

These products will utilise the Faraday drive line technology but be packaged
into body shells sourced from the volume commercial vehicle sector. The first
products from this new generation of vehicles will be delivered to TNT Express
and TNT Logistics and will be launched in October 2006.

The adoption of these "donor" vehicle products, with the efficient integration
methods we have developed, will allow us to considerably increase the build
rate, in order to satisfy market demand.

The natural environment for an electric vehicle is one where the vehicle starts
and ends its day at a depot location where it can be re-charged; and where it
does less than 120 miles per day, often with a multitude of start-stops for
deliveries.

Internet shopping and grocery delivery companies; food distribution; parcel,
mail and logistics companies; and waste collection and recycling companies all
operate significant fleets that fall within these parameters.

We have received orders from or are in negotiations with most of the major fleet
operators such as Sainsbury's, TNT, and Enterprise plc, all of whom recognise
the efficacy and compelling financial case for the use of zero emission vehicles
within a closed urban environment.

The airport sector globally is aware of the impact of its "in-air" activities on
the environment and is therefore highly motivated to minimise emissions on
ground-based operations. We are experiencing significant order intake and
enquiries for the Group's traditional airport product range; plus a high level
of interest in utilising the Smith platform for all manner of aviation ground
support vehicles

Growth in service and maintenance activity continues in line with the increased
output in vehicles as well as new projects won to maintain vehicles within the
dairy sector. The implementation phase of the Dairy Crest contract is now
complete and this has expanded the number of our mobile service engineers to
over 130 and the Group's service depot locations to 17.

The Directors believe that this increased coverage will be invaluable in our
efforts to win further new fleet sales of electric vehicles, as it gives
tremendous confidence to existing and future electric vehicle purchasers that a
significant infrastructure is in place to support and maintain their vehicles.

Tanfield is experiencing a high degree of interest in its zero emission products
from companies and organisations overseas and is therefore considering carefully
its options with regard to the potential for leveraging the Group's products
into other markets.

Fleet Demonstration Funding Programme

I am please to advise that we have structured an agreement with Cenex, a
public-private partnership established to develop and encourage the adoption of
low carbon technologies in the automotive sector, for the full funding of a
demonstration fleet of 30 zero emission commercial vehicles. These vehicles will
be used to seed the fleets of end users with significant potential volume
requirements, to demonstrate the efficacy of electric commercial vehicles. This
is a rolling programme that will be transitioned in to new vehicles as and when
end users purchase the demonstration vehicles. This programme will significantly
increase our demonstration fleet effectiveness and accelerate the sales process.

Powered Access

I am pleased to report that the acquisition of UpRight was completed on June 9th
2006 and has had a twofold positive impact. It has directly impacted on sales
figures while also trebling the number of sales outlets for the Group's existing
Aerial Access brand.

UpRight is the third most recognised brand in powered access equipment globally
and it is this significant brand equity that has allowed us to quickly develop
the market for its products. The products are well recognised as market leaders
and are complimentary to the existing Aerial Access products currently offered
by the Group.

We have strengthened and reinvigorated distribution channels for the product
range. Allied to the growth the Group had already achieved for Aerial Access
distribution channels, this means there is a ready route to market for the
combined powered access offering.

The sales and marketing function has been strengthened and we have commenced the
first stage in an aggressive sales plan to grow the business.

As an example, the UpRight brand was recently re-launched in Spain, with new
distributors and new sales management, and within the first week of operation we
received orders from Spain in excess of £0.5m.

The acquisition and our plans for the business have been very well received by
the market and this has allowed us to tap into significant latent demand for
product. Additionally, we have been able to cross-sell other Group products into
and through the UpRight distribution base.

Order intake has accelerated throughout the first months of ownership to the
point where we are now experiencing a level four times that of the UpRight
business at point of acquisition.

Our strategy is to reintroduce several of the historic product models and expand
the range offered to the market - as well as offering derivative products and
offering certain Aerial Access products under the UpRight brand.

We have also taken over the production of UpRight equipment at the vendor's
facility in Ireland. This allows us to manage the transition of the production
lines from Ireland to the North East of England. This process also allows us to
manage and control the production of existing orders. It is testament to the
capability of our operational team that we have been able to more than double
throughput at this facility within three weeks of gaining control.



Tanfield Centre

We have signed a lease on a new 250,000 sq foot dedicated assembly facility -
"Tanfield Centre" - close to the Group's existing facilities. To offset the cost
of establishing this factory we have negotiated a rent-free period of 15 months
and have been offered a £1.95 million grant from the local Regional Development
Agency. The new facility will become the main site for the final assembly of all
Group products, including those manufactured under the UpRight brand. This will
provide scalability of its operations and allow us to deliver further rapid
growth.





Board Changes

It is with pleasure that I announce two Board changes. The Board has appointed
Darren Kell as Chief Executive of the Group and Brendan Campbell as Operations
Director of the Group.

Over recent months, a number of senior management appointments have been made
within the Group and its divisions. This means that there is now in place an
experienced and enthusiastic team to manage and lead this dynamic and rapidly
growing business. There is clear succession planning and strength in depth.

Summary

Following another period of significant growth and the successful organic
profitable growth of the core businesses, we are now embarking upon a new phase
in the Group's development.

The sectors in which we operate are exciting and dynamic and offer us tremendous
potential for further profitable growth.

The acquisition of the UpRight business puts us firmly in the front ranks of the
fast-growing powered access market and widens our opportunities globally through
our operations in Japan and USA.

Our new production facility will allow us to fulfil market demand for the
Group's products and operate more efficiently.

I would like to take this opportunity to thank all of our people for their
efforts over the past six months and for the continuing support of all our
stakeholders.

Roy Stanley,
Chairman


Tanfield  Group PLC

Consolidated Income Statement
For six months ending 30th June 2006

                                Notes  Unaudited     Unaudited     Audited
                                       6 months      6 months     Year ended
                                       to 30th       to 30th         31
                                       June 2006     June 2005    December 2005
                                       £000's        £000's             £000's

Revenue                                 16,494        10,443           22,431

Other operating income                       -             -               42
Changes in inventories of
finished goods  and WIP                  2,593         1,392            1,983
Raw materials and consumables
used                                   (10,184)       (6,031)          (9,111)
Reversal of previously
impaired  assets                             -             -               69
Staff costs                             (5,385)       (4,489)          (9,049)
Depreciation and amortisation
expense                                    173          (269)             475
Other operating expenses                (1,622)         (574)          (4,729)
Restructuring costs                       (211)

Profit from operations                    1,858           472            2,109

Finance costs                             (126)         (280)            (109)

Net Profit for Year                       1,732           192            2,000

Income tax expense                 2         -             -             (344)

Profit for the
year from
continuing
operations                               1,732           192            1,656

Discontinued operations
Loss for
period from
discontinued
operations                                   -             -               37

Net profit for
the year                                 1,732           192            1,694

Earnings per share
From continuing operations
Basic                              4      0.80p         0.13p            1.00p
Diluted                                   0.78p         0.12p            0.97p

From continuing and
discontinued operations
Basic                                     0.80p         0.13p            1.03p
Diluted                                   0.78p         0.12p            0.99p




Tanfield Group PLC

Consolidated Balance Sheet
As at 30th June 2006                                  Unaudited         Audited
                                                  30th June 2006          2005
                                                       £000's             £000's
ASSETS

Non Current Assets
Property, Plant and Equipment                              4,113         4,015
Goodwill                                                   5,143         5,143
Intangible Assets                                          4,183         3,213
                                                      ------------      --------
                                                          13,440        12,371
                                                      ------------      --------
Current Assets
Inventories                                               14,307         4,377
Trade and Other Receivables                                8,191         5,701
Cash and Cash Equivalents                                    595         1,478
                                                      ------------      --------
                                                          23,092        11,555
                                                      ------------      --------
                                                      ------------      --------
TOTAL ASSETS                                              36,532        23,927
                                                      ============      ========
LIABILITIES
Current liabilities
Trade and Other Payables                                   7,957         5,511
Tax Liabilities                                              299           299
Obligations Under Finance Leases                             366           631
Bank Loans and Overdrafts                                    695         1,048
Other Creditors                                            1,432         1,583
Provisions                                                     -             -
                                                      ------------      --------
                                                          10,749         9,072
                                                      ------------      --------
Non Current Liabilities
Bank Loans                                                 1,022         1,392
Other Creditors                                              198           212
Deferred Tax Liability                                        45            45
Obligations Under Finance Leases                             653           723
Convertible Loan Notes                                        69            69
Provisions                                                   615           661
                                                      ------------      --------
                                                           2,602         3,101
                                                      ------------      --------
                                                      ------------      --------
TOTAL LIABILITIES                                         13,351        12,173
                                                      ------------      --------

Equity
Share Capital                                              2,421         1,905
Share Premium Account                                     10,690         1,509
Share option reserve                                         308           308
Loan Stock Equity Reserve                                      6             6
Merger Reserve                                             1,534         1,534
Capital Reduction Reserve                                  7,228         7,228
Profit And Loss Account                                      994          (737)
                                                      ------------      --------
Total Equity                                              23,181        11,753
                                                      ------------      --------
                                                      ------------      --------
Total Equity & Liabilities                                36,532        23,926
                                                      ============      ========



Tanfield Group Plc                                          

Consolidated Cash Flow Statement

For the six months ending 30th June 2006



                                               Unaudited      Unaudited   Audited
                                                6 months      6 months       Year
                                                to 30th       to 30th     Ended 31
                                              June 2006      June 2005    December
                                                                            2005
                                        Note     £000's         £000's    £000's

Operating Activities
Cash used in operations                     6    (2,324)       (2,355)   (1,990)
Interest paid                                      (126)         (558)     (207)
Tax paid                                              -             -          -

Net Cash from Operating activities               (2,450)       (2,912)   (2,197)

Investing Activities
Acquisitions                                     (6,523)         (329)     (324)
Purchase of property,plant and
equipment                                          (548)       (1,681)   (2,562)
Proceeds from sale of property, plant 
and equipment
Purchase of intangible fixed assets                    -             -   (1,488)
Interest received                                      -            98        98

Net cash used in investing activities            (7,071)        (1,912)   (4,276)

Financing Activities
Issue of ordinary share capital                   9,696          5,323     6,886
Repayment of bank loans                            (331)           686       742
Capital element of finance leases                  (335)          (244)     (121)

Net cash used  in financing                       9,030          5,766     7,507

Net Increase/(Decrease) in Cash
and Cash Equivalents                               (491)           941     1,034

Cash and cash Equivalents at
beginning of Year                                   960            (74)      (74)

Cash and Cash equivalents at end 
of the year                                         469            866       960




Tanfield Group PLC

Consolidated Statement of Changes in Equity
For the six month period ended 30th June 2006

                                                Attributable to equity holders of the company
                                   Share   Share   Share    Capital   Loan    Merger  Profit   Total
                                   capital Option  Premium  Reduction Stock   Reserve and Loss Equity
                                           Reserve          Reserve   Reserve         Account
                                   £000's  £000's  £000's   £000's    £000's  £000's  £000's   £000's

Balance at 1
January 2006                       1,905     308    1,509     7,228       6   1,534     (737)  11,753
- prior period                                                                             -        -
adjustments
- as restated                      1,905     308    1,509     7,228       6   1,534     (737)  11,753

Exercise of
share options                         15       -       14         -               -        -       30
Net gains/(losses) not recognised                                                                   -
in the income statement
Issue of new share capital           500            9,166         -               -        -    9,666
Capital Reduction                                       -         -       -                -        -
Conversion of convertible loan         -                -         -       -       -        -        -
notes
Shares issued for consideration        -                -         -               -        -        -
Net profit for the year                -                -         -               -    1,732    1,732
Dividends
Balance at 30 June 2006            2,421     308   10,690     7,228       6   1,534      994   23,181

For the six month period ended 30th June 2005

                                                 Attributable to equity holders of the company
                                   Share   Share   Share    Capital   Loan    Merger  Profit   Total
                                   capital Option  Premium  Reduction Stock   Reserve and Loss Equity
                                           Reserve          Reserve   Reserve         Account
                                   £000's  £000's  £000's   £000's    £000's  £000's  £000's   £000's

Balance at 1
January 2005                       1,328     410   18,632         -     170   1,534   (20,717)  1,356

- prior period adjustments                                                                78       78
- as restated                      1,328     410   18,632         -     170   1,534   (20,639)  1,434

Exercise of share options             7    (136)       -          -               -      248      118
Net gains/(losses) not recognised                                                                   -
in the income statement
Issue of new
share capital                        275            5,089         -               -        -    5,364
Capital Reduction                                       -         -       -                -        -
Conversion of convertible loan 
notes                                200            1,581         -    (163)      -        -    1,618
Shares issued for consideration        9               81         -               -        -       90
Net profit for the year                -                -         -               -      192      192
Dividends
Balance at 30 June 2005            1,819     273   25,383         -       6   1,534   (20,199)  8,816



NOTES

1. Basis of preparation

The financial statements for the six months ended 30 June 2006 have been neither
audited nor reviewed, nor have the financial statements for the six months ended
30 June 2005. They have been prepared on a consistent basis using accounting
policies set out in the Tanfield Group Plc statutory accounts for the period
ended 31 December 2005.

The figures for the year ended 31 December 2005 do not constitute the company's
statutory accounts for that period within the meaning of Section 240 of the
Companies Act but have been extracted from the statutory accounts, which have
been filed with the Registrar of Companies. The auditors have reported on those
accounts and that report was unqualified and did not contain a statement under
Section 237(2) or Section 237(3) of the Companies Act 1985.

2. Taxation

The tax charge in the period is based on the anticipated effective rate of tax
for the period to 30th
June 2006.

3. Business and Geographical Segment Information

                           Powered   Zero     
                           Access    Emission
                           Platforms Vehicles Engineering Consolidated
                           £000's    £000's      £000's      £000's
Revenue
External Sales               3,128    8,883       4,483       16,494
Inter-segment sales
Total revenue                3,128    8,883       4,483       16,494
Result
Segment Result
before restructuring           367    1,279         423        2,068
Restructuring Costs            211        -           -          211
Segment Result                 156    1,279         423        1,858
Unallocated corporate            -        -           -            -
expenses
Profit from operations         156    1,279         423        1,858
Finance costs                   24       68          34          126
Profit before tax              132    1,211         388        1,732

Income tax expense              0        -           0            0
Profit after tax               132    1,211         388        1,732
Other information
Capital additions            1,243      415          68        1,726
Depreciation and 
amortisation                  (355)     433          94          173
Impairment losses 
recognised in income             0        0           0            0
Balance Sheet
Assets:
Segment assets              16,062   10,558       9,587       36,207
Consolidated total assets   16,062   10,558       9,587       36,207
Liabilities:
Segment Liabilities          3,542    5,610       3,874       13,026
Consolidated total
liabilities                  3,542    5,610       3,874       13,026




4. Earnings per share

Including discontinuing operations

The calculation of the basic and diluted earnings per share is
based on the following data:

Earnings                         6 months ended   6 months ended      Year Ended
                                   30/06/2006       30/06/2005      31/12/2005

Earnings for the purposes
of basic earnings per share             1,732              192           1,694
Effect of dilutive potential
ordinary shares:                           14               14              14
- interest on convertible loan
notes
Earnings for the purposes
of diluted earnings per share           1,718              179           1,680

Number of shares 
Weighted average number of ordinary
shares for the purposes of
basic earnings per share           216,053,300      146,563,869     165,038,027

Convertible Loan Notes                 789,474          789,474         789,474
Share Options                        2,928,671        3,057,342       4,057,342

Weighted average number
of ordinary shares for the
purposes of diluted earnings 
per share                          219,771,444      150,410,684     168,884,843

From continuing operations
The calculation of the basic and diluted earnings per share is
based on the following data:

Earnings                             Year Ended       Year Ended      Year Ended
                                   31/12/2006       31/12/2006      31/12/2005

Earnings for the purposes
of basic earnings per share              1,732              192           1,656

Effect of dilutive potential
ordinary shares:                           14               14              14
- interest on convertible loan
notes

Earnings for the purposes of diluted
earnings per share                      1,718              179           1,642

Earnings per share from continuing 
operations
Basic                                   0.80p            0.13p           1.00p
Diluted                                 0.78p            0.12p           0.97p




5. Acquisition.

On 8th June 2006, the Group acquired the PartsRight business and the UpRight
brand of powered access equipment from Upright International Manufacturing a
consideration of £6.8m. This has been accounted for by the purchase method of
accounting.

                                                                    Fair Value
                                                                          2006
Net Assets Acquired                                                     £'000s

Inventories                                                              5,497
Debtor Book                                                              1,004
Order Book                                                                 327
Other Intangible Assets                                                    533
IPR                                                                        347
                                                                        --------
                                                                         7,708
Goodwill                                                                  (860)
                                                                        --------
Total Consideration                                                      6,848
Satisfied by :
Cash                                                                     6,848
                                                                        --------
                                                                        --------
Net cash outflow arising on acquisition                                  6,848
                                                                        ========

6. Reconciliation of profit from operations to net cash used in operating
activities

                              6 months      6 months       Year
                              to 30th        to 30th     Ended 31
                                 June           June     December
                                 2006           2005         2005
                               £000's         £000's      £000's
Operating Activities
Profit before tax and
interest expense                1,858            472        2,147
Depreciation of property,
plant and equipment               450            374          742
Write off of negative
goodwill                        (860)              -       (1,356)
Impairment of property, plant      -               -            -
and equipment
Amortisation  of intangible
fixed assets                     238               -          159
(Profit)/Loss on disposal of
fixed assets                       -           (105)          102
(Increase)/decrease in 
debtors                       (1,487)        (1,251)       (1,622)
(Decrease)/Increase in
creditors                      1,957            134           205
(Decrease)/Increase in
provisions                       (46)          (475)         (787)
(Increase)/decrease in
inventories                   (4,434)        (1,504)       (1,579)

Net Cash from Operating
activities                    (2,324)        (2,355)        (1,990)


Copies of this report are being forwarded to all shareholders and holders of the
2009 8.5% Convertible Loan Stock and further copies are available from the
Company's Registered Office at Comeleon House, North Tanfield Industrial Estate,
Tanfield Lea, Co Durham. DH9 9NX.






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