ELECTRIC vehicle maker Tanfield could split its operation in half as a means of helping it recover from plunging into the red and seeing turnover fall by almost £63m.

The company, based in Washington, on Wearside, blamed the dramatic fall in profits – from £10.3m profit in the first half last year to a loss of £11m in the year to June 30 – on the recession, but stressed it is well-placed to recover.

And as part of its recovery strategy, the group is looking at whether its two operations – Smith Electric Vehicles, which makes electric vehicles, and cherry picker-maker Powered Access – can be split into separate companies.

A Tanfield spokesman told The Northern Echo that although no decision has been taken, such a move would position both divisions to take full advantage of opportunities in their sectors, and would lead to modest job creation.

Despite the tough past few months and the outlook remaining challenging – with first-half turnover dropping from £92.8m to £29.9m yearon- year – the group is confident it is financially stable and well-placed for the future.

While Powered Access continues to suffer from tough trading, Tanfield’s electric vehicle division is thriving. It received Government funding to further develop electric and low-carbon vehicles and supplying across the world, recently winning contracts in Hong Kong, China and the Netherlands, as well as having a strong operation in the US.

Since late last year, Tanfield has cut staff costs by 40 per cent through making about 170 redundancies and implementing short-time working hours in Washington, which now employs about 300 people.

Although Tanfield has said the recession has significantly hampered sales in both divisions, a spokesman said the group continues to at least match, and often outperform, global competitors in the sector.

Darren Kell, chief executive of Tanfield, said confidence remains high for the future, adding: “Sales performance across the group continues to be constrained by the global recessionary environment.

However, we took appropriate and timely corrective action to reshape the business.

“Throughout the period we have consciously run the company for cash ahead of profitability, a strategy that has maintained the cash position, with the group still retaining a strong balance sheet.

“We continue to prepare for an eventual upturn in market demand in both our core business sectors, and are already witnessing positive developments in the Zero Emission Vehicles division.”