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Darwen Holdings 1 (low)-5 (high)

Management: 4

Market: 4

Product: 3

Financial strength: 3

TOTAL SCORE: 14/20

The chairman of electric truck maker Tanfield (TAN:AIM) is hoping to replicate the company’s business model with a new venture specialising in environmentally friendly buses. Roy Stanley plans to brings Darwen Holdings to Aim next Tuesday Green light for Darwen(25 February) as a pan-European supplier of pedigree vehicles.

The company, which will be valued at £20 million on float, was founded last August by Stanley and has since made two acquisitions. Leyland Product Developments, an engineer, has a background in designing hybrid buses. The second purchase, East Lancashire Coachbuilders, has been making vans, lorries and small coaches since the 1930s.

Darwen already has 5,000 diesel double-decker buses active in the UK, Europe and Asia Pacific, selling to such customers as Arriva (ARI) and Go-Ahead Group (GOG). Although diesel vehicles will continue to be sold, it plans to become a greener business by launching its first environmentally friendly bus range in November.

‘We’re introducing buses that use less fuel than traditional vehicles,’ said Stanley. ‘Over the next two years the market will see an increasing number of hybrid buses, then on to fuel cell power, but this could be ten years away.’

Stanley scaled back his dual role as chief executive of Tanfield in September 2006 to be only chairman. While he continues to retain this position, he said there wasn’t a place in Tanfield’s development strategy to incorporate his plans to sell environmentally-friendly buses.

‘Tanfield has so much on its plate that I was weary of causing any distraction by adding buses to the list,’ he said. ‘It is growing very aggressively and made a decision to focus on powered platforms and electric vehicles. I didn’t see Darwen as a suitable addition to Tanfield, so I launched it on my own.’

Darwen is forecast to make £2.5 million pre-tax profit in its first year. It is not raising any money at float, having already secured seed investment from Stanley and several institutions, including Aberdeen Asset Management and Barclays Capital.

East Lancashire Coachbuilders used to have 350 staff making three buses a week. A restructuring programme has increased this to five buses a week using just 250 workers, having improved the supply chain and put the focus on assembly. Darwen is targeting ten buses a week by the end of this year, rising to 15 a week in 2009.

Stanley will own 50.7% of the business after flotation. Around a third of the issued share capital will be available for public trading. Cenkos Securities is acting as broker and nominated adviser.

The management includes former Sunderland football club chief executive, John Fickling. He joins as a non-exec director, bringing experience in the transport industry as a former shareholder in Northumbria Buses and Kentish Bus.