Electric bike revenue is 112% ahead of last year’s Q1 readings for the Tandem Group whose trading update today reflects a broader picture of heavy forward ordering as the bicycle industry seeks to replenish stocks in anticipation of continued demand.
Across a diverse portfolio of products ranging toys, licensed goods and several cycle brands revenue in two wheeled goods was described as “exceptionally strong”, with bicycle sales 21% ahead of Q1 2020, a period just on the cusp of the pandemic’s beginnings.
Forward looking, Tandem echoes concerns that seem ubiquitous at present, pointing to headwinds on stock availability for bicycles in particular. This key concern is furthered by compounding issues such as container availability to ship goods, associated price increases, which Tandem says have “increased again in recent weeks”, as well as a general shortage of components to complete bicycle builds. All of these factors understandably impact the group’s margin.
“We also continue to be concerned by ongoing cost increases, with significant rises in input costs such as steel, oil, plastic and cardboard all of which also put pressure on margin,” added the trading update. Furthermore, Covid-19 remains a problem in a number of supplier countries.
Overall the group battled onwards, recording a 24% uptick in revenue year-on-year. Added to this, profitability was “considerably ahead”, though still lagging behind pre-Covid levels.
Outside of the bicycle and electric bike business, revenue from the B2B arms associated with sports, leisure and toy sales ran at around 32% ahead of the prior year’s takings. Largely this was attributed to increased FOB national retailer business, as well as own-label product sales tracking ahead of last year’s sales.
Full year 2020 results, released in March, saw 2020’s net profits up over £1.4 million during a year where the firm expanded its distribution capability with an expansion into a new facility adjacent to its Birmingham headquarters.
As of this morning Tandem Groups’ share price sits at £6.40.