Licensed products lead Tandem Group to profit, but IBD closures weigh in

Dawes and British Eagle parent The Tandem Group has posted a profit in its 2019 interim results, with licensed products leading the charge.

Tandem booked a pre-tax profit of £0.4 million for the six months ended June 30th; revenues rising by 27% to £16 million. Over the same period the year prior a loss of £0.3 million occurred.

As a result the business declared an interim dividend of 1.56p per share, up 10% like-for-like.

The bicycle-specific area of its business remains “challenging,” according to the statement.

“Other independent bicycle dealer (IBD) sales from our Dawes and Claud Butler brands continue to be more challenging against a backdrop of declining traditional IBD customers following closures of a number of retailers coupled with falling consumer bicycle demand, particularly in the leisure market. We remain focused on maintaining a strong and compelling offering to our IBD customers, despite these significant headwinds.”

Sales with national retailers, who have tended to stock Falcon, Boss and Townsend bicycles, were slightly down on a strong 2018.

Another highlight of the financials is the news that the firm has reduced its net debt 43% year-on-year, down to £2 million.

Sources for the revenue were attributed to strong performance of licensed products LOL Surprise!, Peppa Pig and Toy Story, among others. In-house labels Kickmaster, U-Move and Wired also added gains.

“We remain enthusiastic about the cinema release of Frozen 2 in November 2019 which should bring further growth,” said the statement.

The bicycle division was pegged back a little by mixed summer weather, though the firm did highlight the mobility business as having had a strong summer.

Risks are on the horizon, said the statement, which is weary of the ongoing Brexit stalemate, something which is impacting forecasting. Further effects on import duty rates and a weakened pound were also cause for concern.

“Whilst we shouldn’t seek to ‘blame’ Brexit, we remain cautious as to the impact that it will have, should it materialise soon, with potentially uncertain future import duty rates and with regards to consumer spending which is discretionary for the type of products that we supply,” said the statement.

Joining at the start of October, Mark Taylor became a non executive director, bringing with him a background in corporate transactions, governance as well as audit and financial reporting.