Tandem Group bike sales 55% down, stock bottlenecks hit
The Tandem Group has this morning released its Annual General Meeting Trading Statement, within which we learn that bicycle division turnover currently sits 55% behind last summer’s figures.
This is of course to be weighted against two outstanding years for the cycling industry in which sales boomed as unprecedented conditions for cycling and legislative exemptions for bike shops during Covid came to pass.
Nonetheless, the figures were described as “disappointing” and the result is an over supply of stock with the distributor, giving new CEO Peter Kimberley and recent Director of Sales, Cycling and Golf recruit Matt Rudd an early tenure challenge. Making it all the more tricky, dealers have been heavily sold into and also find themselves tilting toward overstocked levels, something that may give the industry nerves about early season discounting creeping in.
“We have continued to experience customers cancelling and delaying orders, which has meant, in conjunction with completion of back orders, the current order book of £10.0 million is well behind compared to £35.4 million this time last year, which is more in line with levels seen at the same point in 2020 when they were £10.8 million,” outlined the trading update.
Likewise in the eMobility division “similarly disappointing results” saw turnover down 26%; though against 2020 it was 90% up, albeit on a lower base than the established cycle space.
“This is the area of the business we still believe has the largest upside potential for the Group, and investment is continuing in this area in order to best take advantage of the changing landscape of transport habits in favour of electrically powered modes of transport,” read the statement.
The Group is to open a retail shop of its own on site at its Birmingham facility, or at least it intends to; planning permission remains outstanding. A September opening is projected.
Outlook
The group will have been buoyed by the news that the Government is planning full legalisation of electric scooters as part of a new transport bill announced in the Queen’s speech. When this legislative change was made in France eScooter unit sales made an 8-fold growth in four years to reach a total market value of €458m in 2021, compared to the UK which was estimated to be around £75m in 2021.
The Tandem Group growth forecast for electric bikes is likewise extremely promising and would give investors in the Tandem Group some confidence.
“The UK has already seen a 72% unit growth between 2019 and 2021 to around 160,000 units, but is still well behind Germany where it is around 2 million units. The UK is estimated to be 4 to 5 years behind mainland Europe, but again, this is an area in which the Group is well placed to benefit from, already having significant experience in the sector, coupled with a strong range of products at an attractive price point,” reads the AGM statement.
Alongside this, the weight of infrastructure development for active travel means is given a nod, though rightly the statement acknowledges the UK is behind many European neighbours in driving this change. As reported yesterday, the European Commission is closing in on EU-wide guidance and funding.
Though non-specific on the sector and previously discussed, investment into B2C offerings is forthcoming and a new Digital Marketing hire will help drive reach online.
At the time of writing, the Tandem Group share price is down 15% on the day at 254.00.
