The Tandem Group will hold its Annual General Meeting today at which chairman Steve Grant will outline continued steady growth for the group, but headwinds on supply that will be cause for concern.
Reporting revenues for the 25 weeks to June 22nd, the combination of independent bicycle dealer and national retailer business sat at 12% ahead of the prior years’ numbers. The forward order book, as most in the bike trade will report at present, is described as “exceptionally strong”.
Overall the group’s orders total £34.7 million, compared to £10.7 million just last year. Though this is not entirely bicycle division custom, the statement suggests that it is bike shops ordering well into 2022 that is driving the startling increase. The record orders, Grant says, are based on “demand which may or may not materialise as envisaged.”
Having been in the ascendancy in the children’s bike market, house label Squish notched up 29% more revenue on the same period last year.
“Our greatest challenges continue to be to remain in stock of bicycles and to maintain timely supply to our customers. For the reasons I will explain in relation to the Group’s Outlook, this has been a significant challenge year to date and will remain an ongoing issue for the foreseeable future,” said Grant.
It is here that reference is made to a global shipping crisis and also the closure of Shimano’s Malaysian factory on safety grounds in the face of a Covid outbreak. The “unprecedented challenges”, Grant will say, will put huge pressure on margins and supplier costs. On top of this costs on raw materials – everything from steel, oil, plastic and cardboard – have been a burden to the industry.
All things considered and taking into account the furlough scheme, Tandem Group operating expenses are said to be “broadly inline” with last year’s figures at the present time.
“Although there are still uncertainties regarding what will happen as the economy returns to a degree of normality, the Board remains confident that the Group will deliver another strong year,” concludes Grant.
Having performed well in the past year the group’s dividend will again increase and an intent to pay 5.50 pence per share was outlined pending AGM approval.