Tandem Group margins up, but revenue and profits backtrack
The Tandem Group has posted its half yearly results, with positive signs shown in the mix of otherwise difficult, but broadly reflective of the market, figures.
With Peter Kimberley in the CEO role only since May of 2022, the results are early signs of how the FTSE listed group is steering itself under new leadership in the bikes, leisure and mobility products spaces at a time when numerous challenges overshadow the trading environment.
For the six months to June 30th, group revenue reached £12.9 million, down sharply on last year’s £19.3 million. That meant that gross profit came down 28% to £4.4 million from £6.1 million, though gross margins did measurably improve as a result of foreign exchange positives to reach 34%.
Specifically in the bicycle division, all revenues spanning IBDs, nationals and online, but excluding eBikes were markedly down at 55% behind the prior year’s figures. That said, the tide had begun to turn between June and the end of August with sales up like-for-like. New accounts are being targeted with special offers and apparently the group has seen successes in drawing new business.
As for eMobility products, results were again challenging with turnover down 34%. The statement offered: “We remain confident that eMobility is the division which has the largest potential for the Group, and believe that continued pressures on both fuel prices and climate change will encourage the use of cheaper and cleaner modes of transport in the form of electrically powered alternatives.”
Profit before tax sat at £0.3 million, down from £1.9 million in the same period last year, which put earnings per share down at 5.8 pence, versus 31.2 pence previously. Despite the dips in trading success, the dividend has been maintained at 3.43 pence per ordinary share and the company has £3.2 million in cash to hand to shore up the defences while the broader economy shudders.
In the background the business has been working on its new warehouse investment that remains on course to be completed by the end of the year. Finance costs were up marginally at £0.12 million as a result of borrowing to fund the warehouse.
Forward looking
The Tandem Group statement offers:
There are a number of key economic factors which are affecting the discretionary spending power of consumers, primarily the cost-of-living crisis. Rising energy and fuel costs, coupled with high inflation and increasing interest rates, are expected to outstrip wage inflation, leaving consumers uncertain. This is clearly impacting all areas of our business, and many other businesses alike.
Despite these challenges, there have been encouraging signs, not least from the securing of a significant number of new customer accounts during the period and since the period end, and recent targeted product promotions have yielded good results.
We continue to expect B2C to be a growth area for the business in the future and therefore we are maintaining our investment in key websites and personnel in this area; who will work across all of the business divisions, and we remain focussed on new product development.