The Tandem Group’s September trading update has seen the bicycle, sports and leisure distributor continue a steady path through pandemic trading, albeit with the usual factors (shipping, supplier costs) weighted on the group’s margins.
Group revenue for the six months to June 30th increased by around 14% to £19.2 million over £16.9 million in the same period last year. This drove a 9% increase in gross profit up to £6.06 million, but as part of headwinds in supply gross profit margins slipped from 32.8% to 31.5%. The associated costs of increased shipping rates and cost of supply of goods have apparently largely not been passed on to Tandem’s customer base.
Specifically within the bicycle segment (not including e-Bike), revenue was largely on par with the year prior at £5,489,000 with the only notable exception in performance terms coming rom kids’ bicycle label Squish which was “materially ahead” of the same period in 2020.
“Our greatest challenge continues to be to receive sufficient stock of bicycles to maintain timely supply to our customers,” said the statement today, adding “Despite these supply chain issues the sales order book for bicycles remains exceptionally strong at over £20 million.”
In addition to the growth in kids’ bikes, e-Bikes are markedly ahead of last year’s sales with revenue growth up 174% during the period with revenue of £2,018,000 to 30 June 2021 compared to £737,000 in the prior year period.
Chairman Steve Grant wrote in today’s statement: “The challenges previously reported have continued over the last two months since our AGM update. Global demand remains high with shipping containers still in short supply. Input costs, having risen significantly during the year to date, have yet to return to more reasonable levels.
“We continue to manage these challenges well, where necessary deferring shipments and seeking alternative shipping routes to minimise cost whilst seeking to maintain timely supply of product.
“The outlook for the remainder of 2021 remains positive and the Board are confident that with revenue to 31 August 14% ahead of the prior year and a current sales order book of approximately £30 million (2020 – £11.9 million), the Group will deliver another strong year.”