Pedal power propels Tandem Group back into the black

BICYCLE and leisure goods group, Tandem, has returned to profit after strong half year trading across both its main divisions.

The Birmingham-based company said group revenue in the six months to June 30, 2014 was £13,735,000 (H1 2013: £11,251,000). Gross profit increased to £4,051,000 (H1 2013: £3,370,000), while pre-tax profit for the period was £213,000 which compared to a loss of £498,000 in the same period last year.

Revenue from its bicycle and accessories businesses increased by 3.8% to £7,463,000 (H1 2013: £7,187,000), although operating profit was relatively flat at £159,000 (H1 2013: £157,000).

The performance of its sports, leisure and toy businesses was much stronger, growing by 54.3% to £6,272,000 (H1 2013: £4,064,000).  Operating profit in the division rose to £186,000 in the period, compared to an operating loss of £318,000 in the first half of last year.

Own brands Hedstrom and Stunted were significantly ahead of the prior period, but revenue from licensed product ranges including Peppa Pig, One Direction and Thomas the Tank Engine was also greater than the previous period.

In an update on current trading, it said group revenue for the 37 weeks period to September 12 had been approximately £21m compared to £19.6m in the comparative period last year.  However, the 11-week period to September 12 had been challenging, despite a period of reasonable weather.  

In the bicycles and accessories businesses revenue for the 37-week period was approximately £11.2m against a similar figure in the prior year.

“After a positive start to the year, the leisure bicycle market has been challenging in recent months.  Although some areas of the bicycle market continue to perform strongly, in particular higher priced road bikes, our sector of the cycling market remains highly competitive,” it said.

“We are continuing to grow our corporate bicycle business.  During the period we have introduced new product ranges and expanded the number of customer accounts which has increased turnover.  We believe there is further scope to offer our national customers a value for money range of products to satisfy both retailer listings and their promotional activities.”

Revenue for the sports, leisure and toys division during the 37 weeks was approximately £9.8m, up from £8.3m last year.

“In our sports, leisure and toys businesses we reported that at this time last year selections with national retailers had increased for Spring/Summer 2014.  We are pleased to report that our selections for 2015 have so far been equally encouraging and we expect to build on the progress that we have made during 2014,” it added.

“As we expected, the exceptional trading performance in the sports, leisure and toys businesses during this period last year has been difficult to emulate.  Notwithstanding this, our order books are in line with the previous year which is encouraging.”
 
It said the acquisition of Pro Rider, a leading UK online retailer of mobility scooters, associated mobility products, electric bicycles and electric golf trolleys, had completed in August and the business was already starting to see progress.

A growth strategy based around separating the mobility category from the sports and leisure offering is being implemented and Tandem said it expected Pro Rider to make a strong contribution to trading performance in the remainder of 2014 and beyond.