Profit warning causes share price plummet
BIRMINGHAM toys and leisure goods supplier Tandem Group has issued a profits warning and flagged up the potential for the strong dollar to have a negative impact on 2016 sales.
The group, which produces products under licence for Disney, Batman and Star Wars, is expecting profits to be lower than expected despite a 10% increase in sales.
The profit warning caused an immediate drop in its share price this morning, as it dropped 27% in the first 15 minutes of trading, to 130p.
In a statement to the stock market, it said: “Group operating profit before non-underlying items is expected to be marginally behind the prior year.”
It added: “The recent strengthening of the US dollar is a significant risk. Although we continue to mitigate this risk where possible by the use of various foreign exchange derivative contracts, should the dollar remain at current rates it has the potential to have a negative impact on the second half of the year.”
Revenues for 2015 were up 10% to £34.4m, helped by a £1.6m contribution from ESC, which it acquired in September.
It has made a “significant investment” in relocating its Pro Rider business to new warehouse and office accommodation in Northampton, which the company said “expedited” the move of ESC from Sudbury, that was completed in January.
