Sporting success fails to boost cycle sales for Birmingham supplier

THE sporting success of Britain’s cyclists is failing to translate into a growth in bicycle sales for a Birmingham-based supplier.

Tandem said within its cycling and mobility businesses were down by a quarter compared to the first half of last year.

In his AGM statement, chairman Mervyn Keene said: “A significant national retailer bicycle promotion in 2015 wasn’t repeated by the customer in 2016 and as a result revenue from our corporate bicycles business was considerably behind.

“Although our flagship independent brands, Claud Butler and Dawes, both have significant pedigree and heritage, the independent leisure cycling market continues to be challenging.”  

Despite the poor showing, overall he said revenue for the 25 weeks to June 24, 2016 was encouraging and stood approximately 8% ahead of the same period last year.

In September last year, the company expanded its operations with the £2.1m acquisition of leisure products supplier ESC; a move which has paid dividends for the business.

“Including the ESC business, revenue in our sports, leisure and toys businesses for the 25 weeks to June 24 was approximately 48% ahead of the same period last year.  On a like for like basis, revenue was approximately 3% ahead of the prior year,” said Mr Keene.

New licences Paw Patrol, Shopkins and Finding Dory performed strongly.  Batman was also well ahead of the previous period.  In own brands, Kickmaster was significantly ahead of the prior period, he added.

While the Pro Rider mobility business was slightly behind the prior period, the arrival of new scooters is giving rise to optimism.

“Although the leisure cycling market continues to be highly competitive which impacts on the bicycles and mobility division, we expect the second half of the year in our sports, leisure and toys division to perform well, both on a like for like and overall basis,” said Mr Keene.

Regarding the EU referendum, he warned shareholders that the vote to leave the Single Market would create a period of “volatility and uncertainty”, most notably in respect of a weaker sterling dollar exchange rate which is likely to impact all importers.

“However, we continue to manage this position through the utilisation of existing currency derivatives and the management of our supply chain,” he added.

The company has pledged to maintain its dividend payment of 2.50 pence per ordinary share, which will be paid on July 4.

 

Click here to sign up to receive our new South West business news...
Close