Sports and leisure retailer’s share price take a hit after disappointing results
Shares in sports and leisure retailer Tandem Group took a hit yesterday after the firm announced that revenue so far this year is below the same period in 2021 as it continues to experience customer order cancellations and delays.
The firm’s share price dropped by over 68p yesterday, down almost 23% to 231p – their lowest for two years – after the company reported a disappointing first half of the year with trading 31% behind.
The firm says customers have continued to cancel and delay orders which has meant the current order book of £10m is well behind compared to £35.4m this time last year, which is more in line with levels seen at the same point in 2020 when they were £10.8m.
Both national retailer and independent dealer bicycle sales were down during the period to 17 June 2022, with the division turnover 55% behind that of the prior period.
Tandem said during 2020 and 2021 the bicycles division had benefited from unprecedented demand that COVID-19 lockdowns created. That demand has now diminished and Tandem says it is left with higher stock levels than it would like against a backdrop of overstocked customers.
Tandem said it will address this over the remainder of the year with a number of promotions and special offers.
Investment platform AJ Bell commented: “Dawes and Claud Butler bikes group Tandem is still suffering a hangover from Covid. During the pandemic bike retailers couldn’t keep up with demand as sales were going through the roof.
“This momentum was unsustainable and now retailers are sitting on too much stock, which means that Tandem’s own inventory levels are higher than normal as demand has eased back. It has signalled an intention to run promotions and special offers to shift more units, which might solve its storage problem but won’t be good for its profit margins.”