Profit drops by more than a third for sports and leisure retailer
Designer and retailer of sports and leisure equipment Tandem has revealed a 37% decrease in its gross profit from £4m to £2.5m in the first half of the year.
The Castle Bromwich-based company saw its gross profit margin falling by 25.9% compared to 31% last year, which it says is a result of favourable foreign exchange variances in the prior period.
Revenue for the group in the six months to June 30 also dipped from £12.9m in 2022, to £9.8m, with a loss before tax of £900k.
Tandem says its results have been impacted by the reduction in its customers disposable income thanks to high inflation and interest rates, alongside experiencing persistent unfavourable weather conditions.
As a result, group revenue to September 15, 2023 was £15.1m compared to £19.1m for the same period in the prior year.
In Chairman Steve Grant’s statement, he said that toy sales, which are “typically considered recession-proof” have slumped this year, “particularly the outdoor toy market due to poor weather”. This decline has impacted revenue in toys, sports and leisure which has reduced 44% in H1 against the prior year. E-bike sales however have surged, with turnover 53% higher.
Grant believes Tandem is “perfectly placed to handle this shift in the anticipated sales pattern” after the completion of a purpose-built, solar-powered warehouse. This removes the firms “reliance and cost of 3rd party warehouse facilities” after consolidating operations into a single site.