TIDMTND
RNS Number : 8769P
Tandem Group PLC
23 June 2022
Tandem Group plc
(the 'Group' or 'Company')
Annual General Meeting ('AGM') Trading Statement
Tandem Group plc (AIM: TND), designers, developers, distributors
and retailers of sports, leisure and mobility equipment, announces
that at the AGM of the Company to be held today, the Company's
Chairman, Steve Grant, will make the following statement.
Trading
As previously announced on 28 March 2022, trading in the current
year began slowly with revenues for the first 11 weeks of the
current year approximately 43% behind the prior year. Trading in
the 24 weeks to 17 June 2022 has remained challenging and is
approximately 31% behind the prior year period. To 30 April 2022 we
had continued to track 43% behind, however, we have now slowed this
decline and for the last 7 weeks we were approximately 8% ahead
against the comparative period.
Revenue from our Toys, Sports & Leisure business was in line
with the comparative period in the prior year. Licensed brand sales
were ahead of the prior year, however, own brands were behind.
Revenue from our Ben Sayers golf business was broadly in line
with the prior year.
Both national retailer and independent dealer bicycle sales were
disappointing during the period to 17 June 2022, with overall
Bicycle division turnover 55% behind that of the prior period.
During 2020 and 2021 our Bicycles division benefitted from
unprecedented demand that COVID-19 lockdowns created. That demand
has now diminished and we are left with higher stock levels than we
would like against a backdrop of overstocked customers. We will
address this over the remainder of the year with a number of
promotions and special offers.
In eMobility we experienced similarly disappointing results,
with turnover in this segment down 26% compared to the prior year,
but still 90% up on the comparative period in 2020. This is the
area of the business we still believe has the largest upside
potential for the Group, and investment is continuing in this area
in order to best take advantage of the changing landscape of
transport habits in favour of electrically powered modes of
transport.
Our Home & Garden division has also seen a decline, with
online shopping habits changing seen since COVID-19 times, and
discretionary spending power reducing due to the cost of living
crisis. Home & Garden revenue is 56% lower than that of the
comparative period, but we are continuing to invest in this area of
the business because we still see good potential to grow in the
future as we introduce new product ranges.
Outlook
The outlook for the remainder of 2022 remains challenging.
However, we believe we are well placed in categories that consumers
will return to when the current economic and world problems
abate.
We have continued to experience customers cancelling and
delaying orders, which has meant, in conjunction with completion of
back orders, the current order book of GBP10.0 million is well
behind compared to GBP35.4 million this time last year, which is
more in line with levels seen at the same point in 2020 when they
were GBP10.8 million.
The government will soon be introducing legislation to fully
legalise the use of privately owned e-scooters as part of a new
transport bill announced in the Queen's speech. The UK government
continues to invest in alternative transport infrastructure, but
remains behind European counterparts such as Germany, France and
Spain. The change in French legislation on e-scooters resulted in
an increase in e-scooter unit sales by more than 8 fold between
2017 and 2021, and had a total market value of EUR458m in 2021,
compared to the UK which was estimated to be around GBP75m in 2021.
The Group is already well placed to take advantage of the
potentially large forthcoming uptake of e-scooters.
Market data also suggests that the e-bike market is set to grow
significantly in the coming years, as consumers better understand
the benefits of an electrically assisted bicycle. The UK has
already seen a 72% unit growth between 2019 and 2021 to around
160,000 units, but is still well behind Germany where it is around
2 million units. The UK is estimated to be 4 to 5 years behind
mainland Europe, but again, this is an area in which the Group is
well placed to benefit from, already having significant experience
in the sector, coupled with a strong range of products at an
attractive price point.
The Group will soon be opening a new retail shop on site at our
Birmingham facility. We are disappointed at not yet receiving
formal planning permission, despite a pre-planning application
which revealed no significant areas of concern. We envisage the
facility will be open by September.
The store will offer the customer a unique buying experience and
provide a range of electric powered products to customers,
including e- bicycles, e-scooters and e-motorbikes. There are plans
to incorporate a number of well-known market leading bicycle brands
into the store amongst our own brands, to cater for a broad range
of customers.
The business is continuing to invest in our online B2C
offerings, and we have recently appointed a specialist Digital
Marketeer to help us reach more people online. We expect this to
have a positive impact on sales for the second half of the year and
beyond.
We are delighted that our new warehouse in Birmingham adjacent
to our existing site (which we have announced previously), is
progressing well, with completion still looking to be on time and
tracking close to budget. This new facility will mean we can
operate all our businesses from one site, bringing cost savings and
the ability to expand current and new ranges as customer demand
increases again. The business takes its impact on the environment
seriously and therefore, like our existing Birmingham warehouse,
the new building will be solar powered. The Group also continues to
expand on the number of fully electric vehicles in the Group car
range to further reduce its carbon impact.
In conclusion, although there is still much uncertainty in the
market regarding inflation and the cost of living crisis, the Board
remains confident about the future. With new leadership, we are
well placed to ultimately drive growth, particularly in all forms
of e-powered transportation as consumers look for more affordable
means of travel, and believe that we will emerge from this
challenging trading environment in a strong position.
Dividend
We announced on 28 March 2022 that following the successful
results in 2021 it was the Board's view that there was capacity to
again increase the dividend and therefore that it was our intention
to pay a final dividend of 6.57 pence per ordinary share. A
resolution to that effect will be proposed at the AGM today.
Subject to this resolution being passed, the dividend will be paid
on or around 30 June 2022 to shareholders on the register on 13 May
2022 (ex-dividend date 12 May 2022).
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
Enquiries:
Tandem Group plc
Peter Kimberley, Chief Executive
David Rock, Company Secretary
Telephone 0121 748 8075
Nominated Adviser
Cenkos Securities plc
Ben Jeynes / Dan Hodkinson - Corporate Finance
Russell Kerr / Michael Johnson - Sales
Telephone 020 7397 8900
23 June 2022
Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
The Company cautions security holders and prospective security
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
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END
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