TIDMTND
RNS Number : 4900O
Tandem Group PLC
01 February 2023
Tandem Group plc
(the "Company" or "Group")
TRADING UPDATE AND NOTICE OF RESULTS
Tandem Group plc (AIM: TND), designers, developers, distributors
and retailers of sports, leisure and mobility equipment, provides
the following trading update and announces that its annual results
for the year ended 31 December 2022 ("FY22") will be announced on
27 March 2023.
Trading and operations update
Whilst 2022 has been challenging from a trading perspective we
have taken the following significant steps to improve the outlook
for the Group:
-- Careful management of stock levels
-- New warehouse nearing completion
-- New eMobility Showroom open and trading ahead of schedule
-- Consolidated and relaunched websites
-- New product innovation
-- Significant number of new customer accounts
-- Focused on improving customer feedback ratings
-- Improved social media presence
-- Closed Northampton warehouse
-- Commenced vacation of Felixstowe storage facility
-- Investment to minimise carbon footprint
As we reported in our interim results on 15 September 2022,
revenue in the first half of the year was approximately 33% behind
the equivalent period in the previous year.
A comparatively stronger fourth quarter performance resulted in
unaudited Group revenue for the full year of GBP26.7m, a reduction
of 35% on the prior year, but in line with market expectations.
The Directors expect profit before tax for FY22 to be in line
with market expectations.
The Directors have carefully managed and effectively controlled
stock levels throughout the year, resulting in closing levels
approximately 40% lower than at the prior year.
Toy, Sports & Leisure
The Toys, Sports and Leisure business comprises character
licenced products which are mainly wheeled toys (excluding
character bikes) and own brand sports and leisure products, sold to
both independent and national retailers. Revenue from this division
reduced by approximately 11% against the prior year, but we were
encouraged with the trend of sales in December which were 26% ahead
of the comparative period. Our new licences also made good
contributions to turnover.
Although Golf sales within Toy, Sports & Leisure were 30%
behind the prior year, they achieved a level which was more than
double the sales seen prior to COVID-19, in 2019.
Bicycles
Revenue from the bicycle business includes both child and adult
bicycles, along with licensed character bikes, but excludes any
electric powered bicycles.
This division benefitted from unprecedented high demand during
COVID-19 lockdowns, therefore against the prior year, revenue was
down by approximately 52%, with sales continuing to be challenging
in both independent and national retailer markets. As in Toy,
Sports & Leisure, we were encouraged by the sales trend at the
end of the year, with December sales higher than in any other month
in FY22.
We were very pleased that Tandem Group Cycles was shortlisted
within the cycling industry's highly acclaimed 2022 Bike Biz Awards
for 'Bike Distributor of the Year'.
Also, during October, our Squish bikes were shortlisted twice
and received a Bronze award within the Best Balance Bike category
in the 'Made for Mum 2022 Awards'.
Home & Garden
Our Home & Garden segment revenue was approximately 55%
behind the prior period, due to the exceptional success seen during
COVID-19 as with bicycles, as reductions in discretionary consumer
spending continue to impact. This was further impacted by
reductions in third party marketplace website sales overall,
however, we have recently opened up 2 new national marketplace
seller accounts.
The Group continues to invest in this area, as demonstrated by
the launch of a new Jack Stonehouse website
(www.jackstonehouse.com) in December, ahead of our expected launch
date of January 2023. This migrated our garden and leisure products
from our 'Pro Rider Leisure' and 'Garden Comforts' websites,
providing future category authority and operational
efficiencies.
eMobility
Continued challenges in this division continued throughout the
year, with turnover down by 46%. We remain confident that this
division represents the largest potential. Like for like sales of
eBikes in November and December were 92% ahead of the equivalent
period in the prior year, and likewise for eScooters in the run up
to Christmas in November and December, sales were 25% ahead of
those in November and December 2021.
Government legislation specifically for e-scooters continues to
experience delay which is holding back the opportunity within
e-scooters, but there has been a continued focus around encouraging
consumers to adopt electrified means of transport including
e-mopeds and e-bikes which, as highlighted above, we are seeing
encouraging growth in.
We were pleased to complete our new on-site retail showroom
ahead of schedule, which was opened by West Midlands Mayor, Andy
Street and Cycling and Walking Commissioner for West Midlands, Adam
Tranter.
Outlook
As we expected, 2023 has begun slowly for the Group with a
slowdown in our Free-on-Board (FOB) sales as a result of an early
Chinese New Year, and as consumers remain cautious with their
purchasing. However, we expect to see a different trading pattern
this year, and will be targeting between 8% and 12% like for like
growth on the full year.
The Group have continued to target new accounts and have
successfully secured a significant number during the period, over
80 independent new accounts were opened in the second half of FY22,
and several large national retailer accounts. We are also in
negotiation with a number of brands in relation to distributor
agreements.
Throughout FY23, a key focus for the Group will be continuing to
expand our network of accounts.
We had a very positive response from our customers at the recent
U.K Toy Fair, in particular to our latest new license Gabby's
Dollhouse which will supplement our successful portfolio of
evergreen licenses. In 2023 there are several high-profile movie
launches based on our existing license agreements such as Barbie,
Spider-Man, Paw Patrol, Trolls, Transformers and Baby Shark, all of
which will provide additional sales opportunities. Our new and
extended ranges centred around our own brands (Squish, Stunted,
Hedstrom, Kickmaster Li-Fe and Wired) have also been well
received.
As we invest in the eMobility division, we have developed some
exciting new models of e-bikes, with new designs being launched
later in the year. New finance payment options and two of the
leading tax-free cycle to work scheme providers were introduced to
the Electric Life website (www.electriclife.co.uk) in September
making it easier for our customers to utilise the programme and
therefore contribute to incremental revenue.
Our newly launched Jack Stonehouse website will gain some
tangible efficiencies in FY23; in the first 4 weeks of going live,
compared to the comparative 4 weeks a year earlier, there were 75%
more new users, 56% more sessions and an uplift of 25% in revenue.
It is expected that these gains will continue throughout FY23. We
have recently launched a new range of heating products for Winter,
and have new, innovative cooling and garden products coming in the
Summer, along with new home décor products.
Across the second half of FY22, our social media community has
seen significant growth with both followers and engagement levels
increasing across our core accounts when compared to the same
period in FY21. Our Tandem Group plc LinkedIn account increased its
number of followers by 340%; the Squish following on Instagram is
up 12% and Jack Stonehouse follower numbers on Facebook are up 10%.
We will continue to drive the success of our digital and social
media presence across all platforms to engage more with our
customers and consumers.
To underpin these initiatives we will invest more in marketing
and customer acquisitions than in previous years.
The completion of our new warehouse in Birmingham will take
place within the next few weeks, and we are pleased to report that
our leased premises in Northampton have now been fully vacated.
Work has begun to exit the Felixstowe storage facility and is
expected to complete by the end of February 2023. This will reduce
our overhead spend, provide further opportunities for growth and
increased operational efficiencies.
We maintain our commitment to minimising our carbon footprint
and have continued to invest in this area. The new warehouse
facility is benefitting from low energy lighting and clean solar
energy to complement our current solar installation and offset
increasing energy costs. We have further invested in additional
vehicle charging points.
Notice of results
The Group expects to publish its FY22 results on 27 March
2023.
A final results presentation will be available on the website
after the results are published at
www.tandemgroupplc.co.uk/investor-presentations. Investors with
questions are asked to email the Company at
investorrelations@tandemgroupplc.co.uk.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
take responsibility for this announcement.
Enquiries:
Tandem Group plc
Peter Kimberley, CEO
David Rock, Company Secretary
Telephone 0121 748 8075
Nominated Adviser
Cenkos Securities plc (Nominated Adviser and Broker)
Ben Jeynes / Dan Hodkinson - Corporate Finance
Michael Johnson / Russell Kerr - Sales
Telephone 020 7397 8900
Forward Looking Statements
This announcement contains forward-looking statements relating
to expected or anticipated future events and anticipated results
that are forward-looking in nature and, as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, competition for qualified staff, the
regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political
jurisdiction, uncertainties regarding the results of exploration,
uncertainties regarding the timing and granting of prospecting
rights, uncertainties regarding the Company's or any third party's
ability to execute and implement future plans, and the occurrence
of unexpected events. Actual results achieved may vary from the
information provided herein as a result of numerous known and
unknown risks and uncertainties and other factors.
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END
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