REG - Tandem Grp PLC - AGM Statement

TandemAnnouncement

29/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230629:nRSc2843Ea&default-theme=true

RNS Number : 2843E  Tandem Group PLC  29 June 2023

Tandem Group plc

(the 'Group' or 'Company')

AGM Trading Statement

 

Tandem Group plc (AIM: TND), designers, developers, distributors and retailers
of sports, leisure and mobility equipment, announces that at the Annual
General Meeting of the Company to be held today, the Company's Chairman, Steve
Grant, will make the following statement, with the Board maintaining its
expectations that the Group will achieve market expectations of performance
for the full year and particularly encouraging strong growth in the Group's
emobility division.

 

Trading

As previously announced in our Final Results Outlook Statement, trading
commenced slowly at the beginning of the year, presenting challenges that
persisted throughout the subsequent months. The cautious buying behaviour
observed among national retailers, coupled with a delayed Chinese New Year,
contributed to the initial difficulties. These circumstances were not
unforeseen, as we had previously communicated our expectations. Trading
conditions to 23 June 2023 have remained persistently challenging, however, we
were pleased with performance in the second quarter particularly in bicycles
and eMobility. The prevailing economic landscape, exacerbated by high interest
rates and the impact of the ongoing cost of living crisis on the retail
sector, has further compounded the obstacles we face.

 

We have also experienced a shift in the buying habits of national retailers
who are transitioning from Free On Board (FOB) purchases to Direct Delivery
(DD). This change naturally alters the pattern of our sales, aligning them
more closely with the end customer's buying behaviour and therefore the timing
difference in sales is to be expected to be weighted in favour of later in the
year compared to prior periods.

 

Overall, our sales have experienced a 26% decrease compared to the prior year.
Notably, our Toys, Sports, and Leisure division has been particularly
affected, with a 46% decline. However, it is important to highlight that along
with the move away from FOB, part of this decline can be attributed to
customer overstocks from the previous year that have yet to be cleared, due to
the impact of the cost of living crisis and adverse weather conditions
experienced thus far in the current year. We therefore remain cautiously
optimistic as the year progresses, anticipating a recovery in this segment.

 

In our Bicycles division, although sales are behind last year overall by 20%,
results in Q2 are significantly ahead of the equivalent period in the prior
year as we continue to release new products.

 

Sales in our emobility sector have experienced a significant growth of 51%
compared to the prior year. Sales of electric bikes in particular have
experienced remarkable success in the first part of 2023. In comparison to the
prior year, electric bike sales have more than tripled, reflecting a strong
consumer demand and growing interest in electric-powered transportation
options. This upward trend in electric bike sales highlights the effectiveness
of our strategy in capturing market opportunities.

 

The sale of electric bikes was positively impacted by the growth in new
Independent Bike Dealers and national retailer accounts and our Electric Life
shop, an innovative retail concept which, coupled with the Electric Life
website, has played an important role in driving awareness, accessibility, and
enthusiasm for electric bikes among consumers.

 

We continue to support legislation that will determine the legality and
regulations surrounding electric scooters, and are both well positioned and
poised to seize opportunities as soon as clarity emerges.

 

The Home and Garden division has experienced an overall decline in turnover of
approximately 30% compared to the same period in the prior year. This decline
is in line with the challenges faced from poor weather conditions in Q1 and
the prevailing cost of living crisis continuing to impact non-essential
spending.

 

We were pleased that the decline slowed significantly in Q2 compared to Q1,
therefore despite the difficulties we have outlined, we remain optimistic
about the potential within the Home and Garden sector.

 

In a strategic move to enhance our sales and marketing efforts, we have
expanded our Jack Stonehouse website as a platform to promote products from
other areas of our business. This approach allows us to cross-promote and
showcase the diverse range of offerings available across different divisions.
By leveraging this untapped potential, we aim to maximise visibility, capture
new customers, and drive overall sales growth.

 

Outlook

Looking ahead, we anticipate that the remainder of 2023 will continue to
present challenges for the industry and for the Group. The current market
conditions show no signs of abatement, and we anticipate further obstacles as
increasing interest rates place additional pressure on the disposable income
of households. Despite this, the positive trend we are seeing in sales now is
expected to continue throughout the rest of the year.

 

We are optimistic about the recently released and upcoming movie releases
applicable to our licences in 2023 and the positive impact they will have on
our popular brands such as Barbie, Paw Patrol, and Spider-Man. These beloved
franchises have captivated audiences for years, and with new cinematic
adventures on the horizon, we anticipate an increase in demand for branded
goods associated with these blockbuster movies.

 

Our strategic focus on driving new national and independent accounts has
yielded positive results. These new partnerships hold great potential as
customers work through their previous overstocks with their old suppliers.
These new accounts will continue to contribute to our sales as we build strong
relationships and establish ourselves as a reliable supplier in the market.

 

The changing landscape of the bike industry, has given us further opportunity
to gain market share alongside the launch of new and exciting products.

 

We have invested considerable time and expertise into developing designs that
embody the quality, craftsmanship, and reliability that our Dawes and Claud
Butler brands are renowned for. The significant pre-orders of our highly
anticipated new electric bike models are very encouraging. We continue to make
strong progress with our strategy of growing the eMobility sector.

 

Furthermore, we have made significant progress in building our Group and brand
awareness. Our proactive approach includes publishing articles in appropriate
media outlets, providing us with increased exposure across the industries in
which we operate. This heightened visibility has been further enhanced by the
recognition we have received through several prestigious awards. These
accolades not only validate our commitment to excellence but also serve as a
powerful tool to attract new customers and enhance brand authority.

 

In Home and Garden, we expect sales to perform relatively in line with 2022 by
the year-end. We have recently launched new ranges of products, capitalising
on market trends and consumer preferences. These new offerings, coupled with
improved weather conditions, are anticipated to bolster sales in the Home and
Garden division.

 

Despite all of the current challenges, the Board remain confident in the
Group's ability to continue building and gaining market share. We remain
committed to evolving our strategies, nurturing customer relationships, and
leveraging our growing brand presence to drive further growth and success in
the market, and we therefore maintain our view of achieving market
expectations of our performance for the full year.

 

Dividend

We announced on 27 March 2023 that following the results in 2022 it was the
Board's view 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 6 July 2023 to shareholders on the register on 12 May 2023
(ex-dividend date 11 May 2023).

 

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

 

29 June 2023

 

 

 

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGMDZGZVKRNGFZM