REG - Tandem Grp PLC - Trading Update

TandemAnnouncement

13/12/2023 07:15

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RNS Number : 5612W  Tandem Group PLC  13 December 2023

13 December 2023

 

Tandem Group plc

(the "Company" or "Group")

 

Trading Update

 

Tandem Group plc, designers, developers and distributors of sports, leisure
and mobility products, announces that the Company's revenues for the year
ended 31 December 2023 are expected to be between £22m and £23m. The
delivery of the higher end of this range is subject to expected
freight-on-board ("FOB") orders being shipped in December.

As a result, the Company's losses before tax for the year ended 31 December
2023 are expected to be between £0.9m to £1.3m, with this range again
dependent on expected FOB orders being shipped in December, below current
market expectations.

The economic environment in the consumer sector continues to pose significant
challenges, reflecting the broader issues faced by many UK businesses and in
the closing months of the year, the domestic sales market has proven to be
more challenging than had previously been anticipated, with the impact of
suppressed consumer spending further complicating the landscape.

As reported within the Company's Interim Results, declining trends in our Toy
sales and FOB sales have persisted for the remainder of the year,
significantly affecting overall profit levels. This decline in FOB sales is a
result of retailers adopting a more cautious approach, maintaining lower
stockholding levels amid restrained consumer spending, which aligns with
widespread reports of retailers experiencing tough trading in the run-up to
Christmas, as many businesses try to navigate the challenging market
conditions amid the cost-of-living crisis.

Bicycle sales, including electric bikes, remain significantly ahead of the
prior year. The launch of our new range of electric bikes has helped sales
more than double against the prior year in this area and reflects our
commitment to innovation and meeting evolving consumer preferences. Sales of
our lightweight children's Squish bikes also continue to outperform the prior
year. These results are despite a widely reported major downturn throughout
the bicycle market in the UK throughout this year, mirroring the broader
economic challenges and post COVID effects.

Our Home and Garden division has continued to face notable challenges
throughout 2023, largely attributed to the adverse weather conditions that
starkly contrasted with the more favourable climate experienced in 2022. The
unpredictable and unfavourable weather conditions have presented unique
challenges, affecting various aspects of our Home and Garden division's
activities. Despite this, we remain dedicated to continued product development
and innovation to fortify the division's resilience in the face of
unpredictable climatic conditions.

Looking ahead, our confidence in the Group's resilience and growth is
bolstered by several factors, most notably the recent securing of three new
national retailer accounts. These partnerships mark a significant achievement
for us and contribute to our optimistic outlook for the upcoming year. We are
actively pursuing operational efficiencies to enhance overall business
performance, with a specific focus on optimising the utilisation of warehouse
space to maximise returns.

While the Board is disappointed by the recent adverse change in current
trading and the outlook for the remainder of FY2023, the Group retains a
strong balance sheet, a well-managed current stock position, and we expect to
see a positive impact on pension fund valuations as at 31 December 2023.

We believe that the Group's strategic focus on continued investment in its
people and capabilities, coupled with targeted operating cost reductions,
focus on new customer accounts and innovation, positions the Group well for
success as markets improve. These measures affirm our commitment to long-term
sustainability and growth.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (as amended), which forms part of domestic UK law
pursuant to the European Union (Withdrawal) Act 2018. Upon publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

- Ends -

 

Enquiries:

Tandem Group plc

Peter Kimberley, CEO

David Rock, Company Secretary

Telephone 0121 748 8075

 

Nominated Adviser

Cavendish Capital Markets Limited (Nominated Adviser and Broker)

Ben Jeynes / Dan Hodkinson - Corporate Finance

Michael Johnson / Charlie Combe - Sales and Equity Capital Markets

Telephone 0207 220 0500

 

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