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TND - Tandem News Story

390p -34.0  -8.0%

Last Trade - 25/09/20

Sector
Consumer Cyclicals
Size
Micro Cap
Market Cap £19.6m
Enterprise Value £14.3m
Revenue £39.7m
Position in Universe 1379th / 1808

Tandem Group PLC Half Yearly Report

Wed 20th October, 2010 7:00am
TIDMTND


RNS Number : 6551U


Tandem Group PLC


20 October 2010


TANDEM GROUP PLC


("Tandem" or the "Company")


HALF YEARLY REPORT


The Board of Tandem announces its half yearly report for the six months to 31 July 2010.


CHAIRMAN'S STATEMENT


Introduction


I am pleased to present the unaudited financial statements for the 6 months ended 31 July 2010. Although the period has been one of uncertainty, with volatility in raw material prices, freight costs and the US dollar coupled with shipping line
disruptions and far east labour shortages, we have increased revenue and profit before tax compared to the same period last year and strengthened our balance sheet.


Results


Revenue for the 6 month period to 31 July 2010 increased to GBP19,062 000 from GBP18,949,000 in the comparative period last year. Profit before tax improved by 18.5% to GBP648,000 (2009 - GBP547,000). Net assets also increased by 6.0% to GBP7,707,000
(2009 - GBP7,268,000).


Bicycles and accessories


Bicycles and accessories businesses revenue decreased by 7.8% to GBP11 900,000 (2009 - GBP12,912,000) as a result of a reduction in the value of a promotional contract with a national retailer.


Turnover with our independent bicycle retailers increased and, as we previously reported, revenue from our Dawes cycle business in particular showed growth ahead of market performance.


Despite the significant cost pressures, operating profit in our bicycles and accessories businesses increased to GBP424,000 compared to GBP284 000 in the same period last year.


Sports, leisure and toys


There was an increase in revenue of 18.6% in our sports, leisure and toys businesses to GBP7,162,000 against GBP6,037,000 last year.


Our established licensed properties including Ben 10, Thomas and Fireman Sam performed strongly during the period and we have been encouraged by sales from our new licences including Iron Man 2, Moxie Girlz and Star Wars.


Revenue from all of our own brands of Ben Sayers, Hedstrom, Kickmaster and Pot Black was ahead of the comparative period. Sales of Ben Sayers package sets in particular were ahead of expectations.


Operating profit in the sports, leisure and toys businesses for the period was GBP655,000, an increase of 5.5% on GBP621,000 in the same period last year.


Trading update


Group revenue for the 37 week period to 15 October was approximately GBP26.9 million compared to GBP27.3 million in the comparative period last year.


In the bicycles and accessories businesses revenue to 15 October was approximately GBP16.0 million against GBP17.3 million in the prior year. As we have previously reported, turnover from a bicycle promotional contract with a national retailer was GBP1.4
million lower than the comparative period at the half year and we expect this to be GBP2 million lower by the end of the year.


As previously stated, sales in the sports, leisure and toys sector from our Ben 10 license were behind the exceptionally high levels experienced in the same period last year. Furthermore, Thomas sales were also down following the license for the battery
operated train reverting to a new master toy licensee. Despite this, revenue for the 37 week period to 15 October was approximately GBP10.9 million compared to GBP9.9 million last year, with continuing strong performance from our own brands and new
licences.


Outlook


September and October have been challenging months, particularly in the bicycles and accessories businesses, due to cautious consumer spending and delayed purchasing by independent retailers of our junior models for Christmas. As a result we remain
cautious about the Group's outlook for the Christmas trading period.


Bicycle selections with national retailers have increased for Spring/Summer 2011.


We are also pleased to report that stock availability has been brought forward for our 2011 bicycle ranges which should enable improved sales in January to our independent dealers following our annual trade shows.


Reaction to our new 2011 sports, leisure and toys product ranges has been good. I am pleased to report that Spring/Summer 2011 catalogue listings continue to grow and exceed our expectations. In particular, selections of our new licences, Ben & Holly's
Little Kingdom and Tinga Tinga Tales, are very encouraging.


With Chinese New Year being early next year, we expect January 2011 sales to be ahead of last year as goods are shipped before the holiday period.


Summary


Following the detailed strategic review undertaken earlier this year, your Board has started to implement the measures necessary to achieve our objectives of enhancing shareholder value. This involves achieving growth both organically and by the careful
identification of suitable acquisitions. We are investing in human resources, infrastructure and the additional brand and marketing activities necessary to support our sustainable growth objectives in the medium to long term. We will be keeping investors
informed of developments.


Dividend


In line with our announcement on 3 September 2010, we declare an interim dividend of 1p per share to shareholders on the share register as at 27 October 2010 for payment before 26 November 2010.


MPJ Keene


Chairman


20 October 2010


CONDENSED CONSOLIDATED INCOME STATEMENT


For the 6 months ended 31 July 2010




6 months 6 months
ended ended Year ended
31 July 31 July 31 January
Note 2010 2009 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000


Revenue 19,062 18,949 35,678

Cost of sales (14,152) (14,367) (25,998)
--------- ----------- -----------

Gross profit 4,910 4,582 9,680
--------- ----------- -----------


Operating expenses (4,197) (3,967) (8,463)
--------- ----------- -----------

Operating profit 713 615 1,217

Finance costs (65) (68) (194)
--------- ----------- -----------

Profit before taxation 648 547 1,023

Tax (expense)/credit (47) 187 (22)

Net profit for the period 601 734 1,001
========= =========== ===========


Pence
Pence (restated) Pence
Earnings per share
Basic 3 10.89 12.75 17.67
========= =========== ===========


Diluted 3 10.70 12.75 17.67
========= =========== ===========


All figures relate to continuing operations.


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


For the 6 months ended 31 July 2010




6 months
6 months ended Year ended
ended 31 July 200 31 January
31 July 2010 2009 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000

Profit for the period 601 734 1,001

Other comprehensive income:
Foreign exchange differences on
translation of overseas
subsidiaries 57 (330) (250)
Actuarial loss on pension schemes - - (578)
Movement in pension schemes'
deferred tax provision (19) (22) 136
------------- ------------ -----------
Other comprehensive income for the
period 38 (352) (692)

Total comprehensive income
attributable to equity shareholders
of Tandem Group plc 639 382 309
============= ============ ===========


All figures relate to continuing operations.


CONDENSED CONSOLIDATED BALANCE SHEET


As at 31 July 2010




At 31
At 31 July At 31 July January
2010 2009 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000

Non current assets
Goodwill 2,236 2,236 2,236
Property, plant and equipment 372 425 368
Deferred taxation 1,342 1,222 1,365
---------- ---------- --------
3,950 3,883 3,969
---------- ---------- --------

Current assets
Inventories 6,706 6,731 4,991
Trade and other receivables 8,120 6,333 3,956
Cash and cash equivalents 2,785 1,989 3,046
---------- ---------- --------
17,611 15,053 11,993
---------- ---------- --------


Total assets 21,561 18,936 15,962
========== ========== ========

Current liabilities
Trade and other payables (8,950) (6,842) (5,352)
Financial liabilities (3,086) (3,517) (1,856)
Current tax liabilities (436) (423) (301)
---------- ---------- --------
(12,472) (10,782) (7,509)
Non current liabilities
Pension schemes' deficits (1,382) (886) (1,450)
---------- ---------- --------

Total liabilities (13,854) (11,668) (8,959)
---------- ---------- --------


Net assets 7,707 7,268 7,003
========== ========== ========


Equity
Share capital 1,503 1,503 1,503
Shares held in treasury (115) (64) (129)
Other reserves 2,816 2,679 2,759
Profit and loss account 3,503 3,150 2,870
---------- ---------- --------
Total equity 7,707 7,268 7,003
========== ========== ========


CONDENSED Consolidated statement of changes in equity


As at 31 July 2010




Profit
Shares Capital and
Share held in Merger redemption Translation loss
capital treasury reserve reserve reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000

At 1 February
2009 1,503 (64) 1,036 1,427 546 2,410 6,858
Net profit for
the period - - - - - 734 734
Retranslation
of overseas
subsidiaries - - - - (330) - (330)
Share based
payments - - - - - 6 6
------- -------- ------- ---------- ----------- ------- -------
At 31 July
2009 1,503 (64) 1,036 1,427 216 3,150 7,268

Net profit for
the period - - - - - 267 267
Retranslation
of overseas
subsidiaries - - - - 80 - 80
Net actuarial
loss on
pension
schemes - - - - - (442) (442)
Share buyback - (65) - - - (114) (179)
Share based
payments - - - - - 9 9
------- -------- ------- ---------- ----------- ------- -------
At 31 January
2010 1,503 (129) 1,036 1,427 296 2,870 7,003

Net profit for
the period - - - - - 601 601
Retranslation
of overseas
subsidiaries - - - - 57 - 57
Exercise of
share
options - 14 - - - 26 40
Share based
payments - - - - - 6 6
------- -------- ------- ---------- ----------- ------- -------
At 31 July
2010 1,503 (115) 1,036 1,427 353 3,503 7,707
======= ======== ======= ========== =========== ======= =======


CONDENSED CONSOLIDATED CASH FLOW STATEMENT


For the 6 months ended 31 July 2010




6 months 6 months Year ended
ended ended 31 January
31 July 2010 31 July 2009 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Net profit for the period 601 734 1,001
Adjustments:
Depreciation of property, plant and
equipment 49 72 132
Finance costs 65 68 194
Tax expense/(credit) 47 (187) 22
Taxation paid (53) (34) (282)
Share based payments 6 6 15
Fair value adjustments of forward
contracts - 763 437
------------- ------------- -----------
Net cash inflow from operating
activities before movements in
working capital 715 1,422 1,519

(Increase)/decrease in inventories (1,715) 852 2,592
(Increase)/decrease in trade and
other receivables (4,141) (1,198) 1,173
Increase/(decrease) in trade and
other payables 3,644 (1,430) (3,095)
Net cash (utilised)/generated from
operations (1,497) (354) 2,189

Cash flows from investing
activities
Purchases of property, plant and
equipment (53) (12) (16)
Net cash used in investing
activities (53) (12) (16)
============= ============= ===========

Cash flows from financing
activities
Increase/(decrease) in invoice
financing 1,230 602 (733)
Interest paid (38) (42) (89)
Exercise of share options 40 - -
Payment to acquire own shares - - (179)
Net cash from/(used in) financing
activities 1,232 560 (1,001)
============= ============= ===========


Net (decrease)/increase in cash and
cash equivalents (318) 194 1,172
Cash and cash equivalents at
beginning of period 3,046 2,121 2,121
Effect of foreign exchange rate
changes 57 (326) (247)
------------- ------------- -----------
Cash and cash equivalents at end of
period 2,785 1,989 3,046
============= ============= ===========

NOTES TO THE HALF YEARLY REPORT


1 General information


Tandem Group plc is a public limited company incorporated and domiciled in the United Kingdom with its shares listed on AIM of the London Stock Exchange.


The principal activity of the Group is the design, development and distribution of sports and leisure equipment.


The ultimate parent company of the Group is Tandem Group plc whose principal place of business and registered office address is 35 Tameside Drive, Castle Bromwich, Birmingham, B35 7AG.


The interim financial statements for the period ended 31 July 2010 (including the comparatives for the periods ended 31 July 2009 and 31 January 2010) were approved by the Board of Directors on 20 October 2010. Under the Security Regulations Act of the
European Union ("EU"), amendments to the financial statements are not permitted after they have been approved.


The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 January 2010, prepared under
International Financial Reporting Standards ("IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Sections 498(2) and 498(3) of the Companies Act
2006.


This interim financial information has been prepared using the accounting policies set out in the Group's 2010 statutory accounts. Copies of the annual statutory accounts and the interim report may be obtained by writing to Tandem Group plc, 35 Tameside
Drive, Castle Bromwich, Birmingham, B35 7AG and can be found on the Company's website at www.tandemgroup.co.uk.


The net retirement benefit obligation recognised at 31 July 2010 is based on the actuarial valuation under IAS19 at 31 January 2010 updated for movements in net defined benefit pension income and contributions paid during the half year period. The
deferred tax effect of movements in the net retirement benefit obligation has also been recognised in the half year. A full valuation for IAS19 financial reporting purposes will be carried out for incorporation in the audited financial statements for the
year ending 31 January 2011.


2 segmental reporting


For management purposes the Group is organised into two operating segments. The revenues and net results for these segments are shown below:




Bicycles and Sports, leisure and
accessories toys Total
GBP'000 GBP'000 GBP'000
6 months to 31 July
2010

Revenue 11,900 7,162 19,062
--------------------- ---------------------- -------

Segment result 424 655 1,079
--------------------- ----------------------
Unallocated corporate
expenses (366)
-------
Operating profit 713
Finance costs (65)
-------
Result for the period
before taxation 648
Tax expense (47)
Net profit for the
period 601
=======

6 months to 31 July
2009

Revenue 12,912 6,037 18,949
--------------------- ---------------------- -------

Segment result 284 621 905
--------------------- ----------------------
Unallocated corporate
expenses (290)
-------
Operating profit 615
Finance costs (68)
-------
Result for the period
before taxation 547
Tax credit 187
Net profit for the
period 734
=======

Year ended 31 January
2010

Revenue 21,951 13,727 35,678
--------------------- ---------------------- -------

Segment result before
management charges 689 1,201 1,890
Management charges (564) (104) (668)
--------------------- ---------------------- -------
Segment result after
management charges 1,222
Unallocated corporate
expenses (5)
-------
Operating profit 1,217
Finance costs (194)
-------
Profit before taxation 1,023
Tax expense (22)
Net profit for the
year 1,001
=======

3 earnings per share


The calculation of earnings per share is based on the net result and ordinary shares in issue during the period as follows:




6 months
6 months ended Year ended
ended 31 July 2009 31 January
31 July 2010 Restated 2010
GBP'000 GBP'000 GBP'000

Net profit for the period 601 734 1,001
============= ============= ===========

Weighted average shares in issue
used for basic earnings per share 5,520,563 5,757,480 5,665,222
Weighted average dilutive shares
under option 96,632 - -
Average number of shares used for
diluted earnings per share 5,617,195 5,757,480 5,665,222
============= ============= ===========


Pence Pence Pence
Basic earnings per share 10.89 12.75 17.67
============= ============= ===========

Diluted earnings per share 10.70 12.75 17.67
============= ============= ===========

Enquiries:


Tandem Group plc


Steve Grant, Chief Executive


Jim Shears, Group Finance Director and Company Secretary


Telephone 0121 748 8075


Nominated Adviser


Cairn Financial Advisers LLP


Tony Rawlinson


Telephone 020 7148 7901


This information is provided by RNS


The company news service from the London Stock Exchange


END


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