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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 Grp PLC Final Results

Wed 28th April, 2010 7:00am
TIDMTND

RNS Number : 9117K
Tandem Group PLC
28 April 2010

?
TANDEM GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2010



Chairman's statement
______________________________________________________________


I am pleased to present our results for the year ended 31 January 2010.

When we started the financial year in February 2009, trading conditions were
difficult in an uncertain economic climate. Retailers were unsure of demand and
consequently were de-stocking some product lines and buying others cautiously.
The trend towards direct deliveries ("FOB" sales) to our customers arranged by
our Hong Kong office, which exclude distribution costs, continued. This has the
effect of reducing revenue for the same quantities sold. Despite these factors,
we continued to follow our strategy of maintaining profitability, to reduce
borrowings and to strengthen the balance sheet. I am therefore pleased to
report that revenue for the year ended 31 January 2010 increased 1.5% to
GBP35,678,000 from GBP35,161,000 in the prior year. There was a profit before
goodwill impairment and taxation of GBP1,023,000 compared to GBP1,018,000 last
year. Profit after goodwill impairment and before taxation was GBP1,023,000
(2009 - GBP593,000).

Basic earnings per share was 17.67p per share compared with 5.34p last year,
after adjusting for the share capital reorganisation that took place in
September 2009.

The balance sheet continues to strengthen with cash less invoice finance
liability as at 31 January 2010 being GBP1,190,000, an improvement of
GBP1,658,000 over the previous year.

We do not propose to pay a dividend but will keep the position under review.

Further details of the operational activities can be found in the Business
review below.

Share capital reorganisation
The share capital reorganisation was approved by shareholders at a General
Meeting held on 24 September 2009. Before the reorganisation the Company had
approximately 17,500 shareholders, a large proportion owning a small number of
shares that would be uneconomic to sell. As part of the reorganisation small
shareholders were able to receive cash for their shares without incurring
dealing costs. The Company was also able to purchase 263,080 of its own shares
and hold them in treasury, taking the total shares held in treasury to 519,080.
Following the reorganisation we had fewer than 5,000 shareholders. We estimate
this will save nearly GBP50,000 per annum in administration costs.

We will be sending out a letter in May to small shareholders giving them the
chance to sell their shares without dealing costs.

Pensions
The Group operates two pension schemes that have defined benefit liabilities.
Both of these schemes have no active members and are closed to new members.
Despite this, these schemes continue to utilise cash resources and management
time as government legislation and actuarial views change. During the year
GBP191,000 was paid into the schemes to reduce the deficits in the funding and
over GBP76,000 was paid out in government levies and administration costs.
Despite a rise in the value of investments, changes in the Actuary's mortality
assumptions and discount rates have increased the net deficit in the schemes
from GBP964,000 as at 31 January 2009 to GBP1,450,000 as at 31 January 2010.

Employees
We wish to thank all management and employees for their contribution in
increasing the Group's profitability in difficult times. The established team
of management and staff have the skills required to take the business forward.

In the last few months we have appointed two non-executive directors. Simon
Morris brings a wealth of City experience in the mid-cap corporate market and
will no doubt be a valuable contributor. Andy Bestwick is another excellent
addition to the Board, bringing us experience in areas of product development,
sourcing and sales which are very much allied to those of Tandem.

I will not be standing for re-election at the AGM to be held on 21 June 2010.
Immediately following the AGM, Mervyn Keene will be appointed Non-Executive
Chairman of the Company. Mervyn has managed the Group for a number of years and
has been responsible for leading the team that has delivered consistent
profitability over the last four years, with profit before tax and goodwill
impairment of over a million pounds in each of the last three years. In
addition, the balance sheet has strengthened considerably with the profit
eliminating bank borrowings at 31 January 2010. At the same time Steve Grant,
our Commercial Director, will be appointed Group Chief Executive and Jim Shears,
currently Group Financial Controller and Company Secretary, will be appointed
Group Finance Director. I am confident that these changes will continue to take
the business forward and enable future growth and development.

EU Customs issues
A number of European bicycle companies have received notification from the EU
Customs authorities that Generalised System of Preferences (GSP) forms issued by
the Cambodian government between 2007 and 2009 were invalid. The impact of this
is that it is alleged duty should have been paid at the full rate rather than
the zero rate charged at the time of the importation. We understand that those
companies affected are appealing against the notification. Although we have
purchased a significant number of bicycles from Cambodia we have not received
any notice to this effect. If we receive such notice, it is the Board's
intention to vigorously defend and appeal against it as we believe there is no
liability and strongly consider that we have acted properly and in good faith at
all times.

We have, however, received notification from HM Revenue & Customs affirming
their intention to seek confirmation from the authorities in Indonesia and
Bangladesh that bicycles purchased from these countries and admitted to the
United Kingdom at a preferential rate of Customs duty were manufactured there in
accordance with the rules of origin. Once again we consider that we have acted
in good faith in respect of these imports, in all cases having received
preference certificates which have been issued by the proper authority in each
exporting country. Over the last three years we have benefited from a reduction
in duty of approximately GBP3 million through GSP forms issued by foreign
governments.

Outlook
The Group has traded well during a very difficult economic period. We have been
and continue to be faced with very significant cost pressures in respect of US
dollar volatility, increases in freight and raw material prices, shipping line
disruptions and Far East labour shortages. Sales for the 12 weeks to 23 April
2010 were 24% up on the previous year. We believe this growth is unlikely to
continue into the second quarter as we received a large order for bicycles from
a national retailer in the comparative period last year. We have secured
business from the same retailer this year but at lower volumes.

Revenue for the year to 31 January 2011 is currently expected to be slightly
down on the previous year principally due to the reduction in national retailer
sales on bicycles and competition from new licences on sports, leisure and toys.
Gross margin and profitability will also be under pressure as a result of the
issues referred to above.

In spite of very competitive market conditions, we have over the last four years
managed to maintain profitability and to strengthen our balance sheet. Current
markets are particularly challenging but the Group is now in a position to
actively explore opportunities for growth in our bicycles and accessories and
sports, leisure and toys businesses, both organically and by acquisition.

In the year to 31 January 2010 the sports, leisure and toys business was
significantly more profitable than bicycles. However, although this sector can
grow profits rapidly, the nature of character licences make it far more
volatile. By contrast, the bicycle business, with our well established brands,
provides a platform for steady progression. We believe that the development of
both businesses enhances the ability of the Group to achieve growth in the long
term.

Further details about current trading and prospects are contained in the
Business review below.


Graham Waldron
Chairman
28 April 2010





For further information contact:

Tandem Group plc
Mervyn Keene
Jim Shears
Telephone 0121 748 8075

Nominated Adviser
Cairn Financial Advisers
Tony Rawlinson
Telephone 020 7148 7901


Business review
______________________________________________________________


Operations
In the second half of the year revenue was 2.4% down on the same
period in the previous year. The gross margin percentage was in line with the
comparative period last year. With overheads in the second half down 3.3%
operating profit before goodwill impairment was 3.6% higher.

Revenue for the year ended 31 January 2010 increased 1.5% to GBP35,678,000 from
GBP35,161,000 last year. Gross margin percentage reduced due to a change in the
mix between direct bulk deliveries and sales from our UK warehouses. Rising
costs in Asia and the volatile US dollar also had a negative impact on gross
margin. To counter this, operating expenses were 14% down on the previous year.
There were reductions across most overhead categories, most notably
establishment costs, with the closure of a warehouse facility. However, the
Board recognised the need to continue to promote brand awareness and accordingly
advertising and marketing expenditure increased over the previous year.

This has resulted in a profit before goodwill impairment and taxation of
GBP1,023,000 compared to GBP1,018,000 last year. Profit after goodwill
impairment and before taxation was GBP1,023,000 (2009 - GBP593,000).

Bicycles and accessories
Revenue in our bicycles and accessories businesses of
GBP21,951,000 was 11.1% ahead of last year (2009 - GBP19,763,000). The
operating profit before management charges and goodwill impairment was
GBP689,000 (2009 - GBP1,148,000).

Improved sales to national retailers increased revenue. A proportion of this
business was shipped direct to our customers from our overseas production
sources and as such had lower margins with no distribution costs and minimal UK
overhead. Although our unit selling prices increased it was not possible to
recover the full impact of rising costs in Asia and the volatile US dollar and
as a consequence margins in the bicycle businesses were lower.

Unit sales to independent bicycle retailers were down on last year but with
customers moving to models with higher price points, average selling price and
therefore revenue in this sector was up. The Claud Butler and Dawes brands
increased revenue. Sales of traditional bikes with mudguards, padded leather
look seats, stands and baskets for ladies were considerably up on last year.

We continue to invest in marketing to support the brands by attending bicycle
events, trade fairs and supporting customers with promotional literature, point
of sale materials and equipment. Hits on our websites have increased as our
brands develop further. This is a positive sign in a highly competitive market.

The stock of bicycles as at 31 January 2010 was over 33% down on the previous
year. This was primarily due to the shipping of the 2009 range ahead of the two
week closure for Chinese New Year which fell on 26 January 2009. As these goods
were in transit prior to the year end they were classified as stock. In 2010
Chinese New Year was later, on 14 February 2010, enabling shipment of the new
2010 range after 31 January 2010.

Bicycles revenue for the 12 weeks to 23 April 2010 was 13% up on the previous
year. We expect revenue to be behind last year in the second quarter due to a
reduction in sales to national retailers mentioned in the Chairman's statement.
However, increasing levels of demand from independent retailers combined with
good weather during the summer should help to mitigate this shortfall.

Sports, leisure and toys
Revenue from our sports, leisure and toys
business of GBP13,727,000 was 10.9% down on last year (2009 - GBP15,398,000).
Operating profit before management charges increased to GBP1,201,000 (2009 -
GBP808,000).

The demise of Woolworths, one of our largest customers, in late 2008 and the
continued trend towards direct deliveries arranged by our Hong Kong office,
which exclude distribution costs, reduced total revenue. Sales of Barbie and In
the Night Garden were down on the same period last year whilst Thomas and
Friends revenue was up significantly. However, the big success of the year were
the Ben 10 wheeled products which won the award for Best Licensed Toy or Games
Range at the industry's Licensing Award ceremony in September 2009. Sales of
this range considerably exceeded expectations.

Our continued product development and innovative design enabled us to sustain
our position as market leader for licensed wheeled toys. Although this helped
to maintain margins in the sports, leisure and toys business, the main
improvement to profitability was as a result of overhead savings. The increase
towards FOB sales facilitated the closure of a warehouse and further reduced
expenses in the UK.

Whilst our Ben Sayers golf business suffered from recessionary pressures and
poor weather, we benefited from a complete period of the integration within the
MV business reducing overheads further. A focus on new product development and
strong product reviews has led to increased revenues for the 12 weeks to 23
April 2010.

Some large national retailers are developing their own brands rather than using
well known licensed brands. They can design and source these products
themselves or buy them from experienced companies such as us. It is a credit to
our product development and sourcing teams that we are able to secure these
sales ahead of the competition, albeit at lower margins.

The success of our sports, leisure and toys business depends on securing
licences that perform well, designing and developing product and sourcing at
competitive prices. We have experienced staff both in the UK and Hong Kong that
achieves success at these tasks.

We have taken on a number of new licences for 2010. These new licences,
particularly in wheeled toys, include Moxie Girlz, Iron Man 2, Star Wars and
Doctor Who. Due to the nature of the business we are already creating products
for the 2011 ranges and have successfully secured licences for Ben & Holly's
Little Kingdom, Tinga Tinga Tales and Angelina Ballerina.

Sports, leisure and toys revenue for the 12 weeks to 23 April 2010 was 43% up on
the previous year. Whilst this is a promising start to the year, we anticipate
that revenue may fall behind last year in the second half due to the high levels
of sales for Ben 10 in the same period of last year and competition from new
licences. However, we are encouraged by the potential that our new licences are
showing.


Consolidated income statement
______________________________________________________________

+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | Year ended 31 January | Year ended 31 January |
| | | | 2010 | 2009 |
+-----------+--------+--------+ + +
| | Note | | | |
+-----------+--------+--------+--------------------------------------+--------------------------------------+
| | | | Before | Goodwill | | Before | Goodwill | |
| | | | goodwill | impairment | | goodwill | impairment | |
| | | | impairment | | After | impairment | | After |
| | | | | | goodwill | | | goodwill |
| | | | | | impairment | | | impairment |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Revenue | 3 | | 35,678 | - | 35,678 | 35,161 | - | 35,161 |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Cost | | | (25,998) | - | (25,998) | (24,193) | - | (24,193) |
| of | | | | | | | | |
| sales | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Gross | | | 9,680 | - | 9,680 | 10,968 | - | 10,968 |
| profit | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Operating | | | (8,463) | | (8,463) | (9,842) | (425) | (10,267) |
| expenses | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Operating | | | 1,217 | | 1,217 | 1,126 | (425) | 701 |
| profit | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Finance | | | (194) | - | (194) | (173) | - | (173) |
| costs | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Finance | | | - | - | - | 65 | - | 65 |
| income | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Profit | | | 1,023 | - | 1,023 | 1,018 | (425) | 593 |
| before | | | | | | | | |
| taxation | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Tax | | | (22) | - | (22) | (278) | - | (278) |
| expense | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Net | | | 1,001 | - | 1,001 | 740 | (425) | 315 |
| profit | | | | | | | | |
| for | | | | | | | | |
| the | | | | | | | | |
| year | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Earnings | | | | | Pence | | | Restated |
| per | 4 | | | | | | | Pence |
| share | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Basic | | 17.67 | | | 5.34 |
+------------------------------------------+------------+------------+------------+------------+------------+
| | | | | | | | | |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+
| Diluted | | | | | 17.67 | | | 5.31 |
+-----------+--------+--------+------------+------------+------------+------------+------------+------------+


Consolidated statement of
comprehensive income
______________________________________________________________
+--------------------------------------------+---+---------+----------+----------+
| | | Year | | |
| | | ended | | Year |
| | | 31 | | ended |
| | | January | | 31 |
| | | 2010 | | January |
| | | | | 2009 |
+--------------------------------------------+---+---------+----------+----------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+---+---------+----------+----------+
| | | | | |
+--------------------------------------------+---+---------+----------+----------+
| Profit for the year | | 1,001 | | 315 |
+--------------------------------------------+---+---------+----------+----------+
| | | | | |
+--------------------------------------------+---+---------+----------+----------+
| Other comprehensive income: | | | | |
+--------------------------------------------+---+---------+----------+----------+
| Foreign exchange differences on | | (250) | | 583 |
| translation of overseas assets | | | | |
| subsidiaries | | | | |
+--------------------------------------------+---+---------+----------+----------+
| Actuarial loss on pension schemes | | (578) | | (938) |
+--------------------------------------------+---+---------+----------+----------+
| Movement in pension schemes' deferred tax | | 136 | | 191 |
| provision | | | | |
+--------------------------------------------+---+---------+----------+----------+
| | | | | |
+--------------------------------------------+---+---------+ +----------+
| Other comprehensive income for the year | | (692) | | (164) |
+--------------------------------------------+---+---------+ +----------+
| | | | | |
+--------------------------------------------+---+---------+ +----------+
| | | | | |
+--------------------------------------------+---+---------+ +----------+
| Total comprehensive income for the year | | | | |
| attributable to owners | | 309 | | 151 |
| of the parent company | | | | |
+--------------------------------------------+---+---------+----------+----------+

All figures relate to continuing operations.



Consolidated balance sheet
______________________________________________________________


+-------------+--------+---------+----------+
| | | At 31 | At 31 |
| | | January | January |
| | | 2010 | 2009 |
+-------------+--------+---------+----------+
| | | GBP'000 | GBP'000 |
+-------------+--------+---------+----------+
| Non | | | |
| current | | | |
| assets | | | |
+-------------+--------+---------+----------+
| Goodwill | | 2,236 | 2,236 |
+-------------+--------+---------+----------+
| Property, | | 368 | 488 |
| plant and | | | |
| equipment | | | |
+-------------+--------+---------+----------+
| Deferred | | 1,365 | 1,009 |
| taxation | | | |
+-------------+--------+---------+----------+
| | | 3,969 | 3,733 |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Current | | | |
| assets | | | |
+-------------+--------+---------+----------+
| Inventories | | 4,991 | 7,583 |
+-------------+--------+---------+----------+
| Trade | | 3,956 | 5,786 |
| and | | | |
| other | | | |
| receivables | | | |
+-------------+--------+---------+----------+
| Cash | | 3,046 | 2,121 |
| and | | | |
| cash | | | |
| equivalents | | | |
+-------------+--------+---------+----------+
| | | 11,993 | 15,490 |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Total | | 15,962 | 19,223 |
| assets | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Current | | | |
| liabilities | | | |
+-------------+--------+---------+----------+
| Trade | | (5,352) | (8,536) |
| and | | | |
| other | | | |
| payables | | | |
+-------------+--------+---------+----------+
| Financial | | (1,856) | (2,589) |
| liabilities | | | |
+-------------+--------+---------+----------+
| Current | | (301) | (276) |
| tax | | | |
| liabilities | | | |
+-------------+--------+---------+----------+
| | | (7,509) | (11,401) |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Non | | | |
| current | | | |
| liabilities | | | |
+-------------+--------+---------+----------+
| Pension | | (1,450) | (964) |
| schemes' | | | |
| deficits | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Total | | (8,959) | (12,365) |
| liabilities | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Net | | 7,003 | 6,858 |
| assets | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+
| Equity | | | |
+-------------+--------+---------+----------+
| Share | | 1,503 | 1,503 |
| capital | | | |
+-------------+--------+---------+----------+
| Shares | | (129) | (64) |
| held | | | |
| in | | | |
| treasury | | | |
+-------------+--------+---------+----------+
| Other | | 2,759 | 3,009 |
| reserves | | | |
+-------------+--------+---------+----------+
| Profit | | 2,870 | 2,410 |
| and | | | |
| loss | | | |
| account | | | |
+-------------+--------+---------+----------+
| Total | | 7,003 | 6,858 |
| equity | | | |
+-------------+--------+---------+----------+
| | | | |
+-------------+--------+---------+----------+


Consolidated statement of changes in equity
______________________________________________________________
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| | Share | | Share | Merger | Capital | Translation | Profit | Total |
| | capital | | premium | Reserve | redemption | reserve | and | |
| | | Shares | account | | reserve | | loss | |
| | | held | | | | | account | |
| | | in | | | | | | |
| | | treasury | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Balance at 1 | | | | | | | | |
| February 2008 | 1,503 | - | 5,258 | 1,036 | 1,427 | (37) | (2,293) | 6,894 |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Share-based | - | - | - | - | - | - | 16 | 16 |
| payments | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Share buyback | - | (64) | - | - | - | - | (139) | (203) |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Cancellation | | | | | | | | |
| of share | - | - | (5,258) | - | - | - | 5,258 | - |
| premium | | | | | | | | |
| account | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Transactions | - | (64) | (5,258) | - | - | - | 5,135 | (187) |
| with owners | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Net profit for | - | - | - | - | - | - | 315 | 315 |
| the year | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Retranslation | | | | | | | | |
| of overseas | - | - | - | - | - | 583 | - | 583 |
| subsidiaries | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Net actuarial | | | | | | | | |
| loss on | - | - | - | - | - | - | (747) | (747) |
| pension | | | | | | | | |
| schemes | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Total | | | | | | | | |
| comprehensive | | | | | | | | |
| income | | | | | | | | |
| attributable | - | - | - | - | - | 583 | (432) | 151 |
| to owners of | | | | | | | | |
| the parent | | | | | | | | |
| company | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Balance at 1 | | | | | | | | |
| February 2009 | 1,503 | (64) | - | 1,036 | 1,427 | 546 | 2,410 | 6,858 |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Share-based | - | - | - | - | - | - | 15 | 15 |
| payments | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Share buyback | - | (65) | - | - | - | - | (114) | (179) |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Transactions | - | (65) | - | - | - | - | (99) | (164) |
| with owners | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Net profit for | - | - | - | - | - | - | 1,001 | 1,001 |
| the year | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Retranslation | | | | | | | | |
| of overseas | - | - | - | - | - | (250) | - | (250) |
| subsidiaries | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Net actuarial | | | | | | | | |
| loss on | - | - | - | - | - | - | (442) | (442) |
| pension | | | | | | | | |
| schemes | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Total | | | | | | | | |
| comprehensive | | | | | | | | |
| income | | | | | | | | |
| attributable | - | - | - | - | - | (250) | 559 | 309 |
| to owners of | | | | | | | | |
| the parent | | | | | | | | |
| company | | | | | | | | |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+
| Balance at 31 | | | | | | | | |
| January 2010 | 1,503 | (129) | - | 1,036 | 1,427 | 296 | 2,870 | 7,003 |
+----------------+---------+----------+---------+---------+------------+-------------+---------+---------+



Consolidated cash flow statement
______________________________________________________________



+---------------------------------------+-----------+-----------+-----------+
| | | Year | Year |
| | | ended 31 | ended 31 |
| | | January | January |
| | | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
+---------------------------------------+-----------+-----------+-----------+
| Cash flows from operating activities | | | |
+---------------------------------------+-----------+-----------+-----------+
| Net profit for the year | | 1,001 | 315 |
+---------------------------------------+-----------+-----------+-----------+
| Adjustments: | | | |
+---------------------------------------+-----------+-----------+-----------+
| Depreciation of property, plant and | | 132 | 186 |
| equipment | | | |
+---------------------------------------+-----------+-----------+-----------+
| Goodwill impairment | | - | 425 |
+---------------------------------------+-----------+-----------+-----------+
| Loss on sale of property, plant and | | - | 1 |
| equipment | | | |
+---------------------------------------+-----------+-----------+-----------+
| Finance cost | | 194 | 173 |
+---------------------------------------+-----------+-----------+-----------+
| Finance income | | - | (65) |
+---------------------------------------+-----------+-----------+-----------+
| Taxation paid | | (282) | (133) |
+---------------------------------------+-----------+-----------+-----------+
| Tax expense | | 22 | 278 |
+---------------------------------------+-----------+-----------+-----------+
| Share based payments | | 15 | 16 |
+---------------------------------------+-----------+-----------+-----------+
| Fair value adjustments of forward | | 437 | (394) |
| contracts | | | |
+---------------------------------------+ +-----------+-----------+
| Net cash inflow from operating | | 1,519 | 802 |
| activities before movements in | | | |
| working capital | | | |
+---------------------------------------+ +-----------+-----------+
| | | | |
+---------------------------------------+ +-----------+-----------+
| Decrease/(increase) in inventories | | 2,592 | (2,001) |
+---------------------------------------+ +-----------+-----------+
| Decrease in trade and other | | 1,173 | 242 |
| receivables | | | |
+---------------------------------------+ +-----------+-----------+
| (Decrease)/increase in trade and | | (3,095) | 333 |
| other payables | | | |
+---------------------------------------+ +-----------+-----------+
| Cash generated/(utilised) from | | 2,189 | (624) |
| operations | | | |
+---------------------------------------+ +-----------+-----------+
| | | | |
+---------------------------------------+ +-----------+-----------+
| Cash flows from investing activities | | | |
+---------------------------------------+ +-----------+-----------+
| Purchases of property, plant and | | (16) | (168) |
| equipment | | | |
+---------------------------------------+ +-----------+-----------+
| Sale of property, plant and equipment | | - | 8 |
+---------------------------------------+ +-----------+-----------+
| Net cash used in investing activities | | (16) | (160) |
+---------------------------------------+ +-----------+-----------+
| | | | |
+---------------------------------------+ +-----------+-----------+
| Cash flows from financing activities | | | |
+---------------------------------------+ +-----------+-----------+
| (Decrease)/increase in invoice | | (733) | 289 |
| financing | | | |
+---------------------------------------+-----------+-----------+-----------+
| Interest paid | | (89) | (147) |
+---------------------------------------+-----------+-----------+-----------+
| Payment to acquire own shares | | (179) | (203) |
+---------------------------------------+-----------+-----------+-----------+
| Net cash used in financing activities | | (1,001) | (61) |
+---------------------------------------+ +-----------+-----------+
| | | | |
+---------------------------------------+ +-----------+-----------+
| | | | |
+---------------------------------------+ +-----------+-----------+
| Net increase/(decrease) in cash and | | 1,172 | (845) |
| cash equivalents | | | |
+---------------------------------------+ +-----------+-----------+
| Cash and cash equivalents at | | 2,121 | 2,389 |
| beginning of year | | | |
+---------------------------------------+ +-----------+-----------+
| Effect of foreign exchange rate | | (247) | 577 |
| changes | | | |
+---------------------------------------+ +-----------+-----------+
| Cash and cash equivalents at end of | | 3,046 | 2,121 |
| year | | | |
+---------------------------------------+-----------+-----------+-----------+



Notes to the preliminary results
_____________________________________________________________


1. General information
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The consolidated income statement, the consolidated statement of
comprehensive income, the consolidated balance sheet at 31 January 2010, the
consolidated statement of changes in equity, the consolidated cash flow
statement and the associated notes for the year then ended have been extracted
from the Group's financial statements upon which the auditor's opinion is
unqualified and does not include any statement under section 439 of the
Companies Act 2006. The statutory accounts for the year ended 31 January 2010
will be delivered to the Registrar of Companies following the Group's Annual
General Meeting.

2. Basis of preparation
The consolidated financial statements of the Group have been prepared under the
historical cost convention and in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the EU and the IFRS as issued by the
International Accounting Standards Board.

The key areas of estimation uncertainty and judgment in the financial statements
are as detailed below:

Impairment of goodwill
The annual impairment assessment in respect of goodwill requires estimates of
the value in use of cash generating units to which goodwill has been allocated
to be calculated. As a result, estimates of future cash flows are required,
together with an appropriate discount factor for the purpose of determining the
present value of those cash flows.

Pension scheme valuation
The liabilities in respect of defined benefit pension schemes are calculated by
qualified actuaries and reviewed by the Group, but are necessarily based on
subjective assumptions. The principal uncertainties relate to the estimation of
the life expectancies of scheme members, future investment yields and general
market conditions for factors such as inflation and interest rates. Profits and
losses in relation to changes in actuarial assumptions are taken directly to
reserves and therefore do not impact on the profitability of the business, but
the changes do impact on net assets.

Inventory provisioning
The Group reviews the net realisable value of and demand for its inventory on an
ongoing basis to ensure recorded inventory is stated at the lower of cost or net
realisable value. Factors that could impact estimated demand and selling prices
are the timing and success of future technological innovations, competitor
actions, suppliers' prices and economic trends. If total inventory losses
differ, the Group's consolidated net income in the year would have improved or
declined, depending upon whether the actual results were better or worse than
expected.

Bad debt provision
At each reporting period, the Directors review outstanding debts and determine
appropriate provision levels. The recovery of certain debts is dependent on the
individual circumstances of customers. There are a number of debts which remain
outstanding past their due date, which the Directors believe to be recoverable.

Deferred tax assets
In determining the deferred tax asset to be recognised the Directors carefully
review the recoverability of these assets on a prudent basis and reach a
judgement based on the best available information.Estimates and judgements used
in the financial statements are based on historical experience and other
assumptions that the Directors and management consider reasonable and are
consistent with the Group's latest budgeted forecasts where applicable.
Judgements are based on the information available at each balance sheet date.
Although these estimates are based on the best information available to the
Directors, actual results may ultimately differ from those estimates.


3. Segmental reporting
For management purposes the Group is organised into two operating segments. The
revenues, results and net assets for these segments are shown below:
+-----------------------------------------+----------+-------------+----------+----------+----------+
| | Bicycles | Sports, leisure and | |
| | and | toys | Total |
| | accessories | | |
+----------------------------------------------------+-------------+---------------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------+-------------+---------------------+----------+
| 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 goodwill impairment and | 125 | 1,097 | 1,222 |
| management charges | | | |
+----------------------------------------------------+-------------+---------------------+----------+
| Unallocated corporate expenses | | | (5) |
+----------------------------------------------------+ + +----------+
| Operating profit | | | 1,217 |
+----------------------------------------------------+-------------+---------------------+----------+
| Finance costs | | | (194) |
+----------------------------------------------------+-------------+---------------------+----------+
| Finance income | | | - |
+----------------------------------------------------+-------------+ +----------+
| Profit before taxation | | | 1,023 |
+----------------------------------------------------+-------------+ +----------+
| Tax expense | | | (22) |
+----------------------------------------------------+-------------+ +----------+
| Net profit for the year | | | 1,001 |
+----------------------------------------------------+-------------+---------------------+----------+
| | | | |
+----------------------------------------------------+-------------+---------------------+----------+
| | | | |
+----------------------------------------------------+-------------+---------------------+----------+
| Segment assets | 9,081 | 3,847 | 12,928 |
+----------------------------------------------------+-------------+---------------------+----------+
| Unallocated assets | | | 4,121 |
+----------------------------------------------------+-------------+---------------------+----------+
| | | | 17,049 |
+----------------------------------------------------+-------------+---------------------+----------+
| Segment liabilities | (5,468) | (2,716) | (8,184) |
+----------------------------------------------------+-------------+---------------------+----------+
| Unallocated liabilities | | | (1,862) |
+----------------------------------------------------+-------------+---------------------+----------+
| | | | (10,046) |
+----------------------------------------------------+-------------+---------------------+----------+
| Consolidated net assets | | | 7,003 |
+----------------------------------------------------+-------------+---------------------+----------+
| | | | |
+----------------------------------------------------+-------------+---------------------+----------+
| Capital additions | 3 | 13 | 16 |
+-----------------------------------------+------------------------+----------+---------------------+
| Depreciation and goodwill impairment | 55 | 77 | 132 |
+-----------------------------------------+------------------------+----------+---------------------+
| | | | | | |
+-----------------------------------------+----------+-------------+----------+----------+----------+

+-----------------------------------------+----------+-------------+----------+----------+----------+----------+
| | Bicycles | Sports, leisure and | | |
| | and | toys | Total | |
| | accessories | | | |
+----------------------------------------------------+-------------+---------------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | |
+----------------------------------------------------+-------------+---------------------+----------+----------+
| | | | |
| Year ended 31 January 2009 | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Revenue | 19,763 | 15,398 | 35,161 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Segment result before goodwill impairment | 1,148 | 808 | 1,956 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Goodwill impairment | (425) | - | (425) |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Segment result after goodwill impairment | 723 | 808 | 1,531 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Unallocated corporate expenses | | | (830) |
+----------------------------------------------------+ + +---------------------+
| Operating profit | | | 701 |
+----------------------------------------------------+-------------+ +---------------------+
| Finance costs | | | (173) |
+----------------------------------------------------+-------------+ +---------------------+
| Finance income | | | 65 |
+----------------------------------------------------+-------------+ +---------------------+
| Profit before taxation | | | 593 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Tax expense | | | (278) |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Net profit for the year | | | 315 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Segment assets | 12,123 | 4,227 | 16,350 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Unallocated assets | | | 3,616 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | 19,966 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Segment liabilities | (8,963) | (2,625) | (11,588) |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Unallocated liabilities | | | (1,520) |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | (13,108) |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Consolidated net assets | | | 6,858 |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| Capital additions | 33 | 135 | 168 |
+-----------------------------------------+------------------------+----------+--------------------------------+
| Depreciation and goodwill impairment | 480 | 131 | 611 |
+-----------------------------------------+------------------------+----------+--------------------------------+
| | | | |
+----------------------------------------------------+-------------+---------------------+---------------------+
| | | | | | | |
+-----------------------------------------+----------+-------------+----------+----------+----------+----------+
The Group's revenues and non-current assets are divided into the following
geographical areas:

+-----------------------------------------+---------------+---------+-----------------+-------------+
| Year ended 31 January 2010 | United | Europe | Rest of | Total |
| | Kingdom | | the | |
| | | | World | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| Revenue | 33,939 | 1,504 | 235 | 35,678 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| Non-current assets | 3,955 | - | 14 | 3,969 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| Year ended 31 January 2009 | United | Europe | Rest of | Total |
| | Kingdom | | the | |
| | | | World | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| Revenue | 33,397 | 1,432 | 332 | 35,161 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| Non-current assets | 3,702 | - | 31 | 3,733 |
+-----------------------------------------+---------------+---------+-----------------+-------------+
| | | | | |
+-----------------------------------------+---------------+---------+-----------------+-------------+

There were two customers (2009 - two) whose revenues from transactions amounted
to ten per cent or more of the Group's revenue.

4. Earnings per share
The calculation of earnings per share is based on the net profit and ordinary
shares in issue during the year as follows:
+----------+------------------------------------------------+------------+------------+
| | | Year ended | Year ended |
| | | 31 January | 31 January |
| | | 2010 | 2009 |
| | | | Restated |
+----------+------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+------------+------------+
| | | | |
+----------+------------------------------------------------+------------+------------+
| | Net profit for the year - before goodwill | 1,001 | 740 |
| | impairment | | |
+----------+------------------------------------------------+------------+------------+
| | Net profit for the year - after goodwill | 1,001 | 315 |
| | impairment | | |
+----------+------------------------------------------------+------------+------------+
| | | | |
+----------+------------------------------------------------+------------+------------+
| | Weighted average shares in issue used for | 5,665,222 | 5,898,455 |
| | basic earnings per share | | |
+----------+------------------------------------------------+------------+------------+
| | Weighted average dilutive shares under option | - | 28,400 |
+----------+------------------------------------------------+------------+------------+
| | Average number of shares used for diluted | 5,665,222 | 5,926,855 |
| | earnings per share | | |
+----------+------------------------------------------------+------------+------------+
| | | | |
+----------+------------------------------------------------+------------+------------+
| | | Pence | Pence |
+----------+------------------------------------------------+------------+------------+
| | Basic earnings per share - before goodwill | 17.67 | 12.55 |
| | impairment | | |
+----------+------------------------------------------------+------------+------------+
| | Basic earnings per share - after goodwill | 17.67 | 5.34 |
| | impairment | | |
+----------+------------------------------------------------+------------+------------+
| | Diluted earnings per share | 17.67 | 5.31 |
+----------+------------------------------------------------+------------+------------+
| | | | |
+----------+------------------------------------------------+------------+------------+

There was no dilutive effect of shares under option for the year ended 31
January 2010 because the option exercise prices were greater than the average
market share price. The weighted average shares in issue for the year ended 31
January 2009 have been restated for the share consolidation and sub-division
which became unconditional on 24 September 2009.

5. Dividend
No dividend on the ordinary shares is being proposed (2009 - GBPnil).

6. Annual report and accounts
The annual report and accounts will be posted to shareholders shortly and will
be available on the Company's website, www.tandemgroup.co.uk.

7. Annual General Meeting
The Annual General Meeting will be held at 11:00 a.m. on 21 June 2010 at 35
Tameside Drive, Castle Bromwich, Birmingham, B35 7AG.




This information is provided by RNS
The company news service from the London Stock Exchange
END

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