Final Results

Tandem Group PLC
8 May 2001




Immediate                                                            8 May 2001



TANDEM GROUP PLC

            PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2001



Tandem Group plc, the sports and leisure group and one of the leading
manufacturers and distributors of bicycles in the UK, today announced its
preliminary results for the year ended 31 January 2001.


RESULTS
                                                                 2001      2000
                                                                £'000     £'000

Turnover                                                       26,500    21,226

Pre-tax profit                                                  1,662        71

Earnings per share (before goodwill amortisation)
Basic                                                           1.21p     0.01p
Diluted                                                         1.16p     0.01p



KEY POINTS

*         Turnover up 25%

*         Two acquisitions integrated successfully with seasonality of Pot
          Black much improved

*         New outdoor play equipment well received with excellent growth
          prospects

*         Prestigious contract signed to supply BMW with their uniquely
          designed mountain bikes

*         Bank debt reduced by over £5 million in the year



Commenting on this announcement, Chairman Graham Waldron, said:



'After several years of downscaling, I am pleased to report that we have made
significant and profitable progress this year in our quest to become a broadly
based sports and leisure equipment group.  Our bicycle business continues to
produce solid returns in a highly competitive market and both our
acquisitions, Pot Black and Two Wheel Trading, have responded well to joining
the fold.



'Having established a firm position in the sports and leisure equipment
market, the group now has a solid base from which to expand.  Further
acquisitions in this sector are being sought and a number of opportunities
have been identified already.  However, we will take a cautious approach to
ensure the successful trend we have developed continues.



'Despite the inclement weather in early spring and the Foot and Mouth
situation, the results for our cycles and accessories businesses in the first
quarter were ahead of last year.  We are delighted to have been awarded a
prestigious mountain bike contract with BMW, which is a tribute to Falcon and
confirmation of its quality and reputation for high service levels.
Discussions continue with BMW about increasing volumes later in the year.'



For further information, please contact:


Mervyn Keene, Finance Director, Tandem Group plc                   01733 211399

James Fuller, Director, Haggie Financial Limited                  020 7417 8989








CHAIRMAN'S STATEMENT

_____________________________________________________________





Your board is pleased to announce that the results for the year ended 31
January 2001 show a profit before taxation of £1,662,000.  This compares with
a profit last year of £71,000.  No dividend is being proposed.



After several years of downscaling through the sale of assets and the closure
of loss making businesses, the Group has now made significant progress in its
strategy of becoming a broader based manufacturer and distributor in the
sports and leisure equipment sector.  Two businesses have been acquired.
Group turnover is up 25% and the balance sheet is now positive.  The previous
year saw the Group return to profitability.  This improvement has continued
and the foundations are set to allow further increase in profit in future
years.  Bank debt, which has historically burdened the Group with high
charges, reduced by over £5 million in the year.



Acquisitions

In line with the strategy of expanding the Group in the sports and leisure
equipment sector, Pot Black (U.K.) Limited and Two Wheel Trading Company
Limited were acquired on 28 September 2000 for an aggregate consideration of £
1,938,000, including costs.



The results of the acquisitions have been included in the Group financial
statements from that date.



Cycles and accessories

The Group is one of the largest manufacturers of bicycles in the UK, with its
well-established brand names of Falcon, Claud Butler, Townsend and British
Eagle amongst the market leaders.  Customers include an increasing number of
independent bicycle dealers, mail order companies and national account
retailers.  In addition, export markets are showing signs of great potential.



Turnover of the Group's bicycle business, Falcon, grew in line with
expectations.  Unit sales of bicycles increased over the previous year but a
strong demand for lower priced products saw a fall in average unit prices.
However, tight control of costs and an improved product range enabled Falcon's
profits to be ahead of last year.



The division includes the results of Two Wheel Trading for the last four
months of the financial year, which traditionally is a loss making period for
that business.  Two Wheel Trading distributes a number of well-known bicycle
accessory brands including Freeway and Freak Factory.  Investment has been
made in strengthening the sales operation to take advantage of a number of
opportunities that have become available as a result of Two Wheel Trading
joining the Group.



Sports and leisure equipment

Pot Black is our first acquisition in the sports and leisure equipment sector
outside the bicycle industry.  It has a leading position in the home snooker
and pool market, with excellent distribution through most major catalogue
retailers and leading high street sports and toy retailers.



Results for the four months post acquisition, traditionally the strongest
revenue period for Pot Black, were ahead of the previous year even after
significant re-organisation and restructuring costs.



Current trading

Despite the inclement early spring weather and the foot and mouth situation,
your board is pleased that the results for the first quarter in the cycles and
accessories division were ahead of last year.



Falcon continues to perform solidly in a highly competitive market and after
passing stringent quality control procedures has successfully negotiated a
contract to supply BMW with their uniquely designed mountain bikes.
Discussions continue with the objective of increasing volume, which should
translate into higher turnover and improved gross margin for this range later
this year.  Falcon maintains a reputation for high service levels to all its
customers and is well regarded by major national retailers who carry out
regular audits to ensure product quality.  We anticipate that this level of
service will lead to increased business.



Two Wheel Trading has successfully secured new distributorships for branded
accessories, including Tioga, a well known and heavily marketed mountain bike
brand in the USA, with a good brand recognition in the UK.  The strategy of
consolidating distribution through the wholesale sector and expanding the
retail division is working well.  The sales team has been strengthened and the
marketing of major brands improved.



The synergies between Falcon and Two Wheel Trading will lead to further
reductions in cost and expansion of the customer base.



The first half of the year is traditionally a loss-making period for Pot
Black.  However, considerable progress has been made to counter the
seasonality and the combination of greatly reduced fixed costs and new
profitable product introductions has resulted in losses in the first quarter
being much less than last year and better than expectations.  The new outdoor
play equipment introduced post acquisition has been well received.  We are
pleased with the order intake to date and are confident that more major
customers will be secured leading to increased business later this year and in
2002.  Snooker and pool tables remain the biggest turnover products but are
heavily seasonal and therefore the introduction of outdoor play equipment for
spring and summer combined with snooker and pool products for the Christmas
market means that the opportunities for profitability and cash flows are
maximised.  Pot Black should be a major profit contributor in the future.



Strategy and future prospects

The three operating companies in the Group now have a clear strategy, sound
management and considerable opportunities to develop further.



With a firm position in the sports and leisure equipment market, the Group now
has a solid base from which it can expand. Further acquisitions in this sector
are being sought and a number of opportunities have already been identified.
We will however take a cautious approach to ensure that the successful trend
continues.



Your board is determined to continue the progress already achieved and add
significant shareholder value by building an efficient and profitable business
with high regard to customer service and environmental issues.



Employees

We welcome to the Group the employees of Pot Black and Two Wheel Trading.
Your board is encouraged by their enthusiasm and commitment.



The opportunity should also be taken to thank the employees of Falcon, many of
whom are long serving, for once again turning in a solid performance.



Your board continues to seek an additional non-executive director with
appropriate skills.







Graham Waldron

Chairman

8 May 2001




Consolidated profit and loss account

Year ended 31 January 2001


                                                         2001         2000


                                                     £'000 £'000  £'000 £'000
Turnover
Continuing operations                                      22,112       21,181
Acquisitions                                               4,355        -
Discontinued operations                                    33           45


                                                           26,500       21,226

Cost of sales                                              (19,840)     (16,159)


Gross profit                                               6,660        5,067


Net operating expenses                                     (5,883)       (4,460)


Operating profit
Continuing operations                                439          365
Acquisitions                                         334          -
Discontinued operations                              (274)        66
- release/utilisation of prior year                  317          176
provision
Amortisation of goodwill                             (39)         -
Total operating profit                                     777          607

Exceptional profit on disposal of                          -            59
fixed assets


Profit on ordinary activities before interest              777          666

Net interest payable and similar credits                   885          (595)
/(charges)



Profit on ordinary activities before taxation              1,662        71

Tax on profit on ordinary activities                       -            3/4


Profit on ordinary activities after taxation               1,662        71


Non equity minority interests                              (65)         (65)


Profit for the financial year transferred to reserves      1,597        6




Earnings per share                                         Pence        Pence
Basic

Before goodwill amortisation                               1.21         0.01
After goodwill amortisation                                1.18         0.01
Diluted

Before goodwill amortisation                               1.16         0.01
After goodwill amortisation                                1.13         0.01







Consolidated balance sheet

At 31 January 2001


                                                        2001           2000
                                                        £'000          £'000
Fixed assets
Tangible assets                                         1,514          1,103
Intangible assets                                       2,260          -


                                                        3,774          1,103


Current assets
Stocks                                                  6,010          3,806
Assets for resale                                       -              586
Debtors                                                 4,187          3,015


                                                        10,197         7,407

Creditors - amounts falling due within one year
Bank overdraft                                          4,175          9,351
Other creditors                                         7,724          3,513


                                                        11,899         12,864


Net current liabilities                                 (1,702)        (5,457)


Total assets less current liabilities                   2,072          (4,354)


Creditors - amounts falling due after more than         50             22
one year
Provisions for liabilities and charges                  129            446


Net assets/(liabilities)                                1,893          (4,822)

Capital and reserves
Called up share capital                                 9,046          4,703
Share premium account                                   5,040          4,280
Capital reserve                                         406            406
Profit and loss account                                 (13,739)       (15,394)


Equity shareholders' funds/(deficit)                    753            (6,005)
Non-equity minority interests                           1,140          1,183


                                                        1,893          (4,822)







Statement of movements on reserves

Year ended 31 January 2001


                                Share                     Profit
                              Premium       Capital       and
                                                          loss
                              Account       Reserve       Account       Total
                                £'000       £'000         £'000         £'000
The Group
Balance at 1 February 2000    4,280         406           (15,394)     (10,708)
Profit retained for the year  -             -             1,597         1,597
Non equity dividends waived   -             -             58            58
Net premium arising on issue  760           -             -             760
of shares


Balance at 31 January 2001    5,040         406           (13,739)       (8,293)










Consolidated cash flow statement

Year ended 31 January 2001


                                                     Notes  2001          2000
                                                            £'000         £'000

Net cash inflow from operating activities              A    3,064         2,365


Returns on investments and servicing of finance
Interest paid                                               (842)         (961)
Interest element of hire purchase rentals                   (4)           (7)
Bank fees paid                                              (398)         -


Net cash outflow from returns on investments and servicing  (1,244)       (968)
of finance


Taxation                                                    -             -


Capital expenditure
Purchase of tangible fixed assets                           (74)          (80)
Sale of tangible fixed assets                               8             4,574
Sale of assets held for resale                              349           -


Net cash inflow from capital expenditure                    283           4,494


Acquisitions
Purchase of subsidiary undertakings                         (1,305)       -
Net debt of subsidiary undertakings acquired                (2,212)       -
Purchase of subsidiary company preference shares            (15)          -


Net cash outflow from acquisitions                          (3,532)       -



Net cash (outflow)/inflow before financing                  (1,429)       5,891



Financing
Ordinary shares issue                                       4,580         -
Expenses incurred in issue of ordinary shares               (489)         -
Capital element of hire purchase rentals                    (25)          (76)


Net cash inflow/(outflow) from financing                    4,066         (76)


Increase in cash                                     B & C  2,637         5,815









Notes to consolidated cash flow statement


A. Reconciliation of operating profit to net cash inflow from
operating activities
                                                             2001        2000
                                                             £'000       £'000

Operating profit                                             777         607
Depreciation charges                                         298         246
Amortisation of goodwill                                     39          -
Profit on sale of tangible fixed assets                      (4)         (2)
Loss on sale of assets held for resale                       237         -
Decrease in stocks                                           141         2,436
Decrease in debtors                                          467         1,509
Decrease/(increase) in assets held for resale                -           (586)
Tangible fixed assets transferred to assets held for         -           79
resale
Increase/(decrease) in creditors                             1,426       (1,596)
Release of provisions:
 - continuing activities                                     -           (152)
 - discontinued activities                                   (317)       (176)


Net cash inflow from operating activities                    3,064       2,365



B. Reconciliation of net cash inflow to movement in
net debt


                                                                         £'000
Increase in cash                                                         2,637
Cash to repay finance leases and hire purchase                           25
contracts


Changes in net debt resulting from cash flows                            2,662


Other non-cash changes                                                   2,539
Lease and hire purchase obligations acquired with                        (42)
purchase of businesses


Movement in net debt in the year                                         5,159
Net debt at 1 February 2000                                              (9,374)


Net debt at 31 January 2001                                              (4,215)




C. Analysis
of net debt
                      At        Cash    Non-cash     Acquired lease          At
                                flow                    obligations
              1 February                movement                     31 January

                    2000                                                   2001
                   £'000       £'000       £'000       £'000              £'000

Bank               (9,351)       2,637       2,539       -              (4,175)
overdraft
Hire               (23)        25          -           (42)               (40)
purchase
creditors
                   (9,374)       2,662       2,539       (42)           (4,215)








Notes to the preliminary results



1.       This preliminary announcement is not the company's statutory accounts
but extracts therefrom.  Statutory accounts dealing with the financial period
ended 31 January 2000 have been delivered to the Registrar of Companies,
however, statutory accounts dealing with the financial year ended 31 January
2001 have not yet been delivered.



2.       In the audit report to the 31 January 2000 annual financial
statements the auditors emphasised the fact that the Company met its day to
day working capital requirements through certain overdraft facilities, which
were repayable on demand.  The audit report did not contain a statements under
s237 (2) or (3) Companies Act 1985.



3.       Net interest payable and similar charges/(credits) is analysed as
follows:


                                                     2001             2000
                                                     £'000            £'000

Interest payable on bank loans and overdrafts        842              961
Interest payable on hire purchase creditors          4                7
Foreign exchange gain on bank loan                   -                (373)
Bank debt written off                                (2,160)          -
Bank fees                                            429              -


                                                     (885)            595





4.       The statutory accounts for the year ended 31 January 2001 will be
finalised on the basis of the financial information presented by the directors
in this preliminary announcement and will be delivered to the registrar of
companies following the company's annual general meeting.



5.       The calculation of basic earnings per share is based on profits of £
1,597,000 (2000 - £6,000) and on an average of 135,685,534 (2000 - 94,069,754)
ordinary shares in issue during the year.  Diluted earnings per share is after
taking into consideration share options which gives an average of 140,927,456
(2000 - 94,535,509) ordinary shares.



6.       The Annual Report and Accounts will be posted to shareholders
shortly.