Trading Update

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.

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Enquiries:

Tandem Group plc

Peter Kimberley, CEO

David Rock, Company Secretary

Telephone [phone]

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 [phone]

 

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