TIDMTND
RNS Number : 1709S
Tandem Group PLC
29 September 2017
Tandem Group plc
Half Yearly Report
for the six months ended
30 June 2017
CHAIRMAN'S STATEMENT
Results
I am pleased to announce the Group's interim results for the six
month period ended 30 June 2017. There was an increase in Group
revenue in the six months to 30 June 2017 of approximately 3.1% to
GBP17,651,000 which compared to GBP17,115,000 in the prior year
period.
Gross profit slightly reduced from GBP5,106,000 to GBP4,938,000
in the period. As we have previously reported, to compensate for
the ongoing pressure on margin from the weak GBP to USD exchange
rate we had no alternative but to implement a price increase in the
latter part of 2016, negotiated better buying prices with suppliers
and where this could not be achieved, re-sourced to new
factories.
There was a reduction in operating expenses of GBP630,000 from
GBP4,812,000 to GBP4,182,000 in the six months to 30 June 2017
compared to the prior year period. This reflected the
reorganisation undertaken in our bicycles division in the second
half of 2016 and resultant cost savings.
Operating profit before exceptional costs and credits increased
to GBP756,000 compared to GBP294,000 in the six months to 30 June
2016.
Principally as a result of the fair value revaluation of our
derivative currency contracts, finance costs increased from
GBP304,000 to GBP337,000 in the six months to 30 June 2017. This
fair value charge and finance costs in respect of the pension
schemes are shown in non-underlying items.
The profit before taxation after non-underlying items for the
period increased to GBP419,000 in the six month period to 30 June
2017 compared to GBP196,000 in the prior year period.
The tax charge for the period was GBP46,000 compared to
GBP62,000 in the prior period. This reflected the tax charge in the
Hong Kong business.
Net profit for the period increased to GBP373,000 compared to
GBP134,000 in the six months to 30 June 2016.
Basic earnings per share in the six months to 30 June 2017 was
7.6 pence per share compared to 2.8 pence per share in the same
period in 2016.
Cash and cash equivalents increased from GBP980,000 at 30 June
2016 to GBP1,506,000 at 30 June 2017. There were cash inflows from
operations of GBP266,000 which contributed to the improvement.
Net debt reduced from GBP5,824,000 at 30 June 2016 to
GBP4,292,000 at 30 June 2017 with net assets at 30 June 2017
GBP8,400,000 against GBP8,048,000 at 30 June 2016.
Sports, leisure and toys
In the six months to 30 June 2017 revenue increased to
GBP12,956,000 compared to GBP11,037,000 in the prior year
period.
There was an increase in operating profit from GBP562,000 in the
period ended 30 June 2016 to GBP874,000 in the period to 30 June
2017.
The new Cars 3 and Trolls licences performed well during the
period and PJ Masks started strongly. Disney Princess, Batman and
Paw Patrol also continued to perform ahead of expectation.
In own brands, Stunted and Hedstrom performed particularly well.
Revenue from our Airwave gazebo and party tent products exceeded
the comparative period last year.
During the period we continued to develop our direct to consumer
business with our marketing team focussed on improving brand
awareness and the visibility of our products on the various
websites from which we sell.
Bicycles and mobility
Revenue in our bicycles, accessories and mobility businesses
reduced compared to the previous year period from GBP6,078,000 to
GBP4,695,000 for the six month period to 30 June 2017. This was
anticipated and in line with expectations following the
restructuring of the bicycle businesses last year.
Notwithstanding the reduction in revenue, operating profit
increased to GBP125,000 compared to GBP19,000 in the prior
year.
Mobility sales were behind the prior year period, principally
due to pricing issues although this has been addressed in the
second half of the year.
The new range of Squish lightweight junior bicycles continued to
gain momentum and we significantly increased the number of
customers stocking the range during the period.
Trading update and outlook
Many retailers have reported that poor weather in July and
August has affected sales. We are no exception and this has led to
Group revenue for the 38 week period to 22 September being slightly
behind the prior year period at approximately GBP28.2 million
compared to GBP28.8 million in the comparative period last
year.
Sports, leisure and toys
Sports, leisure and toys revenue for the 38 week period to 22
September was approximately GBP21.3 million compared to GBP19.8
million last year.
A number of national retailer customers are reporting that they
are overstocked after the poor summer trading period. It has been
reported that the outdoor toy market was 25% behind the prior year
in both July and August.
The recent rise in inflation increases our concerns about a
general slowing in the economy as we lead up towards the busy
Christmas period.
One of our major customers has filed for Chapter 11 bankruptcy
protection in the US and Canada but this does not apply to its UK
operation which continues to trade normally. We are closely
monitoring the position.
We are bringing a number of new products to market including an
extended range of gazebos, outdoor light up furniture under our
"Party Glow" brand and a range of tepees both for children and
adults.
Bicycles and mobility
In the bicycles, accessories and mobility businesses revenue for
the 38 weeks to 22 September was approximately GBP6.9 million
compared to GBP9.0 million in the prior year. However, we remain on
target with our turnaround plan and expect to make the anticipated
cost savings of GBP1 million that we reported in our trading update
in January.
The market remains unquestionably challenging. Our cost base has
been adjusted to reflect this following the restructuring of the
business. We remain committed to supporting our loyal network of
independent bicycle dealers with our Claud Butler, Dawes, British
Eagle and Squish brands despite the number of independent bicycle
shops continuing to decrease.
We expect to make continued progress with our lightweight
children's Squish range of bicycles and are excited by the
opportunity to develop the brand further.
There are ongoing opportunities to increase revenue from our
corporate brands including Falcon, Elswick, Townsend, Boss and
Zombie.
We have re-sourced a number of our own brand Pro Rider mobility
scooters which offer better specification at lower prices. In
addition, we have added to our distribution portfolio following an
agreement with KYMCO. This compliments well with our existing
ranges of Pro Rider, Drive Devilbiss, Freerider, Sunrise Medical
and TGA Mobility products. Mobility scooter performance has
improved in the second half of the year to date.
Dividend
We are declaring an interim dividend of 1.35p per share (2016 -
1.30p per share) payable on or about 13 November 2017 in line with
our progressive dividend policy. The ex-dividend date will be 12
October 2017 and the record date 13 October 2017.
MPJ Keene
Chairman
29 September 2017
CONDENSED CONSOLIDATED INCOME STATEMENT
For the 6 months ended 30 June 2017
6 months ended 30 June 2017 6 months ended 30 June 2016 Unaudited Year ended 31 December 2016
Unaudited Audited
Note Before Non-underlying After Before Non-underlying After Before Non-underlying After
non-underlying items non-underlying non-underlying items non-underlying non-underlying items non-underlying
items GBP'000 items items GBP'000 items items GBP'000 items
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2 17,651 - 17,651 17,115 - 17,115 38,414 - 38,414
Cost of sales (12,713) - (12,713) (12,009) - (12,009) (28,434) - (28,434)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Gross profit 4,938 - 4,938 5,106 - 5,106 9,980 - 9,980
Operating
expenses (4,182) - (4,182) (4,812) - (4,812) (8,744) - (8,744)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Operating profit
before
exceptional
items 756 - 756 294 - 294 1,236 - 1,236
Exceptional items - - - - 206 206 - 143 143
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Operating profit
after
exceptional
items 756 - 756 294 206 500 1,236 143 1,379
Finance costs (122) (215) (337) (112) (192) (304) (207) (258) (465)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Profit before
taxation 634 (215) 419 182 14 196 1,029 (115) 914
Tax
(expense)/credit (46) - (46) (62) - (62) (146) 9 (137)
Net profit for
the period 2 588 (215) 373 120 14 134 883 (106) 777
============== ============== ============== ============== ============== ============== ============== ============== ==============
Pence Pence Pence
Earnings per
share
Basic 3 7.6 2.8 16.0
============== ============== ==============
Diluted 3 7.5 2.7 15.7
============== ============== ==============
All figures relate to continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 30 June 2017
6 months
6 months ended
ended 30 June Year ended 31 December
30 June 2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit for the period 373 134 777
Other comprehensive income:
Items that will be reclassified subsequently to profit and loss:
Foreign exchange differences on translation of overseas
subsidiaries (144) 139 322
Items that will not be reclassified subsequently to profit or loss:
Actuarial loss on pension schemes - - (738)
Movement in pension schemes' deferred tax provision - - 57
------------- --------- ----------------------
Other comprehensive income for the period (144) 139 (359)
Total comprehensive income attributable to equity shareholders of
Tandem Group plc 229 273 418
============= ========= ======================
All figures relate to continuing operations.
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2017
At 31
At 30 June At 30 June December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non current assets
Intangible fixed assets 5,617 5,612 5,625
Property, plant and equipment 3,071 3,206 3,141
Deferred taxation 1,921 1,825 1,918
---------- ----------- ---------
10,609 10,643 10,684
Current assets
Inventories 7,267 8,121 7,624
Trade and other receivables 6,713 7,379 3,910
Derivative financial asset held at fair value - 125 117
Cash and cash equivalents 1,506 980 1,101
---------- ----------- ---------
15,486 16,605 12,752
Total assets 26,095 27,248 23,436
========== =========== =========
Current liabilities
Trade and other payables (7,073) (8,434) (5,571)
Other liabilities (3,946) (4,527) (3,226)
Derivative financial liability held at fair value (28) - -
Current tax liabilities (640) (477) (133)
---------- ----------- ---------
(11,687) (13,438) (8,930)
Non current liabilities
Other payables (2) (6) (5)
Other liabilities (1,852) (2,277) (2,072)
Pension schemes' deficits (4,154) (3,479) (4,215)
---------- ----------- ---------
(6,008) (5,762) (6,292)
Total liabilities (17,695) (19,200) (15,222)
========== =========== =========
Net assets 8,400 8,048 8,214
========== =========== =========
Equity
Share capital 1,503 1,503 1,503
Shares held in treasury (247) (295) (272)
Share premium 286 175 232
Other reserves 3,122 3,083 3,266
Profit and loss account 3,736 3,582 3,485
---------- ----------- ---------
Total equity 8,400 8,048 8,214
========== =========== =========
CONDENSED Consolidated statement of changes in equity
As at 30 June 2017
Shares
held Share Capital Profit
Share in premium Merger redemption Translation and loss
capital treasury reserve reserve reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 1,503 (316) 127 1,036 1,427 481 3,561 7,819
Net profit for
the period - - - - - - 134 134
Retranslation
of overseas
subsidiaries - - - - - 139 - 139
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
comprehensive
income for
period
attributable
to equity
shareholders - - - - - 139 134 273
Share based
payments - - - - - - 8 8
Exercise of
share options - 21 48 - - - - 69
Dividends paid - - - - - - (121) (121)
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
transactions
with owners - 21 48 - - 139 21 229
--------- --------- --------- -------- ---------- ----------- --------- -------
At 30 June 2016 1,503 (295) 175 1,036 1,427 620 3,582 8,048
Net profit for
the period - - - - - - 643 643
Retranslation
of overseas
subsidiaries - - - - - 183 - 183
Net actuarial
loss on
pension
schemes - - - - - - (681) (681)
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
comprehensive
income for
period
attributable
to equity
shareholders - - - - - 183 (38) 145
Share based
payments - - - - - - 5 5
Deferral tax - - - - - - - -
on share
options
Exercise of
share options - 23 57 - - - - 80
Dividends paid - - - - - - (64) (64)
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
transactions
with owners - 23 57 - - 183 (97) 166
--------- --------- --------- -------- ---------- ----------- --------- -------
At 1 January
2017 1,503 (272) 232 1,036 1,427 803 3,485 8,214
Net profit for
the period - - - - - - 373 373
Retranslation
of overseas
subsidiaries - - - - - (144) - (144)
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
comprehensive
income for
period
attributable
to equity
shareholders - - - - - (144) 373 229
Share based
payments - - - - - - 6 6
Exercise of
share options - 25 54 - - - - 79
Dividends paid - - - - - - (128) (128)
--------- --------- --------- -------- ---------- ----------- --------- -------
Total
transactions
with owners - 25 54 - - (144) 251 186
--------- --------- --------- -------- ---------- ----------- --------- -------
At 30 June 2017 1,503 (247) 286 1,036 1,427 659 3,736 8,400
========= ========= ========= ======== ========== =========== ========= =======
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the 6 months ended 30 June 2017
At 31
At 30 June At 30 June December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit for the period 373 134 777
Adjustments:
Depreciation of property,
plant and equipment 78 98 186
Amortisation of intangible
fixed assets 8 - 31
Loss/(profit) on sale of property,
plant and equipment 1 - (5)
Waiver of deferred consideration - (241) (651)
Contributions to defined benefit
pension schemes (132) (130) (260)
Finance costs 337 304 465
Tax expense 46 62 137
Share based payments 6 8 13
------- ------- -------
Net cash flow from operating
activities before movements
in working capital 717 235 693
Change in inventories 356 (1,894) (1,397)
Change in trade and other
receivables (2,803) (1,789) 1,558
Change in trade and other
payables 1,996 3,299 946
Cash flows from operations 266 (149) 1,800
Interest paid (122) (54) (207)
Tax paid (40) (22) (287)
Net cash flow from operating
activities 104 (225) 1,306
======= ======= =======
Cash flows from investing
activities
Acquisition of subsidiaries
deferred consideration paid - - (32)
Purchase of intangible fixed
assets - - (44)
Purchase of property, plant
and equipment (8) (42) (59)
Sale of property, plant and
equipment - - 5
Net cash flow from investing
activities (8) (42) (130)
======= ======= =======
Cash flows from financing
activities
Loan repayments (204) (204) (407)
Finance lease repayments (13) (12) (24)
Change in invoice financing 718 493 (808)
Exercise of share options 78 69 149
Dividends paid (128) (121) (185)
Net cash flow from financing
activities 451 225 (1,275)
======= ======= =======
Net change in cash and cash
equivalents 547 (42) (99)
Cash and cash equivalents
at beginning of period 1,101 878 878
Effect of foreign exchange
rate changes (142) 144 322
------- ------- -------
Cash and cash equivalents
at end of period 1,506 980 1,101
======= ======= =======
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, the
market of that name operated by the London Stock Exchange.
The principal activity of the Group is the design, development
and distribution of sports, leisure and mobility 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 30 June
2017 (including the comparatives for the period ended 30 June 2016
and the year ended 31 December 2016) were approved by the Board of
Directors on 29 September 2017. 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 December 2016, 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 2016 statutory accounts.
Copies of the annual statutory accounts and the interim report may
be obtained by writing to the Company Secretary of 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 30 June 2017
is based on the actuarial valuation under IAS19 at 31 December 2016
updated for movements in net defined benefit pension income and
contributions paid during the half year period. A full valuation
for IAS19 financial reporting purposes will be carried out for
incorporation in the audited financial statements for the year
ending 31 December 2017.
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:
Sports, leisure and toys Bicycles and mobility Total
GBP'000 GBP'000 GBP'000
6 months ended 30 June 2017
Revenue 12,956 4,695 17,651
------------------------ --------------------- -------
Segment result 874 125 999
------------------------ ---------------------
Unallocated corporate charges (243)
-------
Operating profit before exceptional items 756
Finance costs (337)
-------
Profit for the period before taxation 419
Tax expense (46)
Net profit for the period 373
=======
6 months ended 30 June 2016
Revenue 11,037 6,078 17,115
------------------------ --------------------- -------
Segment result 562 19 581
------------------------ ---------------------
Unallocated corporate charges (287)
-------
Operating profit before exceptional items 294
Exceptional items 206
-------
Operating profit after exceptional items 500
Finance costs (304)
-------
Profit for the period before taxation 196
Tax expense (62)
Net profit for the period 134
=======
Year ended 31 December 2016
Revenue 26,975 11,439 38,414
------------------------ --------------------- -------
Segment result before corporate charges 2,233 124 2,357
Corporate charges (695) (363) (1,058)
------------------------ --------------------- -------
Segment result after corporate charges 1,538 (239) 1,299
------------------------ ---------------------
Unallocated corporate charges (63)
-------
Operating profit before exceptional items 1,236
Exceptional items 143
-------
Operating profit after exceptional items 1,379
Finance costs (465)
-------
Profit before taxation 914
Tax expense (137)
Net profit for the year 777
=======
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 Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Net profit for the period 373 134 777
========= =========== ============
Number Number Number
Weighted average shares in
issue used for basic earnings
per share 4,930,187 4,755,880 4,863,496
Weighted average dilutive
shares under option 72,775 186,527 84,530
Average number of shares used
for diluted earnings per share 5,002,962 4,942,407 4,948,026
========= =========== ============
Pence Pence Pence
Basic earnings per share 7.6 2.8 16.0
========= =========== ============
Diluted earnings per share 7.5 2.7 15.7
========= =========== ============
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (MAR).
Enquiries:
Tandem Group plc
Steve Grant, Chief Executive
Jim Shears, Group Finance Director and Company Secretary
Telephone 0121 748 8075
Nominated Adviser
Cairn Advisers LLP
Tony Rawlinson
James Caithie
Telephone 020 7213 0880
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LPMLTMBATBFR
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