TIDMTND
RNS Number : 2843E
Tandem Group PLC
29 June 2023
Tandem Group plc
(the 'Group' or 'Company')
AGM Trading Statement
Tandem Group plc (AIM: TND), designers, developers, distributors
and retailers of sports, leisure and mobility equipment, announces
that at the Annual General Meeting of the Company to be held today,
the Company's Chairman, Steve Grant, will make the following
statement, with the Board maintaining its expectations that the
Group will achieve market expectations of performance for the full
year and particularly encouraging strong growth in the Group's
emobility division .
Trading
As previously announced in our Final Results Outlook Statement,
trading commenced slowly at the beginning of the year, presenting
challenges that persisted throughout the subsequent months. The
cautious buying behaviour observed among national retailers,
coupled with a delayed Chinese New Year, contributed to the initial
difficulties. These circumstances were not unforeseen, as we had
previously communicated our expectations. Trading conditions to 23
June 2023 have remained persistently challenging, however, we were
pleased with performance in the second quarter particularly in
bicycles and eMobility. The prevailing economic landscape,
exacerbated by high interest rates and the impact of the ongoing
cost of living crisis on the retail sector, has further compounded
the obstacles we face.
We have also experienced a shift in the buying habits of
national retailers who are transitioning from Free On Board (FOB)
purchases to Direct Delivery (DD). This change naturally alters the
pattern of our sales, aligning them more closely with the end
customer's buying behaviour and therefore the timing difference in
sales is to be expected to be weighted in favour of later in the
year compared to prior periods.
Overall, our sales have experienced a 26% decrease compared to
the prior year. Notably, our Toys, Sports, and Leisure division has
been particularly affected, with a 46% decline. However, it is
important to highlight that along with the move away from FOB, part
of this decline can be attributed to customer overstocks from the
previous year that have yet to be cleared, due to the impact of the
cost of living crisis and adverse weather conditions experienced
thus far in the current year. We therefore remain cautiously
optimistic as the year progresses, anticipating a recovery in this
segment.
In our Bicycles division, although sales are behind last year
overall by 20%, results in Q2 are significantly ahead of the
equivalent period in the prior year as we continue to release new
products.
Sales in our emobility sector have experienced a significant
growth of 51% compared to the prior year. Sales of electric bikes
in particular have experienced remarkable success in the first part
of 2023. In comparison to the prior year, electric bike sales have
more than tripled, reflecting a strong consumer demand and growing
interest in electric-powered transportation options. This upward
trend in electric bike sales highlights the effectiveness of our
strategy in capturing market opportunities.
The sale of electric bikes was positively impacted by the growth
in new Independent Bike Dealers and national retailer accounts and
our Electric Life shop, an innovative retail concept which, coupled
with the Electric Life website, has played an important role in
driving awareness, accessibility, and enthusiasm for electric bikes
among consumers.
We continue to support legislation that will determine the
legality and regulations surrounding electric scooters, and are
both well positioned and poised to seize opportunities as soon as
clarity emerges.
The Home and Garden division has experienced an overall decline
in turnover of approximately 30% compared to the same period in the
prior year. This decline is in line with the challenges faced from
poor weather conditions in Q1 and the prevailing cost of living
crisis continuing to impact non-essential spending.
We were pleased that the decline slowed significantly in Q2
compared to Q1, therefore despite the difficulties we have
outlined, we remain optimistic about the potential within the Home
and Garden sector.
In a strategic move to enhance our sales and marketing efforts,
we have expanded our Jack Stonehouse website as a platform to
promote products from other areas of our business. This approach
allows us to cross-promote and showcase the diverse range of
offerings available across different divisions. By leveraging this
untapped potential, we aim to maximise visibility, capture new
customers, and drive overall sales growth.
Outlook
Looking ahead, we anticipate that the remainder of 2023 will
continue to present challenges for the industry and for the Group.
The current market conditions show no signs of abatement, and we
anticipate further obstacles as increasing interest rates place
additional pressure on the disposable income of households. Despite
this, the positive trend we are seeing in sales now is expected to
continue throughout the rest of the year.
We are optimistic about the recently released and upcoming movie
releases applicable to our licences in 2023 and the positive impact
they will have on our popular brands such as Barbie, Paw Patrol,
and Spider-Man. These beloved franchises have captivated audiences
for years, and with new cinematic adventures on the horizon, we
anticipate an increase in demand for branded goods associated with
these blockbuster movies.
Our strategic focus on driving new national and independent
accounts has yielded positive results. These new partnerships hold
great potential as customers work through their previous overstocks
with their old suppliers. These new accounts will continue to
contribute to our sales as we build strong relationships and
establish ourselves as a reliable supplier in the market.
The changing landscape of the bike industry, has given us
further opportunity to gain market share alongside the launch of
new and exciting products.
We have invested considerable time and expertise into developing
designs that embody the quality, craftsmanship, and reliability
that our Dawes and Claud Butler brands are renowned for. The
significant pre-orders of our highly anticipated new electric bike
models are very encouraging. We continue to make strong progress
with our strategy of growing the eMobility sector.
Furthermore, we have made significant progress in building our
Group and brand awareness. Our proactive approach includes
publishing articles in appropriate media outlets, providing us with
increased exposure across the industries in which we operate. This
heightened visibility has been further enhanced by the recognition
we have received through several prestigious awards. These
accolades not only validate our commitment to excellence but also
serve as a powerful tool to attract new customers and enhance brand
authority.
In Home and Garden, we expect sales to perform relatively in
line with 2022 by the year-end. We have recently launched new
ranges of products, capitalising on market trends and consumer
preferences. These new offerings, coupled with improved weather
conditions, are anticipated to bolster sales in the Home and Garden
division.
Despite all of the current challenges, the Board remain
confident in the Group's ability to continue building and gaining
market share. We remain committed to evolving our strategies,
nurturing customer relationships, and leveraging our growing brand
presence to drive further growth and success in the market, and we
therefore maintain our view of achieving market expectations of our
performance for the full year.
Dividend
We announced on 27 March 2023 that following the results in 2022
it was the Board's view that it was our intention to pay a final
dividend of 6.57 pence per ordinary share. A resolution to that
effect will be proposed at the AGM today. Subject to this
resolution being passed, the dividend will be paid on or around 6
July 2023 to shareholders on the register on 12 May 2023
(ex-dividend date 11 May 2023).
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
Enquiries:
Tandem Group plc
Peter Kimberley, Chief Executive
David Rock, Company Secretary
Telephone 0121 748 8075
Nominated Adviser
Cenkos Securities plc
Ben Jeynes / Dan Hodkinson - Corporate Finance
Russell Kerr / Michael Johnson - Sales
Telephone 020 7397 8900
29 June 2023
Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
The Company cautions security holders and prospective security
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
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END
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