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May's topical tip from Tandem Group is to buy a new bicycle as soon as possible. This is because Tandem, which sells bikes via independent retailers, believes that its Far East suppliers are about to start pushing through some hefty price increases to claw back material price hikes. In recent years, the price of a new basic bike has fallen from around £99 to £79, but Tandem reckons it will soon be over £100.
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And despite the introduction of new ranges (such as a 1940s retro look bike with wicker basket and curved handles) the sharp rise in 2007-08 profits did not come from bicycles. That was because poor summer weather put off seasoned bikers from buying expensive machines; indeed, segmented bicycle profits fell slightly to £1.18m. The growth came from the sports, leisure and toys division, where profits advanced from just £147,000 to £800,000 thanks to good demand for outdoor play equipment and from a range of wheeled toys based on BBC children's programme In the Night Garden.
But with recession looming, it's not surprising that Tandem reckons 2008's trading will be challenging, with no sales growth expected in the current six months. Much may depend on what character licences Tandem can pick up.
TANDEM (TND) |
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|---|---|---|---|---|
| ORD PRICE: | 15.125p | MARKET VALUE: | £5.44m | |
| TOUCH: | 14.5-15.75p | 12-MONTH HIGH: | 20.5p | LOW: 15.75p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 5 | |
| NET ASSET VALUE: | 19p | CASH: | £2.39m | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 56.9 | 609 | 1.64 | nil |
| 2005 | 52.7 | 1200 | 3.00 | nil |
| 2006 | 42.8 | -2157 | -6.14 | nil |
| 2007 | 33.8 | 649 | 2.52 | nil |
| 2008 | 34.9 | 1105 | 2.94 | nil |
| % change | +3 | +70 | +17 | – |
Aim: Recreational products |
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Click here for a guide to the terms used in IC results tables.
That said, the shares are already lowly rated and assets have been boosted by the elimination of the major defined-benefit pension deficit. Good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
