One of Britain’s Biggest in Cycling Sees 2016 Sales Drop by 26%
BIRMINGHAM, UK – In its earlier this week published trading update for the whole year of 2016 Tandem Group plc (owner of among others the brands Claud Butler and Dawes) reports that its bicycles and mobility division was loss-making. In what Tandem Group describes as ‘challenging market environment’ the company saw its cycling revenues decline by 26%.
Tandem Group which names itself “designers, developers and distributors of sports, leisure and mobility equipment,” announces a trading update ahead of its annual results for 2016 which are due to be announced in April 2017.
Trading and operations
Tandem Group saw its overall revenue come in at GBP 38.4 million (€ 44.2m); up 12% compared to 2015. The company also expects it operating profit to be ahead of the prior year. This despite exceptional costs of GBP 191,000 (€ 220,000) it made in respect of redundancies and restructuring of the bicycles division. “These costs were offset by exceptional income of GBP 334,000 (€ 384,000) being a release in over provided deferred consideration in respect of the Pro Rider and ESC acquisitions,” states Tandem Group.
‘Difficult trading conditions’
Tandem Grouop reports further on its bicycle business, “Revenue was approximately 26% behind the prior year.” The 2015 total turnover of the company’s bicycles and mobility division stood at about GBP 15.5 million (€ 17.8m). The Tandem trading update continues with “Both corporate and independent bicycle businesses encountered difficult trading conditions. Unlike the prior year, there was no significant promotional contract in our corporate bicycles division and revenue reduced as a result. We continue to seek opportunities for future promotional business where it is possible to make an acceptable margin.
The trading update continues “In our independent cycles businesses there was a continued downturn reflecting the overall trend in the UK leisure cycling market. Having been aware of and having reported challenging market conditions previously we made some significant changes during the second half of the year. The Claud Butler and Dawes sales teams were merged together with one team selling both brands. We have rationalised the product development department and improved efficiencies within our Scunthorpe premises where all Claud Butler and Dawes products are warehoused together. As a result of these changes we expect to save approximately GBP 1.0 million (€ 1,150,000) of overhead costs in the bicycles businesses in 2017.”
For this year Tandem Group expects to see an improvement in margins thanks to prices increases and better buying prices.