Tandem

Profits stepped up 70% last year at bike-maker Tandem, which has somewhat stabilised after revenues slumped alarmingly the previous year. For the year ended January 2008, turnover has risen to over £34m mainly due to the performance of its sports and toys divisions.

Divided into two similarly sized divisions, the group manufactures cycle brands such as Falcon and Dawes, and has licences for several golfing, toy and sports brands such as Hedstrom outdoor play equipment, Barbie, Bob the Builder and popular golfing brand Ben Sayers.

After sales dropped for year-end 2006 by 21% to £33.7 million, results for 2007 are beginning to improve following the shift of bicycle manufacturing facilities from the UK to Asia. However, revenue in the bicycles division fell 5.9% as lower-cost models outsold the more expensive and higher-margin models - a pattern likely to continue in the present year.

Across the group, a pre-tax profit of £1.1m was realised - mainly on the leisure and toys divisions, where turnover increased by almost £3m. A total of £1.8m was generated in cash over the year, allowing the group’s pension deficit to be cleared and to buy back shares to improve earnings, which have increased 0.39p to 2.91p.

Trading conditions moving into the summer period are expected to be ‘difficult’, and with substantial price increases in steel, oil and labour costs in Asia, the group is not expecting any turnover growth in the first half. This does not bode well for a group that traditionally has suffered fluctuations in less-challenging economic conditions. Avoid.

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