Interim Results
September 30 2003 - 3:00AM
UK Regulatory
RNS Number:3136Q
Tandem Group PLC
30 September 2003
Tandem Group plc
Interim results for the 6 months ended 31 July 2003
Chairman's interim statement
The operating profit before exceptional items and goodwill amortisation for the
six months ended 31 July 2003 on a like for like basis was #453,000 compared to
#639,000 for the same period last year. MV Sports Group Plc, which was acquired
on 8 April 2003, increased the Group's operating profit before exceptional items
and goodwill amortisation by #205,000 to #658,000. No dividend is proposed for
the interim period.
During the period we have relocated the Pot Black snooker and outdoor play
equipment and the Ben Sayers golf businesses to a single site at Bideford. The
Dawes Cycles and the Two Wheel Trading bicycle accessory businesses have been
combined and transferred to the MV Sports premises in the Midlands.
Reorganisation costs of #198,000 have been incurred in the first half year and
an additional provision of #150,000 has been made. Further reorganisation costs
may be incurred in the second half of the year. The full benefit of savings from
employee costs and other fixed overheads will be achieved during the 2004
calendar year.
Falcon and Dawes Cycles
Turnover in our bicycle businesses was 2% up on the previous year with similar
operating profits.
We now have products covering a wide range of price points and, with increased
listings with major retailers, our share of the bicycle market should rise for
the full year.
Pot Black
Sales of outdoor play equipment products introduced since we acquired the
business in September 2000 have grown very successfully. Other products, outside
the core activities of snooker, pool and outdoor play equipment, with low
margins are being withdrawn from the range which has resulted in a reduced
turnover.
Increased sales and marketing costs together with the relocation and reduced
turnover has resulted in a drop in profitability for Pot Black in the first half
year.
Product selections by national retailers for the second half year are
encouraging, which should lead to the business reporting an acceptable level of
profit for the full year.
Ben Sayers
Our golf business achieved an increase in turnover of 17% from the previous
year. Despite increased sales expenses and the cost of reorganisation, profit
levels were maintained.
The relocation of the business to operate alongside Pot Black should allow a
better utilisation of resources and with significantly reduced fixed costs an
increase in profitability.
MV Sports Group
MV distribute products featuring high-profile children's brand and character
licences including Barbie, Bratz, Groovy Chick and Bang on the Door. A range of
football training equipment for children under the brand Kickmaster was
successfully launched in April 2002.
Since the acquisition of MV Sports on 8 April 2003, it has contributed
#6,368,000 of turnover to 31July 2003 with an operating profit of #205,000. The
first half year has previously been a loss-making period for MV Sports with the
six months to 30 June 2002 reporting an operating loss of #88,000.
Early indications at MV Sports look encouraging and the business should yield a
significant return on our investment.
We welcome to the Group the employees of MV Sports who have shown real
commitment and enthusiasm since joining us.
Summary
The first half year has seen the acquisition of MV Sports and, towards the end
of the period, the commencement of the rationalisation of the Group's operating
facilities.
The start of the second half of the year has been encouraging with the benefit
of cost savings already being seen.
Graham Waldron
Chairman
30 September 2003
Registered office: 9 South Street, Crowland,
Peterborough PE6 0AH
Consolidated profit and loss statement
6 months to 6 months to Year ended
31 July 2003 31 July 2002 31 January
2003
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover
Continuing operations 19,022 19,087 37,317
Acquisitions 6,368 - -
Discontinued operations - - -
-------- -------- --------
25,390 19,087 37,317
-------- -------- --------
Operating profit
Continuing operations 453 639 984
Acquisitions 205 - -
Discontinued operations - - (24)
Release/utilisation of prior year provision - - 28
-------- -------- --------
658 639 988
Exceptional items (239) - -
Amortisation of goodwill (102) (92) (201)
-------- -------- --------
Operating profit on ordinary activities
before interest 317 547 787
Net interest payable (272) (263) (553)
-------- -------- --------
Profit before taxation 45 284 234
Taxation - - 9
-------- -------- --------
Profit after taxation 45 284 243
Finance costs of non-equity shares (14) (18) 151
-------- -------- --------
Retained profit for the period 31 266 394
-------- -------- --------
Earnings per share
Basic 0.10 0.76 1.57
Diluted 0.10 0.76 1.57
Adjusted 1.13 1.03 2.38
Consolidated balance sheet
31 July 2003 31 July 2002 31 January
2003
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Intangible assets 6,034 3,509 3,692
Negative goodwill (1,637) (95) (197)
Tangible assets 1,774 1,210 1,153
-------- -------- --------
6,171 4,624 4,648
-------- -------- --------
Current assets
Stocks 8,786 7,824 7,133
Debtors 12,657 9,082 6,433
Cash at bank 1,285 - -
-------- -------- --------
22,728 16,906 13,566
-------- -------- --------
Creditors
Amounts falling due within one year
Bank overdrafts - 5,040 1,374
Other creditors 20,356 10,667 9,539
-------- -------- --------
20,356 15,707 10,913
-------- -------- --------
Net current assets/(liabilities) 2,372 1,199 2,653
-------- -------- --------
Total assets less current liabilities 8,543 5,823 7,301
Creditors
Amounts falling due after more than one
year 1,754 86 1,801
Provisions for liabilities and charges 77 92 69
-------- -------- --------
Net assets 6,712 5,645 5,431
-------- -------- --------
Capital and reserves
Called-up share capital 1,502 11,174 11,174
Share premium account 6,193 5,397 5,442
Capital reserve 5,356 406 406
Merger reserve 63 63 63
Profit and loss account (7,138) (12,472) (12,376)
-------- -------- --------
Equity shareholders' funds 5,976 4,568 4,709
Non-equity minority interests 736 1,077 722
-------- -------- --------
6,712 5,645 5,431
-------- -------- --------
Notes to the interim report
1 Basis of preparation
The interim financial statements have been prepared using accounting policies
stated in the Group's report and accounts for the year ended 31 January 2003 and
are unaudited. The summary of results for the year ended 31 January 2003 does
not constitute full financial statements within the meaning of the Companies Act
1985. The report and full financial statements for that period have been filed
with the Registrar of Companies and contain an unqualified audit report.
2 Earnings per share
The calculation of earnings per share is based on the net profit and ordinary
shares in issue during the period as follows:
6 months to 6 months to Year ended
31 July 2003 31 July 2002 31 January
2003
#'000 #'000 #'000
Basic and diluted earnings per share
Profit for the period after
finance cost of non-equity shares 31 266 394
---------- --------- ---------
Weighted average number of
ordinary shares in issue during
the period used for basic and
diluted earnings per share 33,043,506 34,883,232 25,046,592
Weighted average number of shares
under option 438,575 - -
Number of shares that would have
been issued at fair value (295,640) - -
---------- --------- ---------
Weighted average number of
ordinary shares used for diluted
earnings per share 33,186,441 34,883,232 25,046,592
---------- --------- ---------
Adjusted profit used for adjusted earnings
per share
Profit for the period after
finance cost of non-equity shares 31 266 394
Goodwill amortisation 102 92 201
Exceptional items 239 - -
---------- --------- ---------
Adjusted profit 372 358 595
---------- --------- ---------
The earnings per share figures for the period ended 31 July 2002 and the year
ended 31 January 2003 have been adjusted to take account of the reorganisation
of the ordinary share capital of the Company, which took effect on 19 March
2003.
3 Exceptional items
Exceptional items, analysed below, are reorganisation costs following the
acquisition of MV Sports Group Plc and restructuring of the Group, the release
of negative goodwill on preference shares owned by the company and special
pension contributions made by the company to meet the minimum funding
requirement of its pension schemes.
#'000
Reorganisation costs and 348
provisions
Special pension payments 88
Release of negative goodwill (197)
-------
239
-------
4 Movement in equity shareholders' funds
6 months to 6 months to Year ended
31 July 2003 31 July 2002 31 January
2003
#'000 #'000 #'000
Profit for the period 31 266 394
Re-classification of preference dividends - 32 -
Issue of share capital 1,236 2,317 2,362
-------- -------- --------
1,267 2,615 2,756
Opening equity shareholders' funds 4,709 1,953 1,953
-------- -------- --------
Closing equity shareholders' funds 5,976 4,568 4,709
-------- -------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
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