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(Alliance News) - Tandem Group PLC on Thursday reported a 52% rise in annual profit and proposed a special payout, despite the toy industry declining for the "third year in a row".
The sports, leisure and mobility equipment distributor said revenue was 19% higher in 2019 at GBP38.8 million from GBP32.5 million. Pretax profit jumped to GBP2.9 million from GBP1.9 million.
Tandem said: "Despite a third year in a row of decline in the toy industry as a whole with reported outdoor toy sales declining by almost 10%, revenue from the toys business was considerably ahead of the prior year."
Back in January, toy maker Character Group PLC and grocery chain J Sainsbury's PLC also reported declines in the UK's toy market over the crucial Christmas trading period.
Tandem boosted its ordinary dividend by 6.7% to 4.6 pence from 4.31p. It also proposed a 2.00p special payout.
Tandem said: "Our dividend policy remains progressive, paying an increasing dividend as trading results and funds permit. Moreover, we will review the capacity each year to pay a special dividend where profits are materially ahead of the prior year."
It did not pay a special dividend in 2018.
Tandem said it was "pleased" with the 2019 performance from its toy licensing agreement with Walt Disney Co.
Tandem added: "Coupled with our existing Disney Princess licence, Disney made a significant contribution to revenue. The stand out performing licence however continued to be LOL Surprise! which delivered further growth over the prior year with the folding inline scooter the group's best selling product. Our Batman, Paw Patrol and Peppa Pig licensed ranges and own brands Ben Sayers, Hedstrom, Kickmaster, Stunted, U-Move and Wired continued to perform strongly."
The current financial year has "started more slowly," Tandem conceded.
It said: "Covid-19 has, as anticipated, had a material impact with none of our scheduled shipments leaving the Far East in the whole of February and into early March. Fortunately, as a result of Chinese New Year and the usual factory closures, it is normally a quieter time for the group and there is still time to recover some of the lost production. Unfortunately, the situation in the UK and Europe is worsening by the day and the prime minister announced an effective lockdown in the UK.
"In addition, although we sold to national retailers strongly in 2019, we are aware that some of our major customers have carried stock forward into this year which will impact on their ability to re-buy."
Tandem shares were 8.3% higher at 130.00p each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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