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LONDON (Alliance News) - Tandem Group PLC shares fell on Wednesday morning after the group warned on the outlook for its bicycles and mobility division in 2016.
The sports and leisure equipment maker said the independent cycle market in the UK looks "saturated and highly competitive" and added it does not have a large cycle promotional contract in place for 2016. Together, this will make a challenging year for the bicycles and mobility arm of the business, it said.
In addition, Tandem said it was investigating several import duty classification codes used for certain Pro Rider and ESC products in its range and is discussing these with HM Revenue & Customs, the UK taxman.
It said it is not currently possible to quantify the extent of any underpaid duty on the products, but said where duty has been underpaid, it will make appropriate provisions to cover any payments required.
The group said revenue for the year to the end of December rose around 10% year-on-year, with like-for-like sales increasing 5.0%, though bicycles revenue was held back by the competitive market.
For the first eight weeks of 2016, revenue increased around 4.0% year-on-year, Tandem said, and it remains confident of growth from its divisions outside the bicycles arm.
Tandem shares were down 27% to 128.95 pence on Wednesday morning, the worst performer in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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