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LONDON (Alliance News) - Tandem Group PLC said it swung to profit in the first half, but lamented difficult trading period in recent weeks despite "reasonable" weather conditions.
The Bromwich-based designer, developer and distributor of sports and leisure products posted pretax profit of GBP213,000 for the six months to June 30 compared with a GBP498,000 loss a year earlier, as revenue rose to GBP13.7 million from GBP11.3 million.
Profit was boosted by finance income of GBP272,000 related to a fair value adjustment for foreign currency derivative contracts, effectively the partial unwinding of the charge incurred during the year ended December 31, 2013.
However, the company also said its two main divisions made gains during the period.
Tandem said its bicycles and accessories arm saw revenue rise 3.8% to GBP7.5 million compared with GBP7.2 million a year earlier.
It said within the division the introduction of a new lightweight range of 'Academy' junior cycles, which were used for the British Triathlon Trust's summer cycling events programme across the country, has proved very successful.
Additionally, the company's national retailer bicycles business, under the Falcon, Townsend, Elswick, Boss, Zombie and British Eagle brands, continued to show significant growth during the period.
However, it was the sports, leisure and toys arm which made the most gains with revenue up 54% to GBP6.3 million from GBP4.1 million a year earlier.
Tandem said its own brands Hedstrom and Stunted were significantly ahead of the prior year, while revenue from licensed product ranges including Peppa Pig, One Direction and Thomas the Tank Engine were also greater than the previous period.
Despite its strong performance in the first half, the company said the 11 week period to September 12 was more challenging even though weather conditions were "reasonable".
"After a positive start to the year, the leisure bicycle market has been challenging in recent months. Although some areas of the bicycle market continue to perform strongly, in particular higher priced road bikes, our sector of the cycling market remains highly competitive," Tandem said.
Nonetheless, post the year end the company acquired Pro Rider an online retailer of mobility scooters, associated mobility products, electric bicycles and electric golf trolleys. The company was acquired in a deal worth GBP2.5 million which could rise to GBP3.5 million, depending on the profitability of the business.
The company said it expects Pro Rider to make a strong contribution to trading performance in the remainder of 2014 and beyond.
On the back of its performance the company increased its interim dividend to 1.20 pence from 1.15 pence.
Tandem shares were quoted down 7.3% at 120.53 pence on the open Friday.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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