Tandem Group plc · LSE:TND
Tandem — Investor Presentation (September 2019)
44 slides from Tandem's investor presentation, September 2019
Slide 1: Tandem Group plc Investor presentation
Tandem Group plc Investor presentation September 2019 1
Slide 2: Disclaimer
DISCLAIMER This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with a
Slide 3: Agenda
AGENDA 1. GROUP STRUCTURE 2. OPERATIONS AND PRODUCT RANGES 3. GROUP STRATEGY 4. FINANCIALS AND TRADING UPDATE 3
Slide 4: 1. Group Structure
1. GROUP STRUCTURE 4
Slide 5: Group Structure
GROUP STRUCTURE Tandem Group plc MV Sports
Slide 6: 2. Operations and Product Ranges
2. OPERATIONS AND PRODUCT RANGES 6
Slide 7: MV Sports Operations
OPERATIONS AND PRODUCT RANGES MV Sports Operations MV Sports & Leisure is our UK 40 employees based across two locations based sports, leisure and toy business providing sales, product development and administrative functions The MV Sports Hong Products Kong office based in 70,000 square foot design
Slide 8: MV Sports Licences
OPERATIONS AND PRODUCT RANGES MV Sports Licences: Avengers Infinity War 1*, Avengers*, Barbie*, Batman*, Ben 10*, Bored, Bumblebee*, Disney Pixar Cars*, Disney Pixar Finding Dory*, Disney Princess*, Electrick, E-Moto, Fireman Sam*, Frozen*, Grow & Go, Hatchimals*, Hot Wheels*, Incredibles 2*, Jo Jo
Slide 9: MV Sports Products
OPERATIONS AND PRODUCT RANGES MV Sports Products - UK’s leading wheeled toy supplier including bicycles, scooters, trikes, ride-ons, skates, go karts, glideboards, skateboards and accessories - Other products include helmets, wigwams, scootin’ suitcases, dream dens, hoppers, mitts, knee & elbow pads
Slide 10: MV Sports Own brand products
OPERATIONS AND PRODUCT RANGES MV Sports Own brand products High specification pre-school scooters and ride-ons www.bensayers.co.uk Widely acknowledged as being the oldest golf company in the world 10 Stunt scooters and accessories
Slide 11: Own brand products (cont.)
OPERATIONS AND PRODUCT RANGES MV Sports Own brand products (cont.) High specification pre-school scooters and ride-ons www.hedstrom.co.uk Leading UK supplier of outdoor play products 11 Well renowned scooter, pool and multi-games table brand
Slide 12: Own brand products (cont.)
OPERATIONS AND PRODUCT RANGES MV Sports Own brand products (cont.) Scooters, electric scooters, glideboards and glidekarts UK’s leading range of kids football training products 12 High quality, fun skateboards
Slide 13: MV Sports Customers
OPERATIONS AND PRODUCT RANGES MV Sports Customers include: 13
Slide 14: MV Sports Marketing
OPERATIONS AND PRODUCT RANGES MV Sports Marketing – Trade fairs (London, Nuremberg) – TV advertising to maintain position as market leader in licensed wheeled toys – Press advertising – Page contributions to major retailers – Customer specific marketing initiatives – Website marketing and own brand
Slide 15: Tandem Group Cycles Operations
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles Operations Tandem Group Cycles is still based in Birmingham, more 11 employees based in the UK than 90 years since Dawes Cycles began All products expertly designed and 3rd party developed in the UK warehousing used Strong focus on heritage and well
Slide 16: Tandem Group Cycles: Squish
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Squish Brands and products – Lightweight children’s bicycles – Independent bicycle dealers (RRP £230 - £500) – Launched 2017, rapid growth since – 14-26” wheel – Exciting designs 16 www.squish.bike
Slide 17: Tandem Group Cycles: Dawes
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Dawes Brands and products – Family cyclists and touring – Independent bicycle dealers (RRP £70 - £1,500) – Long established, respected heritage brand – Launching additional ebikes in 2020 – Quality and value 17 www.dawescycles.com
Slide 18: Tandem Group Cycles: Claud Butler
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Claud Butler Brands and products – MTB and ‘urban’ type bicycles – Independent bicycle dealers (RRP £250 - £1,800) – Competitive price points – Limited edition models with spot buying opportunities – ebike development in 2020 18 www.claudbutler.co.u
Slide 19: Tandem Group Cycles: Falcon
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Falcon Brands and products – Family cycles – National Retailers (RRP £150 - £1,000) – Long established heritage brand – New ebikes introduced in 2019 – Strong consumer awareness 19 www.falconcycles.co.uk
Slide 20: Tandem Group Cycles: Boss
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Boss Brands and products – Youth and adult cycles – National Retailers (RRP £180 - £500) – Focus on MTB – Lifestyle brand – Targeting a more “serious” national retailer customer 20 www.bosscycles.co.uk
Slide 21: Tandem Group Cycles: Townsend
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Townsend Brands and products – Children’s bicycles – National Retailers (RRP £50 - £130) – Long established, well known brand with 130 year history – Entry level but with focus on value – Strong brand recognition 21 www.townsendcycles.co.uk
Slide 22: Tandem Group Cycles: Elswick
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Elswick Brands and products – Heritage style bicycles for all ages – National Retailers (RRP £75 - £800) – Well renowned cycling brand – Traditional with a modern edge – Targeting leisure cyclists 22 www.elswickbikes.co.uk
Slide 23: Tandem Group Cycles: Zombie
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles: Zombie Brands and products – Children’s and youth BMX bikes – National Retailers (RRP £130 - £230) – Focus on BMX and dirt jump – Take advantage of current market trends – Built for strength and long life 23 www.zombiebikeco.com
Slide 24: Tandem Group Cycles Sales and Marketing
OPERATIONS AND PRODUCT RANGES Tandem Group Cycles Sales and Marketing – Team of UK sales representatives supported by telesales – Roadshows, events and trade fairs – Dealer support and POS – Promotional material – Customer specific marketing initiatives – Strong customer service – Website marketing
Slide 25: Expressco Direct Operations
OPERATIONS AND PRODUCT RANGES Expressco Direct Operations Located in Northampton, 24 employees based in the UK, Expressco is our online, supported by Hong Kong office for direct to consumer business sourcing, QA and QC All products developed 33,000 square foot in the UK warehouse with additional 3rd
Slide 26: Expressco Direct: Garden Comforts
OPERATIONS AND PRODUCT RANGES Expressco Direct: Garden Comforts www.garden-camping.com Brands and products – Focus on garden and outdoor products – Home of own brand ‘Airwave’ gazebos and party tents – Parasols and spas – Garden furniture and storage – Outdoor play 26
Slide 27: Expressco Direct: Home Comforts
OPERATIONS AND PRODUCT RANGES Expressco Direct: Home Comforts www.jackstonehouse.com www.athomecomforts.co.uk Brands and products – Indoor home, electrical and furnishings – Own brand ‘Jack Stonehouse’ radiator covers – Heating and cooling – Small electrical appliances – Furniture, lighting and mirr
Slide 28: Expressco Direct: Pro Rider Mobility
OPERATIONS AND PRODUCT RANGES Expressco Direct: Pro Rider Mobility www.proridermobility.com Brands and products – Mobility scooters and mobility accessories – Rise & Recline chairs – Own brand ‘Pro Rider’ – Distributor for Drive, Freerider, Kymco, Pride, Sunrise and TGA – Strong aftersales and servi
Slide 29: Expressco Direct: Pro Rider Leisure
OPERATIONS AND PRODUCT RANGES Expressco Direct: Pro Rider Leisure www.proriderleisure.com Brands and products – Electric and manual golf trolleys – eBikes and manual own brand ‘British Eagle’ bikes – Ride-ons and fitness – Distributor for ‘Bioflow’ sports bands – New product development for 2020 29
Slide 30: Summary: Core competencies and group synergies
OPERATIONS AND PRODUCT RANGES Summary Core competencies • product design Group synergies • product development • sourcing • suppliers and terms • importing • customers • QC/QA systems • shipping • financial controls and cost • distribution management • warehousing • distribution • banking, finance a
Slide 31: 3. Group Strategy
3. GROUP STRATEGY 31
Slide 32: Major objectives
GROUP STRATEGY Major objectives To enhance shareholder value by: • generating cash • improving the profitability of the Group and increase net asset value • paying a regular dividend • improving communications with investors in order that the Group’s performance is recognised • increasing market cap
Slide 33: Building brands and licences
GROUP STRATEGY Building brands and licences Our objectives are to: • continue to invest in leading licences and remain the UK market leader in licensed wheeled products • explore expansion into additional licensed categories • invest in the development of new innovative product ranges • grow own bra
Slide 34: Acquisitions and disposals
GROUP STRATEGY Acquisitions and disposals Whilst our focus is for organic growth we continue to have an opportunistic approach to M&A: Acquisitions: • Complements/enhances current product ranges • Uses common or existing supply base • UK designed and developed • Known brand/expertise • Major/Nationa
Slide 35: Infrastructure and resources
GROUP STRATEGY Infrastructure and resources We will invest as appropriate to enable our objectives to be achieved by: • continuing to review our warehouse/distribution requirements • investing in, rewarding and empowering key personnel • reviewing and supporting capex and infrastructure projects • e
Slide 36: Conclusions
GROUP STRATEGY Conclusions To realise our strategy we: • recognise that we operate in a highly competitive and rapidly changing retail environment • are aware of the need to harness the power of our brands to drive growth • are capable of driving revenue organically, accelerated by key acquisitions
Slide 37: 4. Financials and Trading Update
4. FINANCIALS AND TRADING UPDATE 37
Slide 38: Summary: 6 months to June 2019
FINANCIALS AND TRADING UPDATE Summary 6 months to 30 June 2019 Group Gross Gross Revenue Profit Profit % + 80 + 27% + 30% bps Net Profit Basic EPS Dividend £155k v 3.0p v + 10% £(356)k (7.0)p 38
Slide 39: Profit & Loss Account
FINANCIALS AND TRADING UPDATE Profit & Loss Account 39
Slide 40: Profit & Loss Account commentary
FINANCIALS AND TRADING UPDATE Profit & Loss Account commentary • + 27% revenue growth (£16.0m v £12.7m) significantly driven by strong licence performance • Improved gross profit percentage (30.6% v 29.8%) through better buying, re-sourcing, new products and concentration on profitable product lines
Slide 41: Balance sheet
FINANCIALS AND TRADING UPDATE Balance sheet 41
Slide 42: Balance sheet commentary
FINANCIALS AND TRADING UPDATE Balance sheet commentary • Tight control of inventories (£5.7m v £6.2m), stocks are clean and saleable • Increased trade debtors (£7.1m v £5.6m) reflecting revenue growth, no material bad debts • Cash generation (£3.7m v £1.0m) and reduction in net debt position (£(2.0)
Slide 43: Outlook
FINANCIALS AND TRADING UPDATE Outlook • Ongoing strong licence potential in 2020 • Further development of MV own brand products and ranges • Squish expected to keep growing and take market share • Continuing challenges in the overall bicycle market • New product development in online businesses incl
Slide 44: Dividend
FINANCIALS AND TRADING UPDATE Dividend • First dividend paid 2010 following share capital restructure • Dividends paid to date £1.6 million • Cumulative dividend growth since inception +44% • We aim to continue with our progressive dividend policy • Dividend strategy and amount paid continually unde
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