Interim Results

Tandem Group PLC 20 September 2004 Chairman's interim statement Profit before taxation for the six months ended 31 July 2004 was £173,000 compared to £45,000 for the same period last year. Turnover was £24,544,000 compared to £25,390,000 for the same period last year. Falcon and Dawes Cycles Turnover in our bicycle business reduced due to the withdrawal from low margin business and a worldwide supply shortage of certain components used to manufacture the higher value Claud Butler and Dawes products, where demand was strong. Profit in our bicycle business was in line with last year with an improved return on working capital. Reduced fixed overheads and improved margins should improve the full year's results. Pot Black Sales of snooker and pool products were ahead of last year but turnover in outdoor play equipment was down. New contracts, at satisfactory margins, have been achieved for outdoor play equipment in August and September, which should increase Pot Black's turnover in the second half of the year and also during the peak season in the spring and summer of 2005. Ben Sayers Turnover declined at our smallest business, golf equipment company Ben Sayers, following a reduction of the product range. Sales to national retailers are increasing. With reduced overheads the business should produce an acceptable result. MV Sports Group The results for MV were better than budget, both in turnover and profitability. Our character licenses performed well with increased sales and margins. The Bang On The Door Baby products introduced during the last year continued to expand as did the Kickmaster range of football training equipment. Summary The first half of the year has seen a strengthening of our balance sheet with improved profitability and cash generation. The second half of the year usually sees an increase in turnover and profit compared to the first half and therefore the results for the full year should be in line with expectations. Graham Waldron Chairman 20 September 2004 Registered Office: 9a South Street, Crowland, Peterborough, PE6 0AH Consolidated profit and loss statement 6 months to 6 months to Year ended 31 July 2004 31 July 2003 31 January 2004 Unaudited Unaudited Audited £'000 £'000 £'000 Turnover Continuing operations 24,544 25,390 56,256 Discontinued operations - - 643 -------- -------- -------- 24,544 25,390 56,899 -------- -------- -------- Operating profit Continuing operations 564 419 736 Discontinued operations (44) - 202 -------- -------- -------- 520 419 938 Amortisation of goodwill (103) (102) 243 -------- -------- -------- Operating profit on ordinary activities 417 317 1,181 before interest Net interest payable (244) (272) (572) -------- -------- -------- Profit before taxation 173 45 609 Taxation - - (3) -------- -------- -------- Profit after taxation 173 45 606 Finance costs of non-equity shares (14) (14) (27) -------- -------- -------- Retained profit for the period 159 31 579 -------- -------- -------- Earnings per share Basic 0.42 0.10 1.64 Diluted 0.42 0.10 1.62 Adjusted 0.70 0.40 0.96 Consolidated balance sheet 31 July 2004 31 July 2003 31 January 2004 Unaudited Unaudited Audited £'000 £'000 £'000 Fixed assets Intangible assets 3,423 6,034 3,523 Negative goodwill (197) (1,637) (197) Tangible assets 1,148 1,774 1,396 -------- -------- -------- 4,374 6,171 4,722 -------- -------- -------- Current assets Stocks 7,358 8,786 7,593 Debtors 12,630 12,657 9,275 Cash at bank 2,849 1,285 1,965 -------- -------- -------- 22,837 22,728 18,833 -------- -------- -------- Creditors Amounts falling due within one year Other creditors 18,798 20,356 15,249 -------- -------- -------- Net current assets 4,039 2,372 3,584 -------- -------- -------- Total assets less current liabilities 8,413 8,346 8,306 Creditors Amounts falling due after more than one 982 1,754 1,006 year Provisions for liabilities and charges - 77 - -------- -------- -------- Net assets 7,431 6,712 7,300 -------- -------- -------- Capital and reserves Called-up share capital 1,503 1,502 1,503 Share premium account 5,258 6,193 5,258 Merger reserve 1,036 63 1,036 Other reserves 5,321 5,356 5,363 Profit and loss account (6,450) (7,138) (6,609) -------- -------- -------- Equity shareholders' funds 6,668 5,976 6,551 Non-equity minority interests 763 736 749 -------- -------- -------- 7,431 6,712 7,300 -------- -------- -------- Consolidated cash flow statement Notes 6 months 6 months Year ended ended ended 31 July 31 July 31 January 2004 2003 2004 Unaudited Unaudited Audited £'000 £'000 £'000 Net cash inflow from operating 4 1,239 3,633 4,436 activities -------- ------- ------- Returns on investments and servicing of finance Interest paid (237) (264) (556) Interest element of hire purchase (7) (8) (16) rentals -------- ------- ------- Net cash outflow from returns on investments and servicing of finance (244) (272) (572) -------- ------- ------- Taxation - - (3) -------- ------- ------- Capital expenditure Purchase of tangible fixed assets (85) (201) (351) Sale of tangible fixed assets 33 11 35 -------- ------- ------- Net cash outflow from capital (52) (190) (316) expenditure -------- ------- ------- Acquisitions and disposals Purchase of subsidiary undertakings - (449) (449) Net cash at bank and in hand acquired with subsidiary - 185 185 Disposal of subsidiary undertakings - - 1,245 -------- ------- ------- Net cash inflow/(outflow) from acquisitions and disposals - (264) 981 -------- ------- ------- Net cash inflow before financing 943 2,907 4,526 -------- ------- ------- Financing Expenses incurred in issue of ordinary shares - (193) (193) Repayments of amounts borrowed - - (880) Capital element of hire purchase rentals (59) (55) (114) -------- ------- ------- Net cash outflow from financing (59) (248) (1,187) -------- ------- ------- Increase in cash 5 884 2,659 3,339 -------- ------- ------- 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 2004 and are unaudited. The summary of results for the year ended 31 January 2004 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 2004 31 July 2003 31 January 2004 £'000 £'000 £'000 Basic and diluted earnings per share Profit for the period after finance cost of non-equity shares 159 31 579 ---------- --------- -------- Weighted average number of ordinary shares in issue during the period used for basic and diluted earnings per share 37,584,412 33,043,506 35,333215 Weighted average number of shares under option 1,740,000 438,575 1,310,959 Number of shares that would have been issued at fair value (1,085,141) (295,640) (942,252) ---------- --------- --------- Weighted average number of ordinary shares used for diluted earnings per share 38,239,271 33,186,441 35,701,922 ---------- --------- --------- Adjusted profit used for adjusted earnings per share Profit for the period after finance cost of non-equity shares 159 31 579 Goodwill amortisation 103 102 (237) ---------- --------- --------- Adjusted profit 262 133 342 ---------- --------- --------- 3 Movement in equity shareholders' funds 6 months to 6 months to Year ended 31 July 2004 31 July 2003 31 January 2004 £'000 £'000 £'000 Profit for the period 159 31 579 Re-translation of overseas subsidiaries (42) - (13) Issue of share capital - 1,236 1,276 ---------- --------- --------- 117 1,267 1,842 Opening equity shareholders' funds 6,551 4,709 4,709 ---------- --------- --------- Closing equity shareholders' funds 6,668 5,976 6,551 ---------- --------- --------- 4 Reconciliation of operating profit to net cash inflow from operating activities 6 months 6 months Year ended ended ended 31 July 31 July 31 January 2004 2003 2004 £'000 £'000 £'000 Operating profit 417 317 1,181 Depreciation charges 300 320 637 Amortisation of goodwill 103 (95) 206 Negative goodwill released - - (443) Profit on sale of tangible fixed assets - - (4) Decrease/(increase) in stocks 235 (372) 906 Increase in debtors (3,355) (4,377) (1,209) Increase/(decrease) in creditors 3,539 7,832 3,231 Utilisation of provisions on discontinued - 8 (69) activities ------- ------ ------- Net cash inflow from operating 1,239 3,633 4,436 activities ------- ------ ------- 5 Reconciliation of net cash inflow to movement in net funds/(debt) 6 months 6 months Year ended ended ended 31 July 31 July 31 January 2004 2003 2004 £'000 £'000 £'000 Increase in cash 884 2,659 3,339 Cash to repay finance leases and hire purchase contracts 59 55 114 Bank loan - - 800 ------- ------ ------- Changes in net debt resulting from cash flows 943 2,714 4,253 Lease and hire purchase obligations acquired with subsidiary - (65) (65) Loan acquired with subsidiary - (80) (80) ------- ------ ------- Movement in net debt in the year 943 2,569 4,108 Net funds/(debt) at beginning of period 64 (4,044) (4,044) ------- ------ ------- Net funds/(debt) at end of period 1,007 (1,475) 64 ------- ------ ------- This information is provided by RNS The company news service from the London Stock Exchange

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