Tandem's double-digit revenue growth tempered by higher costs

(Sharecast News) - Sports and leisure products retailer Tandem Group said that both revenues had grown double-digits in the six months ended 30 June, but continued bottom-line losses and ongoing macroeconomic uncertainty weighed on shares early on Friday.

Tandem said group revenues had increased by 14.3% to �11.2m, helping to swing the firm from an adjusted underlying loss of �248,000 to adjusted underlying earnings of �81,000 for the first half.

Gross profits were up 21.4% at �3.4m, with gross margins increasing from 28.8% to 30.9%, primarily due to "strong inventory management", cost reductions and foreign exchange movements during the period.

The AIM-listed group also noted that losses before interest and taxation had fallen from �405,000 to �167,000 in H1. Net losses also narrowed, dropping from �607,000 in H124 to �378,000 a year later.

However, operating expenses rose to �3.5m from �3.2m, primarily due to the benefit of the rates credit in 2024, increased salary cost due to the increase in employers' NI and additional expenditure in advertising to support the increase in sales, offsetting gains seen in both gross profits and margins.

Looking forward, Tandem warned that consumer confidence remained "subdued", against a backdrop of increasing levels of unemployment, rising business costs, and continued cost-of-living pressures.

Encouragingly, Tandem stated that as interest rates have now been lowered, and shipping rates have stabilised, it was "currently cautiously optimistic" about an improvement in conditions through the remainder of 2025 and beyond.

As of 0900 BST, Tandem shares were down 5.94% at 190p.

Reporting by Iain Gilbert at Sharecast.com