Tandem Share Discussion Threads

[mrshaungcm] 10/1/2011 13:10

5% buy back - now 25% - so cost saving to customer has greatly reduced unless scheme extended over 3 yrs which most employers are unwilling to do

i refer to the higher priced CB - not average - as the schemee stimulated higher price points

[greengiant] 10/1/2011 12:08

Point 6



gg

[greengiant] 10/1/2011 12:06

MrShaunGCM,

The changes in cyclescheme have been so miniscule that I would be suprised to see any such drop never mind a 20% ish drop. The latest HMRC guidance based on a £1,000 bike was that there would be around a £10 difference in the savings and this would obviously a lot less for the average price band of Butler and Dawes (c £250 - £300)

Please let me know where you got your 20% drop figure from

gg

[mrshaungcm] 10/1/2011 11:56

mid/high end bike sales have taken a bit of a pasting over the last 3/4 mths or so due to "changes" in the tax saving cyclescheme - 20%ish drop
TND is partly in this market with Claude and Dawes

[neverforget] 10/1/2011 11:46

gg, what do you make of todays trades? unusual to see 2 very high trades like that.
Agree with regard to wiggle and hope you found your meeting useful

[greengiant] 10/1/2011 06:50

David,

He would make a fantastic Chairman and I believe is looking for other non exec roles (PwC are aware of this and have but him forward for a non exec role at a recently PE backed deal)

Online sales (retailer based) would go against TND's single dimensional distribution policy. Wiggle is a good idea and strengthens Plimsolls argument that consumers are using internet first to get an idea of what they can buy, then either buying on line or visiting a bricks and mortar retailer.

gg

[davidosh] 10/1/2011 02:30

Had any of you guys already heard of Wiggle for online sales ?





Apparently they are doing about £55m of sales annually and I see Raleigh have a few bikes listed with them. None of our brands though !

Andy Bond the ex CEO at ASDA has invested in the company and is their chairman.

He would have been a great catch for Tandem surely ? He is a cycling fanatic and has superb retailing links.

[greengiant] 09/1/2011 10:06

Neverforget,

I believe the highest paid director at HTI was around £430k. If people believe that I am against high pay, they are very mistaken. I am actually very much in favour of paying directors and employees well. HTI are motivated to perform because of their level of shareholding.

However, pay has got to be linked to performance - period. Pay a basic wage for basic performance (although you have to question whether management are the correct management if they only want to do the basic) and provide incentives for performance that is in excess of previous years.

If TND management wants to pay themselves bonuses, then let's see the kind of growth that HTI, Character, Flair, Trek, Specialized, Brompton, etc etc are showing. It is really simple. After all Let us remind ourselves of Tandems performance over the past 5 years:

2005/06 Revenue £52,683, Op Profit £1,690 Directors Remun £385
2006/07 Revenue £33,785, Op Profit £1,191 Directors Remun £341
2007/08 Revenue £34,878, Op Profit £1,368 Directors Remun £588
2008/09 Revenue £35,161, Op Profit £1,126 Directors Remun £557
2009/10 Revenue £35,678, Op Profit £1,217 Directors Remun £568

That is a 5.60% growth in turnover over 4 years. Tandems own presentation reported that the value of the market had risen by over 10% in a 3 year period. Is that good enough? In a period when the company's balance sheet was sound and could have taken advantage of this market growth? (Consider that other sources believe the market to have grown more than this)

gg

[horridharry] 09/1/2011 07:48

thanks, what is the pay at hti? A potential warning that fy results at tandem may be lower than people here believe. Online booming, but tnd have ltd exposure.

[neverforget] 09/1/2011 07:44

~Nice find horrid. HTI sales growth is remarkable and shows what can happen if management are incentivised. GG what are your thoughts with regard o the pay at hti and its growth prospects?

[greengiant] 07/1/2011 11:08

Hi Guys,

Just back so only on for a minute. The idea of linking bonuses to progressive profitability is not a new one. The idea is fundamentally sound and focuses managements attention away from milking a business to one of growing the business. There will always be factors outside the company's control and as a bonus scheme should always have some element of discretion in it. You do not want to penalise management for factors outside their control, however, you have also got to realise that it works both ways. For example, for the last 5 years we have seen a boom in the cycling market. Some companies have taken advantage of it and profited, whilst others have remained static. This is poor strategic execution.

Tandems profits have been stagnant for 5 years now, the company have had a fundamentally sound balance sheet for 3 years and have not progressed. Why not? Either the management are not capable of progressing and are not suited to the roles (Their is a fundamental difference between being good at a job and possessing the skill set to grow a business) or they have not been properly incentivised to grow the business.

Some management teams (in the past Tandem) have been very good at operating efficiently, that is making sure they squeeze every penny out. This is great up to a point, where they have to date failed is they obviously (particularly in bikes) failed to be effective. that is giving the customer what they want. This may seem to be a very harsh thing to say, and is in no shape or form undermining the work performed by the employees. What this is, is a statement highlighting that Tandem have underperformed - there has been c15% cost inflation, and a booming market and sales have been static. This is the failing, and is not the failing of the employees, but of the custodians of the business. This is the issue that needs to be addressed, and the correct incentives is one way of ensuring it is addressed.

I wholly agree with the shares issue, Management should be incentivised to think longer term. However, as I was recently told by a member of the non exec team, I have "messed up" the LTIP by overinflating the share price. Not something you expect to be told.

gg

[neverforget] 07/1/2011 10:29

Also just to note, although MTC, CC. NXT and now Games Workshop have all warned because of bad weather look at their EPS growth all post warning

MTC 30.7p Lasy Year 33.9 this year
CC 3.54 Last Year 4.6 this year
NXT 177.4 Last Year 213.8 this year

Which shows to me if you have an excellent management team with a good strategy you can overcome these issues of external factors. I also agree about the shares.

[davidosh] 07/1/2011 10:13

If I may just say another issue I have with any bonus is that they should not be paid wholly in cash. What is wrong with incentives that are longer term and paid out in shares ?? so 30% cash and 70% shares would be my ideal split.

[neverforget] 07/1/2011 10:08

horridharry / gg.
Its a very interesting idea that you link bonuses to profitability so for example if the company made £1.3m EBIT this year. then you would "provide" a pool of around £100k of which 20% could be distributed to management. I like this idea. It would mean however, that management would have to achieve an additional £500k profit just to pay SG's bonus last year.

I really like this idea,it focusses the minds on growing profits and rewards performance. I suppose the downside could be that it does not take into account macro economic conditions and could be "unfair" to management.

[horridharry] 07/1/2011 09:58

gg good to talk to you last night, thanks for taking the time. I agree with what you are saying and agree that if performance is below last year then definately no bonuses should be paid. Also bonuses above last year should be staggered whereby they can earn up to say 20p per £ in a bonus pool for distribution. That way management are incentivised to grow profits.

[horridharry] 06/1/2011 10:58

just bought 5k shares after hearing what AB is up too (and fully supportive) gosh, I now have more shares than the fd and non execs put together

[neverforget] 05/1/2011 14:09

proactive management?

[neverforget] 05/1/2011 11:34

gg I dont think you are being very fair. After all revealing how bonuses are calculated is very detrimental to 5.8% of shareholders, that relates to the directors shareholdings who are the beneficiaries of those bonuses

[neverforget] 05/1/2011 08:59

Good for you gg. If the Board of directors had any sense of morality, if the performance is less then last year then they would not take any bonus. Maybe if gg has anything to do with this it will not be a listed company within the next 12 months

[greengiant] 05/1/2011 07:04

DD,

Mookie Toys is run by Moshe Orr (the company was set up by his dad Mookie Orr). The company is exceptionally well run. Works in pretty much the same way as Tandem and are very big into licencing products. They have been growing significantly over the past 3 years and have targets for further growth in the next 3 years.

Neverforget,

I have now set out my stall, I want change in this company and wont settle for anything else. I want the directors to explain to all shareholders exactly HOW they calculate the bonus and only want bonuses to be paid if they over perform (relative to the upper quartile peers). I am sick and tired of being told that the company has to work for ALL shareholders, how does getting the company explain its Bonus policy and putting in place a bonus scheme for performance work AGAINST shareholders?

gg

[neverforget] 04/1/2011 18:12

Good to see Andrew continue to build his stake, obviously wants to get into a position whereby he ensures that the actions he is going to take come to fruition.



Also dont know if this has been posted

[davidosh] 04/1/2011 13:27

Looks like we missed out on this one just announced...




DQE, the animation, gaming, live action entertainment production and distribution company, today announces that it has entered into an exclusive toy licensing agreement for DQE's 3D animated series The jungle book with Mookie Toys Ltd ( Mookie ), a UK based company.


DQE's Jungle Book UK merchandising is represented in UK by Copyright Promotions Licensing Group Ltd (CPLG), Europe's leading licensing agency. Under the terms of the agreement through DQE's licensing agent CPLG, Mookie has acquired the Toy licensing rights for "The Jungle Book" in the UK, Republic of Ireland and the Channel Islands. This agreement allows Mookie to sell Jungle Book toy merchandise including wheeled bicycles; tri-scooters; tricycles; balance bikes; sit N rides; play balls, outdoor activity centres; slides etc. DQE will receive a substantial amount in upfront payment as minimum guarantee from this agreement that covers the outdoor play and ball categories for a three year period.


Mookie is well placed to exploit the huge potential for Jungle Book toys and have already created some impressive initial concepts. Mookie Toys is an outdoor toy manufacturer & distributor for several well known brands such as Peppa Pig, Noddy, Rupert Bear, Toy Story, Fire Man Sam, Ben 10, Mr. Men, Postman Pat, Disney's Characters like Little mermaid, cars, Snow white, Winnie the pooh etc. Mookie will use multiple distribution channels for retail including High Street, Mass Market, Independents & online.



I checked out the Mookie website



Anyone know much about them ? Private company at present.