Tandem Share Discussion Threads

[davidosh] 10/1/2020 01:13

Jaknife...It is a valid point and maybe all the non exec directors should be up for re election this year if the board are not willing to look at these corporate governance issues themselves.

Nice to see some interest in the company today.

[davidosh] 06/1/2020 16:33

I have selected Tandem in my five picks for 2020 in the annual Stock Challenge so lets hope this is the year. A doubling or tripling of the dividend would certainly help and I see no reason why shareholders should not be sharing in the long term benefits here especially as I have been a shareholder for nearly 15 years

[my retirement fund] 02/1/2020 09:50

Dream on distributed amongst board and directors in salaries, bonuses, expensesand perks.

[amt] 02/1/2020 09:05

Castleford. I recall there was a discussion about distribution of the cash a while back and it became evident there is no prospect of such a distribution because of the pension regulations. I don't think it makes business sense either. Far better to build up a buffer for when the next recession strikes.

[castleford tiger] 31/12/2019 15:45

It was another year of cash generation with cash and cash equivalents increasing to GBP4,847,000 at 31 December 2018 compared to GBP3,856,000 at 31 December 2017. I am also very pleased to report that for the first time in a number of years we finished the year with a net cash position. The net debt of GBP1,016,000 at the end of last year reduced to a net cash position of GBP107,000 at the end of 2018.

that's pretty clear to me after ALL debts we are net cash.
I expect that to be 2m as of today

tiger

[simso] 30/12/2019 12:22

Thanks for your comments GrahamITY, and pointing out the comments from Paul Scott's SCVR. In response I would make 3 points:-

1. Paul was talking about June Net Cash/debt...and I was talking of December Year End..and there is a big difference between the two. For example, the June 18 Cash was £0.9m but this rose to £4.8m by December year end. This increase between June and December is driven partly by the Second half Profit (Underlying PBT was £2.4m in 2H 18) and partly by Working Capital swing from stock levels being much higher in June than December.

2. Yes, it would be technically correct to net off the £1.2m remaining Loan against my projected Y/e Cash Balance of £6m when quoting "net debt". However, in analysing the Balance Sheet, I personally net that off against the Freehold Property against which it is secured. The Freehold is valued at £3.2m. A final Bullet payment to clear this debt is due in 2020.

3. The Current Liabilities from Paul's quote above are mostly Invoice Discounting. TND typically have c £4m of Receiveables at year end, but effectively factor around £3m of that to take payment earlier than terms. TND do include that Factoring amount when referring to "Net Debt" in their RNS statements, but I believe most companies would not, as it is not "debt" in the traditional sense. I see it more logical to net against Receivables...as we have effectively taken some money which is owed to us earlier than (c60 day?) terms.

[castleford tiger] 30/12/2019 10:06

Thanks Simso.

I had some growth in the second half to achieve the 40m t/o

Other than that I cannot disagree with anything you say and was party to the discussion.

Just what are the company going to do with all the spare cash its generating.

I would like to see 25/50% distributed to holders maybe starting at 25% with a further special of 25%.

Like you I think 400p is about right but the market is poor to trade with such a wide spread.

re my earlier post how can this sale of gone unreported

[graham1ty] 30/12/2019 10:01

Simso, you suggest net cash of £6m. Yet, read the extract below from Paul Scott’s SCVR of October.

“However, the narrative then refers to overall net debt, despite there apparently not being any bank debt on the balance sheet;

There was a 43% reduction in net debt from £3,508,000 at 30 June 2018 to £2,006,000 at 30 June 2019.
Therefore, I make that a £5,746k liability included within net debt. Let's try to work out what that is! Right, I've worked it out - this figure must be the total of two lines, both called "other liabilities", of £4,736k in current liabilities, plus £1,010 in non-current liabilities.“

So, TND does not have netcash. It still has net debt, even if reducing fast

[simso] 30/12/2019 09:21

Castleford said in post 3640 above "I am seeing t/o close to the 40m mark at @30% giving Gross P of £12m, I am off track here?"

My forecasts have the simple (and hopefully prudent!)assumption H2 2019 will match H2 2018 Sales, Margin and Costs. That would mean FY 19 Sales of £36m, Underlying PBT £2.7m, Underlying EPS 46p. I forecast Closing Net Cash of £6m, and Closing Net Assets of £14m. With a current market cap of £9m, my forecasts would imply an Enterprise Value of just £3m, and current year Cash adj P/e Rating of 1.4 times. It is hard to imagine there is another share on the whole stock market where decent fundamentals are given such a lowly rating. The Directors' attitude towards shareholders is clearly a significant factor, much discussed on this board.

The most likely trigger for re-rating would be a change to the dividend policy. To start with some context, Stockopedia highlights that the average UK Stock is on a P/e of 13 and pays a 3.5% yield....so is paying around half its earnings out as dividend. I would argue the average UK stock does not operate with a Balance Sheet as strong as Tandem, and see no obvious reason why TND cannot pay out (at least) half their earnings. I am sure a dividend of around 23-25p would see the share price re-rate to £3+ in very short order, and perhaps towards a more realistic £4.

I attended the AGM this year, where holders questioned the miserly dividend. Mervyn Keene (Chairman) explained it was a legal requirement from the Pension Regulator (TPR) that Dividend Payments must be lower than Deficit Recovery payments. I have managed and dealt with Pension Schemes over decades, and had never heard of this requirement from TPR. I note that Norcross have a deficit of £49.3m from their 2018 Tri Annual Valuation..and have agreed a Revovery Plan starting at £3.25m pa. The cost of last year's Dividend was £6.4m, expected to increase +7.7%. Renew Holdings paid £5.7m cash into their Scheme (which I assume covers more costs than just Deficit Recovery) yet paid out £6.3m in Dividends.

I think a change of Dividend Policy is the most obvious trigger for re-rating, and the disdainful attitude of the current Board towards Shareholders and what they would like is the largest obstacle to achieving that.

[zoolook] 28/12/2019 12:43

Not looked at this before. Initial impressions was that it seemed a bit of a ragbag of businesses of fading bicycle brands and toy licencing which is a lumpy business to say the least and unsurprisingly earnings up and down. BOD heavy on accountants.

Paul Scott did a lengthy write up in response to the half year report.

Going on past form he thought the bumper H2 last year might have been a bit of a one-off bumper period? Any view on that?

The Outlook comments on a satisfactory result are without context as there doesn't seem to be any broker forecasts out there.

He also felt that the headline figures were confusing regarding the cash position
with invoice discount financing hidden in “other liabilities” which along with the pension liability made the balance sheet weaker than first appeared.

His summary:

“My opinion - given its tiny market cap, and balance sheet not being as strong as it initially looks, on top of profitability (with a high tax charge) that is significantly down on the last half year sequentially, I'm struggling to get excited about this.

The dividend yield is nothing to write home about either. Plus there's often a wide bid-offer spread, and the share is very illiquid. I recall it took me several attempts to sell, and had to do it piecemeal, for a smallish speculative holding that I picked up a while ago & then got bored with.

On the upside, outlook comments suggest that H2 should be OK.

In these cautious & uncertain times, I don't think it's worth getting involved again here, so I'll stay watching from the sidelines.”

[castleford tiger] 27/12/2019 17:15

year end.

I am seeing t/o close to the 40m mark at @30% giving Gross P of £12m.

I am off track here?

tiger

[castleford tiger] 26/12/2019 22:31

Jupiter reduced from 10.76 to 9.56 %
So 65 odd thousand shares sold and a reduction in a holding but not shown as a trade?
Can someone explain how this happens?
( I have since been told you only DECLARE at each full % point )
so the 10.76 may have been previously sold down to 10.01 therefore reducing last weeks sale to .45%
which is still 24000 shares far more than has gone through the market.
Unless it’s a new buyer then a increase in holdings should show?
They clearly are not with a MM as the price was unchanged

Always ready to learn


Tiger

[castleford tiger] 18/12/2019 18:27

amt its reversed a little.

No fair market here as they must be worth 350/450p.

Tiger

[amt] 13/12/2019 08:35

Big rise in pound vs dollar should help margins as it works through in a few months.

[graham1ty] 04/11/2019 18:14

Article in today’s Times about bloke just cycled the world on a Dawes bike. Good to see TND getting lots of publicity from this .......NOT.

[castleford tiger] 24/10/2019 18:19

Redmayne B to their clients see above
tiger

[davidosh] 24/10/2019 12:15

This is the front page of the City Confidential newsletter out this morning....

Out of favour Tandem pedalling on

Tandem Group (170p) has been making steady progress in recent years and the current market capitalisation of £8.5m looks exceptionally low. Being a shareholder certainly requires patience but 2019 is likely to be another year of impressive profitability given that market conditions are far from ideal.

The AIM-listed company is a designer, developer, distributor and retailer of sports, leisure and mobility products. Bicycles brands include Dawes, Claud Butler, Falcon, Boss, Townsend, Elswick and Zombie.
The Squish lightweight junior range has been particularly successful recently. Licenses for products such as wheeled toys include LOL Surprise!, Peppa Pig, Paw Patrol, Spider-Man, Toy Story, Frozen and Disney Princess. Owned brands include Kickmaster, U-Move, Wired, Hedstrom and Ben Sayers. Online and direct-to-consumer activities continue to progress in several product areas.

Interim results for the six months ended 30 June 2019 were released at the end of September. Revenue jumped 27% to £16.0m versus £12.7m in the six months to 30 June 2018. Profit before taxation after none underlying items was £370k compared to a loss of £348k in the corresponding period last year. Basic earnings per share were 3.1p compared to a loss of 7.1p per share in the first half of 2018. Net assets as at 30 June 2019 were £12.4m versus £10.6m as at 30 June 2018. Cash and cash equivalents were £3.74m, up from £957k a year earlier, and there was a 43% reduction in net debt from £3.51m as at 30 June 2018 to £2.01m as at 30 June 2019.

The cinema release of Frozen 2 next month is expected to bring further growth and the timing of this should help ensure a positive end to the year. The recent addition of Mark Taylor as a non-executive director is also interesting and suggests that there could be activity on the pension deficit which has been a thorn
in the company’s side, although it now only represents the equivalent of one year of profit. Weak sterling would impact on profitability and the company has inevitably noted that Brexit could have consequences. However, with the shares trading on broadly 4x our own estimate of earnings for the current year and a
healthy net cash position also likely by the year end the shares must be a BUY.

[castleford tiger] 15/10/2019 18:30

RHOMBOID

I suppose buying a 30% stake and then bidding for this there would be serious money to be made.

I don't think the BOD have enough support if it went hostile.

I just want.......
A fair market
A share that can be traded.
A return on my investment.

If that's not forthcoming I can see things erupting here
Tiger

bought more this morning.

[cwa1] 15/10/2019 11:59

I agree with a lot of what rhomboid has said. I used to be a sizeable holder here but have largely sold down due to a lot of the factors mentioned. Horrible illiquidity and spread-if you ever want out in a hurry, you're stuffed. Management that are happier to feather their own beds than the owners'. They also seem very reluctant to engage with the actual owners of the business and impart any information. The business is of a lowish earnings quality IMO and is open to "surprises"(sometimes positive ones I concede!!). Enough already, but I think it is cheap for a reason. Don't get me wrong, I'm still a holder and follow the company with interest but I doubt I'll be back as a sizeable holder unless a few things change for the better.

[rhomboid] 15/10/2019 11:35

Tiger you’ve answered your own Q’s

It’s a lobster pot...huge spread & illiquid

Mgt are overpaid

Dividends are too low to attract income investors

No-one goes out looking for cycles/novelty toys/marquee/mobility scooter investment opportunities

...but it’s still v cheap

I’d like to own the company as a whole...but not a minority stake

[castleford tiger] 15/10/2019 07:45

Were none of these things known 2 months ago?

To value a company at almost half net assets and 5 times historic earnings which may fall to 3.5 times is madness.

I would hardly call them retail as well to be honest.
We have an online platform and I would assume this years sales are in the bag.

Imagine someone comes along and offers a tender at £2.00 a share they could quickly own 30% of the shares for 3 million quid.

I agree with David the divided needs to be in proportion to earnings.
I would take 30% which would underpin the shares on pay-out rather than the current system where to be honest there is no real market.
You pay 15% spread on either trade.

Tiger

[amt] 15/10/2019 07:15

"What is wrong" is that the outlook for the sector and retail in general is very uncertain. A good Brexit outcome should make a difference, although even then we are not going to know the impact of Brexit for a long time. In these circumstances it's difficult to see the uncertainty being entirely removed so the effect could drag on for a year or two. The market hates uncertainty so its not entirely surprising there is pressure on the share price, just as there is for the sector in general.
Having said that if the market could see through all these issues over consumer confidence the share is an absolute bargain.

[castleford tiger] 14/10/2019 18:17

Only 45 p up from the start of the year yet the outlook has never been brighter.
What am I missing that means someone will sell shares in the low 160,s?
By any measure we should make 30-50 p eps ( yes I am nearer 50 than 30 )
Debt gone and net cash by the end of the year
Nav keeps rising.Was standing at in excess of 12 million against a market cap today of 8 .So 240 p covers assets only.
This could be as high as 14 million by year end so 300 p a share.

What is wrong?
Tiger