Tandem Group’s FY25: profits beat, dividend back, and debt sharply lower
Tandem Group has delivered a tidy set of final results for the year ended 31 December 2025. Revenue was up 6.2% to £26.2 million, profits came in ahead of market expectations, the dividend is back at 3.0p per share, and net debt more than halved to £1.9 million. For a consumer-facing business operating through a choppy retail cycle, that’s a meaningful reset.
Here’s what stood out to me – and why it matters if you’re holding or watching TND.
Headline numbers you should know
| Metric (FY25) | Result | FY24 |
|---|---|---|
| Revenue | £26.2 million | £24.6 million |
| Gross margin | 31.1% | 29.9% |
| Underlying profit before tax | £692k | £510k |
| Statutory net income | £850k | £(60)k |
| Diluted EPS | 15.4p | (1.1)p |
| Proposed dividend | 3.0p per share | not disclosed (no dividend) |
| Adjusted EBITDA | £1.31 million | £1.13 million |
| Net debt (year-end) | £1.9 million | £4.3 million |
| Net assets | £26.1 million | £23.9 million |
| Inventory | £4.4 million | £5.9 million |
| Cash | £1.54 million | £1.39 million |
“Underlying” strips out non-recurring items to better reflect trading. Basis points (bps) are hundredths of a percent – gross margin rose by 120 bps year-on-year.
What drove the improvement
Margin rebuild and better working capital
- Gross profit increased to £8.1 million with margin up to 31.1%, helped by less clearance activity, cost negotiations and FX hedging.
- Inventory was cut to £4.4 million from £5.9 million, releasing cash and reducing risk if demand wobbles.
- Cash from operations swung to an inflow of £2.42 million (FY24: outflow £0.68 million) as stock and receivables were tightened.
- Finance costs fell to £313k (FY24: £375k) thanks to lower borrowing, helped by an interest rate cap in place.
Category winners and laggards
- Bicycles: the standout. Revenue up 37.5% to £10.2 million, with electric bikes +30.0% and mechanical bikes +47.6%. Children’s bikes +10.7%. The new HOY lightweight range launched late in the year added sparkle.
- Toys, Sports & Leisure: down 17.5% to £10.2 million, reflecting softer demand and retailer ranging/timing. Not pretty, but online marketplace sales within the division rose 34% as the range and content sharpened.
- Golf: up 8.6% to £2.8 million, driven by strong growth in Pro Rider electric trolleys and refreshed Ben Sayers sets and bags.
- Home & Garden: up 30.1% to £3.0 million, aided by a hot summer and broader ranges across heating, cooling and outdoor products.
Dividend back and balance sheet tidier
The Board proposes a 3.0p per share dividend, payable 6 July 2026 (subject to AGM approval). Reinstating cash returns after a loss last year is a clear vote of confidence in cash generation and outlook, even as the backdrop stays mixed.
Net debt closed at £1.9 million versus £4.3 million a year ago – a material de-risking. The property revaluation increased to £15.9 million (from £14.1 million at the prior valuation), helping push net assets to £26.1 million. Useful support for the balance sheet, though revaluations don’t pay the bills – operating cash flow did the heavy lifting here.
Worth noting: the defined benefit pension deficit is down to a modest £16k (31 December 2024: £358k) after £605k of scheme payments, including £448k of deficit contributions. Positive for risk, but the cash drain is a continuing consideration.
Costs up, but under control
Operating expenses rose to £7.16 million (FY24: £6.55 million) on business rates normalisation, higher national insurance and extra advertising. As a result, net operating expenses as a share of sales rose to 27.4% (FY24: 26.6%). On the flip side, adjusted EBITDA improved to £1.31 million and interest cover increased to 3.5x (FY24: 2.7x). Directionally better, even if not yet eye-popping.
Early FY26 trading and growth levers
Management says early 2026 trading is in line with expectations, with positive momentum into the new year. The plan for growth feels pragmatic rather than fanciful:
- Toys & wheeled goods: expanding the licensed portfolio in 2026 with Toy Story, Dora and Marvel Avengers, plus a Netflix collaboration (K-Pop Demon Hunters). “FOB” and domestic channels are ahead year-on-year; FOB means Free On Board – goods shipped directly from the origin port.
- Bikes: six new sub-£1,100 e-bikes will extend the range to 20 models; continued push into mechanical entry price points and BMX refresh; HOY lightweight kids’ range now live with scope to extend into adults in Q4 2026; international rollout of bike ranges with a new Head of International Sales.
- Golf: maintain strong entry price electric trolleys via Ben Sayers and Pro Rider, supported by redesigned Ben Sayers packages.
- Home & Garden: broader ranges across heating, cooling, storage, furniture and accessories, with cost efficiencies from Far East partners and flexibility from domestic sourcing.
- Consumer channels: group-wide consumer sales up 25% in FY25. Own sites up 27%; third-party marketplaces up 23%. Content quality is a focus, with AI tools used to speed creation and improve consistency.
Governance update
Chair Steve Grant will step down at the AGM after six years. Non-Executive Director Jonathan Crookall will become Chair. Continuity at the Board level matters as the strategy moves into an execution-heavy phase, particularly around product launches and internationalisation.
The good, the not-so-good, and what to watch
Positives
- Profits ahead of expectations, margins rebuilt, and strong operating cash flow.
- Net debt more than halved; finance costs falling; interest cover improving.
- Bikes are firing on all cylinders, with clear range and price-point strategy.
- Dividend reinstatement signals confidence in cash generation.
- Pension deficit reduced to a negligible level.
Negatives
- Toys, Sports & Leisure weakness – demand, retailer ranging and promotion timing hurt. Execution on the 2026 licence slate needs to land well.
- Operating costs rose faster than sales. Keeping opex discipline will be key if growth slows.
- Macro and logistics risk: the Board flags Middle East developments potentially affecting shipping routes and costs.
Key watchpoints for FY26
- Sustained bike momentum as new e-bikes and mechanical models gain full-year availability.
- Recovery in Toys & wheeled goods as the new licensed properties roll through.
- Stock discipline maintained – inventory now leaner at £4.4 million.
- Cash conversion and finance costs – can net debt fall further?
- International bike launch traction and early European channel expansion.
My take
This is a sensible rebuild year for Tandem: better mix, cleaner balance sheet, cash flowing, and a dividend to prove the point. The bikes segment is doing the heavy lifting, and that strength buys time to stabilise Toys & Leisure without reaching for risky promotions. Strategic moves – sub-£1,100 e-bikes, HOY brand development, and a deeper licensed slate – all look aligned to where demand actually is.
It’s not without risk. Consumer confidence is fragile, and shipping costs can turn on a dime. But with net debt down to £1.9 million, inventory reduced, and early FY26 trading on track, Tandem looks in a sturdier place than a year ago. For investors, this reads as measured progress with optionality – and a 3.0p dividend to boot.
