Shares in Tandem Group plc (LON:TND) sprinted higher once again on Wednesday after the sports equipment manufacturer reported a £1mln rise in underlying operating profits last year.
The Birmingham-headquartered group – which makes Ben Sayers golf clubs and Dawes bikes among other products – saw its share price surge when it primed investors for the upcoming results last month, and the stock gained another 17.8% today to trade at 135.5p.
READ: Tandem expects net profits to be significantly higher
Operating profits before finance costs and tax jumped to £2.4mln in the 12 months ended 31 December – a 42% increase on the £1.4mln it posted a year earlier.
The increased profitability helped to top up Tandem’s cash balance, which more than trebled to £3.9mln as of the end of 2017 (Dec 31 2016: £1.1mln).
As expected, cost control measures taken to streamline the firm’s bicycle operations brought about a 4% reduction in turnover to £38.4mln (2016: £36.8mln).
Given the solid results, Tandem intends to pay a 2.75p final dividend to shareholders which, when added to the 1.35p it paid out earlier in the year, represents a 5% increase year-on-year.
“Challenging start” to 2018
There were some words of warning though from chairman Mervyn Keene, who said he was “cautious” about the outlook for the year ahead given sluggish consumer confidence in the UK, although he added he was “confident” that Tandem was still well-positioned to deliver profitability.
One of the business Keene expects to perform well this year is Kickmaster – which makes football training equipment – given the World Cup later this summer.
Tandem’s value golf brand Ben Sayers has undergone something of a revamp recently, and the chair also expects “a better performance” from that division this time around.