Tandem Group – 190p

30 September 2019 – interim results

Interim results for the six months to 30 June 2019 have been released.  Group revenue was up 27% to £16.0m (2018: £12.7m).  Profit before taxation after non-underlying items for the period was £370k versus a loss of £348k in the same period a year earlier.   Net profit for the period was £155k versus a loss of £356k in the six months to 30 June 2018.  Basic earnings per share were 3.1p versus a loss of 7.1p per share a year earlier.  An interim dividend of 1.56p per share (2018 – 1.42p per share) is payable on or about 11 November.  Net assets at 30 June 2019 were £12.45m versus £10.63m as at 30 June 2018.  Cash and cash equivalents were £3.74m as at 30 June 2019 compared to £957k at 30 June 2018.  There was a 43% reduction in net debt from £3.51m as at 30 June 2018 to £2.01m as at 30 June 2019.  As reported previously 2019 has been an encouraging year so far with significant revenue and profitability growth.  There are some positive factors working in the company’s favour but weak sterling and a potential tightening of consumer spending could be headwinds.  The shares currently trade on less than 6x historic earnings and with an increase in profit likely this year the shares remain good value.  We keep our BUY rating.

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