LONDON (ShareCast) - Bikes, toys and sporting goods distributor Tandem is considering a cash return or buy-back after it swung back into profit in the first half.

Pre-tax profits in the half-year to July came in at £335,000, compared with a loss of £373,000. Turnover rose from £16.1m to £18.1m despite lower revenue at its bikes division and the impact of the wet weather over the summer

There is no dividend, but the company said, “It is now in a position to explore ways to enhance shareholder value and a number of options are being considered for 2008.”

This could mean a buy-back or return to paying dividends, sources close to the company said. A share capital reorganisation is also a possibility.

Tight cost control helped profits from its bikes arm rise by £246,000, but the sports and toys business provided the major boost. Sports, leisure and toys sales increased by 32.4% and the group made a profit instead of the traditional loss.

A good showing from the Hedstrom outdoor play equipment arm and new licences for Transformers and C'Mons, from Vauxhall's ads, boosted the performance. New licences should generate further sales revenue in the second half of the year, Tandem said.

The improving sales trend should continue for the rest of the year, the statement added.

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