Last time we covered Angling Direct LON:ANG, the AIM-listed, retailer of fishing tackle and bait was bemoaning a lack of bites as extreme summer weather in 2022 with high temperatures and low rainfall meant that many waterways were closed for fishing,
This significantly impacted Angling Direct’s revenues which dampened-down its numbers for 2023. However, since then the business has been getting a lot more nibbles, and despite, as Steve Crowe, the company’s newly-installed CEO warned in the Norwich-based retailer’s full-year results to end-March 2024 today (14th May), that trading conditions still remain tough: “The changing competitive landscape in the UK presents us with the opportunity to deploy capital, take market share and reduce surplus liquidity.”
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Crowe moved from CFO to CEO last May, whilst his predecessor Andy Torrance moved upstairs to become executive chairman.
Although trading has been tough, it has improved, and the advantages that Angling Direct has been able to lean into is its national and international footprint and significant brand recognition amongst hobbyists, both on the ground in bricks and mortar outlets, as well as online, which has allowed it to have diversity of revenue and region.
Building up a cash pile
Moreover, the company has built up a cash buffer, which has meant that it has been able to continue investing in stock, premises and people, when its competitors have had to be making tough decisions on what to cut back operationally, and that it has been able to cover its overheads in the lean seasons. The economies of scale and distribution infrastructure have seen Angling Direct grow compared to its competitors (many of them one-shop, family businesses) who have increasingly been unable to keep up margins and in some cases operational.
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Admittedly growth has been measured but Angling Direct still opened up new stores in Cardiff and Goole, which took the bait-and-tackle retailer’s outlets to 47 stores nationally. The company is also driving growth in its digital footprint, launching MyAD, a UK customer loyalty club, which the firm says will help it become Europe’s biggest fishing club. The new app had 220,000 new members join in the year.
The company has also been investing in its ‘own-brand’ products, Advanta and Discover, and saw own-brand profits grow 16% year-on-year. The investment into the company’s drive into Europe is also now starting to pay dividends and helping the company’s bottom-line where, Online Sales in Europe grew 36.3% with key European territories of Germany, France and the Netherlands growing 40% y-o-y.
Record UK sales for Angling Direct despite tough trading
Overall, Group Revenue was up 10% y-o-y to GBP81.7m, which included record sales in the UK of GBP77.4m. The company works closely with the Angling Trust sponsoring the charity’s ‘Get Fishing’ campaign, that seeks to bring lapsed anglers back to the hobby and encourage people to take up the sport, highlighting the mental and physical health benefits of fishing.
Although coarse fishing licence sales remained flat compared to pre-Covid sales, Crowe was energised with: “…over 20% increases in young people and disabled licence sales pointing to increasing engagement from people new to the pastime.”
Online Sales across the group were up 11.1% y-o-y, with customers buying more kit per visit to what they were doing a year ago. Group Earnings were up 21% to GBP2.7m and this contributed towards a positive operating cashflow of GBP6.5m, a strengthened balance sheet and net cash of GBP15.8m at the end of January. With Gross Profit up 10.5% y-o-y to GBP28.5m, basic EPS up 125.7% to 1,58p and Profit Before Tax up 126.8% to GBP1.5m, Angling Direct is a much more cheerful place than it was a year ago.
Angling Direct’s shares opened at 36.45p today, up 40.2% over one-year and shares have ranged between 25p and 45p over a 52-week period. The company has a market cap of GBP26.8m.
Summer is traditionally Angling Direct’s busiest period (although fish don’t bite as well in warmer water), and the company is going into the season with renewed purpose and executing on its plan to become a UK business generating GBP100m in revenue with earnings in excess of GBP6m, and at the same time expanding its European footprint and using its spare cash to make strategic acquisitions to develop its brand.
