Full Year Results

RNS Number : 8907N

Angling Direct PLC

14 May 2018

 

14 May 2018

Angling Direct plc

("Angling Direct" or "the Company" or "the Group")

Full year results for the 12 months ended 31 January 2018

Angling Direct plc (AIM: ANG.L), the largest specialist fishing tackle and equipment retailer in the UK, is pleased to announce its audited financial results for the twelve months ended 31 January 2018.

Financial Highlights:

·      Group revenue of £30.24m up by 44% (2017: £21.03m)

·      Gross profit of £9.8m up by 37% (2017: £7.1m)

·      EBITDA of £1.1m up by 24% (2017: £0.9m)

·      Operating profit of £0.9m up 27%(2017: £0.7m)

·      Net cash equivalents at 31 January 2017 of £0.7m (2017: £0.3m)

·      Successfully completed AIM admission and placing, raising gross proceeds of £7.5 million

Operational Highlights:

·      Online sales of £16.1m up by 54% (2017: £10.5m)

·      Store sales of £13.2 million up by 40% (2017: £9.3m), included like-for-like store growth of 9%

·      £3.0 million acquisition of fishing tackle store, Fosters of Birmingham

·      Acquisition of North West Angling Centre and Tacklesaver for £450,000 total consideration

·      Store network increased to 21, with new stores opened:

o  Swindon (4,000 sq ft)

o  Slough (4,250 sq ft)

o  Stoke (4,500 sq ft)

·      Continued investment in online marketing, logistics and distribution

Commenting on the results, Martyn Page, Executive Chairman, said: "It has been a transformational year for Angling Direct, with the Company's admission to AIM and the completion of a number of acquisitions and new store openings, which has cemented Angling Direct's position as the UK's number one fishing tackle retailer, online and in-store.

"The business achieved record revenues and profits, following strong sales growth across the store network and online as a result of our ongoing investment in marketing campaigns and customer experience in-store and online. The Company is executing its strategy of consolidating a highly fragmented market and we will continue to build on this in the year ahead, with exciting new store openings planned, and continued targeted online growth.

"Despite the adverse weather conditions for fishing, the Company has had a good start to the year with momentum building in recent weeks, and our plans for the summer season are well set. The Board is confident that the Company is on track to meet its full year targets."

For further information:

	Angling Direct PLC		[phone]
	Martyn Page, Executive Chairman
	Darren Bailey, Chief Executive Officer
	Cenkos Securities - NOMAD and Broker		[phone]
	Stephen Keys (Corporate Finance) Russell Kerr (Sales)
	Yellow Jersey PR - Financial PR
	Charles Goodwin		[phone]
	Harriet Jackson		[phone]

Notes for editors

About Angling Direct plc

Angling Direct is the largest specialist fishing tackle retailer in the UK. The Company sells fishing tackle products and related equipment through its network of 21 retail stores, located throughout the UK, as well as through its own website (www.anglingdirect.co.uk) and other third party websites.

The Company currently sells over 21,500 fishing tackle products, including capital items, consumables, luggage and clothing. The Company also owns and sells fishing tackle products under its own brand 'Advanta', which was formally launched in March 2016.

From 1986 to 2003 the Company's Founders acquired interests in a number of small independent fishing tackle shops in Norfolk and, in 2003, they acquired a significant site in Norwich, which was branded Angling Direct. Since 2003, the Company has continued to acquire or open new stores, taking the total number up to 21 retail stores. In 2015 the Company opened a 30,000 sq ft central distribution centre in Rackheath, Norfolk, where the Company's head office is also located.

Angling Direct's shares are traded on the AIM market of the London Stock Exchange under the ticker symbol ANG.L.

For further information, please visit www.anglingdirect.co.uk

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report that the Group has made excellent progress over the last year both pre and post admission to AIM, as it continued with its growth plans to build a significant position in the UK fishing tackle market. The results demonstrate strong revenue growth, accompanied with a substantial increase in operating profit before exceptional items, which was in line with market expectations. The Group's encouraging results reflect the success of its acquisitions, its well-executed store expansion programme and organic growth across the existing store network and e-commerce platforms.

The year has been a major milestone in the history of the business after completing Angling Direct's successful admission to the AIM Market on the 13th July 2017, raising gross proceeds of £7.5 million. These funds were used to redeem £1.4 million of preference shares and to invest in the expansion of our business through:

·      The acquisitions of Fosters Fishing Ltd, North West Angling Centre and Tacklesaver;

·      Continued store expansion programme with the opening of 3 new stores in Swindon, Slough and Stoke; and,

·      Ongoing e-commerce investment which is seen as an important area for growth in both the UK and internationally.

The fishing tackle marketplace is large and very fragmented, with over 2,000 operators across the UK, which are mainly owner-managed. Given Angling Direct's financial strength and marketing capabilities, we see continued growth opportunities for the Group across our store network and online. Beyond the UK, the Group is also looking to grow the brand online in Germany, France and the Benelux, all of which have large angling markets. Last year, the Group also saw encouraging online sales growth from these territories despite not having websites specific to the country's language. The Company has recently launched a German website, with other European websites to follow this year.

Financial results

The business achieved excellent growth for the year to 31st January 2018, with revenue increasing by 44% to £30.240 million (2017: £21.032m). Revenue generated from stores increased by 40%, which reflected new acquisitions, new store openings, as well as organic growth from existing stores. The organic growth on a like-for-like basis increased by 9%, which the Board considers to be an encouraging performance, given the headwinds that the UK high street faced in recent months, and clearly underlines the success of Angling Direct's in-store strategy. The e-commerce business continues to go from strength-to-strength, with revenue up 54% to £16.1 million for the year. Angling Direct continues to make considerable investment in this area, both in online marketing and logistical capabilities, which is driving this growth.

The Company recorded gross profits of £9.85m, up 37% on the previous year. Profit before exceptional costs rose by 27% (£0.202m) to £0.94m. The Company's admission to AIM in July 2017 meant that it booked exceptional costs of £0.730m. Profit before tax in the year was £0.159m (2017: £0.662m), with the decrease  due to the exceptional costs as outlined above.  On a like-for-like basis, this would be £0.89m, an increase of 34%.  

Share Placing

On the 13th July 2017, Angling Direct completed its admission to the AIM Market and raised £7.5m (gross) through a placing of new ordinary shares. The net proceeds from this were used to purchase the Company's preference shares of £1.4m, and to support the continued expansion of the business.

Dividend

The Company declared a dividend on the preference shares of £4,143 on the 8th June 2017 and £3,145 on 14th July 2017.

The Board is focused on increasing the scale of the Group and it is re-investing all its surplus cash resources back into the business. As a result of this, in the short term, the Directors do not recommend any further dividend payments. However, the dividend policy will be kept under regular review.           

The Board

As the Company prepared for its AIM admission the Board was re-structured. To this end, J Higdon resigned on 6th April 2017 and William Hill resigned on the 7th April 2017. We would like to take this opportunity to thank both of them for their exceptional contribution to the business. In June 2017, three new directors were appointed to the Board in June , with John (Ian) Hunter, the Company's Finance Director becoming an Executive Director, whilst Paul Davies and Stephen Moon joined as Non-Executive Directors.

Outlook

The Board continues to believe that the prospects for the Group are very positive, and we have plans to open two further stores, in Peterborough and Guildford, over the next few months. These two new stores will result in the Company's total being 23 stores.

We are also looking to develop the market by encouraging more people to take up fishing by supporting more grass root initiatives. These include Fishing for Schools, National Fishing Month, Angling Trust and various other angling projects around the country, which will allow people to try fishing free of charge, with many of these events being supported by our store network.

We have been pleased to deliver like-for-like turnover growth through our store network and a strong online performance versus the same period last year, despite the year having started slower than anticipated due to the extreme cold winter weather conditions. The Board is confident that the Company will meet its full year growth target this year, and that  our product offering, professional staff and continued improvement in our online platform, both in the UK and Internationally, will help deliver another excellent performance.

Martyn Page CTA, TEP

Executive Chairman

CHIEF EXECUTIVE'S REPORT

Introduction

I am very pleased to report on a significant year of growth and progress. The new funds raised through the Company's IPO and admission to AIM, in July 2017, have helped to support this continuing development through two acquisitions and the expansion of our store network. We have also developed our e-commerce and digital marketing infrastructure to give our customers an enhanced experience.

Review of Operations:

Stores

During the year, Angling Direct's store network grew to 21, following a series of acquisitions and new openings. Three new stores were opened in Swindon, Slough, and in Stoke, all of which are situated in geographical areas that are known to have high numbers of anglers, and they are each surrounded by number of quality fisheries. While the new stores have only been trading for a short period, the management team is pleased with the early performance and we look forward to the contribution they will make for a full year.

In addition to these three new stores, we acquired one of the UK's largest fishing stores, Fosters Fishing Ltd based in Birmingham, on the 2nd October 2017. We also completed two further acquisitions on 16th November, North West Angling Centre, based in Wigan, and Tacklesaver, based in Wilmslow near Manchester.       

We have a pipeline of further new stores to add to the Company's portfolio, with Guildford, and Peterborough due to open in the coming months. Additionally, we are in negotiations to open another store shortly.   

The new store openings and acquisitions throughout the year have helped to drive the significant growth in retail store sales by 40% to £13.2m (2017: £9.3m). Like-for-like sales with the same stores increased by 9%.

E-Commerce

We have developed and will continue to develop this very important sales channel both in the UK and internationally. This development has been a key driver for the increase of sales by circa 54% to £16.1m (2017: £10.5m).

The focus will be to deliver an outstanding technical experience, increased investment in optimisation, with personalised marketing to support.

Angling Direct has already built up an international customer base through its UK focused website. To support international sales growth, we will be enhancing the brand with strategic marketing in each target country. The majority of the target markets are aligned to the UK, but some will need to have a specific focus, especially around dedicated fishing styles.

Having investigated the opportunities of growing the international footprint, the Board is now considering bringing the strategic plan forwards into these countries to deliver quicker growth. The first move has been the launch of our German website in May 2018 and this will be followed by additional sites this year. Each country will have dedicated customer support and we are adding more telesales staff to help with live chat and social media interaction. Continued focus around customer acquisition will be applied throughout the international expansion and, notwithstanding this, we believe our acquisition costs will remain favourable, despite the need to increase non-organic marketing to strengthen the brand in various countries.

In March 2018 we launched a new Foster's e-commerce website to ensure that across both brands we are delivering the enhanced experience that customers have come to expect; fast, mobile friendly and functional.

During 2018 we will be investing in Kardex, a vertical storage solution, in order to futureproof our current warehousing space and accommodate the planned expansion, which will ensure we continue to deliver to the very high standards we have set ourselves in respect to stock availability.

Staff

I would like to take this opportunity to welcome new staff to our Angling Direct team, and to thank our existing staff for all their hard work, passion and dedication during a year of exceptional change and growth. Our fabulous staff are essential to our future success and to support this we continue to help train and develop their skills. This in turn helps to ensure that our customers have an unmatched fishing retail experience, both online and in-store, and build long term brand loyalty.

Outlook

We are very positive about the outlook and the management's ability to strengthen Angling Direct's position as the market's leading retail brand. Our Strategy will see us continue to open new destination stores in popular angling areas and to develop our e-commerce platform for our UK and international customers.

Darren Bailey

Chief Executive Officer      

FINANCIAL REVIEW

Income statement

In the year to 31st January 2018, Sales increased by 44% to £30.2m (2017 £21.0m) as the Group continued with its growth. Gross Profit also increased 37% to £9.8m (2017 £7.1m).

E-commerce grew strongly, with sales up 54% and margins maintained at expected levels, reflecting market dynamics.

Operating profit before exceptional costs have increased by 27% (£0.202m) to £0.940m (2017 £0.738m).

Exceptional costs of £0.730m, are one off costs incurred in the floatation of the business in July 2017.   

Finance costs for the year were 31% lower, £0.024m than prior year (2017 £0.075m).

Income tax for the year is £0.131m, an increase of 29% on prior year (2017 £0.102m)

Profit before tax in the year was £0.159m (2017 £0.662m), this decrease is as a result of the £0.730m exceptional costs as outlined above, on a like for like basis this would be £0.889m an increase of 34%.

The basic earnings per share in the year equates to a profit of £0.10 (2017 £54.72) this has been driven by the floatation costs as mentioned above, if these were added back the like for like basic earnings per share in this year would be £2.89.

Statement of financial position

Total equity at 31st January 2018 increased by £5.855m to £8.255m (2017 £2.400m) mainly due to the additional Ordinary Shares issued at the company's AIM floatation in July 2017.

Investment in goodwill has increased by £2.748m to £4.564m (2017 £1.816m) due to the Fosters Fishing Ltd, North West Angling Centre and Tacklesaver acquisitions.

Investment in stock has increased by 56%, £2.437m to £6.815m (2017 £4.378m) due to 3 additional new stores and the acquisitions as outlined above.

Current liabilities - trade and other creditors have increased by 64%, £2.155m to £5.518m (2017 £3.362m) some of which is due to the deferred consideration regarding the acquisitions that we have made, and also due to the additional new stores and the acquisitions outlined above.  

The Group repaid its bank loans and entered into a revolving credit facility with its bank and it had current liabilities - financial borrowings of £0.888m an increase of 29% (2017 £0.688m).

The Group also had cash and cash equivalents of £0.749m in funds an increase of £0.653m (2017 £0.096m)

Cashflow

At the year end the Group's net cash position (representing cash and bank balances less loans and borrowings) was a net borrowing of £0.193m, a decrease of £1.332m on prior year (2017 £1.525m).

Proceeds from the ordinary share issue was £7.5m gross, and there was a repayment of £1.400m of preference shares.

The Group invested in working capital in the year of £0.719m to £1.662m an increase of c76% on prior year (2017 £0.943m) and a further investment in fixed assets of £1.234m to support the continued growth of the business.

John Hunter FCMA, GCMA

Finance Director

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 JANUARY 2018

	Notes	2018 £ 000's	2017 £ 000's
CONTINUING OPERATIONS
Revenue		30,241	21,032
Cost of sales		(20,387)	(13,859)
GROSS PROFIT		9,854	7,173
Distribution costs		(1,794)	(1,206)
Administrative expenses		(7,119)	(5,229)
OPERATING PROFIT BEFORE EXCEPTIONAL COSTS OF IPO		941	738
Exceptional costs of IPO treated as an expense	2	(730)	-
OPERATING PROFIT AFTER EXCEPTIONAL COST OF IPO		211	738
Finance costs		(52)	(75)
PROFIT BEFORE INCOME TAX		159	663
Income tax		(132)	(103)
PROFIT FOR THE PERIOD		27	560
Profit attributable to: Owners of the parent		27	560
(Loss)/Earnings per share attributable to the ordinary equity holders of the parent: Basic and diluted (pence)	3	0.10	54,721.78
		0.10	54,721.78

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JANUARY 2018

	Notes	2018 £ 000's	2017 £ 000's
PROFIT FOR THE YEAR		27	560
OTHER COMPREHENSIVE INCOME  Item that will not be reclassified to profit or loss:
Revaluation of property to fair value	5	86	-
Income tax relating to item of other comprehensive income		-	-
Item that may be reclassified subsequently to profit or loss:
Bonus share issue		(303)	(9)
Income tax relating to item of other comprehensive income		-
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX		(217)	(9)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		(190)	551
Total comprehensive income attributable to: Owners of the parent		(190)	551

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 JANUARY 2018

	Notes	2018 £ 000's	2017 £ 000's
ASSETS
NON-CURRENT ASSETS
Goodwill		4,564	1,816
Property, plant and equipment		2,294	1,121
		6,858	2,937
CURRENT ASSETS
Inventories		6,815	4,378
Trade and other receivables		617	496
Cash and cash equivalents		749	283
		8,181	5,157
TOTAL ASSETS		15,039	8,094
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	4	430	1,410
Share premium	4	7,032	-
Revaluation reserve		86
Retained earnings		707	990
TOTAL EQUITY		8,255	2,400
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables		7	200
Financial liabilities - borrowings
Interest bearing loans and borrowings		54	1,120
Deferred tax		203	160
		264	1,480
CURRENT LIABILITIES
Trade and other payables		5,518	3,362
Financial liabilities - borrowings
Bank overdrafts			187
Interest bearing loans and borrowings		888	501
Tax payable		114	164
		6,520	4,214
TOTAL LIABILITIES		6,784	5,694
TOTAL EQUITY AND LIABILITIES		15,039	8,094

The financial statements were approved and authorised for issue by the Board of Directors on  

...................................................... and were signed on its behalf by:

.................................................................

Mr D I Bailey - Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 JANUARY 2018

	Called up share capital £000's	Retained earnings £000's	Share premium £000's	Revaluation reserve £000's	Total equity £000's
Balance at 1 February 2016	1	464			465
Changes in equity
Profit for the year		560			560
Other comprehensive income		(9)			(9)
Total comprehensive income		551			551
Dividends		(25)			(25)
Issue of share capital	1,409				1,409
Total transactions with owners
recognised directly in equity	1,409	(25)			1,384
Balance at 31 January 2017	1,410	990			2,400
Changes in equity
Profit for the year		27			27
Other comprehensive income		(303)		86	(217)
Total comprehensive income		(276)		86	(190)
Dividends		(7)			(7)
Issue of share capital	420		7,032		7,452
Reduction in share capital	(1,400)				(1,400)
Total transactions with owners
recognised directly in equity	(980)	(7)	7,032		6,045
Balance at 31 January 2018	430	707	7,032	86	8,255

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 JANUARY 2018

		2018 £ 000's	2017 £ 000's
Cash flows from operating activities
Cash generated from operations		(223)	1,301
Interest paid		(45)	(69)
Interest element of finance lease payments paid		(6)	(6)
Tax paid		(138)
Taxation refund		-	13
Net cash from operating activities		(412)	1,239
Cash flows from investing activities
Purchase of goodwill		(2,748)	(1,524)
Purchase of tangible fixed assets		(1,234)	(216)
Sale of tangible fixed assets		-	18
Net cash from investing activities		(3,982)	(1.722)
Cash flows from financing activities
New loans in year		850	1,250
Loan repayments in year		(1,516)	(267)
Capital repayments in year		(30)	(22)
Share issue		7,520	-
Cost of issue		(370)	-
Redemption of preference shares		(1,400)	-
Equity dividends paid		(7)	(25)
Net cash from financing activities		5,047	936
Increase in cash and cash equivalents		653	453
Cash and cash equivalents at beginning of year		96	(357)
Cash and cash equivalents at end of year		749	96

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2018

1. Basis of preparation

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRC Interpretations issued by the International Accounting Standards Board as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

The financial information set out above does not constitute the company's statutory accounts for 2018 or 2017. Statutory accounts for the years ended 31 January 2018 and 31 January 2017 have been reported on by the Independent Auditors. The Independent Auditors' Report on the Annual Report and Financial Statements for 2018 and 31 January 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under

498(2) or 498(3) of the Companies Act 2006.

Statutory accounts for the year ended 31 January 2017 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 January 2018 will be delivered to the Registrar in due course.

2. Exceptional Costs of IPO

On 13 July 2017 Angling Direct plc successfully floated on the Alternative Investment Market ("AIM"), issuing 11,562,500 ordinary 1p shares for consideration of £7,400,000.

In relation to the IPO, costs of £730,113 were incurred and were expensed and charged to the Income Statement for the year as an exceptional item.

3. Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share take into account share options in issue as disclosed in note 27.

Reconciliations are set out below.

	Earnings £	2018 Weighted Average number of shares	Per share amount pence
Basic EPS
Earnings attributable to ordinary shareholders	26,869	26,225,168	0.10
Effect of dilutive securities
Options		1,410,911
Diluted EPS
Adjusted earnings	26,869	27,636,079	0.10
	Earnings £	2017 Weighted Average number of shares	Per share amount pence
Basic EPS
Earnings attributable to ordinary shareholders	560,351	1,024	54,721.78
Effect of dilutive securities
Diluted EPS
Adjusted earnings	560,351	1,024	54,721.78

4. Called up share capital

Allotted, issued and fully paid:		2018 £	2017 £
10,000 Ordinary shares of £1 each		-	10,000
42,999,993 Ordinary shares of 1p each		430,000	-
Nil (2017: 1,400,000) £1 Preference shares		-	1,400,000
		430,000	1,410,000
The £1 Ordinary shares are sub-divided into four classes as follows:
			2017
			Number
Ordinary 'A'			3,960
Ordinary 'B'			3,960
Ordinary 'C'			880
Ordinary 'D'			1,200
On 22 March 2017 these four classes of £1 Ordinary shares were all converted into a single class of £1 Ordinary shares.
On 19 June 2017 the £1 Ordinary shares were subdivided with each share being split into 100 new Ordinary shares of 1p each.
A bonus issue of 30,250,000 1p Ordinary shares took place on 19 June 2017 on a pro rata basis to the existing Ordinary share holders.
On 13 July 2017 11,562,500 Ordinary shares of 1p each were allotted as fully paid for cash at a premium of 63p per share.
On 28 July 2017 187,493 Ordinary shares of 1p each were allotted as fully paid for cash at a premium of 63p per share.
The numbers of Ordinary shares in issue are as follows:
	2018 1p shares number	2018 £1 shares number	2017 £1 shares number
At 1 February 2017	-	10,000	1,000
Sub-divide shares	1,000,000	(10,000)	-
Bonus issue	30,250,000	-	9,000
Issued during the year	11,749,993	-	-
At 31 January 2018	42,999,993	-	10,000
The 1,400,000 Preference £1 shares were fully redeemed during the year
The numbers of Preference shares in issue are as follows:
		2018 number	2017 Number
At 1 February 2017		1,400,000	-
Issued during the year			1,400,000
Redeemed during the year		(1,400,000)
At 31 January 2018		-	1,400,000

5. Business Combinations

On 2 October 2017 the Company acquired the entire share capital of Fosters Fishing Ltd, a company incorporated in England and Wales, for consideration payable in cash.

The directors consider that other than land and buildings, the book value of the assets acquired do not differ significantly from the fair value and no adjustment is required. Land and buildings had a book value of £414,268 at the date of acquisition and were subsequently revalued to fair value of £500,000 creating a revaluation reserve of £85,732.

Foster Fishing Limited contributed £1,621,272 revenue and £135,547 to the group's profit for the period between the date of acquisition and the balance sheet date.

 

END

 

 

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