REG - Angling Direct PLC - Capital Allocation Policy & Buyback Programme

Angling DirectAnnouncement

09/12/2024 07:00

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RNS Number : 2128P  Angling Direct PLC  09 December 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

9 December 2024

 

Angling Direct PLC

('Angling Direct', the 'Company' or the 'Group')

 

Capital Allocation Policy

&

Commencement of Buyback Programme

 

Since the end of COVID-19 and against a backdrop of continuing uncertainty for
Omni channel retailers, the Group has focused on driving profitable growth and
has firmly established itself as a cash generative operation. This has
provided the Company with a solid platform to enable investment to further
grow earnings and the addressable market of the Group. The level of cash
generation has kept pace with the scale of the investment and the Group
continues to maintain a robust balance sheet underpinned by strong levels of
net cash which were £13.5m at 30 November 2024. The Group continues to carry
no debt outside of store and other IFRS 16 leases as part of its Omni channel
model.

Strategic Objectives

In May 2024, the Company published its medium-term objectives and periodically
updates on progress against their delivery. One of these objectives covers the
Company's approach to the 'deployment of surplus liquidity to further grow the
business beyond the medium-term objectives'.

The Board remains committed to investing in the business to support innovation
and drive further profitable growth. The Company intends to increase capital
investment, especially in technology alongside further working capital
deployment which complements new retail space investment and further own brand
development.

In line with recent acquisitions completed by the Company, management will
continue to target further small strategic acquisitions including investment
in the selective acquisitions of brands which complement the existing
business, accelerate the Company's ambitions and, the Board believes, would be
accretive to long-term shareholder value. The Company has signed heads of
terms on one such small strategic acquisition and will continue with its
appraisal of a range of acquisition options. There can be no guarantee that
any of the acquisitions being considered will ultimately be completed nor as
to the terms of such acquisitions.

Capital Allocation Policy

The Board aims to maintain a robust balance sheet with a sustainable
underlying net cash balance, providing the Group with the strategic
flexibility to capitalise on opportunities to grow, whilst providing
protection against headwinds for the UK retail sector.

Consistent with this objective, the Board's stated priorities as part of its
Capital Allocation Policy will be to:

 ·         Retain appropriate levels of underlying cash to support the operations of the
           business in light of well publicised headwinds facing the UK retail sector;
 ·         Maintain a sufficient working capital buffer above the natural seasonal
           requirement to maximise the Group's scale and enable it to continue to take
           advantage of ad-hoc stock acquisition opportunities, in turn helping the Group
           to deliver compelling customer offers and favourable trading terms;
 ·         Ensure sufficient capacity to accelerate the Group's planned UK store estate
           roll out ahead of plan should opportunities present themselves;
 ·         Retain sufficient funds to invest in capital expenditure projects which
           deliver growth and efficiencies and / or protect against ongoing cost
           headwinds, ultimately maintaining or enhancing return on investment;
 ·         Retain modest levels of cash to support the Company's stated UK M&A
           strategy; and
 ·         Quantify, at least annually, any excess capital taking into account the above
           priorities, in particular the strength of organic cash generation and any use
           of the modest levels of cash retained for UK M&A.

 

In considering its formal approach to capital allocation, the Board has taken
into account the following aspects in particular:

 ·         The Group is forecasting to hold reduced levels of net cash at the end of FY25
           compared to FY24;
 ·         Its expectations of strengthening Group EBITDA performance underpinning medium
           term operating cash generation; and
 ·         Small scale UK M&A remains a realistic target and the Board continues to
           pursue these opportunities where appropriate.

 

Share Buyback Programme

The Board has evaluated the Group's existing net cash balance in light of its
new Capital Allocation Policy, taking into account feedback from its major
shareholders. The Board is also of the view that the current value of the
Group's equity represents an attractive opportunity for deployment of surplus
capital.

The Company is therefore commencing a share buyback programme with a buyback
of up to £4.0m ordinary shares of 1 penny each in the Company ("Ordinary
Shares"), subject to remaining within the general authority of the Company to
repurchase Ordinary Shares granted at the Company's last Annual General
Meeting ("AGM") on 20 June 2024 (the "Buyback Programme").

The Company has instructed Singer Capital Markets Securities Limited ("Singer
Capital Markets") to conduct the Buyback Programme on its behalf within
certain pre-set parameters, including that the maximum amount (excluding
expenses) of share value that can be traded in one week is £250,000.

 If not terminated earlier, the Buyback Programme will expire at the close of
business on 10 December 2025. The Company may terminate the Buyback Programme
(at any time) provided that it is not in a closed period or party to any
inside information which has not previously been disclosed via Regulatory
Information Service. The Buyback Programme will also terminate if the general
authority to repurchase Ordinary Shares is not renewed at the Company's next
AGM in 2025.

The Company has determined that it will not rely on the safe harbour
conditions for trading set out in Article 5 of EU Market Abuse Regulation
(2014/596/EU) (which forms part of domestic UK law pursuant to the European
Union (Withdrawal) Act 2018) ("UK MAR") given the limited liquidity in the
Ordinary Shares and limitations that it would impose on the number of Ordinary
Shares that can be purchased.

Singer Capital Markets will make its trading decisions in relation to the
Ordinary Shares independently of the Company. There is no guarantee that the
Buyback Programme will be implemented in full or that any purchases will be
made.

Any purchases will be on market purchases of Ordinary Shares and made in
accordance with the general authority of the Company to repurchase Ordinary
Shares granted at the Company's AGM. Any Ordinary Shares purchased under the
Buyback Programme will be held by the Company in treasury.

The Company is satisfied that it is not currently in a closed period, nor is
it party to any inside information which is not disclosed in this announcement
or has not been previously disclosed via Regulatory Information Service.

Total Voting Rights

As at the time of this announcement, the Company's total issued share capital
consists of 77,267,304 Ordinary Shares, of which zero shares are held in
treasury, therefore, the total number of Ordinary Shares carrying voting
rights is 77,267,304.

The above figure of 77,267,304 may be used by shareholders as the denominator
for the calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the Company under
the FCA's Disclosure Guidance and Transparency Rules.

For further information please contact:

 

 Angling Direct PLC                          +44 (0) 1603 258 658
 Steven Crowe, Chief Executive Officer

 Sam Copeman, Chief Financial Officer

 Singer Capital Markets - NOMAD and Broker   +44 (0) 20 7496 3000
 Peter Steel

 Tom Salvesen

Alex Bond

 James Todd

 FTI Consulting - Financial PR               +44 (0) 20 3727 1000
 Alex Beagley                                anglingdirect@fticonsulting.com

Matthew Young
 Hannah Butler

 

This announcement contains inside information for the purposes of Article 7 of
UK MAR. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

About Angling Direct

Angling Direct is the leading omni-channel specialist fishing tackle retailer
in the UK, with an established and growing presence in Europe. Headquartered
in Norfolk UK, the Company sells fishing tackle products and related equipment
through its network of in excess of 50 UK retail stores, as well as through
its leading digital platform (www.anglingdirect.co.uk
(https://eu-west-1.protection.sophos.com?d=anglingdirect.co.uk&u=aHR0cDovL3d3dy5hbmdsaW5nZGlyZWN0LmNvLnVrLw==&i=NWZmMzFiMDlmNTYxZTYwZGYyODQyMzUz&t=K2FWYTRxeDV6cWRxd2I5dVpOODk5dnFObVU2U2p5WElLNndSM01SaStUcz0=&h=704002e0ebe140b99f9f3842770cb87e&s=AVNPUEhUT0NFTkNSWVBUSVapg934Yb5nAolTQ9o0CeldsCYWuT9YetF_pLFbutVHOzk4kq9BEj_vGoYOcSbmh2Q)
) and the MyAD Fishing Club app. The Company has three further native language
websites in its key European territories (www.anglingdirect.de,
(https://eu-west-1.protection.sophos.com?d=anglingdirect.de&u=d3d3LmFuZ2xpbmdkaXJlY3QuZGU=&i=NWZmMzFiMDlmNTYxZTYwZGYyODQyMzUz&t=VVRndGRoM1kvaFpNWnRpMzZ0M3NsT2I1NFdGTEp6ZllkYnFBaFFZb2FNWT0=&h=704002e0ebe140b99f9f3842770cb87e&s=AVNPUEhUT0NFTkNSWVBUSVapg934Yb5nAolTQ9o0CeldsCYWuT9YetF_pLFbutVHOzk4kq9BEj_vGoYOcSbmh2Q)
.fr, .nl), with orders fulfilled by its international distribution centre in
The Netherlands.

 

Angling Direct's purpose is to inspire everyone to get out and enjoy an
exceptional fishing experience, regardless of background or ability, in the
great outdoors. Angling Direct's active digital channels and over 500
colleagues contribute to the Company's ethos of care for the wider community
and the environment (www.anglingdirect.co.uk/sustainability
(https://eu-west-1.protection.sophos.com?d=anglingdirect.co.uk&u=aHR0cDovL3d3dy5hbmdsaW5nZGlyZWN0LmNvLnVrL3N1c3RhaW5hYmlsaXR5&i=NWZmMzFiMDlmNTYxZTYwZGYyODQyMzUz&t=a25La0pYblhuR0diWS9OWVhUTEJtSjRiNmhCdktRWnNiUG9ibXlUMjNuTT0=&h=704002e0ebe140b99f9f3842770cb87e&s=AVNPUEhUT0NFTkNSWVBUSVapg934Yb5nAolTQ9o0CeldsCYWuT9YetF_pLFbutVHOzk4kq9BEj_vGoYOcSbmh2Q)
). Angling Direct currently sells over 25,000 fishing tackle products from
industry leading brands alongside its own brands 'Advanta', and entry level
offering 'Discover'.

 

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