REG - Angling Direct PLC - Final Results
14/05/2024 07:00
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RNS Number : 2549O Angling Direct PLC 14 May 2024
14 May 2024
Angling Direct PLC
('Angling Direct', the 'Company' or the 'Group')
Final Results
Innovation and resilience driving continued sales growth across UK &
Europe
Angling Direct PLC (AIM: ANG), the leading omni-channel specialist fishing
tackle and equipment retailer, is pleased to announce its financial results
for the twelve months ended 31 January 2024 (FY24).
£m FY24 FY23 % Change
Revenue 81.7 74.1 10.2%
Retail store sales 44.4 41.3 7.6%
UK online sales 32.9 29.7(1) 11.1%
Total UK sales 77.4 71.0 9.0%
European Online sales 4.3 3.1 36.3%
Gross profit 28.5 25.8 10.5%
Gross margin % 34.9% 34.8% 10bps
EBITDA (pre IFRS 16) 2.7 2.2 21.0%
EBITDA (post IFRS 16) 5.3 4.6 16.7%
Profit before tax 1.5 0.7 126.8%
Basic EPS 1.58p 0.70p 125.7%
Financial highlights
· Group revenue increased by 10.2% to £81.7m, including record UK sales of
£77.4m
· Retail store sales increased 7.6% against FY23 (£41.3m) as the store rollout
strategy continued with two new stores opened in FY24
· Like-for-like store sales increased by 3.1%(2) underpinned by improved
conversion
· UK online sales grew 11.1%, driven by average basket increases, representing a
return to growth and a significant increase on pre-Covid levels
· In Europe, online sales grew 36.3% with our key European territories of
Germany, France and the Netherlands growing 40% year-on-year
· Gross margin increased to 34.9% with progress in both the UK and Europe driven
by ranging and own brand progression, offsetting increased levels of store
theft
· Group EBITDA (Pre IFRS 16) grew 21.0% to £2.7m
· Positive operating cashflow of £6.5m with a strengthened balance sheet and a
net cash (pre-IFRS16) position of £15.8m as at 31 January 2024 (31 January
2023: £14.1m)
· Well-positioned to manage ongoing consumer headwinds and capture further
market share in the UK and Europe
Operational highlights
· Launched MyAD proposition, a UK omni-channel customer loyalty club, the
cornerstone for our ambition to become Europe's largest fishing club, gained a
membership of over 220k members at the period end
· Ongoing development of own brand offer through Advanta and Discover,
increasing their gross profit by 16.0%
· Progressed UK store rollout, opening two new stores in Cardiff and Goole,
reaching a total network of 47 UK sites at year end
· Engaged over 27,000 new and lapsed participants to angling as a pastime
through continued support of the Angling Trust as lead sponsor for the "Get
Fishing" campaign
Current trading and outlook
· Total Q1 FY25 sales increased 4.0%, achieving growth in the UK and Europe
· In the UK, acquired two existing store catchments and opened one further new
catchment in Q1 FY25
· Successfully opened first European store in Utrecht, the Netherlands, while
maintaining a considered and prudent approach to ongoing European investment
· The changing UK competitive landscape creates a significant opportunity for
further growth, and the Board is actively seeking and engaging in
opportunities to deploy capital, take market share and reduce surplus
liquidity to improve return on capital employed
· Resilient Q1 trading against an uncertain consumer landscape and sub-optimal
weather conditions: focus on protecting operating margins, cost control and
successfully optimising stock levels ahead of the key summer season
· The Board remains mindful of the macroeconomic headwinds facing the market and
has confidence that its experienced management team and agile business model
position the Company well to navigate and succeed in the period ahead while
delivering against its medium-term objectives
Medium-term financial objectives
We are pleased to set out our medium-term financial objectives reflecting our
growth plans for the business as follows:
· UK business generating £100m annual revenues with a pre-IFRS16 EBITDA in
excess of £6m(3)
· Moving the European business through the early stages of development to
break-even
· Deployment of surplus capital to accelerate growth beyond our medium-term
targets, including selective M&A, with investment weighted towards the UK
business
1 Includes £0.1m of third party marketplace income
2 Excluding the Reading store which hasn't materially traded in the period
after it suffered a fire in the first week of February. Total like for like
stores grew 1.1% including Reading.
3 Pre IFRS 2
Steve Crowe, CEO of Angling Direct, said:
"The last twelve months have seen Angling Direct further expand its market
share and grow sales, despite the continued industry headwinds. Supported by
our omni-channel business model, we are pleased to have achieved record UK
revenues of £77.4m and delivered growth across our markets. This stellar
performance reflects the dedication and exceptional customer service provided
by Angling Direct colleagues.
Throughout the period, we have made good progress against our strategic
objectives. Through a prudent and considered investment strategy, we have
continued our store rollout plans in the UK and, for the first time, into
mainland Europe. The opening of our store in Utrecht marks a significant
milestone for Angling Direct, and we are pleased that our European customers
can now participate in the full omni-channel proposition.
Now with over 220,000 members since launch in June 2022, our MyAD customer
proposition bridges the gap between our physical stores and online offering,
unlocking further marketing efficiencies across the business and giving our
customers access to differentiated pricing, targeted offers and promotions. I
am excited by the significant progress since the launch of MyAD and the
opportunity this creates to build Europe's largest and most engaging fishing
club, harnessing the passion of a thriving angling community.
The Board remains optimistic about the long-term growth prospects of the
Group, and despite the challenges we have seen in consumer confidence,
inflation, and sub-optimal weather, the angling market remains resilient. We
are excited to set out our medium term objectives which outline our strategy
of continued growth both in the UK and Europe in the years ahead. Our core
objectives remain in place, and I am confident that with our agile business
model and strong fundamentals, we are well positioned to navigate the period
ahead as we fully capitalise on the significant opportunities available to us.
Angling Direct has a compelling product and service offering for our
passionate and loyal customer base, and it is with these foundations that I
remain optimistic in the Group's outlook."
Investor Meet Company presentation - 20 May 2024
Management will provide a live presentation via the Investor Meet Company
platform at 11.00 a.m. BST on 20 May. The presentation is open to all existing
and potential shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting
or at any time during the live presentation. Investors can sign up to Investor
Meet Company for free to meet Angling Direct plc via:
https://www.investormeetcompany.com/angling-direct-plc/register-investor
(https://www.investormeetcompany.com/angling-direct-plc/register-investor) .
Investors who already follow Angling Direct on the Investor Meet Company
platform will automatically be invited.
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, Alex Bond, James Todd (Corporate Finance)
Tom Salvesen (Corporate Broking)
FTI Consulting - Financial PR +44 (0) 20 3727 1000
Alex Beagley
Eleanor Purdon
Matthew Young
Hannah Butler
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 approximately 50 UK retail stores, as well as through
its leading digital platform (www.anglingdirect.co.uk) and the MyAD Fishing
Club app. The Company has three further native language websites in its key
European territories (www.anglingdirect.de, .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 its 450
colleagues contribute to the Company's ethos of care for the wider community
and the environment (www.anglingdirect.co.uk/sustainability). Angling Direct
currently sells over 25,000 fishing tackle products from industry leading
brands alongside its own brands 'Advanta', and entry level offering
'Discover'.
Chairman's Statement
Introduction
I am delighted to present my first Chair's statement having moved from my
Chief Executive role in June 2023 following the Annual General Meeting.
Angling Direct has once again achieved record sales, winning new customers
attracted by the continued development of a market leading, contemporary,
omni-channel consumer proposition. We are pleased to have achieved this
performance despite ongoing pressure on consumer discretionary spend in a
sustained inflationary environment.
Amid strong signs that fishing tackle markets in both the UK and Europe
continue to consolidate, Angling Direct maintains its strategy of
appropriately and prudently investing where the opportunity exists to increase
market share. We remain focused on our strong purpose of 'Getting Everyone
Fishing', as we believe everyone should have the opportunity to get out by the
waterside and experience the proven wellbeing benefits of angling.
Staying true to our rigorous investment criteria, we progressed our UK store
roll-out with the opening of two new stores in the year.
We maintained our considered and prudent approach to investing in our European
business, with our focus on improving trading margins and operational
efficiencies, while also achieving good growth and share gain in the key
territories of this large and attractive market.
Digitally, the launch of MyAD, our new omni-channel customer loyalty scheme,
exceeded our expectations with over 220,000 customer sign ups in its first
year. MyAD is unique in our market, allowing customers to access a range of
benefits and content, including differentiated pricing as well as increasingly
targeted offers and promotions. We have made considerable effort to introduce
and leverage retail AI technology into several areas of our offering including
paid advertising, product recommendations and customer services.
Finally, I am delighted that we have our strong executive leadership team in
place, as Steve Crowe, previously CFO, replaced me as CEO in June 2023 and Sam
Copeman joined as the Group's new CFO in June, working alongside Steve. The
Board is very pleased with how well Steve and Sam have transitioned into their
new roles and look forward to them leading the Company through its next
exciting phase of profitable growth.
Financial overview
The Group achieved a record revenue of £81.7m in the financial year to 31
January 2024 (2023: £74.1m, up 10.2%).
Store sales increased by 7.6% to £44.4m (2023 £41.3m) and online sales
increased by 13.5% to £37.2m from £32.8m. Within this, UK online sales
increased by 11.1% to £32.9m, achieving a return to growth. Significantly, UK
online sales are now 62.8% above pre-Covid levels, illustrating the
advancements we have made in that area of our business.
As a result of our continuing focus on realising operational efficiencies, and
despite a number of headwinds facing the broader market, the Group delivered
pre-IFRS 16 EBITDA of £2.7m (2023: £2.2m) and a pre-tax profit of £1.5m
(2023: £0.7m). The Group ended the year with a strong balance sheet and net
cash of £15.8m as at 31 January 2024 (2023: £14.1m).
People & community
One of our strong founding principles is that we should help improve the
angling experience for everyone who engages with us. Our continued focus on
'Getting Everyone Fishing' is important to everyone at Angling Direct as we
want to ensure that the Group has a positive impact on the sustainable health
of angling as a pastime with all the associated benefits for our employees,
suppliers, shareholders, local communities, and the environment.
Our success is in no small way due to the dedication and enthusiasm of our
superb colleagues who share our vision and are passionate in delivering the
very best experience to our angling community. Our outstanding colleagues are
key to all we do, and we endeavour to support them with our ambition to be the
best employer in our sector, not only in terms of reward but also in caring
for wellbeing and fulfilment.
We continue to support the Angling Trust as lead sponsors for the "Get
Fishing" campaign, which last year engaged over 27,000 new participants.
We endorse the wide-ranging evidence that fishing can be a great way to
improve all round wellbeing and we support bodies set up to encourage and
enable those with disabilities, of any kind, to benefit from fishing. We have
been particularly focused on supporting Tackling Minds, a rapidly growing
Community Interest Company focused on using fishing to help improve mental
health.
Looking ahead
Since the year end, we have opened 3 stores in the UK and our first European
store, being a mix of new stores as well as acquiring, smaller footprint
existing fishing tackle stores in new catchments. This takes our total to 50
UK stores and one European store, with further UK openings in the pipeline
through the year.
I am particularly pleased that we have opened our first store in Utrecht, the
Netherlands, following the establishment of our European distribution centre
which commenced deliveries in March 2022. The opening of this store is a
significant milestone for Angling Direct, enabling our European customers to
participate in the full Angling Direct omni-channel proposition. We know from
our experience in the UK that our physical stores and amazing colleagues act
as great ambassadors for our brand, and we expect the new store to complement
our digital business within the EU.
For Angling Direct the last four years have seen a period of significant
growth and a return to profitability. After a huge amount of organisational
change, we are now firmly embedded as the clear UK market leader and have
established a growing strategic presence within key markets in Europe. For
consumers, the challenging economic environment will continue into this year,
and we are not immune to greater than anticipated UK government policy driven
cost inflation.
However, our strength lies in being laser focused on providing the very best
for our customers, in the most cost-efficient way. Whilst rates of market
consolidation are difficult to forecast, we anticipate that opportunities will
arise for those businesses, such as Angling Direct, that are prepared and
capable of seizing and delivering upon them. With our strong balance sheet and
experienced management team, we are well placed and ready to progress our
growth strategy by capitalising on such opportunities, benefiting our
colleagues, our shareholders, the angling community, the wider society and,
not least, the environment.
Board changes
Following my move to Chair and the aforementioned CEO and CFO changes in the
year, I would like to offer my heartfelt thanks to our founder, Martyn Page,
who stepped down from his role as Non-Executive Chairman to become a
Non-Executive Director. As a Board and on behalf of the Group, we are
delighted that Martyn has remained on the Board, continuing to offer wisdom
and guidance, in turn helping the business to stay firmly on course with our
strategic aims, our beliefs, purpose and culture. There were no other
Non-Executive Director changes in the year, providing continuity to the board.
The current year has already got off to an exciting start and we look forward
to updating shareholders on strategic progress as we continue to grow our
market share in the UK and Europe, both in store and online.
Yours sincerely,
___________________________
Andy Torrance
Non-Executive Chairman
13 May 2024
Chief Executive's Review
'Focused on our clear purpose to inspire everyone to get out and enjoy an
exceptional fishing experience, we are building Europe's most engaging fishing
club through MyAD. Despite industry headwinds, we have taken market share and
built further innovation and resilience into our business.'
Building Europe's Biggest Fishing Club
We have a strategy to become Europe's largest fishing club by inspiring and
delighting increasing numbers of customers, focusing on sustainable profitable
growth and enhancing local fishing communities. This will generate
sustainable value for all stakeholders as we create a better world for
anglers, fisheries, supply partners and all those who love the pastime. We are
now the largest, and most trusted fishing retailer in the UK, and we continue
to take share in a substantial retail category, underpinning resilience and
further growth potential in our revenues.
The recent launch of our MyAD proposition brings together our complete offer
under one banner, bridging the gap between our physical stores and our digital
offering. MyAD launched in June 2023 as an omni-channel customer loyalty
scheme, the cornerstone to building Europe's largest fishing club. MyAD
reached a membership in excess of 220,000 at the period end. This unified
positioning will significantly enhance our marketing efficiency and
effectiveness across the business. The proposition has allowed us to harvest,
for example, early stage insights on cross-channel customer behaviour and the
impact of targeted customer offers and promotions. This gives us confidence
around the development roadmap for MyAD in the coming year. It has reinforced
our belief in the strategic benefits this can provide for Angling Direct and
our partners, as well as our valued members.
We are the only UK angling business which has successfully brought together
digital and retail services at scale, operating as the UK's market leading
business with record in year UK revenues of £77.4m representing 9.0% growth
and mid-teen UK market share.
Our European ambitions remain strong, with attractive addressable markets that
are approximately three times the size of the UK market. We have made risk
appropriate steps to trial an omni channel offer in the coming year in the
Netherlands, with the signing of a retail lease in January 2024, in an
existing angling catchment and the store now trading. The digital business
continues to take share across all its key markets, balancing growth and
profitability to ensure that, as markets recalibrate, Angling Direct is well
placed to deliver value for all stakeholders.
As the UK market leader with a purpose of 'Getting Everyone Fishing', Angling
Direct is uniquely placed to deliver further profitable growth both within the
UK and the significant European fishing tackle markets as people of all
backgrounds discover the restorative pleasure, challenge and wellbeing
benefits of angling.
Omnichannel seamlessly connected for the customer
Our network of stores, across 47 UK sites at the period end, gives us scale
and reach that brings us closer to anglers and enables us to offer greater
flexibility and convenience than our competitors, under one consistent
operating platform and brand. We will continue to invest in the opportunity
for new angling stores in the UK, rolling out at pace in attractive
catchments, particularly where we observe the need for an increasingly
contemporary retail offer. During the year, we established two new catchments
for the UK business (opening stores in Cardiff in February and Goole in
April), and we continue to seek out new catchments which present the
opportunity to deliver scalable revenues and accretive returns.
In our UK stores, we continued to optimise operating processes against the
backdrop of increasing colleague and premises costs. We achieved stronger
customer conversion (up 250 bps to 61.4%) through digital price and promotion
labelling deployment, and continued refinement of store colleague hours
against customer footfall intensity windows. Further work on a digitised
central returns model also commenced in Q4.
We remain committed to utilising innovative contemporary digital technologies
as part of providing our customers with market leading advice, engagement,
service and inspiration. Our in-house web development team has continued to
progressively deploy our digital customer journey functionality, to improve
speed and resilience, alongside improved onsite search relevance. Q4 saw the
team deploy new AI retail technology to drive improved product recommendations
and subsequent conversion into the customer journey, seamlessly integrated
with our digital paid marketing campaigns.
We will continue to leverage our category authority and expertise to lead
choice, innovation and value, making it easier for anglers to access the best
products and services. Our ongoing development of our own brand offer through
the Advanta and the new entry level Discover brands provides a key area of
competitive advantage and supply resilience. We will continue to focus on cash
generation from these brands, positioning them where supply partners'
alternative products have margins which undervalues their products or there is
inconsistency of supply. Own brands gross profit grew 16.0% in FY24, with
further substantial headroom for development in the coming year.
Consumer headwinds and inflationary cost pressures for suppliers and
competitors have made trading conditions increasingly volatile. We remain
agile in our trading, continuing to balance the trajectory of taking further
market share against maintaining resilient gross margins. In addition, in FY24
we developed two new revenue streams: in-store services (reel spooling) and
income from selling digital and physical promotional space for our brand
partners. Further opportunities exist in FY25. The UK business is
demonstrating success with revenue increasing by 9.0% while improving bought
in margins by 40 bps.
Both our UK and European distribution centres continue to explore and test
improved ways of operating. Despite strong wage and energy headwinds, both
operations delivered carriage and colleague ratios below FY23.
Our medium-term objectives - on a positive journey to deliver sustainable
value for shareholders
We continue to scale the Group, growing the UK business at pace, with the
medium-term target of growing to £100m revenue and earnings in excess of £6m
now within sight. The European business continues to scale, balancing the
longer-term opportunity against the current market economics. Our medium-term
priority here is to move the European business through the early stages of its
development to break-even.
Our Group EBITDA ratio increased 30 bps to 3.3%, with the UK EBITDA growth of
15.6% 1 (#_ftn1) over indexing against its sales growth at 9.0% and the
European EBITDA losses improving as a ratio of Group EBITDA by c1800 bps to
35.9%.
The UK business is starting to demonstrate both progressive gross margins,
which have evolved from 31.2% in FY20 to 35.4% in FY24 and leveraging the UK
Group central fixed cost base. Both these facets represent clear opportunities
for further value creation.
Macro headwinds on market pricing (driven by faltering competition) and store
theft were greater challenges than anticipated in FY24, presenting real
opportunity for improvements in FY25 and beyond. We continue to adapt trading
protocols to manage risks around increased levels of theft, an issue affecting
the whole retail sector as reported elsewhere. The stores suffered £0.5m of
shrinkage in the year (FY23: £0.3m); as a ratio of UK sales this represents a
30 bps drag on the UK EBITDA margin.
The Group generated positive cashflows both at an operating performance level
and post investment of further capital deployment. Operating cash flow
increased £6.5m against the prior year of £1.5m. Capital deployment
increased in the year to £2.9m as we sought to accelerate activities that
would drive enhanced EBITDA metrics for the Group in FY25.
As a result of our strong cash management, the Board remains focused on
evaluating and delivering opportunities to drive returns beyond our
medium-term targets by deploying surplus funds and accelerating our organic
and M&A growth strategy. The investment of surplus funds would be weighted
towards the UK business. Given the current market backdrop, we are seeing an
increased pipeline of relevant M&A opportunities, however, in many cases
vendor pricing expectations are incompatible with our overriding objective of
ensuring that deployment of surplus funds is value accretive for our
shareholders.
Growth opportunities
European markets
Our clear strategy is to become Europe's first choice fishing club through
which all anglers can shop with confidence, seek advice, and be inspired.
In the period we continued to develop our European business, underpinned by
our belief in the clear opportunity to establish a market leading,
contemporary, omni-channel proposition in mainland Europe, significantly
growing our addressable market. We were pleased to identify and sign the lease
for our first store in mainland Europe, in the Netherlands in January. This
followed a thorough search for a suitable site to act as a test-case for our
omni-channel model which is designed to enhance returns for all stakeholders.
Overall, the European market, due to its significant size and fragmented
nature, remains very attractive to Angling Direct in order to significantly
expand its addressable market and develop a significantly larger business over
the long term. The Board believes that our omni-channel customer offering is
the appropriate model to deliver profitable growth.
The European consumer landscape is currently more uncertain than the UK with
intense pricing competition continuing. The Group will continue to focus on
margin discipline and adopting a prudent approach to developing both the
existing digital business and an adaptable physical trading presence in Europe
in light of the prevailing conditions. Key areas of focus include optimising
ranging, marketing and pricing strategies, with our work to date in these
areas resulting in year-on-year improvements in the gross and EBITDA margins
by +410 bps and +1550 bps respectively. Whilst the competitive market is
creating opportunity for the Group, we will keep EU trading progress under
continual evaluation and, ahead of any potential significant cash investment,
maintain our rigorous review of the likely returns in this area of the
business. In summary, we believe that the current intense levels of price
competition are unsustainable and will create opportunity for the Group
alongside a disciplined approach to expansion. We remain confident in the
significant longer term growth opportunity.
UK markets
The MyAD fishing club and insight this brings will continue to be developed to
support both suppliers and customers, and ultimately to deliver incremental
shareholder value.
We remain confident the UK has over 80 catchments which can be served by
Angling Direct and in H2 commenced the search programme for the "smaller"
store format. More latterly in the year, elements of the market started to
exhibit increasing levels of distress with a number of single premises
retailers shutting their doors. This presents opportunity for the Group, as
evidenced by two store acquisitions completing in February 2024 and April 2024
respectively. UK store catchments of scale offer the ability for the Group to
deliver attractive returns on capital and leverage the Group's UK cost base.
Our own brand product development has gained momentum during the year, and we
see increased opportunities for broadening this range further, including
through potential new brand acquisitions, as we deploy further capital into
the UK market.
Our values underpin how we operate - maintaining our commitment to a
sustainable future
Our colleagues remain the face of Angling Direct to our customers and are key
to delivering an excellent service, both in store and online. They also play
an important role in the angling community. We differentiate ourselves by
providing expert help, trusted advice and inspiration for customers to get the
most from their fishing.
As the exclusive retail sponsors of the Angling Trust's Get Fishing campaign,
designed to attract new and lapsed anglers through a bankside coaching
collaboration with Sport England and the Environment Agency, we are delighted
that the programme reached over 27,000 individuals through 1,500 events during
2023. The campaign's digital communications had a reach of over 3m, all
sign-posting the collaboration with Angling Direct. We continue to work
closely with the Angling Trust to improve this reach and attract and retain
anglers through tailored marketing journeys and product offers. Our ambition
remains to support the health of the pastime and industry through
collaboration.
Coarse fishing licence sales remain broadly flat against those of the pre
COVID landscape but with over 20% increases in young people and disabled
licence sales pointing to increasing engagement from people new to the
pastime.
Underpinned by our belief in the general wellbeing benefits of fishing, we are
very supportive of moves to include fishing as part of a programme for NHS
social prescribing. Working with Anglia Ruskin University (ARU) we have
previously co-funded significant research in this area, the resultant data
having now been peer reviewed and published, further raising awareness of not
just the health benefits of angling but also the need to broadly invest in
order to improve access for more people to fish.
We continue to work closely with Tackling Minds, a pioneering mental health
organisation which uses fishing as therapy. We promote, sell and fulfill their
merchandise through 14 of our physical stores as well as through our webstore
with all proceeds being returned to Tackling Minds. During the period this
returned £26k to Tackling Minds.
We have refreshed our approach to developing a culture where "everybody can
contribute", aligned with our objective to become the leading employer within
our market. We have increased the focus on our annual leadership survey,
driving clear action plans from leaders with the primary focus being on
driving one team with the opportunity to all win together. In addition, we
have introduced "benefits statements for all store colleagues" so we mutually
reflect on the total value of the colleague offer and continued to offer
additional well-being days for all colleagues over and above historic annual
leave entitlements.
We continued to extend our social media and YouTube reach. In the period, our
YouTube subscribers exceeded 60,000 for the first time. We have seen
particular success with our "Masterclass" and 'how to' style, 'Quick Bites'
skills development features. Building on our inclusive approach, we have
featured various articles with colleagues of a broad range of ages, genders,
fishing abilities and disciplines, designed to appeal to an ever more diverse
customer base.
We take our ESG responsibilities seriously and that extends to ensuring
Angling Direct is continually working towards enhancing sustainable business
practices across the areas of environmental protection, economic viability,
and social diversity.
Current trading, this year's road map and beyond
We have a clear ambition to continue to scale the UK business in the next 12
months and beyond. Our MyAD proposition will continue to take market share
through leveraging our physical and digital infrastructure to serve new and
existing customers as market consolidation reduces the number of other retail
outlets in the market. Alongside this we will increase the pace of our UK
physical estate roll out to acquire existing retailers or reach new unserved
catchments where we believe we can make accretive returns. The UK digital
business will continue with its journey, accessing and developing new retail
AI technologies to maintain its competitive advantage.
In Europe we will continue to responsibly grow our digital business, balancing
ambition in a highly attractive addressable market, set against the current
softer market conditions. Alongside this we will look to learn at pace from
our first European store, to be well placed ahead of the FY25/26 fishing
season to evaluate further roll out if appropriate.
Against these ambitions in Q1 the overall Group grew revenue 4.0%. Two new UK
trading locations have been secured through acquisition and opened in FY25
thus far, alongside opening in one new catchment. In addition, we have signed
an agreement with a leading UK retailer to trial retail space within its
existing estate where it is mutually beneficial to both parties.
In Europe, the Netherlands store has commenced trading in May 2024, giving us
the opportunity to trial and learn about the omni-channel model in Europe.
We continue to focus on gross margin development, and at the same time, our
operational grip continues to mitigate ongoing cost headwinds.
With significant cash on the balance sheet, the Group will continue to
strategically invest in UK market share gains, scaling the Angling Direct own
brand opportunity and operational efficiencies. In Q4 FY24, the UK business
committed to a seven-figure capital investment in an automated UK packaging
solution, to drive further efficiencies and reduce exposure to further
significant living wage inflation.
The changing competitive landscape in the UK presents us with the opportunity
to deploy capital, take market share and reduce surplus liquidity. Vendor
expectations on valuation and timing continue to be a persistent challenge to
our M&A strategy, however the Board remains committed to delivering growth
while retaining both strong liquidity and a robust balance sheet.
We remain vigilant to the external headwinds facing the sector, including
inflationary pressures, and believe that our experienced management team and
agile business model position us well to navigate any challenges in the period
ahead as we fully capitalise on the significant opportunity available to us in
the UK and European markets.
With the continued support of our outstanding colleagues, I look forward to
sharing further success with shareholders through 2024 and beyond.
___________________________
Steve Crowe
Executive Director and Chief Executive Officer
13 May 2024
Chief Financial Officer's statement
Continuing to deliver record revenues, strengthening EBITDA margins and
generating cash to execute our strategy
The Group has continued to deliver on its strategic priorities throughout
FY24, despite the competitive pricing environment, the challenging consumer
landscape, increased cost headwinds facing the business and the weather impact
on angling conditions in H2 of FY24. The Group delivered record revenues,
strengthened EBITDA margins and enhanced its strong balance sheet and
liquidity position. The UK financial performance continued to underpin the
investment in Europe. The Group remains well positioned to capitalise on
opportunities as further market consolidation occurs and a more favourable
consumer dynamic returns.
Financial highlights
In FY24 the Group delivered record revenues, with 10.2% growth to £81.7m
(FY23: £74.1m). This was delivered in the UK, both online and within the
store portfolio, in terms of both the existing store footprint and the new
space effect of new and prior year store openings. This was set alongside
growth in the second full year of trading in Europe from the distribution
centre in the Netherlands.
Pre-IFRS16 EBITDA grew 21.0% to £2.7m (FY23: £2.2m) which equates to 36.9%
growth on a comparable basis, when excluding the cyber security insurance
proceeds reported in FY23 that related to an FY22 event. This performance was
underpinned by margin progression through improved own brand customer
engagement, upside from the FY23 range review driven by supplier mix,
improving supplier terms and the roll out of new revenue streams in terms of
both in-store services (e.g. spooling) and commercial marketing. This was then
partially eroded through higher levels of retail shrinkage and store theft
(consistent with the wider retail industry news flow) and higher out of season
promotional activity in H2. The EBITDA growth was also supported by a number
of operational initiatives and efficiencies delivered within the cost base.
Profit before tax grew 126.8%, underpinned by the EBITDA growth as well as the
higher interest income, as cash balances are optimised in the higher interest
rate environment.
The discussion of our financial performance and position in this section is
primarily on an IFRS 16 basis for all years presented. We have also included
an analysis of pre- IFRS 16 EBITDA as an alternative performance measure that
we consider as a key measurement of performance internally as well as within
our covering Broker's market forecasts.
Note 6 to the consolidated financial statements provides more information and
reconciliations relating to EBITDA on both a pre and post IFRS 16 basis. An
explanation of the difference between the reported operating profit figure and
adjusted EBITDA is shown below:
Financial Highlights
2024 2024 2023 2023 Change % Change %
Post IFRS16 Pre IFRS16 Post IFRS16 Pre IFRS16 Post IFRS16 Pre IFRS16
Revenue (£m) 81.7 81.7 74.1 74.1 10.2% 10.2%
EBITDA (£m) 5.3 2.7 4.6 2.2 16.7% 21.1%
Profit before tax (£m) 1.5 1.5 0.7 0.8 126.8% 94.3%
Basic earnings per share (pence) 1.58 0.70 125.7%
Adjusted financial measures are defined in the Annual Report and reconciled to
the financial measures defined by International Financial Reporting Standards
("IFRS"). Management uses EBITDA on a pre IFRS16 basis for assessing the
financial performance of the Group. These terms are not defined by IFRS and
therefore may not be directly comparable with other companies adjusted profit
measures.
Another year of revenue growth
Revenue grew 10.2% year on year, with the UK business growing at 9.0% and the
European business growing at 36.3%.
UK store revenues were resilient and rose 7.6% to £44.4m, underpinned by
stronger conversion and new store openings (Cardiff in February and Goole in
April), increasing the Group's store footprint from 45 to 47. These new
stores, alongside those stores opened in FY23, contributed £3.6m of revenue
in the year. Like for like store revenue was £40.7m 2 (#_ftn2) ,
representing 3.1% growth underpinned by improved conversion, and demonstrating
strength against FY23 where the growth rate was flat. UK online revenue
increased 11.1% to £32.9m driven by strong average transaction value growth.
The UK business also did not benefit from any inflationary tailwinds, with
this broadly flat year on year. Overall the UK business delivered 60.6% growth
versus the pre-Covid FY20 year, with further scope for expansion.
The European business continued to be a purely online offering during FY24,
based from our European distribution centre in The Netherlands. This delivered
revenue growth of 36.3% to £4.3m, with the Group continuing to focus on
European territories with the market size to deliver both strong revenue
growth and promising levels of profitability. Our key territories of Germany,
France, and The Netherlands increased revenue year on year by 40.0% and these
territories now represent 96.9% of total international revenue (FY23: 94.3%
and FY22: 84.4%). These European markets were materially impacted by the
competitive pricing environment and the challenging consumer landscape in
FY24, so from a medium-term upside perspective these markets remain attractive
as they normalise.
Revenue
31 January 31 January
2024 2023
£m £m
UK 77.4 71.0
Germany, France and Netherlands 4.2 3.0
Other countries 0.1 0.2
81.7 74.1
Retail stores 44.4 41.3
Ecommerce 37.2 32.8
81.7 74.1
Gross profit
Total gross profit increased by 10.5% to £28.5m (FY23: £25.8m). Total gross
margin increased by 10 bps to 34.9% (FY23: 34.8%).
In the UK, gross margins increased by 10 bps to 35.4%. This progression was
delivered through: improved own brand customer engagement; upside from FY23
range review driven by supplier mix, improving supplier terms, and the roll
out of new revenue streams in terms of both in-store services (e.g. spooling)
and commercial marketing. This was then partially eroded through higher levels
of retail shrinkage and store theft, consistent with the wider retail industry
news flow, and higher out of season promotional activity in H2. In Europe, the
gross margin improved by 410 bps to 27.4%, primarily driven by range
optimisation and mix.
Own brand product ranges (Advanta, alongside the new entry level Discover
brand introduced in FY24) contributed 8.8% (FY23 8.3%) of total gross profit,
£2.5m, during the year (FY23: £2.1m). This was an increase of 16.0% on the
prior year and over indexed against total gross profit growth (10.7%) by 540
bps.
Other income
The Reading store did not materially trade in the period after it suffered a
fire in the first week of February 2023. This was an insured risk and the
Group has received payments on account in respect of the insurance policies
which are reflected in the accounts along with a prudent provision for the
remaining amounts, as the claim position is not yet finalised.
FY23 includes insurance proceeds in respect of the malicious cyber-attack
during Q4 FY22 that was subject to an insurance claim with the Group's
insurers, successfully settled in FY23 (FY23: £0.3m).
Administrative expenses
Total administrative expenses increased by 9.1% to £23.7m (FY23: £21.7m)
compared to a 10.2% increase in revenue.
In the UK, head office administrative expenses increased 6.7% year, excluding
cyber income recognised in FY23 but relating to an FY22 event, against UK
revenue growth at 9.0%, as the Group continued to challenge itself to ensure
its growth leveraged its central fixed cost base. This represented 6.8% as a
percentage of revenue; a 20 bps improvement year on year. In UK retail,
administrative expenses increased by £0.5m, of which £0.4m relates to the
investment timing of new space and increased energy costs. In UK online,
administrative expenses increased by £0.7m of which over £0.6m relates to
variable costs that flex with revenue.
In Europe, administrative expenses have stayed broadly flat despite the 36.3%
increase in revenue, as we continue to leverage the existing cost base while
climbing the growth curve.
Distribution expenses
Total distribution expenses increased by 6.1% to £3.5m (FY23: £3.3m)
compared to a 10.2% increase in revenue. These costs are variable based on
revenue so highlight some of the strong cost focus in the year, with the UK
improving by 30 bps as a percentage of revenue. Europe costs also had a slight
reduction as a percentage of revenue (20 bps).
Segmental Analysis
The UK stores segment delivered pre-IFRS16 EBITDA growth of 9.1% (£0.5m),
over indexing against revenue growth of 7.6% (£3.1m), including the EBITDA
drag of the new space effect as it builds up to maturity. This highlights the
progress in the year beyond the headline revenue growth, in terms of the gross
profit and cost base outturn, despite the retail shrinkage and cost headwinds
and continuing to invest in growth.
The UK online segment delivered pre-IFRS16 EBITDA growth of 11.9% (£0.4m),
also over indexing against revenue growth of 11.1% (£3.3m). This again
highlights the progress in the year beyond the headline revenue growth in
terms of the gross profit and cost base outturn, despite the cost headwinds
and continuing to invest in growth..
The European segment delivered revenue growth of £1.1m (36.3%) and pre-IFRS16
EBITDA growth of £0.2m, reducing the EBITDA losses by 19.3% to -£1.0m. This
highlights the progress in the margin and the leveraging of the cost base as
we continue to prudently grow the European business. Overall, this resulted in
the European pre-IFRS16 EBITDA losses improving as a percentage of Group
EBITDA by c1,800 bps to 35.9%.
The UK head office segment saw a modest decrease in pre-IFRS EBITDA of £0.3m
(5.0%), excluding the £0.3m FY22 cyber claim income recognised in FY23 that
related to an FY22 event. As set out above, this is against the backdrop of UK
revenue growth at 9.0%, as the Group continued to challenge itself to ensure
its growth leveraged its central fixed cost base. To demonstrate the progress,
this represented 6.8% of revenue, a 20 bps improvement year on year.
Segmental analysis
2024 2023
Stores UK Online Europe Online UK head office Total Stores UK Online Europe Online UK head office Total
Revenue (£m) 44.4 32.9 4.3 - 81.7 41.3 29.7 3.1 - 74.1
Net assets 14.2 3.1 2.5 18.8 38.5 14.4 3.3 3.4 16.2 37.3
Profit / (loss) before tax (£m) 4.2 3.2 (1.0) (4.8) 1.5 3.9 2.8 (1.3) (4.8) 0.7
EBITDA post IFRS 16 (£m) 7.4 3.8 (0.7) (5.1) 5.3 6.7 3.4 (1.0) (4.5) 4.6
EBITDA pre IFRS 16 (£m) 5.3 3.6 (1.0) (5.3) 2.7 4.9 3.2 (1.2) (4.7) 2.2
Profit before tax and EBITDA
Profit before tax increased 126.8% to £1.5m (FY23: £0.7m) with the ratio to
revenue increasing to 1.9% from 0.9% in FY23, gross margin representing 0.1%
of the movement, the cost base 0.4% and increased interest income 0.5% (from
£0.1m to £0.5m).
Post IFRS 16 EBITDA increased 16.7% to £5.3m (FY23: £4.6m) and as a ratio of
revenue improved to by 30 bps to 6.5% (FY23: 6.2%). When excluding the £0.3m
cyber security insurance proceeds reported in FY23, but relating to an FY22
event, the EBITDA growth improved to 23.7% and as a ratio of revenue grew 70
bps to 6.5% (FY23: 5.8%).
On a pre IFRS 16 basis, EBITDA increased 21.0% to £2.7m (FY23: £2.2m) and as
a ratio of revenue improved to by 30 bps to 3.3% (FY23: 3.0%). When excluding
the £0.3m cyber security insurance proceeds reported in FY23, but relating to
an FY22 event, the EBITDA growth improved to 36.9% and as a ratio of revenue
grew 60 bps to 3.3% (FY23: 2.7%).
Tax
The Group's effective tax rate was 19.7% (FY23: 19.4%). A reconciliation of
the expected tax charge at the standard rate to the actual charge is shown
below. All the Group's revenues and the majority of its expenses are all
subject to corporation tax. Tax relief for some expenditure, mainly unapproved
share options is received over a longer period than that for which the costs
are charged to the financial statements. Headline corporation tax rates in the
UK (c24% for the full year, 19% to 31 March 2023, then 25% for the remainder
of FY24) and the Netherlands (25.8%) are comparable and therefore no material
difference arises from the differential in headline corporation tax rates.
Taxation
£m %
Profit before tax 1.5
Expected tax at UK standard rate of tax 0.4 24.0%
Ineligible depreciation 0.0 0.5%
Capital allowances enhanced deduction (0.0) (0.8%)
Difference in current and deferred tax rate 0.0 0.9%
Adjustments in respect of previous year's tax charge (0.1) (4.9%)
Actual charge / effective tax rate 0.3 19.7%
Returns and dividends
Basic earnings per share ('EPS') were 1.58p (FY23: 0.70p) increasing 125.7%
year on year, comparable with the rate of increase in profit before tax. The
lower diluted earnings per share reflects the current LTIP share options in
issue which would dilute the basic earnings per share.
There were no dividends paid, recommended, or declared during the current and
prior financial year. As discussed in the Directors' report, the Group is
focused on delivering a strategy of profitable growth and will reinvest all
surplus cash resources back into the business, and continue to evaluate
accretive growth opportunities, including M&A activity. Accordingly, in
the short term, the Directors do not recommend a dividend payment to be
distributed for the year ended 31 January 2024. The dividend policy will be
kept under review as strategic expansion plans progress.
Statement of financial position
The consolidated statement of financial position remains robust. As at 31
January 2024 the Group had a net asset position of £38.5m (FY23: £37.3m) and
a net current asset position of £24.3m (FY23: £23.7m). The Group includes
£0.3m of net assets and liabilities of its wholly owned subsidiary ADNL B.V.
The Group continued to have no external borrowing as at the reporting date and
closed FY24 with a cash and cash equivalents position of £15.8m (FY23:
£14.1m). Net debt (representing the Group's IFRS16 lease liabilities less the
cash position as at the reporting date) decreased to (£4.2m) from (£2.6m) in
FY23, (£0.0m) reflecting the broadly flat (+£20k) lease obligations in the
UK stores with the remainder largely reflecting the improved working capital
position (also see the statement of cashflows section below).
The table below shows the key components of the statement of financial
position. Property, plant and equipment grew by £1.2m with the continued
investment in the store portfolio, notably with two new stores in the year
(Goole and Cardiff) and one re-fit (Guildford). Right of use assets (ROU) have
reduced modestly by £0.2m, with the two new stores being added into the
estate alongside the new store in Utrecht (lease signed in January 2024 and
opened in May 2024) with the remaining movement including new leases in
Guildford (plus early exit of the previous lease), Lincoln and Chelmsford.
Offsetting this growth in the gross ROU asset, the depreciation charge grew to
£2.1m (FY23: £2.0m). The Group continues to evaluate its dilapidation
obligations and associated restoration provision for its growing physical
store and distribution centre footprint. The average length of lease remaining
for the Group has reduced to 5.1 years (FY23: 5.6 years). Additional
investment in our software and IT platforms of £0.3m was largely offset by a
corresponding depreciation charge as the business reaches a relative level of
maturity in its investment profile. Working capital improved by £1.0m,
underpinned by stock levels reducing £0.8m despite the additional new space
impact (£0.5m, includes some stock build for Cannock, not opened until FY25),
reflecting a comparable £1.3m improvement year on year driven by further
improvements in our stock ranging and fulfilment processes. The stock holding
in the European distribution centre remained broadly flat. Stock turn for the
Group marginally increased to 2.9x from 2.8x with a higher year on year stock,
particularly over H1, due to the timing of forward orders and securing
availability in the seasonal peak. Similarly, stock turn for the UK modestly
increased to 3.1x from 3.0x.
Statement of financial position
31 January 31 January
2024 2023
£m £m
Property, plant and equipment 8.7 7.5
IFRS 16 Right-of-use assets 11.2 11.4
Intangible assets 6.1 6.1
Total non-current assets 26.0 25.0
Stock 17.0 17.8
Cash 15.8 14.1
Other current assets 1.2 1.1
Total current assets 34.0 33.0
Trade and other payables / contract liabilities (7.8) (7.5)
Lease liabilities (1.8) (1.8)
Other current liabilities (0.0) (0.1)
Total current liabilities (9.6) (9.3)
Lease liabilities (9.8) (9.8)
Other non-current liabilities (2.0) (1.7)
Total non-current liabilities (11.8) (11.4)
Net assets 38.5 37.3
Cashflow and funding
During FY24 the Group increased its cash generated from operating activities
increased by £5.0m to £6.5m (FY23: £1.5m). Operating cash generation was
improved as a result of increased profit before tax as set out above (£0.8m),
lower tax (£0.6m) and a year on year working capital inflow improvement
(£3.4m).
The lower tax payments (£0.6m) were driven by a £0.5m UK tax payment in FY23
that was made up of the FY22 tax due (£0.4m) and a single quarterly payment
on account that was made towards FY24 (£0.1m). The business had no tax to pay
in respect of the FY23 year (taxable losses) so it fell outside of the
quarterly payment regime and as such the quarterly payment on account was
refunded in FY24 (£0.1m).
In FY23 the working capital outflow was £2.4m as a result of higher stock
(£1.5m - driven by new space and the initial investment into the European
distribution centre) and lower creditors (£0.9m) as more stock paid for at
year end driven by supplier mix. In FY24 this trend reversed with a working
capital inflow of £1.0m driven by lower stock at year end (£0.9m, as set out
above despite additional new space).
The Group has pursued its growth strategy by continuing to deploy available
cash resources into further development of our e-commerce platforms both in
the UK and internationally, alongside investment in our technology and
inventory management systems, with the Group investing £0.3m in FY24. The
Group also deployed £2.5m on property plant and equipment, largely reflected
the continued investment in the retail estate (as set out above).
Total cash generated in the period was £1.7m (FY23: £2.5m cash utilised).
Statement of cashflows
31 January 31 January
2024 2023
£m £m
Opening cash 14.1 16.6
Profit before tax 1.5 0.7
Movement in working capital 1.0 (2.4)
Depreciation and amortisation 3.8 3.5
Taxation received / (paid) 0.1 (0.5)
Other operating adjustments 0.1 0.3
Net cash from operating activities 6.5 1.5
Net cash used in investing activities (2.9) (2.3)
Net cash used in financing activities (1.8) (1.7)
Net (decrease) / Increase in cash in year 1.7 (2.5)
FX changes on cash equivalents (0.1) 0.0
Closing cash 15.8 14.1
__________________________
Sam Copeman
Chief Financial Officer
13 May 2024
Consolidated statement of profit or loss and other comprehensive income
Consolidated
Note 2024 2023
£'000 £'000
Revenue from contracts with customers 4 (#_ArvNote_TOC) 81,657 74,096
Cost of sales of goods 7 (#_AexNote_TOC) (53,153) (48,307)
Gross profit 28,504 25,789
Other income 5 (#_AroNote_TOC) 205 287
Interest revenue calculated using the effective interest method 494 104
Expenses
Administrative expenses (23,728) (21,742)
Distribution expenses (3,458) (3,260)
Finance costs 7 (#_AexNote_TOC) (500) (509)
Profit before income tax expense 1,517 669
Income tax expense 9 (#_AitNote_TOC) (299) (130)
Profit after income tax expense for the year attributable to the owners of 1,218 539
Angling Direct PLC
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation (96) 127
Other comprehensive income for the year, net of tax (96) 127
Total comprehensive income for the year attributable to the owners of Angling 1,122 666
Direct PLC
Pence Pence
Basic earnings per share 24 (#_OepNote_TOC) 1.58 0.70
Diluted earnings per share 24 (#_OepNote_TOC) 1.57 0.69
Consolidated statement of financial position
Consolidated
Note 2024 2023
£'000 £'000
Non-current assets
Intangibles 10 (#_NaiNote_TOC) 6,052 6,060
Property, plant and equipment 11 (#_NaaNote_TOC) 8,675 7,534
Right-of-use assets 12 (#_NauNote_TOC) 11,237 11,418
Total non-current assets 25,964 25,012
Current assets
Inventories 13 (#_NasNote_TOC) 16,974 17,813
Trade and other receivables 14 (#_NarNote_TOC) 403 447
Income tax refund due - 58
Prepayments 811 603
Cash and cash equivalents 15,765 14,127
Total current assets 33,953 33,048
Current liabilities
Trade and other payables 1 (#_ClpNote_TOC) 5 6,976 6,765
Contract liabilities 16 (#_ClnNote_TOC) 790 727
Lease liabilities 17 (#_ClmNote_TOC) 1,809 1,793
Derivative financial instruments 9 51
Income tax 32 -
Total current liabilities 9,616 9,336
Net current assets 24,337 23,712
Total assets less current liabilities 50,301 48,724
Non-current liabilities
Lease liabilities 17 (#_ClmNote_TOC) 9,754 9,750
Restoration provision 18 (#_ClvNote_TOC) 851 801
Deferred tax 19 1,171 883
Total non-current liabilities 11,776 11,434
Net assets 38,525 37,290
Equity
Share capital 20 (#_EqcNote_TOC) 773 773
Share premium 21 (#_EqyNote_TOC) 31,037 31,037
Reserves 22 (#_EqrNote_TOC) 619 602
Retained profits 6,096 4,878
Total equity 38,525 37,290
Consolidated statement of changes in equity
Share Share Retained Total equity
premium
capital account Reserves profits
Consolidated £'000 £'000 £'000 £'000 £'000
Balance at 1 February 2022 773 31,037 266 4,339 36,415
Profit after income tax expense for the year - - - 539 539
Other comprehensive income for the year, net of tax - - 127 - 127
Total comprehensive income for the year - - 127 539 666
Transactions with owners in their capacity as owners:
Share-based payments - - 209 - 209
Balance at 31 January 2023 773 31,037 602 4,878 37,290
Share Share Retained Total equity
premium
capital account Reserves profits
Consolidated £'000 £'000 £'000 £'000 £'000
Balance at 1 February 2023 773 31,037 602 4,878 37,290
Profit after income tax expense for the year - - - 1,218 1,218
Other comprehensive income for the year, net of tax - - (96) - (96)
Total comprehensive income for the year - - (96) 1,218 1,122
Transactions with owners in their capacity as owners:
Share-based payments - - 113 - 113
Balance at 31 January 2024 773 31,037 619 6,096 38,525
Consolidated statement of cash flows
Consolidated
2024 2023
£'000 £'000
Cash flows from operating activities
Profit before income tax expense for the year 1,517 669
Adjustments for:
Depreciation and amortisation 3,796 3,485
Share-based payments 113 209
Net movement in provisions 30 30
Net variance in derivative liabilities (42) 50
Interest received (494) (104)
Interest and other finance costs 512 429
5,432 4,768
Change in operating assets and liabilities:
Decrease in trade and other receivables 49 95
Decrease/(increase) in inventories 910 (1,540)
(Increase) in prepayments (206) (58)
Increase/(decrease) in trade and other payables 171 (965)
Increase in contract liabilities 63 84
6,419 2,384
Interest received 494 104
Interest and other finance costs (512) (429)
Income taxes refunded/(paid) 79 (513)
Net cash from operating activities 6,480 1,546
Cash flows from investing activities
Payments for property, plant and equipment (2,595) (2,014)
Payments for intangibles (332) (289)
Net cash used in investing activities (2,927) (2,303)
Cash flows from financing activities
Repayment of lease liabilities (1,835) (1,720)
Net cash used in financing activities (1,835) (1,720)
Net increase/(decrease) in cash and cash equivalents 1,718 (2,477)
Cash and cash equivalents at the beginning of the financial year 14,127 16,604
Effects of exchange rate changes on cash and cash equivalents (80) -
Cash and cash equivalents at the end of the financial year 15,765 14,127
1. Basis of preparation
These financial statements have been prepared in accordance with UK adopted
international accounting standards.
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 January 2024 and 31 January 2023.
Statutory accounts for the years ended 31 January 2024 and 31 January 2023
have been reported on by the Independent Auditors. The Independent Auditors
report on the Annual Report and Financial Statements for the years ended 31
January 2024 and 31 January 2023 is unqualified.
Statutory accounts for the year ended 31 January 2023 have been filed with the
Registrar of Companies. The statutory accounts of the year ended 31 January
2024 will be delivered to the Registrar of Companies in due course.
2. Going concern including liquidity
The Group has considerable financial resources together with long-standing
relationships with a number of key suppliers and an established reputation in
the retail sector across the UK and Europe.
The Directors have considered the Group's growth prospects in the period to 31
January 2026 based on its customer proposition and online offering in the UK
and Europe and concluded that potential growth rates remain strong. The Group
has no external finance outside of its right-of-use lease liabilities. The
Group has conducted various stress tests, none of which resulted in a change
to the assessment of the Group as a going concern.
In making this judgement, the Directors have reviewed the future viability and
going concern position of the Group for the foreseeable future.
The Group's policy is to ensure that it has sufficient facilities to cover its
future funding requirements. At 31 January 2024, the Group had cash and cash
equivalents of £15.8m (2023: £14.1m). This significant headroom has been
factored into the Directors' going concern assessment.
Having duly considered all of these factors and having reviewed the forecasts
for the coming year, the Directors have a reasonable expectation that the
Group has adequate resources to continue trading for the foreseeable future,
and as such continue to adopt the going concern basis of accounting in
preparing the financial statements.
3. Segmental reporting
Segment information is presented in respect of the Group's operating
segments, based on the Group's management and internal reporting structure,
and monitored by the Group's Chief Operating Decision Maker (CODM).
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly own brand stock in transit from the
manufacturers, group cash and cash equivalents, taxation related assets and
liabilities, centralised support functions salary and premises costs, and
government grant income.
Operating segments
Management has made a judgement that there are three operating segments
(Stores, UK Online and Europe Online). The business operated predominantly in
the UK, also operating three native language web sites for Germany, France and
the Netherlands, being the European segment.
Each of these operating segments is managed separately as each segment
requires different specialisms, marketing approaches and resources. Head
Office includes costs relating to the employees, property and other overhead
costs associated with the centralised support functions.
Where the customer contract is fulfilled by an operating segment other than
the segment to which the customer order was placed, the revenue is recognised
in the operating segment to which the order originates, and the profit
attributable to that transaction is recognised in the operating segment
fulfilling the order. In 2024, Revenue of £683,000 (2023: £937,000) was
recognised in the UK Online and fulfilled by the Stores, and profit of
£44,000 (2023: £38,000) was transferred to the Stores from the UK Online
segment.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and
amortisation) pre IFRS 16. The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial
statements, save for IFRS 16. A full reconciliation of pre IFRS 16 EBITDA to
post IFRS 16 EBITDA performance is provided to the CODM.
The information reported to the CODM is on a monthly basis.
At 31 January 2024, £24,965,000 of non-current assets are located in the UK
(31 January 2023: £24,066,000) and £1,086,000 of non-current assets are
located in the Netherlands (31 January 2023: £946,000).
There are no major customers in the current year and prior year that
contribute more than 10% of the Group's revenue.
Operating segment information
UK Europe
Stores Online Online Head office Total
Consolidated - 2024 £'000 £'000 £'000 £'000 £'000
Revenue 44,438 32,933 4,286 - 81,657
Profit/(loss) before income tax 4,171 3,198 (1,018) (4,834) 1,517
EBITDA post IFRS16 7,391 3,756 (745) (5,083) 5,319
Total assets 26,036 6,679 3,657 23,545 59,917
Total liabilities (11,885) (3,619) (1,187) (4,701) (21,392)
EBITDA Reconciliation
Profit/(loss) before income tax 4,171 3,198 (1,018) (4,834) 1,517
Less: Interest income - - - (494) (494)
Add: Interest expense 455 42 32 (29) 500
Add: Depreciation and amortisation 2,765 516 241 274 3,796
EBITDA post IFRS 16 7,391 3,756 (745) (5,083) 5,319
Less: Costs relating to IFRS 16 lease liabilities (2,047) (180) (220) (181) (2,628)
EBITDA pre IFRS 16 5,344 3,576 (965) (5,264) 2,691
UK Europe
Stores Online Online Head office Total
Consolidated - 2023 £'000 £'000 £'000 £'000 £'000
Revenue 41,296 29,656 3,144 - 74,096
Profit/(loss) before income tax 3,925 2,771 (1,259) (4,768) 669
EBITDA post IFRS 16 6,663 3,373 (977) (4,500) 4,559
Total assets 26,377 7,029 4,460 20,194 58,060
Total liabilities (12,001) (3,733) (1,084) (3,952) (20,770)
EBITDA Reconciliation
Profit/(loss) before income tax 3,925 2,771 (1,259) (4,768) 669
Less: Interest income - - - (104) (104)
Add: Interest expense 362 45 37 65 509
Add: Depreciation and amortisation 2,376 557 245 307 3,485
EBITDA post IFRS 16 6,663 3,373 (977) (4,500) 4,559
Less: Costs relating to IFRS 16 lease liabilities (1,764) (178) (219) (174) (2,335)
EBITDA pre IFRS 16 4,899 3,195 (1,196) (4,674) 2,224
4. Revenue from contracts with customers
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
2024 2023
£'000 £'000
Route to market
Retail store sales 44,438 41,296
E-commerce 37,219 32,800
81,657 74,096
Geographical regions
United Kingdom 77,371 70,952
Europe and Rest of the World 4,286 3,144
81,657 74,096
Timing of revenue recognition
Goods transferred at a point in time 81,657 74,096
5. Other income
Consolidated
2024 2023
£'000 £'000
Insurance claim 154 258
Rental income 51 29
Other income 205 287
6. EBITDA reconciliation (earnings before interest, taxation, depreciation
and amortisation)
The Directors believe that adjusted profit provides additional useful
information for shareholders on performance. This is used for internal
performance analysis. This measure is not defined by IFRS and is not intended
to be a substitute for, or superior to, IFRS measurements of profit. The
following table is provided to show the comparative earnings before interest,
tax, depreciation and amortisation ("EBITDA") after adjusting for rents,
dilapidation charges and associated legal costs, where applicable, relating to
IFRS 16 lease liabilities.
Consolidated
2024 2023
£'000 £'000
EBITDA reconciliation
Profit before income tax expense post IFRS 16 1,517 669
Less: Interest income (494) (104)
Add: Interest expense 500 509
Add: Depreciation and amortisation 3,796 3,485
EBITDA post IFRS 16 5,319 4,559
Less: costs relating to IFRS 16 lease liabilities (2,628) (2,335)
EBITDA pre IFRS 16 2,691 2,224
7. Expenses
Consolidated
2024 2023
£'000 £'000
Profit before income tax includes the following specific expenses:
Cost of sales
Cost of inventories as included in 'cost of sales' 53,153 48,307
Depreciation
Land and buildings improvements 10 39
Plant and equipment 1,142 862
Motor vehicles 2 2
Computer equipment 191 204
Land and buildings right-of-use assets 2,032 1,904
Plant and equipment right-of-use assets 7 7
Motor vehicles right-of-use assets 66 56
Computer equipment right-of-use assets 6 6
Total depreciation 3,456 3,080
Amortisation
Software 340 405
Total depreciation and amortisation * 3,796 3,485
Finance costs
Interest and finance charges paid/payable on lease liabilities 512 430
Interest and finance charges on restoration provision 30 30
Change in fair value of forward foreign currency hedges (42) 49
Finance costs expensed 500 509
Foreign exchange losses (4) 18
Leases
Short-term lease payments 20 40
Low-value assets lease payments 70 47
Total leases expensed 90 87
*Depreciation and amortisation expense is included within "administrative
expenses" in the Statement of profit or loss and other comprehensive income.
8. Staff costs
Consolidated
2024 2023
£'000 £'000
Aggregate remuneration:
Wages and salaries 10,453 9,711
Social security costs 944 963
Other pension costs 465 377
Total staff costs 11,862 11,051
The average number of employees during the year was as follows:
Consolidated
2024 2023
Stores 303 300
Warehouse 51 46
Administration and other 44 47
Marketing and digital trading 26 28
IT and web 12 12
Management 9 9
Average number of employees 446 442
Staff costs above include Directors' salaries, social security costs and other
pension costs. Directors' remuneration is detailed in the Remuneration report
which forms part of these financial statements.
9. Income tax expense
Consolidated
2024 2023
£'000 £'000
Income tax expense
Current tax 45 25
Deferred tax - origination and reversal of temporary differences 329 80
Current tax adjustment recognised for prior periods (34) (34)
Deferred tax adjustment recognised for prior periods (41) 59
Aggregate income tax expense 299 130
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense 1,517 669
Tax at the statutory tax rate of 24.03% (2023: 19%) 365 127
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Non-qualifying depreciation 8 12
Super deduction rate (12) (54)
Non-deductible expenses - 1
Deferred tax rate change 13 19
374 105
Adjustment in respect of prior years (75) 25
Income tax expense 299 130
The corporate income tax rate went from 19% up to 25% from 1 April 2023 hence
an average rate of 24.03% for the year ended 31 January 2024.
10. Intangibles
Consolidated
2024 2023
£'000 £'000
Non-current assets
Goodwill - at cost 5,802 5,802
Less: Impairment (182) (182)
5,620 5,620
Software - at cost 2,052 1,720
Less: Accumulated amortisation (1,620) (1,280)
432 440
6,052 6,060
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Goodwill Software Total
Consolidated £'000 £'000 £'000
Balance at 1 February 2022 5,620 556 6,176
Additions - 289 289
Amortisation expense - (405) (405)
Balance at 31 January 2023 5,620 440 6,060
Additions - 332 332
Amortisation expense - (340) (340)
Balance at 31 January 2024 5,620 432 6,052
11. Property, plant and equipment
Consolidated
2024 2023
£'000 £'000
Non-current assets
Land and buildings improvements - at cost 1,002 1,002
Less: Accumulated depreciation (352) (342)
650 660
Plant and equipment - at cost 11,116 9,158
Less: Accumulated depreciation (3,607) (2,836)
7,509 6,322
Motor vehicles - at cost 9 15
Less: Accumulated depreciation (8) (12)
1 3
Computer equipment - at cost 1,432 1,333
Less: Accumulated depreciation (917) (784)
515 549
8,675 7,534
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Land and Plant and Motor Computer
buildings
improvements equipment vehicles equipment Total
Consolidated £'000 £'000 £'000 £'000 £'000
Balance at 1 February 2022 699 5,666 5 538 6,908
Additions - 1,511 - 214 1,725
Exchange differences - 7 - 1 8
Depreciation expense (39) (862) (2) (204) (1,107)
Balance at 31 January 2023 660 6,322 3 549 7,534
Additions - 2,335 - 157 2,492
Exchange differences - (6) - - (6)
Depreciation expense (10) (1,142) (2) (191) (1,345)
Balance at 31 January 2024 650 7,509 1 515 8,675
12. Right-of-use assets
Consolidated
2024 2023
£'000 £'000
Non-current assets
Land and buildings - long leasehold - right-of-use 21,089 19,235
Less: Accumulated depreciation (10,017) (7,984)
11,072 11,251
Plant and equipment - right-of-use 80 80
Less: Accumulated depreciation (63) (56)
17 24
Motor vehicles - right-of-use 510 433
Less: Accumulated depreciation (370) (304)
140 129
Computer equipment - right-of-use 59 59
Less: Accumulated depreciation (51) (45)
8 14
11,237 11,418
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Land and Plant and Motor Computer
buildings equipment vehicles equipment Total
Consolidated £'000 £'000 £'000 £'000 £'000
Balance at 1 February 2022 10,899 31 78 20 11,028
Additions 2,142 - 107 - 2,249
Remeasurement 73 - - - 73
Exchange differences 41 - - - 41
Depreciation expense (1,904) (7) (56) (6) (1,973)
Balance at 31 January 2023 11,251 24 129 14 11,418
Additions 1,481 - 77 - 1,558
Remeasurement 398 - - - 398
Exchange differences (26) - - - (26)
Depreciation expense (2,032) (7) (66) (6) (2,111)
Balance at 31 January 2024 11,072 17 140 8 11,237
13. Inventories
Consolidated
2024 2023
£'000 £'000
Current assets
Finished goods - at cost 16,974 17,813
Finished goods include £0.05m (2023: £0.1m) of provisions for obsolescence.
The movement in this provision reflects the net realisable value of the
product lines that was recognised through the statement of profit or loss
during the year to 31 January 2024.
14. Trade and other receivables
Consolidated
2024 2023
£'000 £'000
Current assets
Trade receivables 23 26
Other receivables 380 421
403 447
15. Trade and other payables
Consolidated
2024 2023
£'000 £'000
Current liabilities
Trade payables 4,503 4,543
Accrued expenses 1,107 1,088
Refund liabilities 32 55
Social security and other taxes 367 589
Other payables 967 490
6,976 6,765
16. Contract liabilities
Consolidated
2024 2023
£'000 £'000
Current liabilities
Contract liabilities 790 727
Reconciliation
Reconciliation of the written down values at the beginning and end of the
current and previous financial year are set out below:
Opening balance (Contract liabilities at the start of the year) 727 643
Issued in year 2,821 3,801
Redeemed in year (2,758) (3,717)
Closing balance (Contract liabilities at the end of the year) 790 727
The contract liabilities primarily relate to unredeemed vouchers and gift
cards. This will be recognised as revenue when the vouchers and gift cards are
redeemed by customers, which is expected to occur over the next two years.
17. Lease liabilities
Consolidated
2024 2023
£'000 £'000
Current liabilities
Lease liability 1,809 1,793
Non-current liabilities
Lease liability 9,754 9,750
11,563 11,543
18. Restoration provision
Consolidated
2024 2023
£'000 £'000
Non-current liabilities
Restoration provision 851 801
Movements in provisions
Movements in each class of provision during the current financial year, other
than employee benefits, are set out below:
Restoration
provision
Consolidated - 2024 £'000
Carrying amount at the start of the year 801
Additional provisions recognised 52
Unwinding of discount 30
Provisions released on disposal (31)
Effects of movement in exchange rates (1)
Carrying amount at the end of the year 851
19. Deferred tax
Consolidated
2024 2023
£'000 £'000
Non-current liabilities
Deferred tax liability comprises temporary differences attributable to:
Property, plant & equipment 1,463 1,097
IFRS 16 transitional adjustment (58) (70)
Unapproved share options issued (147) (119)
Tax losses (87) (25)
Deferred tax liability 1,171 883
Movements:
Opening balance 883 744
Charged/(credited) to profit or loss 329 80
Adjustment recognised for prior periods (41) 59
Closing balance 1,171 883
20. Share capital
Consolidated
2024 2023 2024 2023
Shares Shares £'000 £'000
Ordinary shares of £0.01 each - fully paid 77,267,304 77,267,304 773 773
21. Share premium
Consolidated
2024 2023
£'000 £'000
Share premium account 31,037 31,037
The share premium account is used to recognise the difference between the
issued share capital at nominal value and the capital received, net of
transaction costs.
22. Reserves
Consolidated
2024 2023
£'000 £'000
Foreign currency reserve 31 127
Share-based payments reserve 588 475
619 602
Foreign currency reserve
The foreign currency translation reserve comprises exchange differences
relating to the translation of the net assets of the Group's foreign
subsidiary from their functional currency into the parent's functional
currency.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to
employees and Directors as part of their remuneration, and other parties as
part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial
year are set out below:
Foreign Share-based
currency payments Total
Consolidated £'000 £'000 £'000
Balance at 1 February 2022 - 266 266
Foreign currency translation gains 127 - 127
Options granted - 209 209
Balance at 31 January 2023 127 475 602
Foreign currency translation gains (96) - (96)
Options granted - 113 113
Balance at 31 January 2024 31 588 619
23. Dividends
There were no dividends paid, recommended or declared during the current or
previous financial year.
24. Earnings per share
Consolidated
2024 2023
£'000 £'000
Profit after income tax attributable to the owners of Angling Direct PLC 1,218 539
Number Number
Weighted average number of ordinary shares used in calculating basic earnings 77,267,304 77,267,304
per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares 515,516 900,536
Weighted average number of ordinary shares used in calculating diluted 77,782,820 78,167,840
earnings per share
Pence Pence
Basic earnings per share 1.58 0.70
Diluted earnings per share 1.57 0.69
25. Events after the reporting period
Since 31 January 2024, the Group has completed the following transactions:
· In Crewe, the following two transactions were consolidated on to
a single site:
o On 8 February 2024, acquired the business and assets of HF Angling Limited
(a company registered in England and Wales) for consideration of £0.21m. The
business comprised of a single angling retail store in Crewe, UK.
o On 9 February 2024, acquired the specified assets of Fink Foods Limited (a
company registered in England and Wales) for consideration of £0.04m. The
assets were acquired from a single angling retail store in Crewe, UK.
· In Walsall, on 22 April 2024, acquired the specified assets of
Allen's Fishing Tackle Limited (a company registered in England and Wales) for
consideration of £0.07m. The assets were acquired from a single angling
retail store in Walsall, UK.
The initial accounting for these acquisitions is incomplete given the
proximity to the year end.
1 (#_ftnref1) Excluding the cyber security insurance proceeds reported in
FY23 that related to an FY22 event
2 (#_ftnref2) Excluding the Reading store which has not materially traded in
the period after it suffered a fire in the first week of February 2023. Total
like for like stores grew £0.5m / 1.1% including Reading.
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