Specialist fishing tackle and equipment seller Angling Direct (ANG:AIM) has reeled in strong like-for-like sales since re-opening stores in June and continues to deliver eye-catching online growth rates, news that sent the shares 16.3% higher to 57p on Tuesday.
Catering to anglers who participate in an outdoor, socially-distanced sport and currently capitalising on pent-up demand, Angling Direct expects to benefit from ‘staycations’ over the remainder of the summer as well as from ‘heightened interest in angling as customers seek to take advantage of its numerous wellbeing benefits’.
NETTING STRONG SALES
For the half to 31 July, Angling Direct’s overall revenue grew by a robust 21% to £32.1 million. This was despite all retail stores being closed between 24 March and 14 June during the coronavirus lockdown, not to mention the extensive rain and flooding that impacted the start of the first quarter.
Angling Direct still achieved a 43% surge in online sales to £17.9 million, reflecting strong growth in the UK, Germany, France and the Netherlands.
SUCCESSFULLY TACKLING RE-OPENING
Inevitably, like-for-like store sales were down by 23% for the half due to the impact of outlet closures. However, this has recovered strongly in the period since all stores safely re-opened, with Angling Direct delivering like-for-like sales growth of 75% from 15 June to 31 July 2020.
This is a devastating time for the retail sector, with many major operators shuttering stores and shedding jobs, yet niche retailer Angling Direct is bucking the trend. It is a business in expansion mode, having opened three new stores in Warrington, Bristol and Northampton in the half.
ON THE HOOK FOR GROWTH
Angling Direct conceded the impact of Covid-19 has created ‘an exceptional sales period, with pent-up demand certainly experienced as a consequence of fisheries being closed for almost two months’.
With no further pandemic-related restrictions, management expects sales to ‘begin reverting to more normal trading patterns during the remainder of the year’, though a strong balance sheet means the company is ‘well positioned to withstand any further challenges, whilst also continuing to invest in key growth areas’.
THE BROKER’S VIEW
‘With sales growth of 21% in the first half, and period end net cash of £21 million (including circa £5 million of placing proceeds), trading performance has been considerably more resilient and profitable than was feared at the outset of the pandemic,’ enthused N+1 Singer.
The broker explained that Angling Direct’s newly strengthened management team have successfully controlled costs and protected cash in response to the pandemic, and begun to take quick and decisive action to address the operational and commercial issues that impacted margin and profitability in the last full financial year.
The broker concluded: ‘Angling Direct looks to be very well-placed to continue strengthening its multi-channel platform to drive profitable future growth, in highly fragmented markets which should benefit long term post-Covid.’
