- Positive momentum continues in H2
- Utrecht store sales continue to scale
- Confidence in meeting full year expectations
Angling Direct (ANG:AIM) was in demand with investors on Wednesday, shares in the specialist fishing tackle retailer rallying 4.2% to 37p on news of a robust first half performance delivered despite challenging weather conditions and a tough consumer backdrop.
There was relief as the nets, rods and scales seller expressed confidence in achieving the year-to-January 2025 sales of £88.4 million and £3.15 million worth of EBITDA (earnings before interest, tax, depreciation and amortisation) called for by consensus, with the positive momentum witnessed in the first half persisting into the second.
NETTING A 5.6% SALES GAIN
For the half to July, Angling Direct, whose attractions Shares flagged in May, reeled in a respectable 5.6% rise in revenue to £45.8 million.
Encouragingly, UK sales growth accelerated from 4.2% in the first quarter to 7.6% in the second as the fishing tackle shop moved into its key summer trading season.
UK retail sales grew 8.4% to £26.4 million in the half, with 1.8% like-for-like growth benefiting from increased footfall.
During the period, Norfolk-headquartered Angling Direct used its strong balance sheet to accelerate its store opening programme with the launch of two new UK outlets.
A first European brick and mortar store was opened in Utrecht in the Netherlands, where Angling Direct observed that revenues continue to scale.
Angling Direct boasts exciting long-run potential in the large and fragmented European market, but European sales were flat at £2.4 million in the half with the online market remaining tough amid continued competitive pricing pressure.
PLENTY TO CROWE ABOUT
Guided by CEO Steve Crowe, Angling Direct remains focused on its key markets of Germany and the Netherlands as it targets break-even in the EU over the medium term by improving the margin profile of the EU business through scale.
Crowe commented: ‘The progress made on expanding our UK footprint, alongside the roll out of our customer loyalty club, MyAD, and the associated growth of revenues in our existing UK stores and digital platforms, provides further confidence in achieving our medium-term UK revenue target of £100 million.’
Canaccord Genuity’s Mark Photiades, who has a 57p price target on the stock, said: ‘Growth has been driven by a combination of new stores and like-for-like growth both in stores and online, as the group continues to advance its multi-channel approach both in the UK and Europe.’
Photiades added: ‘We view this as a robust outcome given the uncertain consumer backdrop and challenging weather conditions experienced across Q1, as well as the distraction of the Euros in Q2.’
