Specialist fishing tackle seller Angling Direct’s (ANG:AIM) shares are in demand on Tuesday, surging 13.2% higher to 94.5p on news first half revenue was ahead of management’s expectations, a positive pronouncement that bucks the downbeat UK retail trend.
Consolidating a resilient niche market, Angling Direct has shrugged off adverse weather and the weak outlook for consumer spending to demonstrate UK retailers with compelling, complementary store and online propositions can most certainly flourish.
REELING-IN MARKET SHARE
Led by no-nonsense Norwich City FC supporter Darren Bailey, CEO, Angling Direct has rapidly grown into the UK’s largest specialist fishing tackle and equipment retailer, currently operating from 22 brick and mortar stores and with number 23 about to open in Guildford.
Angling Direct is taking market share organically from struggling competitors, notably quoted rival Fishing Republic (FISH:AIM), aided by investment in quality staffing, an extensive product range and a best-in-class website, while also expanding through acquisition into new areas of the country with a strong angling demographic.
The Norfolk-headquartered concern sells a comprehensive range of over 21,500 fishing tackle products, including a successful own brand, ‘Advanta’, launched in March 2016.
In June, the AIM-quoted company acquired Ted Carter Fishing Tackle, a Preston-based store located near to key angling venues since rebranded as Angling Direct Preston, for £125,000 in a deal that will enhance earnings from day one and increases the company’s presence in the North West of England.
OFF-THE-HOOK HALF
For the six months ended 31 July, Angling Direct reeled-in sales of £21.94m, an impressive 56% year-on-year increase reflecting strong store and e-commerce sales alike.
Retail store sales grew 60% to £9.93m thanks to Angling Direct’s expanding footprint, whilst online sales rose 60% to £11.69m due to ongoing investment in the company’s e-commerce platform.
‘The company’s performance for the first half of the year is extremely positive and, despite the adverse winter weather earlier in the year and the very hot summer, it is pleasing to deliver like-for-like sales for the period up 4.2%,’ comments Bailey.
‘We have demonstrated that our strategy to operate both online and retail stores works coherently together in niche markets. We remain focused on our strategy of consolidation, as well as the roll out of new e-commerce platforms in Europe, in order to continue to deliver value and growth.'
Bailey says Angling Direct remains on track to open further ‘destination stores’ in popular fishing spots across the UK, while also flagging up June’s successful launch of a German website with other European websites to follow later in the year.
‘We believe Angling Direct will provide investors with strong double-digit growth as management continues with its strategy of organic growth, store expansion, increasing online sales and potential acquisitive growth,’ says Cenkos, reiterating its ‘buy’ rating on the stock.
Expecting niche operator Angling Direct will continue to buck the current UK retail malaise and benefit from leading a consolidating industry, the broker forecasts a top line leap from £30.2m to £41.3m for the year to next January, which translates into a rise in adjusted pre-tax profit from £900,000 to £1.1m.
