Fishing tackle retailer Angling Direct (LON: ANG) improved European online sales in the second half following the opening of the new distribution centre in the Netherlands. There is still significant potential growth in the UK and Europe. The share price rose 12.3% to 29.2p on the latest results.
In the year to January 2023, group revenues edged up from £72.5m to £74.1m. UK store sales improved, but UK online sales fell and were only partly offset by other European markets. The ending of Covid relief measures meant that pre-tax profit slumped from £4m to £700,000. Net cash was £14.1m even though stock levels increased.
There was price competition in the period, and this meant that margins declined. The heatwave last summer also had a negative effect.
AIM-quoted Angling Direct is the number one retailer in a fragmented sector and it is gaining market share. A new store was opened in Cardiff after the year end taking the total to 46. Management is also keen to open stores in other markets, so that it has a full omnichannel retail offer.
The finance director Steve Crowe is taking over as chief executive from Andy Torrance in June and the current incumbent will become non-executive chairman. A new finance director has already been recruited.
There should be no big change in strategy, although the new chief executive is an angler unlike his predecessor. The share price is back to the level it was six months ago, but it has fallen by nearly three-quarters over the past five years.
There should be plenty of opportunities for organic growth as well as potential acquisitions. The cash pile means that these could be financed without any requirement to issue new shares.
There could be a recovery in pre-tax profit to £900,000 this year.
