Source - RNS
RNS Number : 5043K
Fishing Republic PLC
22 September 2016
 
22 September 2016

AIM: FISH

 

Fishing Republic plc

("Fishing Republic" or "the Company" or "the Group")

 

Half year results

for the six months ended 30 June 2016

 

KEY POINTS

 

·  Group continues to make encouraging progress

 

·  Revenue increased by 34% to £2,500,000 (2015: £1,870,000)

 

·  Profit before tax of £157,000 (2015: loss of £150,000 after exceptional costs £299,000) 

 

·  Earnings per share of 0.47p (2015: loss per share of 1.17p)

    

·  Store network expanded - increasing geographic footprint:

-      two stores opened, in South Birmingham and Crewe, and Hull store relocated

-      like-for-like store sales up 16%

 

·  Online sales - transitioning to focus on own websites sales

-      further investment planned to accelerate the move to own website sales away from third party retailers

 

·  Share placing in June raised £3.75m (before expenses) - to support continuing expansion

-      new shareholders include Bill Currie, Iain McDonald and Sir Terry Leahy

 

·  Post period, acquisition of fishing tackle store in Lincoln

-      provides first presence in the East Midlands

 

·  Two additional stores expected to be opened before the year end

 

·  Sales in H2 to date have been broadly satisfactory with a quieter July and August followed by an encouraging beginning to September

 

·  Decision taken to accelerate the deployment of placing proceeds; accordingly profit forecast for 2016 rebased.  Benefits of the investment programme will flow through in 2017 and beyond

 

 

James Newman, Chairman, said:

 

"Since joining AIM in June 2015, we have made significant progress in working towards our ambition of becoming a dominant player in the highly fragmented fishing tackle market. These results show the Group's continuing encouraging progress. The additional funds raised in June support ongoing growth and we are pleased to welcome new shareholders including Bill Currie, Iain McDonald and Sir Terry Leahy.

 

"With the planned opening of two further stores before the year end, additional investment in our recent acquisition and the increase in resource across key areas, including multi-channel, the Group's cost base will rise significantly in the current financial year.  This, coupled with lower than expected sales during the latter part of the summer season, means our results for this financial year are now anticipated to be below current market expectations.  However, we believe that the benefits of our accelerated investment in both online and across the store network will begin to flow through in 2017 and continue to view the Group's growth prospects very positively."

 

 

Steve Gross, Chief Executive, said:

 

"During the period, we expanded our store network, opening two new stores, in South Birmingham and Crewe, and relocated our Hull store to new larger premises.  We also completed the integration of our first acquisition, Cotswold Angling in Swindon, which has given us a presence in the South of England. The acquisition of Fantackletastic, in Lincoln, in September continues our geographical expansion, taking the Group into the East Midlands.

 

"Following the successful placing in June, we are now accelerating investment across the business, including multi-channel. We expect the benefits of this investment programme to come through in 2017. The Group has a strong balance sheet and we are confident about growth prospects and will continue to consider further acquisitions and selective store openings.  

 

"We look forward with confidence to reporting on the Group's ongoing growth.

 

Enquiries:

 

Fishing Republic plc

Steve Gross, Chief Executive

 

T: 01709 722590

 

 

 

 

KTZ Communications Limited

 

T: 020 3178 6378

Katie Tzouliadis / Viktoria Langley / Emma Pearson

 

 

 

 

 

Northland Capital Partners Limited

 

T: 0203 861 6625

Nominated Adviser and Broker

 

 

Matthew Johnson / David Hignell (Corporate Finance)

 

 

John Howes / Abigail Wayne (Corporate Broking)

 

 

 

 

About Fishing Republic plc

www.fishingrepublic.net

 

Fishing Republic is one of the largest fishing tackle retailers in the UK by floor space.  Established in 1985, the Company caters for all types of anglers: coarse, carp, game and sea fishing.  It operates a chain of 'destination' retail outlets and has an online presence both through third party online retailers and its own websites (www.fishingrepublic.net and www.yorkshiregameangling.co.uk).  Its comprehensive product offering includes own-brand ranges, such as Klobba and Theseus.

 

 

 

JOINT REPORT OF THE CHAIRMAN AND CHIEF EXECUTIVE

 

Introduction

 

We are pleased to present Fishing Republic's results for the six months to 30 June 2016, which show the Company's continuing progress.

 

Since joining AIM in June 2015, we have made significant progress in working towards our ambition of building a substantial market presence in the highly fragmented fishing tackle market. During the period, we expanded our store network, opening two new stores, in South Birmingham and Crewe, and relocated our existing Hull store to a significantly larger site.  We also completed the integration of our first acquisition, Cotswold Angling in Swindon, which has given us our first presence in the South of England. 

 

After the period end, in early September, we acquired 'Fantackletastic', a fishing tackle store in Lincoln, taking our total number of outlets to 11. The store also marks our first presence in the East Midlands and continues the expansion of the Group's footprint across the country.  Like the other stores in our network, it fits our 'destination' store model, catering for all types of fishing disciplines and offering a comprehensive range of products. We have now identified suitable sites for two new stores, in Cambridgeshire and Reading, and expect to open both stores before the end of the year. 

 

In addition to increasing our store network, we have previously stated that our ambition was to grow our online sales and, in particular, to increase sales derived from our own websites, as opposed to via third party online retailers.  We are now accelerating our efforts to increase our own website sales and, in the period, concentrated our resource into this area.  It is our intention to continue the transition, to gain the benefits of building direct, long-term relationships with our customers, although third party channels will remain important.   

 

At the end of the first half of the year, we completed a share placing, which was oversubscribed, to raise £3.75m (gross). These proceeds will support our continuing expansion, including the development of our online platform and digital strategy.  We welcome all new shareholders including Bill Currie, Iain McDonald and Sir Terry Leahy.   

 

Financial Results

 

It should be noted that in the comparative period in 2015, the business was in private ownership until the Company joined AIM on 4 June 2015. 

 

Results for the first six months of the financial year reflect the benefits of capital raised as well as the increased costs associated with being a publicly quoted company. Sales rose by 34% to £2,503,175 (2015: £1,870,213), reflecting both the contribution from new stores and investment in existing stores. The Company generated a gross profit of £1,254,730 (2015: £814,867), an increase of 54%, year-on-year. This increase benefited from an uplift in gross margin to 50% from 44% in the comparative period last year.

 

Operating profit before exceptional costs grew by 6% to £165,731 (2015: £156,008) and the Company generated a profit before tax of £157,348 (2015: loss of £150,143 after exceptional costs of £299,000).  Basic earnings per share was 0.47 pence (2015: loss of 1.17 pence).

 

Capital expenditure in the period amounted to £280,000, with investment being mainly allocated to software development to improve operational efficiency and to store fittings.

 

There was a cash inflow of £3.6m, net of expenses, following the share placing in June 2016, and at 30 June 2016, the Company held cash balances of £3,907,419 (30 June 2015: £683,732). In August 2016, the Company repaid its only bank loan, amounting to £255,000, leaving the Group debt free. 

 

Review of Operations

 

Fishing Republic stores follow a large 'destination' store format, with a wide range of products and staffed by people with a passion for fishing and able to provide customers with advice on our product range and on local angling.

 

Our stores performed well during the period, with like-for-like sales increasing by 16% (excluding sales from our Hull outlet which was relocated to a larger retail unit at the end of January).  Including Hull, like-for-like sales rose by 23%. With the addition of our four new stores, in Birmingham, Crewe, Hull and Swindon, overall store sales rose by 70% over the comparative period last year and generated approximately 70% of the Group's revenues (2015: 50%). The newly opened stores are continuing to establish themselves and we expect to see their sales build over future fishing seasons.

 

The Group's online sales to date have predominately been generated via third party online retailers. A key focus for us now is to increase sales generated by the Group's own websites, which include www.fishingrepublic.net and www.yorkshiregameangling.co.uk. This will provide for full customer ownership and enhanced online gross margins. Our focus as we acquire customers via our own sites will be to drive recency, frequency and lifetime value. During the period, we moved resource into this area and will be recruiting additional development and digital marketing capacity. 

 

We are pleased to report that sales from our own websites increased 153% year-on-year (from a low base) although, reflecting the shift of our focus to own website sales, total online sales decreased by 9% year-on-year. The overall gross margin rose to 50% from 44% last year, largely reflecting the change in sales mix referred to above.  

 

Online sales accounted for approximately 30% of Group sales and we would expect this to increase as we deploy the proceeds from our recent share placing, which will help to accelerate the development of our online channel and digital marketing initiatives. Looking forward we will also focus more on content-based and social media marketing.

 

Own brand sales were largely maintained year-on-year and accounted for 13% of our total sales (2015: 14%).  As we have highlighted previously, we believe that own brand sales represent a growth opportunity for us. We intend to expand our own brand range in addition to continuing to widen the range of popular fishing tackle brands we offer online and in store. 

 

Staff

 

Fishing Republic relies on dedicated staff with a passion for fishing and I would like to take this opportunity to thank everyone for their hard work over the first half of the year.

 

Outlook

 

Fishing Republic has made good progress since joining AIM in June last year and the business continues to benefit from the higher profile it has gained in the fishing tackle marketplace.

 

The recent placing will now help to accelerate the Board's plans to develop the Group's online capability as well as support the continuing expansion of our geographic footprint into selected catchment areas.  It also places us in a good position to pursue further complementary acquisitions. 

 

Sales in the second half to date have been broadly satisfactory with a quieter July and August followed by an encouraging beginning to September.

 

Given our strong balance sheet position and the significant opportunity which exists in the fishing tackle market to become a dominant player, we have rebased our profit forecasts for the current financial year to allow us to invest for growth in both our store network and online.  We fully expect the benefits of this investment programme to begin to flow through in 2017 and beyond.

 

We look forward with confidence to reporting on the Group's ongoing growth.

 

James H Newman

Chairman

 

Steve Gross

Chief Executive

 

 

 

 

 

Income Statement

for the six months ended 30 June 2016

 

 

 

 

 

 

 

 

Six months

to 30 June

2016

Unaudited

 

Six months

to 30 June 2015

Unaudited

 

Twelve months

 to 31 December 2015

Audited

 

£

 

£

 

£

 

 

 

 

 

 

Revenue

2,503,175

 

1,870,213

 

4,124,257

 

 

 

 

 

 

Cost of sales

(1,248,445)

 

(1,055,346)

 

(2,243,036)


Gross profit

Other income

Selling and distribution costs

 

1,254,730

 

3,013

 

(604,714)

 

 

814,867

2,000

 

(495,277)

 

 

1,881,221

2,057

(1,050,066)
 

Administrative expenses

(487,298)

 

(165,582)

 

(512,415)

 

 

 

 

 

 

Operating profit before exceptional costs of IPO

165,731

 

156,008

 

320,797

Exceptional costs of IPO treated as an expense

-

 

(299,040)

 

(299,040)

 

 

 

 

 

 

Operating profit after exceptional costs of IPO

165,731

 

(143,032)

 

21,757

Finance costs

(8,383)

 

(7,111)

 

(16,039)

 

 

 

 

 

 

 

 

 

 

 

 

Profit on ordinary activities before taxation

157,348

 

(150,143)

 

5,718

 

 

 

 

 

 

Income tax expense

(31,470)

 

(28,521)

 

(37,176)

 

 

 

 

 

 


Profit after taxation

 

125,878

 

 

(178,664)

 

 

(31,458)

 

 

 

 

 

 

Basic earnings per share (pence)

Diluted earnings per share (pence)

0.47

0.46

 

(1.17)

(1.17)

 

(0.16)

(0.16)

 

 

 

 

 

 

 

 

 

 

 

Statement of Comprehensive Income

for the six months ended 30 June 2016

 

 

 

 

 

Six months to

30 June

2016

Unaudited

 

Six months to

30 June

2015

Unaudited

 

Twelve months to

31 December

2015

Audited

 

£

 

£

 

£

 

 

 

 

 

 

 
Profit for the period

 

125,878

 

 

(178,664)

 

 

(31,458)

 

Other comprehensive income

 

-

 

 

-

 


-

 

 

 

 

 

 

 
Total comprehensive profit for the period attributable to the equity shareholders

 

 

 

125,878

 

 

 

 

(178,664)

 

 

 

 

(31,458)

 

 

 

Company Registration Number 09196822

Statement of Financial Position

at 30 June 2016

 

 

 

 

 

 

 

 

As at

30 June

2016

Unaudited

 

As at

30 June

2015

Unaudited

 

As at

31 December

2015

Audited

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

Intangible assets

154,092

 

12,812

 

84,987

Property, plant & equipment

365,762

 

138,907

 

181,291

Deferred tax asset

-

 

-

 

-

 

519,854

 

151,719

 

266,278

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories
Trade and other receivables

3,293,632

183,536

 

2,130,688

312,311

 

2,446,905
277,066

Cash and cash equivalents

3,907,419

 

683,732

 

646,303

 

 

 

 

 

 

 

7,384,587

 

3,126,731

 

3,370,274

 

Total assets

 

7,904,441

 

 

3,278,450

 


3,636,552

 

 

Non-current liabilities

Interest bearing loans and borrowings

 

 

 

 

Current liabilities

 

 

 

231,977

 

 

 

 

     248,000

 

 

 

 

      243,677

Trade payables

Other payables and accruals

Non-interest bearing loans from directors

Interest bearing loans and borrowings

 

722,633

206,959

76,425

24,000

 

434,050

231,663

4,781

32,000

 

244,274
118,196
77,638
24,000

 

 

 

 

 

 

 

 

1,030,017

 

702,494

 

464,108

 

 

 

 

 

 

Total liabilities

1,261,994

 

950,494

 

707,785

 

 

 

 

 

 

Equity

 

 

 

 

 

Called up share capital

Share premium

378,268

5,052,933

 

237,500

1,152,294

 

268,750

1,574,649

Reserves

1,211,246

 

938,162

 

1,085,368

 

 

 

 

 

 

 

6,642,447

 

2,327,956

 

2,928,767

 

 

Total equity and liabilities

7,904,441

 

   3,278,450

 

   3,636,552

Statement of Changes in Equity

For the six months ended 30 June 2016

            

 

 

 

Share

Capital

 

Share

Premium account

 

 

Retained

Profit

 

 

 

Total

 

£

£

£

£

At 1 January 2015

1,375,000

-

(120,674)

1,254,326

Profit for the period

-

-

(178,664)

(178,664)

Capital reduction

(1,237,500)

               -

1,237,500

-

Share issue on IPO

100,000

1,400,000

-

1,500,000

Share issue costs

-

(247,706)

-

(247,706)

 

 

 

 

 

At 30 June 2015

237,500

1,152,294

938,162

 

2,327,956

 

Profit for the period

-

-

147,206

147,206

Share issue

31,250

468,750

-

500,000

Share issue costs

-

(46,395)

-

(46,395)

 

 

 

 

 

At 31 December 2015

268,750

1,574,649

1,085,368

2,928,767

Profit for the period

-

-

125,878

125,878

Share issue

109,518

3,676,108

-

3,785,626

Share issue costs

 

-

(197,824)

-

(197,824)

 
At 30 June 2016

 

378,268

 

5,052,933

 

1,211,246

 

6,642,447

 

 

Statement of Cash Flows

for the six months ended 30 June 2016

 

 

 

 

 

 

 

 

Six months

to 30 June

2016

Unaudited

 

Six months

to 30 June

2015

Unaudited

 

Twelve months

to 31 December

2015

Audited

 

£

 

£

 

£

Operating activity

 

 

 

 

 

 

 

 

 

 

 

Operating profit

157,348

 

(150,143)

 

5,718

Depreciation charge

27,153

 

5,260

 

15,078

Interest expense

8,383

 

7,111

 

16,039

Profit on disposal of PPE
(Increase)/decrease in inventories

-

(846,727)

 

-

(222,022)

 

-
(538,239)

(Increase)/decrease in receivables

62,060

 

(49,400)

 

(23,850)

Increase/(decrease) in payables

567,122

 

(91,405)

 

(393,607)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash generated from operations

(24,661)

 

(500,599)

 

(918,861)

 

 

 

 

 

 

Investing activity

 

 

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

(203,924)

 

(10,900)

 

(58,872)

Acquisition of intangible assets

(76,805)

 

-

 

(76,406)

 

 

 

 

 

 

Net cash used in investing activities

(280,729)

 

(10,900)

 

(135,278)

 

 

 

 

 

 

Financing activity

 

 

 

 

 

 

 

 

 

 

 

Issue of share capital (net of expenses)

3,587,802

 

1,252,294

 

1,705,899

Loan repayments

Loan advance

Interest paid
Funds introduced by directors
Funds withdrawn by directors

(11,700)

-

(8,383)

-

(1,213)

 

-

4,246

(7,111)

-

(105,914)

 

(8,077)

-
(16,039)
-
(33,057)

 

 

 

 

 

 

Net cash inflow from financing activities

3,566,506

 

1,143,515

 

1,648,726

 

 

 

 

 

 

Net increase in cash and cash

equivalents

 

3,261,116

 

 

632,016

 

 

594,587

 

 

 

 

 

 

Cash and cash equivalents at start of period

646,303

 

51,716

 

51,716

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

3,907,419

 

 

683,732

 

 

646,303

 

 

 

 

Notes to the Interim Statement

 

1.       Basis of preparation

 

The interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Company's full financial statements for the year ending 31 December 2016. These policies are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 31 December 2015. They are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 30 June 2016. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34.

 

The financial information in this statement relating to the six months ended 30 June 2016 and the six months ended 30 June 2015 has neither been audited nor reviewed by the Auditors, pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 31 December 2015 does not constitute the full statutory accounts for that period.  Full audited financial statements for the year ended 31 December 2015 are available on the company's website.

 

        The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. These projections take account of the timing of expected cash inflows and financial commitments over that period. Based upon these projections and the availability of financial resources as required over this period, the Directors have a reasonable expectation that the company will meet its future obligations as they fall due and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

 

2.       Earnings per share

     

Earnings per share has been calculated on the attributable profit for the period and the weighted average number of shares in issue during the period.

 

 

 

 

 

 

Six months

to 30 June

2016

Unaudited

Six months

to 30 June

2015

Unaudited

Twelve months

to 31 December

2015

Audited

 

 

 

 

Profit for the period (£)

£125,878

(£178,664)

(£31,458)

Profit before IPO costs charged to income statement (£)

£125,878

£120,376

267,582

Weighted average shares in issue (no.)

27,060,597

15,241,713

19,623,288

Basic earnings per share (pence)

0.47

(1.17)

(0.16)

 

 

 

 

Earnings per share before exceptional IPO costs

 

 

 

Basic earnings per share (pence)

Diluted earnings per share (pence)

0.47

0.46

0.79

0.79

1.36

1.36

 

The earnings attributable to ordinary shareholders is profit after tax. The weighted average number of ordinary shares in issue during each reporting period is used for the purpose of calculating basic earnings per share. Fully diluted earnings per share takes into account share options in issue throughout the period as follows;

Unapproved share options for 581,407 shares

EMI share options total 1,099,975 shares

Diluted earnings per share has been calculated using the Treasury Method.

 

 

3.       Share capital  

 

During the six months to 30 June 2016 the following share issue took place:

 

An issue of 237,500 ordinary shares at 15 pence per share upon the exercise of options held in the company (10 May 2016).

 

An issue of 10,714,288 ordinary shares at 35 pence per share, by way of placing, for a total consideration of £3,750,000 (gross) (29 June 2016).

 

 

4.      Interim report

 

Copies of this interim report are available from Fishing Republic plc, Vulcan Works, Chesterton Road, Eastwood Trading Estate, Rotherham, South Yorkshire S65 1SU and on the Company's website at  www.fishingrepublic.net. 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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