Nevertheless, the Norwich-headquartered company continues to reel-in the sales, both at home and abroad, while a robust balance sheet should help it cope with near-term earnings pressures.
PROFITS WASHED AWAY
Angling Direct, whose long-serving chief executive Darren Bailey stepped down from the role last week to be replaced by Andy Torrance, warned: ‘Notwithstanding the strong growth the company has delivered this year, a disappointing trading period, post-Christmas, influenced by exceptional winter flooding, has impacted profits.’
Lower levels of fishing activity meant that the fishing tackle, luggage and clothing retailer’s higher margin consumable products were hit disproportionally, while Angling Direct also said ‘a more prudent approach has been taken to some legacy costs’.
Taken together, the £44.3m cap expects to deliver an earnings before interest, taxation, depreciation and amortisation (EBITDA) loss of ‘no more than £0.5 million’ for the year to 31 January 2020, although management was at pains to highlight a robust balance sheet flush with £5.9m cash as of 31 January 2020.
FISHING FOR GLOBAL GROWTH
Today’s earnings alert is undoubtedly disappointing, but it is anything but all doom and gloom at Angling Direct. This expansionist retailer grew profits by the best part of 50% during the Black Friday period and its growth story has increasingly international dimensions.
Angling Direct still expects to report annual sales up 26.5% to £53.1m, reflecting growth online and through its brick and mortar stores. Online revenue rose 13.3% to £25.2m last year thanks to continued investment in the e-commerce platform, while a recent focus on lucrative international territories is paying off.
The retailer’s German, French and Netherlands websites increased sales by 24.6%, 70.9% and 86.7% respectively last year and these three territories now represent 42% of Angling Direct’s total international sales.