Angling Direct : Full Year Results 2021

11 May 2021

Angling Direct plc

("Angling Direct" the "Company" or the "Group")

Full Year Results

Delivering profitable growth in a year of significant strategic and operational progress

Angling Direct plc (AIM: ANG), the leading omni-channel specialist fishing tackle and equipment retailer, is pleased to announce its Full Year results for the 12 months ended 31 January 2021 ("FY21").

Financial Highlights

• Group revenue increased 27.1% to £67.6m (FY20: £53.2m)
• Online sales up 39.9% to £35.3m (FY20: £25.2m), with international sales accounting for 12.4% of total online sales
• Retail store sales up 15.5% to £32.3m (FY20: £27.9m), despite impact of national lockdowns
• Gross profit of £23.1m, up 39.5% (FY20: £16.6m) with a 300bps improvement in gross margin to 34.2% (FY20: 31.2%), underpinned by more disciplined approach to pricing and inventory management
• Operating cashflow up 825% to £6.9m
• EBITDA (post IFRS 16) of £5.7m (FY20: £0.7m)
• Profit before tax of £2.6m, up 279% (FY20: (£1.5m loss))
• Basic earnings per share of 3.33p (FY20: (2.03p loss))
• Strong balance sheet with Group net cash of £15.0m at 31 January 2021

Operational Highlights

• Web platform upgrade delivering new and improved customer journey functionality across UK and international websites (.uk, .de, .fr, .nl)
• Online direct wage cost efficiency improvement of 240 bps to 3.6% of sales alongside distribution centre reconfiguration
• Four new stores opened (Warrington, Bristol, Northampton, Leicester) in strategically located, high density fishing catchments, bringing store estate total to 38 at period end (FY20: 34)
• Post period-end opening of new Redditch store (February) and Sittingbourne re-sited (April)
• Growing contribution from higher margin own brand Advanta range, representing 4.8% of total sales (FY20 2.8%)
• Became exclusive retail partner of Angling Trust's Get Fishing campaign; at least two Angling Trust qualified fishing coaches now in each store
• Key hires within growth critical areas of Web development, Technology, Buying, Finance and Operations

Current Trading and Outlook

• Strong Q1 FY22 sales, up 54% on the prior year, reflecting closure periods in both years. Online sales up 42%, store sales up 75%
• Focused internationally on five key growth territories; Germany, France, Netherlands, Belgium and Austria
• Assuming no further lockdowns, the Group is well-placed to deliver profitable growth in revenues, albeit at a lower rate than the prior year as trading conditions and sales mix begin to normalise
• Financial guidance reinstated for FY22, on track to meet current year market expectations
• Cash at 30 April 2021 £15.5m
• Martyn Page to move from Executive Chairman to Non-Executive Chairman, Darren Bailey stepping down as Non-Executive Director at forthcoming Annual General Meeting

Andy Torrance, CEO of Angling Direct, said:

"In a year characterised by the unique challenges associated with the pandemic, I am extremely proud of the way our people responded to help deliver such a strong Group performance. We made great strides with our strategic and operational objectives, growing revenues both in the UK and key European territories, driving operational excellence across the business and delivering sustainable margin-accretive, profitable growth as part of our laser-focus on pricing and inventory management. As the health and wellbeing benefits of angling become more widely recognised and its popularity grows around the world, we are ideally positioned to fulfil our ambition of becoming Europe's first choice omni-channel fishing tackle destination for all anglers, regardless of their experience or ability.

Having reopened our stores on 12 April and with the UK emerging from the pandemic, I am cautiously optimistic when I look to the future: the strong foundations we have put in place through 2020 will ensure the Group is able to take advantage of the numerous opportunities that will arise through the remainder of 2021 and beyond."

Analyst Webinar

A virtual meeting for sell-side analysts will be held at 09:30am (UK) today, 11 May 2021, the details of which can be obtained from FTI Consulting using the contact details below.

Investor presentation

Andy Torrance (CEO) and Steven Crowe (CFO) will provide a live presentation relating to the Full Year Results via the Investor Meet Company platform on Monday 17 May at 10.30am. The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00am the day before the meeting or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet Angling Direct via: https://www.investormeetcompany.com/angling-direct-plc/register-investor. Investors who already follow Angling Direct on the Investor Meet Company platform will automatically be invited.

For further information please contact:
Angling Direct plc	+44 (0)	1603 258658
Martyn Page, Executive Chairman
Andy Torrance, Chief Executive Officer
Steven Crowe, Chief Financial Officer
N+1 Singer - NOMAD and Broker	+44 (0)	20 7496 3000
Peter Steel, Alex Bond (Corporate Finance)
Tom Salvesen (Corporate Broking)
FTI Consulting - Financial PR	+44 (0)	20 3727 1000
Alex Beagley	[e-mail]
James Styles
Alice Newlyn

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

About Angling Direct

Angling Direct is the leading omni-channel specialist fishing tackle retailer in the UK. The Company sells fishing tackle products and related equipment through its network of retail stores, located strategically throughout the UK as well as through its leading digital platform (www.anglingdirect.co.uk.de, .fr and .nl) and other third-party websites.

Angling Direct is committed to supporting its active customer base and widening access to the angling community through its passionate colleagues, store-based qualified coaches, social media reach and ADTV YouTubechannel. The Company currently sells over 20,000 fishing tackle products, including capital items, consumables, luggage and clothing. Angling Direct also owns and sells fishing tackle products under its own brand 'Advanta', which was formally launched in March 2016.

From 1986 to 2002, the Company's founders acquired interests in a number of small independent fishing tackle shops in Norfolk and, in 2002, they acquired a significant premise in Norwich, which was branded Angling Direct. Since 2002, the Company has continued to acquire or open new stores, taking the total number up to 38 retail stores. In 2015, the Company opened a 30,000 sq. ft central distribution centre in Rackheath, Norfolk, where the Company's head office is

also located. Angling Direct has an established, and rapidly growing, presence in Europe with native language websites set up in key regions to address demand.

Chairman's Statement

Introduction and Board changes

I am pleased to present a successful performance, but I do so with somewhat mixed emotions as I reflect on the challenges that have impacted so many over the past year. As our year began COVID-19 was rocking the foundations of the world as we knew it, however we had no idea of the extent to which it might impact on lives and the wider global economy.

Since then, the dedication of so many frontline people, the commitment to lockdown measures and advances in treatment and vaccines has brought considerable hope that we are seeing the path to a new normal.

We started the year with risk analysis and prevention to protect our colleagues and customers, deferred non-essential costs, adopted COVID safe practices and secured additional funding by means of a Placing in June 2020, raising £5.1m net of costs.

Retail businesses have been affected to different degrees. Fortunately Angling Direct has a strong purpose, diversified selling model and enjoys an experiential culture, growing on the back of being serious about our customers' successful and enjoyable fishing experience. We operate in a specialist niche sector and one well known for its wellbeing and mental health benefits as a result of time spent outside beside the water. Whilst we experienced store and fishing closures in the year, demand and popularity of angling grew with annual fishing licence sales increasing by 17%, equivalent to more than 100,000 new licences in 2020.

During the store closure periods, our online business saw exceptional growth, which was helped by our flexible stocking system. Additionally, during the summer, the huge pent-up demand resulted in larger than usual sales volumes after our stores reopened.

Our Board also saw a number of changes in the year. Darren Bailey stepped down as CEO in February 2020 and was appointed as a Non-Executive Director. Darren has now notified the Board of his intention to step down as a Non-Executive Director to take effect as at the close of the Company's forthcoming Annual General Meeting. Darren's contribution to the growth and success of the Company has been immeasurable and I offer my heartfelt thanks for everything he has done.

Andy Torrance became our new CEO (from his role as a Non-Executive Director) and Dilys Maltby joined as a Non-Executive Director in February 2020. In January 2020 we also appointed Steve Crowe as our new CFO. At the time I was confident that the variety and depth of experience provided by these appointments would prove invaluable during our next phases of growth, and I am pleased with the progress that has been delivered to date.

Our new Board members were immediately faced with the pandemic in addition to onboarding and learning the intricacies of the business, its processes and culture and its strengths and weaknesses. A 'baptism of fire' which they rose to and surpassed with exceptional efficiency whilst demonstrating a compassion for colleagues and customers. I am so very pleased to offer my gratitude and thanks for their commitment, dedication, and passion.

Financial performance

Despite COVID-19 the Group exceeded its growth forecast and achieved record revenue of £67.6m, up 27.1% (2020: £53.2m). Whilst our retail stores were affected by lockdowns throughout the year, our online sales grew by 39.9% to £35.3m (2020: £25.2m). Pleasingly, and as a result of our planning and drive for efficiency, the Group returned to profitability in the year, delivering a post-tax profit of £2.4m and a 300bps improvement in Gross margin to 34.2%. As a result of the share placing, our cost saving measures and strong cash generation, the Group ended the year with a strong balance sheet with net cash of £15.0m at 31 January 2021.

Operational progress

It is important to periodically strengthen pillars and build new platforms to provide capacity and functionality to support the next growth cycle. Prior to IPO we did that to enable the Group to grow to meet its 5 year £50m revenue target. We achieved this in just 3 years enabling us to make step changes operationally to embark on and support the next stage of our growth strategy. As such, despite COVID-19, we stayed focused on our strategic objectives; strengthening the Board, and reviewing operational processes to enable the Company to move strongly towards its future ambitions.

We thoroughly reviewed financial, purchasing and sales process efficiencies, including placing a big emphasis on margin and cash retention. We cut stock shrinkage and discounting and increased distribution efficiencies and capacity. We evaluated labour to turnover ratios and implemented best practices and processes to improve efficiency and provide store

colleagues with more time for our customers. We implemented a customer segmented category management process to ensure that we buy the right product at the best prices, covering the various fishing disciplines and angling abilities. We also continued our online technology development to obtain benefits from ongoing in-house improvements following upgrades to our web platform, a key driver in our European strategy.

Whilst COVID-19 prevention was a major logistical exercise, we successfully introduced 'safe practice' processes in all our premises to ensure best possible protection for our colleagues and customers. We also opened four new stores and refurbished others, constantly aiming to improve our reach and exceed customers' expectations.

Change in market dynamics through 2021

Instore retailing has faced significant challenges in recent years and lockdown restrictions have acted as a further catalyst rapidly accelerating the trend towards online sales.

Fortunately, we operate in a specialist niche sector with stores based in destination locations that have proved more adaptable during lockdowns. Customers want to buy our broad range of products to facilitate the sport they love. Our unrivalled range of products allows us to offer the opportunity, supported by an experienced team, for customers to see, feel, buy and immerse themselves in their passion whether they are beginners or seasoned experts.

Additionally, our omni-channel strategy of operating the best stores and websites seamlessly together within our sector paid dividends as our online operation handled significant demand increases during the periods our stores were closed, supported by our flexible stocking policy.

The large pent-up demand built up whilst fishing was prohibited released with a flood of business from mid-June when stores reopened, whilst our online business continued to grow at pace. This proved that demand for well-located physical experiential stores, manned by trained enthusiastic colleagues, remains strong in our sector.

The large increase in fishing's popularity as a low cost activity with multiple well-being benefits attracted many new anglers to the sport which in turn, brought, we believe, the first real increase in licence sales for several years.

Maintaining consistent product availability with many suppliers closed for periods and shipping delays from China presented challenges, but we foresaw this risk with the increase in our available cash helping the Group to secure good stocks of the product available. Brand shortages also benefited our own higher margin Advanta own brand sales.

People and community

Supporting people and communities is one of our key strategic pillars and we focus on the role the Group plays, aiming to not just enhance the lives of anglers and colleagues, but also to have a positive impact on our suppliers, shareholders, local communities, the wider society and environment.

We have an incredible team of colleagues sharing our vision and passion to deliver the very best experience to all our customers. Our ambition is to be the best employer in our sector, caring for our colleagues' wellbeing and fulfillment. Our people are core to our culture and to delivering our purpose and I am grateful to them for their tremendous contributions and dedication, particularly during these times.

"There are two distinct visits to tackle shops, the visit to buy tackle and the visit which may be described as Platonic when, being for some reason unable to fish, we look for an excuse to go in, and waste the tackle dealer's time" Arthur Ransome

Our customers love being in our stores, on our website and social media outlets socialising, learning and receiving top-quality fishing advice and assistance. We equally relish both the visits to buy and the platonic, to use Arthur Ransome's words.

Ours is a passion to introduce the benefits of fishing to as many people as possible, through promotion, coaching, education and advice. In addition to our own direct initiatives, we have teamed up with the Angling Trust and their "Get fishing" campaign. We endorse evidence that fishing is a great way to improve all round well-being and we support bodies set up to encourage those with disabilities, of any kind, to benefit from fishing.

Looking ahead

In conclusion, it has been a year of great difficulty and sadness for the whole world and we are aware and respectful that Angling Direct has been more fortunate than many. We have faced challenges, arising from the pandemic and at a time