TIDMANG
RNS Number : 9603E
Angling Direct PLC
24 October 2018
The information contained within this announcement (the
"Announcement") is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014. Upon the publication of this Announcement via
Regulatory Information Service ("RIS"), this inside information is
now considered to be in the public domain.
24 October 2018
Angling Direct plc
("Angling Direct" or the "Company")
Placing of new Ordinary Shares to raise GBP20.0 million
Notice of General Meeting
and
Directorate Change
Angling Direct plc (AIM: ANG), the UK's largest specialist
fishing tackle and equipment retailer, is pleased to announce a
placing with institutional investors to raise approximately GBP20.0
million before expenses (the "Placing") through the issue of
21,622,000 new ordinary shares of 1 pence each in the capital of
the Company ("New Ordinary Shares") at 92.5 pence per New Ordinary
Share ("Placing Price"). The Placing was over-subscribed, with
strong support from both new and existing institutional
shareholders.
Since the Company's IPO in July 2017, the Company has opened a
total of 8 new stores bringing the total number to 23. The Company
intends to use the proceeds to accelerate the rollout of Angling
Direct stores in the UK and to significantly increase online sales
in the UK and Europe.
The Directors intend that the net proceeds of the Placing will
be used primarily for the following purposes:
-- to open approximately 20 new stores in the UK over the calendar years 2019 and 2020;
-- for website development including the roll-out of native language sites in Europe;
-- for a European media and marketing plan;
-- to facilitate the exploration of potential strategic M&A opportunities;
-- to increase the headcount across the business; and
-- for general working capital and expansion of the Advanta(R) product lines.
The Placing is conditional, inter alia, upon the Company
obtaining approval from its Shareholders to disapply statutory
pre-emption rights and to grant the Board authority to allot the
Placing Shares and Admission.
Directorate Change
The Company also announces that Stephen Moon, non-executive
director, will be stepping down from the board of Angling Direct
with effect from 23 January 2019. The Company expects to have
appointed another independent non-executive director by that time
and will update the market in due course. Stephen joined the board
as the Company prepared for its IPO and has overseen the Company
progress to this next milestone. The board would like to thank
Stephen for his significant contribution.
Angling Direct's Chief Executive Officer, Darren Bailey,
commented:
"We are delighted with the level of support Angling Direct has
received from its existing and new investors. The business has made
excellent progress in the 15 months since joining AIM, with
acquisitions completed, new stores opened, and revenue grown
significantly. The new funds will allow Angling Direct to go to the
next level, as we seek to extensively increase our UK footprint and
expand into Europe through our successful online business.
"I would also like to take this opportunity to thank Stephen
Moon for his contribution to the Company. His advice and guidance
has been highly valuable since Angling Direct became a public
company, and we wish him the very best for the future."
A General Meeting of the Company will be held at B-24 Business
Lounge, 18 Wendover Road, Rackheath Industrial Estate, Rackheath,
Norwich, Norfolk NR13 6LH, at 11:00 a.m. on 9 November 2018.
Further details of the Placing are set out below. Defined terms
used in this announcement are set out at the end of the
announcement. A Circular is being posted to shareholders today,
which set outs the background to and reasons for the Placing, which
will be available on the Company's website:
www.anglingdirect.co.uk.
For further information:
Angling Direct PLC
Martyn Page, Executive Chairman
Darren Bailey, Chief Executive
Officer +44 (0) 1603 258658
Cenkos Securities - NOMAD
and Broker
Stephen Keys (Corporate Finance)
Russell Kerr (Sales) +44 (0) 20 7397 8900
Yellow Jersey - Financial
PR
Charles Goodwin
Harriet Jackson +44 (0) 7747 788 221
Katie Bairsto +44 (0) 7544 275 882
Introduction
The Company today announces the terms of a placing to raise
approximately GBP20.0 million (before expenses) by the allotment
and issue by the Company of up to 21,622,000 new Ordinary Shares at
the Placing Price. The net proceeds will be used, inter alia, to
fund continued expansion both instore and online in the UK and
Europe, and to explore further strategic acquisition opportunities.
In addition, a further 2,162,000 Sale Shares have been placed in
connection with the Placing at the Placing Price. Pursuant to this
transaction, the Selling Shareholder has committed (subject to
certain customary exceptions) not to dispose of any further
existing Ordinary Shares for a period of 12 months following
Admission.
The Placing is conditional, among other matters, on Shareholders
approving the Resolutions at the General Meeting, compliance by the
Company in all material respects with its obligations under the
Placing Agreement, and Admission. The Resolutions are contained in
the Notice of General Meeting set out in the Circular to be posted
to Shareholders later today.
Background to and reasons for the Placing
On 13 July 2017, the Existing Ordinary Shares were admitted to
trading on AIM ("IPO"), raising gross proceeds of GBP9.0 million.
Since that time the Company has continued to implement its strategy
set out at the IPO and the funds raised from the IPO have
principally been used to expand the number of Angling Direct stores
within the UK. The Company has opened a total of 8 new stores since
IPO bringing the total number to 23. The Company remains the
largest UK in-store and online retailer of fishing tackle, and is
pursuing a fundraise to accelerate the rollout of Angling Direct
stores in the UK and to significantly increase online sales in the
UK and Europe.
In-Store Strategy
The Company reported retail store sales up 60 per cent. to
GBP9.9 million (2018: GBP6.2 million) in the six months ended 31
July 2018, as a result of the Company's expanding footprint. The
Company intends to continue its successful store roll-out and open
approximately 20 new stores across the UK over the calendar years
2019 and 2020. The roll-out is expected to be via the acquisition
of existing independent fishing tackle retailers and opening new
sites using the Company's proven store format.
The Directors believe that the continued expansion of the
Company's retail store network is important in supporting the
future growth strategy of the Company, both offline and online. The
Directors further believe that the physical presence of Angling
Direct retail stores increases activity on the Company's website
and increases brand awareness. The Company will continue to drive
sales from existing stores by focusing on store layout, product
availability, tuition, advice and instore experience.
European Online Strategy
The Company has circa. 25 per cent. of the UK online market and
is experiencing rapid growth in Europe. The Company's online
business contributes more than half of the Company's sales and
increased by 60 per cent. to GBP11.7 million (2018: GBP7.3 million)
in the six months ended 31 July 2018. The Directors believe that
the UK online market is 2 to 3 years more mature than that in
Europe, giving Angling Direct an early mover advantage in a market
estimated to be worth approximately GBP600 million per annum. Like
the UK market, the Directors believe that the European market is
highly fragmented and the Company is not aware of any rival
consolidators, which presents a significant opportunity for the
Company.
The Company launched its first domestic language website in
Germany in June 2018, and is due to launch native language sites in
France and Benelux in November 2018. The German website has been
received well, with 194,973 unique users since its launch. The
Company intends to rollout native language websites in additional
European countries to drive user adoption and sales. To ensure that
the launch of native sites is a success, the Company intends to
invest in a media and marketing plan to promote the new sites and
support each site with multilingual customer service teams.
Strategic M&A Opportunities
The Company remains focused on acquiring stores in the UK
through its strategically placed store roll-out. In addition, the
Company will continue to assess acquisition opportunities that will
be a functional fit and add value to its overall operations in the
UK and Europe.
Infrastructure
The Company operates a central distribution centre in Rackheath
near Norwich. The Company has recently invested in a new Kardex
system, which has enhanced the Company's ability to expand in the
UK and Europe. The Company intends to increase headcount across the
Company to support the continued growth of the business.
Working Capital and Advanta Expansion
The Company's store roll-out will require an investment in
inventory to adequately stock each site. Furthermore, increased
online sales from Europe will require additional inventory at the
Rackheath distribution centre.
The Company is also looking to further expand its own branded
"Advanta(R)" range by increasing the number of products offered.
The Company already stocks more than double the number of
Advanta(R) products than it did in May 2017. The average gross
margins of the Advanta(R) products are 50.4 per cent. (on some
Advanta(R) products the gross margin is as high as 92.8 per cent.)
compared with an average gross margin of 30.8 per cent. (online)
and 35.7 per cent. (in-store) for non-Advanta products, resulting
in a greater positive impact on the Company's EBITDA. Expansion of
the Advanta(R) range is seen by the Company as an opportunity for
accelerated growth through sales in the current and proposed store
network and online, including across Europe following the intended
online expansion.
Use of proceeds
The Directors intend that the net proceeds of the Placing
receivable by the Company will be used primarily for the following
purposes:
-- to open approximately 20 new stores in the UK over the calendar years 2019 and 2020;
-- for website development including the roll-out of native language sites in Europe;
-- for a European media and marketing plan;
-- to facilitate the exploration of potential strategic M&A opportunities;
-- to increase the headcount across the business; and
-- for general working capital and expansion of the Advanta(R) product lines.
Current trading and prospects
The Company announced its interim results for the six months
ended 31 July 2018 on 8 October 2018. The Company reported revenues
of GBP21.9 million up 55.8 per cent. (H1 2018: GBP14.1 million) and
a pre-tax profit of GBP0.6 million (H1: 2018 GBP0.1 million) after
accelerated investment in European expansion. Since that time, the
Company has continued to implement its strategy, with like-for-like
store sales up by 15.4 per cent. and 12.0 per cent. in August and
September respectively. The Board looks to the Company's future
with increasing confidence.
The Placing
The Company has entered into the Placing Agreement under which
Cenkos has agreed to use its reasonable endeavours to procure
Placees for the Placing Shares at the Placing Price. Further
details of the terms of the Placing Agreement are set out below.
Subject to the satisfaction of the conditions under the Placing
Agreement including, among other matters, the passing of the
Resolutions without amendment, the Company will issue up to
21,622,000 New Ordinary Shares which will raise approximately
GBP20.0 million, before expenses, and GBP19.1 million, after the
expenses of the Placing (which are estimated to be up to
approximately GBP0.9 million (excluding VAT)). The Placing Shares
have been conditionally placed by Cenkos, acting as the bookrunner
and as agent for the Company, with institutional and other
investors. Application will be made for the New Ordinary Shares to
be admitted to trading on AIM, and, on the assumption that, among
other matters, the Resolutions are passed, dealings in the Placing
Shares are expected to commence on 12 November 2018. The Placing is
not underwritten.
The Placing is conditional, among other things, upon:
-- the Resolutions being passed without amendment;
-- compliance by the Company in all material respects with its
obligations under the Placing Agreement; and
-- Admission of the New Ordinary Shares to trading on AIM
becoming effective by not later than 8.00 a.m. on 12 November 2018
(or such later date as is agreed between the Company and Cenkos,
being not later than 8.00 a.m. on the Long Stop Date).
The Placing Agreement contains, inter alia, customary
undertakings and warranties given by the Company in favour of
Cenkos as to the accuracy of information contained in this
announcement and as to other matters relating to the Company.
Cenkos may terminate the Placing Agreement in specified
circumstances prior to Admission including in the event of a force
majeure event occurring.
The New Ordinary Shares will represent approximately 33.5 per
cent. of the Enlarged Share Capital and the Sale Shares will
represent approximately 3.3 per cent. of the Enlarged Share
Capital. The New Ordinary Shares will, following Admission, rank in
full for all dividends and distributions declared, made or paid in
respect of the issued Ordinary Share capital of the Company after
the date of their issue and will otherwise rank equally in all
other respects with the Existing Ordinary Shares. The Placing Price
represents a discount to the closing mid-market price of 7.5 per
cent. per Ordinary Share as at 23 October 2018 (being the latest
practicable date before the announcement of the Placing).
The Company has also agreed to issue a warrant instrument, on
completion of the Placing, granting Cenkos warrants to subscribe
for, in total, 432,440 Ordinary Shares, being equal to 2.0 per
cent. of the New Ordinary Shares (and corresponding to GBP4,324.40
in aggregate nominal value). Each warrant corresponds to one
Ordinary Share and is exercisable between the first and fifth
anniversaries of the date of the warrant instrument, at GBP1.10 per
Ordinary Share. Before this first anniversary, these warrants may
be cancelled by the Company.
Selling Shareholder Agreement
Cenkos and the Selling Shareholder have entered into the Selling
Shareholder Agreement pursuant to which 2,162,000 Sale Shares have
been placed in connection with the Placing at the Placing Price.
The Selling Shareholder Agreement is conditional on Admission,
among other things.
Related party transaction
The following substantial Shareholder (being a Shareholder
holding 10 per cent. or more of the Company's Ordinary Shares as at
23 October 2018, being the latest practicable date prior to the
date of this announcement) is participating in the Placing as
described below:
Number Percentage Amount Number Number Percentage
of of Existing subscribed of of of enlarged
Existing Ordinary Placing Ordinary share
Ordinary Shares Shares Shares capital
Shares held
including
the Placing
Shares
Canaccord Genuity
Wealth Management 5,762,500 13.4% GBP1,799,125 1,945,000 7,707,500 11.9%
---------- ------------- ------------- ---------- ------------- -------------
The participation by the Shareholder referred to above in the
Placing is classified as a related party transaction for the
purposes of the AIM Rules by virtue of such Shareholder being a
"substantial shareholder" (as defined in the AIM Rules) in the
Company. The Directors, having consulted with Cenkos, the Company's
Nominated Adviser, consider that the terms of the transaction,
namely the participation by Canaccord Genuity Wealth Management in
the Placing, are fair and reasonable insofar as the Company's
Shareholders are concerned.
PLACING STATISTICS
Placing Price (per share) 92.5p
Number of Existing Ordinary Shares 42,999,993
Number of New Ordinary Shares 21,622,000
Number of Sale Shares 2,162,000
Number of Placing Shares 23,784,000
New Ordinary Shares as a percentage of the
Enlarged Share Capital 33.5%
Sale Shares as a percentage of the Enlarged
Share Capital 3.3%
Number of Ordinary Shares in issue following
Admission 64,621,993
Total gross proceeds of the Placing GBP20.0 million
Estimated expenses of the Placing GBP0.9 million
Estimated net proceeds of the Placing receivable GBP19.1 million
by the Company
EXPECTED TIMETABLE OF PRINCPAL EVENTS
Publication of this announcement 24 October 2018
Publication of the Circular 24 October 2018
Latest time and date for receipt of Forms 11.00 a.m. on 7 November
of Proxy 2018
General Meeting 11.00 a.m. on 9 November
2018
Admission and commencement of dealings in 12 November 2018
the Placing Shares
Long Stop Date 26 November 2018
DEFINITIONS
Act the Companies Act 2006 (as amended)
Admission admission of the New Ordinary Shares to
trading on AIM becoming effective in accordance
with Rule 6 of the AIM Rules
AIM the AIM Market operated by the London
Stock Exchange
AIM Rules the AIM Rules for Companies published
by the London Stock Exchange from time
to time
Cenkos Cenkos Securities plc
certificated form an Ordinary Share recorded on a company's
or in share register as being held in certificated
certificated form form (namely, not in CREST)
Company Angling Direct plc, a company incorporated
and registered in England and Wales under
the Companies Act 1985 with registered
number 05151321
CREST the relevant system (as defined in the
CREST Regulations) in respect of which
Euroclear is the operator (as defined
in those regulations)
CREST Regulations the Uncertificated Securities Regulations
2001 (S.I. 2001 No. 3755)
Directors or Board the directors of the Company, or any duly
authorised committee thereof
Enlarged Share Capital the 64,621,993 Ordinary Shares in issue
immediately following Admission
Euroclear Euroclear UK & Ireland Limited, the operator
of CREST
Existing Ordinary the 42,999,993 Ordinary Shares in issue
Shares at the date of this announcement, all
of which are admitted to trading on AIM
FCA the UK Financial Conduct Authority
Form of Proxy the form of proxy for use in connection
with the General Meeting
FSMA the Financial Services and Markets Act
2000 (as amended)
General Meeting or the general meeting of the Company to
GM be held at B-24 Business Lounge, 18 Wendover
Road, Rackheath Industrial Estate, Rackheath,
Norwich, Norfolk NR13 6LH at 11.00 a.m.
on 9 November 2018
London Stock Exchange London Stock Exchange plc
Long Stop Date 26 November 2018
New Ordinary Shares 21,622,000 new Ordinary Shares to be issued
pursuant to the Placing
Notice of General the notice convening the General Meeting
Meeting
Ordinary Shares ordinary shares of GBP0.01 each in the
capital of the Company
Placee or Placees the subscribers for the New Ordinary Shares
and purchasers of the Sale Shares pursuant
to the Placing
Placing the placing by Cenkos of the New Ordinary
Shares and Sale Shares with certain institutional
investors and existing Shareholders (or
their associated investment vehicles),
otherwise than on a pre-emptive basis,
at the Placing Price
Placing Agreement the conditional agreement entered into
between the Company and Cenkos in respect
of the Placing dated 24 October 2018
Placing Price 92.5 pence per Placing Share
Placing Shares the New Ordinary Shares and the Sale Shares
Resolutions the resolutions set out in the Notice
of General Meeting
Sale Shares 2,162,000 Existing Ordinary Shares to
be sold by the Selling Shareholder in
connection with and pursuant to the Placing
Selling Shareholder William Hill
Selling Shareholder the agreement between Cenkos and the Selling
Agreement Shareholder to place the Sale Shares at
the Placing Price
Shareholders holders of Ordinary Shares
UK or United Kingdom the United Kingdom of Great Britain and
Northern Ireland
GBP and p United Kingdom pounds sterling and pence
respectively, the lawful currency of the
United Kingdom
About Angling Direct plc
Angling Direct is the largest specialist fishing tackle retailer
in the UK. The Company sells fishing tackle products and related
equipment through its network of retail stores, located throughout
the UK, as well as through its own website
(www.anglingdirect.co.uk) and other third-party websites.
The Company currently sells over 21,500 fishing tackle products,
including capital items, consumables, luggage and clothing. The
Company also owns and sells fishing tackle products under its own
brand 'Advanta', which was formally launched in March 2016.
From 1986 to 2003 the Company's Founders acquired interests in a
number of small independent fishing tackle shops in Norfolk and, in
2003, they acquired a significant premises in Norwich, which was
branded Angling Direct. Since 2003, the Company has continued to
acquire or open new stores, taking the total number up to 23 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.
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END
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