TIDMFISH
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 GBP2,500,000 (2015:
GBP1,870,000)
-- Profit before tax of GBP157,000 (2015: loss of GBP150,000
after exceptional costs GBP299,000)
-- 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 GBP3.75m (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 T: 01709 722590
Steve Gross, Chief Executive
KTZ Communications Limited T: 020 3178 6378
Katie Tzouliadis / Viktoria
Langley / Emma Pearson
Northland Capital Partners T: 0203 861 6625
Limited
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 GBP3.75m (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 GBP2,503,175 (2015: GBP1,870,213), reflecting both the
contribution from new stores and investment in existing stores. The
Company generated a gross profit of GBP1,254,730 (2015:
GBP814,867), 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
GBP165,731 (2015: GBP156,008) and the Company generated a profit
before tax of GBP157,348 (2015: loss of GBP150,143 after
exceptional costs of GBP299,000). Basic earnings per share was 0.47
pence (2015: loss of 1.17 pence).
Capital expenditure in the period amounted to GBP280,000, with
investment being mainly allocated to software development to
improve operational efficiency and to store fittings.
There was a cash inflow of GBP3.6m, net of expenses, following
the share placing in June 2016, and at 30 June 2016, the Company
held cash balances of GBP3,907,419 (30 June 2015: GBP683,732). In
August 2016, the Company repaid its only bank loan, amounting to
GBP255,000, 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 Steve Gross
Chairman Chief Executive
Income Statement
for the six months ended 30 June 2016
Six months Six months Twelve
to 30 to 30 months
June June 2015 to 31
2016 Unaudited December
Unaudited 2015
Audited
GBP GBP GBP
------------------------------- ------------ --- ------------ --- ---------------
Revenue 2,503,175 1,870,213 4,124,257
Cost of sales (1,248,445) (1,055,346) (2,243,036)
------------------------------- ------------ --- ------------ --- ---------------
1,254,730 814,867 1,881,221
Gross profit 3,013
(604,714) 2,000 2,057
Other income (495,277)
(1,050,066)
Selling and distribution
costs
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 0.47 (1.17) (0.16)
(pence)
Diluted earnings per 0.46 (1.17) (0.16)
share (pence)
------------------------------- ------------ --- ------------ --- ---------------
Statement of Comprehensive Income
for the six months ended 30 June 2016
Six months Six months Twelve
to to months
30 June 30 June to
2016 2015 31 December
Unaudited Unaudited 2015
Audited
GBP GBP GBP
------------------------- ----------- ----------- -------------
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 As at As at
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------- ----------- --- ----------- --- -------------
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 3,293,632 2,130,688 2,446,905
Trade and other receivables 183,536 312,311 277,066
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 722,633 434,050 244,274
Other payables and accruals 206,959 231,663 118,196
Non-interest bearing
loans from directors 76,425 4,781 77,638
Interest bearing loans
and borrowings 24,000 32,000 24,000
------------------------------- ----------- --- ----------- --- -------------
1,030,017 702,494 464,108
------------------------------- ----------- --- ----------- --- -------------
Total liabilities 1,261,994 950,494 707,785
------------------------------- ----------- --- ----------- --- -------------
Equity
Called up share capital 378,268 237,500 268,750
Share premium 5,052,933 1,152,294 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 Share Retained Total
Capital Premium Profit
account
GBP GBP GBP GBP
------------------- ------------ ---------------- ----------- -----------
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 Six months Twelve
to 30 to 30 months
June June to 31
2016 2015 December
Unaudited Unaudited 2015
Audited
GBP GBP GBP
-------------------------------- ----------- --- ----------- --- -----------
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 (11,700) - (8,077)
Loan advance - 4,246 -
Interest paid (8,383) (7,111) (16,039)
Funds introduced by
directors - - -
Funds withdrawn by directors (1,213) (105,914) (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 Six months Twelve
to 30 to 30 months
June June to 31 December
2016 2015 2015
Unaudited Unaudited Audited
Profit for the period GBP125,878 (GBP178,664) (GBP31,458)
(GBP)
Profit before IPO costs
charged to income statement
(GBP) GBP125,878 GBP120,376 267,582
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 0.47 0.79 1.36
share (pence)
Diluted earnings per 0.46 0.79 1.36
share (pence)
------------------------------ ----------- ------------- ----------------
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 GBP3,750,000 (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
END
IR MMGZLGMNGVZZ
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