Thursday, September 22, 2016

News: Fishing Republic to invest for growth

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Rotherham-based retailer, Fishing Republic has increased revenues and profit margins, prompting the board to accelerate investment in future growth.

The placing of ten million new shares at 15p per share in June last year raised £1.5m for the Eastwood company that is already one of the largest retailers of fishing tackle in the UK by floorspace. A share placing this year raised a further £3.75m.

Floating on AIM, the directors believe that Fishing Republic is the only participant in the market looking to act as a consolidator, snapping up smaller, often family-run businesses.

For the six months ended June 30 2016, the group reported that revenue increased to £2.5m, up by 34% from the £1.87m in the same six months of 2015. Profit before tax was £157,000 and compares to a loss of £150,000 reported last year after exceptional costs of £299,000.

During the period, Fishing Republic expanded its store network, opening two new stores, in South Birmingham and Crewe, and relocated its existing Hull store to a significantly larger site. The first acquisition, Cotswold Angling in Swindon - the first presence in the South of England, was integrated into the group and after the period end the company acquired Fantackletastic, a fishing tackle store in Lincoln, taking the total number of outlets to 11.

The Company generated a gross profit of £1.25m (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. Sales from its own websites increased 153% year-on-year (from a low base) although, reflecting the shift of of focus to its own website sales, total online sales decreased by 9% year-on-year.

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Given the strong balance sheet position, the group has decided to rebase its profit forecasts for the current financial year to allow it to invest for growth in both its store network and online.

James Newman, chairman of Fishing Republic, 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."

Steve Gross, chief executive of Fishing republic (pictured), added: "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."

Fishing Republic website

Images: Fishing Republic


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