Angling Direct reels in revenues up by 56%

FISHING is a top five hobby in the UK, with more than 900,000 anglers spending time at the river bank, dabbling with rods, baits and other tackle. Many of them buy their gear from Angling Direct, the largest specialist retailer in the field.

Midas recommended Angling last November, when the shares were 78p. Last week, they closed at 97½p, following upbeat half-year figures and a confident message about the future.

Revenues were up 56 per cent to £22 million in the six months to July 31, just under half of which came from Angling’s 22 stores. Another store opened over the summer and one more will open by the end of the year, all strategically placed in areas popular with fishing enthusiasts.

Shop sales are strong, supported by new store openings. Online sales are stronger still and expected to continue in that vein.

Angling already ships to more than 40 countries worldwide and in June opened its first overseas website, in Germany – offering customers the chance to order tackle in their native language and talk to German speakers if they need help.

The gear is still sent from England and so is the customer service, with fluent German speakers working from Angling’s headquarters just outside Norwich. Chief executive Darren Bailey intends to launch websites in France, Belgium and the Netherlands by the end of the year, French and Dutch speakers have already been hired to deal with queries from across the Channel and Russia is on the cards too.

Brokers expect annual sales of £41.3 million, rising to £47 million in the year to January 2020. This year’s profits are forecast at £1.1 million, rising to £1.4 million next year. The figures are relatively low, as Bailey is investing much of the company’s cash in future growth.

As such, a dividend is unlikely for the next couple of years. Further out however, the policy may well change, not least because the company’s two founders own 53 per cent of the business between them, while Bailey, who has worked there since he was 16, owns 6 per cent.

MIDAS VERDICT: Investors have done well out of Angling Direct and may be tempted to sell some stock and take profits in uncertain times. But they should not sell out completely. Bailey is ambitious, competent and experienced, the company is growing fast and angling has proved enduringly popular here and overseas.