Nothing tasty in the Budget? Relax ... and fish for a profit
BUDGETS come and go, but fishing remains a constant refuge for enthusiasts up and down the country. There are 900,000 licensed anglers in the UK, while many more unofficial dabblers also enjoy the odd day on the water.
All told, angling is a top five pastime in Britain and Angling Direct is ideally placed to benefit. The largest specialist fishing tackle retailer in the UK, Angling floated in the summer at 64p. The shares are 78p today and are likely to increase as the company expands.
Angling’s founders, Martyn Page and William Hill, started out in 1986, acquiring fishing tackle shops in Norfolk. Keen anglers both, they expanded over the years and in May 2000 launched the website Angling Direct.
Today, the group has 20 stores and a flourishing online business. Page remains at the helm as chairman, supported by chief executive Darren Bailey, who was just 16 when he began working weekends in a Norfolk store. That was in 1986 and he has been there ever since.
Page and Bailey have big ambitions for Angling Direct. The fishing tackle business is dominated by thousands of small, one-man stores, many of which are redolent of another era. Some anglers enjoy the old-fashioned feel of these places but, for many of their owners, business is tough, not least because online competitors are driving down prices.
Angling Direct is a pioneer in the online fishing tackle world. It has had years to work out how best to make money from the web.
Today, half its revenues are generated online and there is even a Youtube channel, ADTV, to enthuse viewers about the joys of angling.
The group also uses data gleaned from the web and online customers to find out what kinds of fishing anglers are into at any given time, what products they are most keen to buy and where fishing is most popular.
This, in turn, allows Page and Bailey to assess where best to open new stores or acquire existing shops. Earlier this month, for example, they made two significant acquisitions in North-West England. Last month they opened a new store in Slough and announced the opening of another in Stoke-on-Trent.
The company is not just at the forefront of the online fishing tackle sector, it is also determined to bring stores into the 21st Century, so they are bright, wellstocked and staffed by knowledgeable anglers. Brokers expect maiden annual revenues of £27.3million for the year to January 31, 2018, a 30 per cent increase year on year. Profits are forecast to rise by 42 per cent to £1million, moving to £1.6million in 2019.
On the revenue front, Page and Bailey are targeting £50million turnover within the next few years. Further out however, they are hoping to take sales to more than £100 million by opening new stores, making selected acquisitions and driving more customers to the web.
Next year too, there are plans to increase overseas sales. Customers from Germany, France and the Benelux countries are already using Angling Direct, benefiting from sterling weakness, and multilingual websites should be up and running over the coming months. Midas verdict: Angling is a popular hobby but it is big business too. Average annual expenditure is around £750 per head and Angling Direct expects to sell a substantial amount of tackle this weekend, through Black Friday and preChristmas deals. The company is well run and the management is ambitious.
At 78p, the shares are a good long-term buy.