UK’s largest retailer reports record sales but CEO warns of more work ahead
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Angling Direct, the largest tackle retailer in the UK, today reported a gross profit of £16.6m against record group sales of £53.2 million for the 12 months ended January 31st, 2020. Loss before income tax benefit is £1.5m.
Gross profit and sales are up by 20% and 27% respectively on the previous year.
Online sales of £25.3m are up by 14% and international sales by 8%. Store sales of £27.9m grew by 42%, with like-for-like store growth of 12%.
EBITDA loss is £0.5m, against a full year profit of £0.3m the previous year, as a result of adverse post-Christmas trading due to exceptional flooding, wider margin pressure and a more prudent approach to legacy costs, says the company.
Operational highlights included:
• Store network increased by ten to 34 at the year-end, which included seven new stores and three acquisitions;
• Continued investment in online marketing, including the native language websites developed and launched in France and Netherlands to complement first full year of German website;
• Further operational efficiencies driven from Kardex logistics system in the distribution centre;
• Decision made in H2 to cease lower margin exports;
• Further investment made in own-brand Advanta to support margin growth.
“Our revenue growth during the financial year ended 31st January 2020 has been both organic and acquisitive through the addition of new stores and targeted acquisitions,” said CEO Andy Torrance.
“Key milestones achieved in FY20 include exceeding £50m of revenue, on-going international expansion, the development of our e-commerce platforms and significant upgrades to our systems to support our next leg of growth.
“I started as CEO in February 2020 and I am clear that despite the tremendous growth in sales in recent years, and the significant growth opportunity that remains, there are certain areas of the Group that need to be strengthened as we look to achieve our core strategic objectives.
“In addition to ensuring we have the correct infrastructure to grow our market share, driving international growth and ensuring operational efficiency, we must aim to protect and improve our profit margins and ensure that our investments generate an appropriate and sustainable return for all stakeholders.”
Commenting on the results, Martyn Page, Executive Chairman, said: “Last year was a period of rapid expansion for Angling Direct, with major investment going into the opening of ten new stores, three of which were acquisitions, as well as delivering further upgrades to our online business and our own brand products.
“The impact of COVID-19 led to the closure of our 36 stores, but our online business has seen excellent growth and we have been able to fulfil the increasing number of orders as a consequence of the prior investment made in automation within our distribution centre, as well as our online customer experience.
“We are now in the process of preparing to open our stores safely, as we work in accordance with government advice to protect our staff and customers.
“COVID-19 aside, the Board has taken progressive steps to create further operational efficiencies and address the challenges inherent in all rapidly growing businesses. We continue to focus on these steps and the opportunity to grow revenue and margins both in the UK and internationally.”
The Chairman’s Statement also explained that Angling Direct has exited the Russian market alongside a small number of other unprofitable international sectors generating poor margins, in order to focus on those locations it expects will achieve higher margins and a better return on capital.