Proactive Investors - Angling Direct PLC (LON:ANG) shares rose on Wednesday as the company predicted full-year profits in line with market consensus forecasts as it revealed 2.2% revenue growth despite consumer headwinds caused by cost-of-living pressures.
In the year ended 31 January 2023, the fishing tackle specialist saw revenue grow to £74.1mln from £72.5mln in the prior year, with a robust 6.8% increase in retail store sales offsetting a 3% fall in online sales, it said in a full-year trading statement.
It increased its number of stores to 45 from 42 during the year. Like-for-like store sales were flat at £38mln, impacted by the unusually hot weather in the UK and Europe in August last year.
UK online sales, which represent 90% of total online sales, fell by 4.8% during the year, driven by tough comparatives in the first six months, although they returned to growth in the second half.
UK online sales were still 57.9% above pre-Covid levels, Angling Direct noted.
Following the opening of its European distribution centre in March last year, the company's European revenue returned to growth with sales rising 18.4%, including 32.3% growth in the key markets of Germany, France and the Netherlands.
The annual results included the first 11 months of in-region EU sales fulfilment. This “significant strategic initiative” generated larger losses than anticipated in its first year, due to consumer spending pressures during the launch phase, Angling Direct noted.
However, the costs of the European expansion were absorbed within the “resilient trading performance” of the company’s UK operations, and Angling Direct, therefore, expects to report underlying profit (EBITDA) of no less than £2.2mln for full-year 2023, in line with market expectations.
In the statement, Andy Torrance, CEO of Angling Direct, commented: "We are pleased with the progress achieved in FY23 despite the difficult macro-economic environment. Following the opening of our European Distribution centre in March, it was particularly pleasing to see such strong sales growth in Europe, which is further evidence of the opportunity that lies ahead for the group.
“Ahead of the start of the 2023 fishing season, the board re-affirms its view that the company is well-placed to capitalise on the opportunities ahead and gain market share both within the UK and Europe whilst remaining vigilant as to continuing challenges for consumers in the macro-environment."
The company had net cash of £14.1mln as of 31 January 2023, compared with £16.6mln a year earlier.
It said it has settled residual claims with its insurers in relation to the disruption caused by the cyber-attack in November 2021.
In early trade in London, Angling Direct shares were up 5.1% at 31.00p.