THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
9
December 2024
Angling Direct
PLC
('Angling
Direct', the 'Company' or the 'Group')
Capital Allocation
Policy
&
Commencement of Buyback
Programme
Since the end of COVID-19 and against a
backdrop of continuing uncertainty for Omni channel retailers, the
Group has focused on driving profitable growth and has firmly
established itself as a cash generative operation. This has
provided the Company with a solid platform to enable investment to
further grow earnings and the addressable market of the Group. The
level of cash generation has kept pace with the scale of the
investment and the Group continues to maintain a robust balance
sheet underpinned by strong levels of net cash which were £13.5m at
30 November 2024. The Group continues to carry no debt outside of
store and other IFRS 16 leases as part of its Omni channel
model.
Strategic Objectives
In May 2024, the Company published its
medium-term objectives and periodically updates on progress against
their delivery. One of these objectives covers the Company's
approach to the 'deployment of
surplus liquidity to further grow the business beyond the
medium-term objectives'.
The Board remains committed to investing in the
business to support innovation and drive further profitable growth.
The Company intends to increase capital investment, especially in
technology alongside further working capital deployment which
complements new retail space investment and further own brand
development.
In line with recent acquisitions completed by
the Company, management will continue to target further small
strategic acquisitions including investment in the
selective acquisitions of brands which complement the existing
business, accelerate the Company's ambitions and, the Board
believes, would be accretive to long-term shareholder value. The
Company has signed heads of terms on one such small strategic
acquisition and will continue with its appraisal of a range of
acquisition options. There can be no guarantee that any of the
acquisitions being considered will ultimately be completed nor as
to the terms of such acquisitions.
Capital Allocation
Policy
The Board aims to maintain a robust balance
sheet with a sustainable underlying net cash balance, providing the
Group with the strategic flexibility to capitalise on opportunities
to grow, whilst providing protection against headwinds for the UK
retail sector.
Consistent with this objective, the Board's
stated priorities as part of its Capital Allocation Policy will be
to:
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Retain appropriate levels of underlying cash to
support the operations of the business in light of well publicised
headwinds facing the UK retail sector;
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Maintain a sufficient working capital buffer
above the natural seasonal requirement to maximise the Group's
scale and enable it to continue to take advantage of ad-hoc stock
acquisition opportunities, in turn helping the Group to deliver
compelling customer offers and favourable trading terms;
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Ensure sufficient capacity to accelerate the
Group's planned UK store estate roll out ahead of plan should
opportunities present themselves;
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Retain sufficient funds to invest in capital
expenditure projects which deliver growth and efficiencies and / or
protect against ongoing cost headwinds, ultimately maintaining or
enhancing return on investment;
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Retain modest levels of cash to support the
Company's stated UK M&A strategy; and
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Quantify, at least annually, any excess capital
taking into account the above priorities, in particular the
strength of organic cash generation and any use of the modest
levels of cash retained for UK M&A.
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In considering its formal approach to capital
allocation, the Board has taken into account the following aspects
in particular:
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The Group is forecasting to hold reduced levels
of net cash at the end of FY25 compared to FY24;
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Its expectations of strengthening Group EBITDA
performance underpinning medium term operating cash generation;
and
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Small scale UK M&A remains a realistic
target and the Board continues to pursue these opportunities where
appropriate.
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Share Buyback
Programme
The Board has evaluated the Group's existing
net cash balance in light of its new Capital Allocation Policy,
taking into account feedback from its major shareholders. The Board
is also of the view that the current value of the Group's equity
represents an attractive opportunity for deployment of surplus
capital.
The Company is therefore commencing a share
buyback programme with a buyback of up to £4.0m
ordinary shares of 1 penny each in the Company ("Ordinary Shares"), subject to remaining
within the general authority of the Company to repurchase Ordinary
Shares granted at the Company's last Annual General Meeting
("AGM") on 20 June 2024
(the "Buyback
Programme").
The Company has instructed Singer Capital
Markets Securities Limited ("Singer Capital Markets") to conduct the
Buyback Programme on its behalf within certain pre-set parameters,
including that the maximum amount (excluding expenses) of share
value that can be traded in one week is £250,000.
If not terminated earlier, the Buyback
Programme will expire at the close of business on 10 December 2025.
The Company may terminate the Buyback Programme (at any time)
provided that it is not in a closed period or party to any inside
information which has not previously been disclosed via Regulatory
Information Service. The Buyback Programme will also terminate if
the general authority to repurchase Ordinary Shares is not renewed
at the Company's next AGM in 2025.
The Company has determined that it will not
rely on the safe harbour conditions for trading set out in Article
5 of EU Market Abuse Regulation (2014/596/EU) (which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018) ("UK MAR") given the
limited liquidity in the Ordinary Shares and limitations that it
would impose on the number of Ordinary Shares that can be
purchased.
Singer Capital Markets will make its trading
decisions in relation to the Ordinary Shares independently of the
Company. There is no guarantee that the Buyback Programme will be
implemented in full or that any purchases will be made.
Any purchases will be on market purchases of
Ordinary Shares and made in accordance with the general
authority of the Company
to repurchase Ordinary Shares granted at the Company's AGM.
Any Ordinary Shares purchased under the Buyback Programme will
be held by the Company in
treasury.
The Company is satisfied that it is not
currently in a closed period, nor is it party to any inside
information which is not disclosed in this announcement or has not
been previously disclosed via Regulatory Information
Service.
Total Voting
Rights
As at the time
of this announcement, the
Company's total issued
share capital consists of
77,267,304 Ordinary Shares, of which zero shares are held in
treasury, therefore, the total number of Ordinary Shares carrying
voting rights is 77,267,304.
The above figure of 77,267,304 may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in,
or a change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
For
further information please contact:
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Angling Direct PLC
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+44
(0) 1603 258 658
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Steven Crowe, Chief Executive
Officer
Sam Copeman, Chief Financial
Officer
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Singer Capital Markets - NOMAD and Broker
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+44
(0) 20 7496 3000
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Peter Steel
Tom Salvesen
Alex Bond
James Todd
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FTI
Consulting - Financial PR
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+44
(0) 20 3727 1000
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Alex Beagley
Matthew Young
Hannah Butler
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anglingdirect@fticonsulting.com
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This announcement contains inside
information for the purposes of Article 7 of UK MAR.
Upon the publication of this announcement via
the Regulatory Information Service,
this inside information is now considered to be in the public
domain.
About Angling
Direct
Angling Direct is the leading
omni-channel specialist fishing tackle retailer in the UK, with an
established and growing presence in Europe. Headquartered in
Norfolk UK, the Company sells fishing tackle products and related
equipment through its network of in excess of 50 UK retail stores,
as well as through its leading digital platform
(www.anglingdirect.co.uk)
and the MyAD Fishing Club app. The Company has three further native
language websites in its key European territories
(www.anglingdirect.de, .fr, .nl),
with orders fulfilled by its international distribution centre in
The Netherlands.
Angling Direct's purpose is to
inspire everyone to get out and enjoy an exceptional fishing
experience, regardless of background or ability, in the great
outdoors. Angling Direct's active digital channels and over 500
colleagues contribute to the Company's ethos of care for the wider
community and the environment (www.anglingdirect.co.uk/sustainability).
Angling Direct currently sells over 25,000 fishing tackle products
from industry leading brands alongside its own brands 'Advanta',
and entry level offering 'Discover'.