Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I agree, their prices have become un competitive.
Be interesting to see next update, think it will be fairly painful... Gla
Being an angler and having a share portfolio I keep tabs on this stock
It’s a very competitive market out there online and AD are off the pace,generally an angler will research the item they want and then purchase the cheapest option online & there are literally 10s of other outlets beating them on price including delivery
I have a local AD and yet my independent tackle shop is beating them even at the consumable end of the market
Just bought a Daiwa trolley from BobCo for £80 delivered AD have them @ £115
They used to be my go to for fishing tackle but no more…being the market leader they’ve sat on their laurels and hiked their prices & I think that will bite them in the aris
Thanks for detail, makes sense..
Think we can say short term it's looking a bit fishy as there's obviously going to be less spend on hobbies when there's huge bills to pay..
However, if your holding for 2 years it will be a different story.
I'm adding more at 25p which I feel we will see after next update.
Hi Peaky
Reading through the report they lump 'property, plant and equipment' together on multiple occasions. Current value IRO £7m. Not once do they list property alone as an asset held, so I guess we can deduce they don't own any property - just the length of lease held. As for exactly what is categorised under that heading, well, your guess is as good as mine. It doesn't include Stock, as that's listed at just over £16m (or putting it another way 72% of the companies mcap without considering the £16.5m cash.)
Realisation moment - just added more to my bags.
https://www.anglingdirect.co.uk/corporate/uploads/reports-accounts/annual-reports/Angling_Direct_Annual_Report_2022.pdf
They've not burnt any cash since April, they've actually added. Cash has gone from £13.4m 30/04/22 to £17.1m now.
Trading just above cash does seem a bit silly.
I don’t think it’s complete madness, there is a case to be made that some of that cash is going to be burned opening and closing a warehouse in Europe for 18 months while, at the same time, demand is destroyed at home for 3/4 years.
But that’s the worst case scenario. Anything other than that and it’s good value.
Pretty sure they don't. Either way, a valuation of £2m above their cash in bank when they are running at break-even is a stunning valuation even in this market.
Well I've bought a foot hold...don't mind holding this for a long time to get a return but my any measure this is now priced for destruction in my view.
Exactly, you no the next update will be much the same or worse.
Another one to watch for next year possibly.
Does anyone know if they own any of their property??
Not exactly a big trading volume though
That's kinda the story with the retail sector, the bounce could be a long time coming, so what's the rush when the risk/reward is unbalanced
I was going to jump in this morning on the drop, but clearly no rush now.
Lol, no chance....
Looking at the valuation, the market has long priced this in. Then again, in this market .....
Wasn't expecting the profit warning at the end of today's results, almost felt it was hidden....
Just look at the figures!
- Market cap of a mere £24m but subtract latest cash fig of £17m as at end July, the business is valued at just £7m
- Even on reduced estimates for this year - c£80m of turnover and £3 -£3.4m EBITDA - the business ex- cash is valued at 2-2.3x profits...
- Value of inventory carried at cost according to AR = c£16m.....crazy
- Average transaction value c£39-£40, so not a big ticket item, less than a pair of shoes
Sooner or later this massive valuation gap will get seen, and if I were Mike Ashley I would be salivating....
Yeah, sounds about right. The difficult macro is a headwind but also an opportunity if u can see into fy24 and beyond.
It's difficult to separate the wheat from the chaff but my take is as follows:
- The general UK fishing tackle market has declined;
- ANG is holding it's own (it appears to have gained market share to maintain UK sales at c£37m YoY);
- The decline in UK online sales has been matched by an increase in UK retail sales;
- The shift from online to retail is not dissimilar to that being seen in the fashion industry;
- Increases in online sales at the expense of retail during Covid have proven to be transient;
- We are now likely to revert back to pre-Covid online vs retail trends;
- There is still demand for retail outlets despite prices generally being higher;
- Sales are not presently being overly impacted by supply problems (current problems are more demand related);
- Margins are likely to be squeezed by weak demand (more difficult to pass on rising costs);
- The heatwave and drought are likely to impact UK demand further in Q3 (at least);
- European sales are still likely to grow despite the heatwave and drought in mainland Europe (gaining share); and
- But short/medium term European sales growth is likely to be less than previously expected (smaller cake)
Clearly both the economic turmoil and climate conditions are having an impact on current demand. However, beyond the initial outlay on fishing equipment, angling is one of the cheaper pastimes. I don't think that participation and demand are going to completely fall of a cliff (as economic pressures mount I think people will increasingly want cheap distractions) but big ticket sales are going to become harder to come by. Time to just batten down the hatches and manage costs. Net cash is still reasonable and good opportunities to acquire additional strategic retail outlets might afford themselves (allowing ANG to further benefit from economies of scale).
Hi Florence, just finished looking at the update today. Looked like something like this was coming our way, and actually now it's come it's really not that bad. Just added a few more.
Paul Scott on stockopedia gets it about right as follows: "ANG is not the best business in the world, but it looks OK, and above all has bulletproof finances, and a super-cheap valuation. So I like ANG, as a value investment. I appreciate it must be very frustrating to own this share, and see it relentlessly dropping. I know the feeling very well, but I think it's important not to sell in despair, as that would probably be at or near the low. We just have to be patient, and wait for good companies to interest other investors again.
We're back down to the early pandemic low again, which seems very surprising, with the fall looking overdone to me"
Below is the post I made in June.
I am not putting this to say “told you so” merely to point out that FT market is in a decline for the rest of this year.
I am not suggesting AD have specific problems but the immediate market future is not good.
“The market is struggling to beat 2019.
The Covid boom in fishing has unfortunately dropped off and this has been exacerbated by the situation in China which has resulted in difficulties in shipments and NPD.
The f t market this year is not looking good.”
I seem to have been asleep for a year without realising, reading this RNS about 2023. Not once, but throughout. Did I miss anything? Is the war with Ukraine over? Has China invaded Taiwan? Is inflation back under control?
Hands up and to be honest, I've bought in at 29p and gone long, to cheap at these levels...
PUNgent even
I think this is too cheap now. They were in a real sweet spot of government help combined with COVID related sector tailwinds. This was always likely to give them impossible YoY comparables.
However, they are still profitable and the strength of the balance sheet makes it very unlikely that they will need to dilute shareholders anytime soon. Indeed net cash underpins about 80% of the market cap right now.
Considering these factors the risk/reward here looks good over the medium term IMO.