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That makes sense. H221 EBITDA was £2.9m, a minimum of £0.6m this year seems incredibly conservative. However in mid-October they would have had good visibility of Q3 performance so if it was down then it seems prudent to assume Q4 would be the same. There seems to be quite a mismatch between mgmt saying 'at least £5m' and Singer saying £6.9m
In terms of revenue, agreed that £72.5m looks to be consensus (Singers), meaning £34.1 in H2 as compared to £35.5 in H2 21. The half year results on 13/10/21 said that, "Sales in Q3 are anticipated to decline relative to the unprecedented levels in Q3 in the prior year (post lock down 1)." I imagine that this is what sits behind the predicted drop in H2, which was in Singers 13/10/21 note. The half year results go on to say that it's "not yet clear the extent to which the Company will track sales levels during Q4 against the comparative period, which included the second lockdown (all stores closed November 2020) and the beginning of the third lockdown (all stores closed January 2021)". Singers £72.5m figure as at 13/10/21 is then repeated in their note on 20 January 2022, which seems cautious to me since Omicron is unlikely to have had a major impact I imagine, although there was the cyber incident as well which may have impacted sales for a while.
In terms of EBITDA, they said in the trading update for H1 on 18 August that they were upping their 22 EBITDA expectation from £3.8m to £4m and yet when the H1 results came out it transpired that they had already made £4.4m EBITDA in H1 and so they increased their EBITDA expectation to £5m for 22. In 21 the split was £2.1m in H1 and £1.9m in H2 and yet what the £5m is suggesting is that in 22 the split will be £4.4m and £0.6m.
So, I think I'm right in saying that in order for us to believe that they will only make £0.6m in H2 we have to believe that they more than doubled EBITDA in H1 22 as compared to 21 and yet in H2 they will only make less than a third of what they made in 21. Now, the half year results do refer to supply chain issues and increased raw material and freight costs, but they also say that they have managed this by using their cash position to build their inventory and that they have “relative depth of stock”. Government assistance being withdrawn may have some impact also I guess, but I'm not clear on the timing of this. There hasn’t been a profit warning or an upgrade though, so the £5m figure can’t be that far out.
I think what this is telling us is that 22 is likely to be better than management have said/ consensus both in terms of revenue and EBITDA, but not by vast amounts.
Any other thoughts, anyone?
Anyone have any thoughts on sales expectations for H2 and FY22?
Consensus (Singer) looks to be £72.5m. H1 was £38.4m so this implies H2 of £34.1. This compares to H221 where sales were £35.5m but in that period stores were only open for collection for 53 days. It doesn't appear that stores being closed impacted sales very much but can't explain why sales would be expected to fall compared to last year.
In each of their updates this year Singer have been updating their expectations. Management are exceptionally cautious around future guidance and the SP seems to be anticipating underperformance so I think it's possible that we could see some upside surprise. Maybe thats just hope but momentum is definitely positive regarding sales growth and direction of gross margin
Going off expectations for EBITDA of £6.9m the valuation is incredibly undemanding. Using a MCAP of £41m, less cash of £20m gives an EV/EBITDA of around 3.5x. This seems incredibly low, probably reflecting the outlook for UK retail
Good spot. Only a week to go.
Next week, 22 Feb
https://www.anglingdirect.co.uk/corporate/investors/financial-calendar/
I expect Europe to make a contribution in 2024, probably a bit far out for the average investor, but between now and then they should see sales continue to grow as they build market share through an enhanced digital offering, improved in store experience and stock availability. Supply chain wise they are probably being impacted like everyone else but probably not as badly as their smaller competitors. The stock is probably being thrown out with the rest of the sector but I think fishing will prove to be more resilient than fast fashion and consumer electronics
I suspect quite a few of us sold out on the last rise and have since bought back in. Agree with what you guys say above. There have been quite a few retail casualties recently as well as some successes. Which is Ang? My guess is it's a winner, and I hope it is, especially coming off this valuation point and with blackrock out.
Rag,
ANG missed out on the share price rise in early Jan when other shares which had fallen away leapt up (HRN, RBGP, SRC, SDG etc).
Blackrock's offloading during this time prevented the SP from climbing despite PIs buying in. I think the Euro expansion is a little bit away.
The xxxxhub affair had minimal to negligible damage IMO. This year will not be as fantastic as last year (since last year was a bumper yr due to Covid) but nonetheless, H1 was superb and they literally have to sit on their but ts to meet expectations. So I am expecting to be ahead of expectations with a cautious outlook.
Supply constraints wise - I don't reckon they have had any issues given they have taken proactice steps to minimise disruptions.
Overall, I'm very pro.
Let's hope we are all squids in!
Not throwing this one back ScoobyDoo. I had sold out some time ago but bought back in after the cyber security incident threw up an opportunity. The company has a tonne of cash and a very attractive valuation. They are tightly managing costs and are confident enough in the business, particularly the digital element, that they don't need to do any acquisitions to continue to grow sales. The upside of the European expansion plan is significant, though these things go wrong as often as they succeed. That margin improvement and CAGR sales growth is admirable as well. I can't believe this is in the 50s.
But for potential investors, don't take my word for it, worth having a listen to them yourself if you haven't already
https://www.youtube.com/watch?v=lJt3AIXb0Jc
Has been quiet here!
Anyway - last year 24/2/21 - Full Year Trading Update and Notice of Results
Should expect a similar time frame.
Plaice your bets now
...I have the following concern In the long run: the main thesis here is that since AD is a “niche” retailer, targeting hobbyists in a resilient market, with no competitors up to the challenge but only unsophisticated mom&pop shops, it should have a reasonable chance to succeed and capture market share both through m&a and organic growth. It sound logical and I like the story. But when I look to the facts I see that another company embarked in the same journey before: Fishing Republic. And we all know how it ended... So I really cannot reconcile the story the company is telling with the evidence by Fishing Republic that maybe the journey is not so easy... Does anyone know some detail about the reasons that pushed Fishing Republic into administration? Was it just mismanaged? An issue specific to FR? Why that happened and what’s different with AD that makes you believe they can manage when others have failed? I really like the story and I like even more what seems to me an absurdly cheap valuation. And with lots of cash on hand they must be pretty safe at least for some time... But still, when I found out FR going went into administration I was concerned and I would like to find out more about it... Anyone can help? Thanks in advance.
You were right. BlackRock down from nearly 11% to less than 5%
Something fishy going on
Some v big trades going through today; I’ve added. Hopefully some sellers out, or nearly out now. gLA
I bought back in today, like it might be bouncing off the bottom now. Hello santa!
Looking at the SEO data, the domain has recovered well. Not 100% back to the levels pre-hack but plenty of time to get back there before peak season. And like Investhome said, they are back #1 for the key search terms.
Plus with everyone avoiding pubs and going out, there might be more people fishing again over the holidays!
That risk appears to have gone away thankfully
Restored to number one on "fishing shop" search and back top on "angling direct" itself
Good sign
Fingers crossed
If the shoppers were rational, they should now actually use or switch to AD from smaller providers who will in theory be more susceptible to future breaches
If you look at Bobco's accounts for example you find a tiny business compared to AD's c£35m online business
Yeah, it's about balancing those downsides against the other points such as the extra publicity/ banter that's on social media right now; how long term is this likely to still be an issue etc. They have insurance in place and this quarter is typically a quiet period anyway, would have been more disruptive if during Spring or Summer. I wouldn't say it's obvious either way tbh and we'll no doubt find out soon enough.
Based on Semrush data AnglingDirect were getting on average 840K estimated visits a month organically based on their rankings. Latest update shows this has now dropped 550K and could still be falling lower as google updates.
If you want to see the impact for yourself just google "Angling Direct", they don't rank 1st for that anymore! They are now down in fourth - people will have to scroll down past the BBC article saying "The UK's biggest fishing shop has been hacked, with its website redirecting keen anglers to an adult website."
Another example, they were number 1 for "fishing shop" on google. Nowhere to be seen now. Now imagine that across all the key phrases for the stuff they sell and that's a lot of people clicking off to their competitors instead. For the board to say "this incident will not have a detrimental impact on underlying trading" is very naive imo.
Maybe. But a lot (maybe almost all) of ANG traffic is through word of mouth, personal connections, in shop experience etc. Maybe people will make a joke of this and just move on. And where else are the customers going to go? Seems unlikely to me that they will switch from ANG to an independent local angling store just because of this. I've added this afternoon - though I do recognise that this is with the risk that the damage turns out to be bigger than I expect.
Looks like they've reclaimed the site and their twitter now, but at what cost.
I won't be jumping back in until I can see they don't suffer a big SEO hit. Google isn't going to like a site redirecting to a dodgy site. Nor are any sites that were linking to angling direct pages, as it'd affect their site's SEO too. So they may have lost a lot of decent rankings (bringing organic traffic) and incoming links in the last few days.
Could be wrong but looks like eith a redirect on the site or someone has control over their external DNS.
Somebody dangling their worm?
Another 24 hours done and the site and socials still aren't back
I was going to buy some hooks to get ready for a father and son fishing trip. Good job my son wasnt watching as i visited the website.
And now I see an hour ago the BBC posted an article on the story "Fishing gear seller caught in hacker's net". Not good PR!