Fishing Republic Regulatory News (FISH)

AIM: FISH

Fishing Republic plc

("Fishing Republic" or "the Company" or "the Group")

First Day of Dealings on AIM

Fishing Republic, the fishing tackle retailer, is pleased to announce that admission and trading of its Ordinary Shares commences today on AIM, with the ticker FISH.

Fishing Republic has placed 10 million New Ordinary Shares at 15p per share to raise £1.5 million (before expenses). Northland Capital Partners Limited is acting as the Company's Nominated Adviser and Broker. Fishing Republic's market capitalisation based on the Placing Price at Admission is approximately £3.56 million.

KEY POINTS

· Fishing Republic is one of the largest retailers of fishing tackle in the UK by floor space in one of the UK's largest participation sports:

- catering for all types of anglers, coarse, carp, game and sea fishing, the Company operates online and from a chain of seven retail outlets in the North of England

- outlets are designed to be 'destination' stores with comprehensive product range and knowledgeable and enthusiastic staff

- offering includes own-brand product ranges

· The Company has a highly experienced management team with a wide knowledge of the retail and wholesale fishing tackle marketplace, and is led by its founder and CEO Steve Gross:

- Steve started his first venture in retailing aged 13 years selling fishing flies and fly tying materials to fishing tackle wholesalers and previously captained England's under-21 fly fishing team

· Management sees a substantial market opportunity to act as a consolidator in the sector, and has a clear strategy for growth:

- the fishing tackle retail sector is highly fragmented and there is a significant opportunity to build the Company's presence through acquisitions and organic growth, including building online and own-brand sales

· The net proceeds of the Placing will be used to provide funding for organic expansion, allow the Company to issue Ordinary Shares as consideration for acquisitions as part of its 'buy and build' strategy and to develop the Group's online presence.

Steve Gross, Chief Executive of Fishing Republic, commented:

"I am delighted that Fishing Republic has joined AIM and I look forward to this new phase of development for our business. We see an exciting opportunity to build Fishing Republic's presence in a highly fragmented sector and the Company's admission to AIM will assist us in realising our growth ambitions.

"A major focus is on further organic expansion, including building our online and own-brand sales. However, we also have also identified the opportunity to act as a consolidator in our sector and with our wide knowledge of both the retail and wholesale markets, Fishing Republic is ideally placed to capitalise on what we believe is our first-mover advantage.

"Fishing Republic is a business that we have built from the ground up, and we are excited about the potential opportunities as a publicly listed company."

Unless the context otherwise requires, defined terms shall have the meaning ascribed to them in the Admission Document available on the Group's website, www.fishingrepublic.net.

Enquiries:

PLACING STATISTICS

INTRODUCTION AND BUSINESS OVERVIEW

In a highly fragmented market, Fishing Republic is one of the largest retailers of fishing tackle in the UK by floor space. Established in 1985, its founder and Chief Executive, Steve Gross, previously captained England's under-21 fly fishing team and started his first venture aged 13 years selling fishing flies and fly tying materials to fishing tackle wholesalers. Catering for all types of anglers - coarse, carp, game and sea fishing - Fishing Republic operates from both physical stores and online.

It currently has a chain of seven retail outlets in the North of England, located in Barnsley, Doncaster, Manchester, Sheffield, Sunderland, Hull and Rotherham, where the Company is headquartered. They are typically situated in out-of-town light industrial sites and have a combined footprint of approximately 61,500 ft2 of retail and warehousing space. The Directors believe that the wide range of products available and knowledgeable staff make the outlets 'destination' stores, drawing customers from a wide area.

Fishing Republic generates approximately 49 per cent. of its sales online via third party online retailers and its own websites, www.fishingrepublic.net and www.yorkshiregameangling.co.uk. It is the Company's intention to build online sales, offering its products via additional third party online retailers as well as through its own websites. In addition to selling well-known third party fishing tackle brands, Fishing Republic has also developed a range of own brand products, including Klobba for clothing and Theseus for fishing tackle, with cost effective third party manufacturing established in the Far East.

As part of its organic growth strategy, the Company has identified a new site for a Fishing Republic store on the outskirts of Birmingham. Birmingham has been targeted by the Group as it has one of the largest angling clubs in the UK and is primarily served by a number of smaller fishing tackle retailers.

The Directors believe that Fishing Republic's key strengths are:

● highly experienced management team with wide knowledge of both the retail and wholesale fishing tackle marketplace, including potential acquisition opportunities;

● existing significant market presence in highly fragmented sector;

● proven model of 'destination' stores with wide product range and knowledgeable staff, combined with online sales;

● ability to source a wide range of high margin own brand products, notably clothing and luggage, from suppliers in the Far East; and

● well-established systems including supply chain and IT platform, creating efficiencies and underpinning scalable business model.

THE MARKET AND THE GROUP'S GROWTH STRATEGIES

Fishing is one of the UK's largest participation sports, attracting approximately four million participants over the two years to 2012 and generating approximately £3.5 billion per year on average in direct and indirect sales. In 2012, Defra and the Environment Agency commissioned the Angling Trust, the representative body for anglers in England, to compile a national strategy for the future of angling participation, resulting in the publication of 'Fishing for Life', which sets out a five year plan to promote fishing in the UK.

The fishing tackle retail sector is highly fragmented, predominantly comprising a large number of independent retailers including a few established small chains. According to the Tackle Trade Survey 2011, there were approximately 2,500 specialist fishing tackle retailers in the UK and the retail value of the UK angling trade in 2011 was £541 million.

The Directors believe that there is an opportunity to act as a consolidator in the sector and build a significant market presence through acquisition and organic growth. In addition, they believe that Fishing Republic is the only participant in the market looking to act as a consolidator, giving the Group the benefit of first-mover advantage.

The Group's previous experience in the wholesale of fishing tackle means that it is well placed to identify the businesses where the owner is thinking of selling or retiring. The Directors believe that small fishing tackle retailers have also suffered following the financial crisis as they have found it harder to secure bank debt to fund the high levels of stock that attract fishermen to their stores, limiting potential opportunities for growth. The Directors believe that this is another driver for consolidation in the sector.

Acquiring other businesses will allow the Group to grow its customer base quickly, both in-store and online. Alongside its acquisition strategy, the Group intends to drive organic growth and where the Directors believe there is a vibrant fishing community that is not well-served by a specialist fishing tackle retailer it will consider opening new stores. Fishing Republic also intends to build on its current own website sales growth and to further develop its own-brand product lines.

GROUP STRUCTURE AND SUMMARY FINANCIAL INFORMATION

The Company was incorporated in August 2014 to act as a holding company for the Group for the purposes of the proposed Admission and acquired the entire share capital of the Group's trading subsidiary, Lureflash International Limited, on 20 May 2015. Lureflash was incorporated in August 1991 and is the entity through which the Group has conducted its activities and trading. For the year to 31 December 2014, Lureflash generated revenues of £3.4m and profit before taxation of £0.3m. At that date it had net assets of £1.25m.

CURRENT TRADING

The Group's business is seasonal in nature from a profit perspective, with higher margin products such as consumables being sold in the warmer spring and summer months when more people go fishing and with capital items such as rods, reels, seat boxes and poles being sold in the colder autumn and winter months. Current trading is in line with Directors' expectations, with unaudited revenue to 31 March 2015 of £681,483. Sales via the Group's 'Fishing Republic' website platform, developed in 2014, continue to grow at rates above 30 per cent. year on year.  

DETAILS OF THE PLACING

Northland Capital Partners Limited, acting as agent for the Company, has placed 10,000,000 Placing Shares with institutional and other investors. The Placing has raised £1.5 million (before expenses) for the Company. The Placing Shares represent approximately 42 per cent. of the Enlarged Share Capital.

REASONS FOR FLOTATION AND USE OF PROCEEDS

The Directors believe that admission to trading on AIM will offer the Company a number of benefits, including to:

· provide funding for organic expansion, in particular the planned store opening in Birmingham;

· allow the Company to issue Ordinary Shares as consideration for acquisitions, as part of its 'buy and build' strategy;

· develop the Group's online presence;

· enhance the credentials of the Group with existing and future customers and suppliers;

provide access to equity capital; and

· raise the Group's profile.

THE BOARD

Fishing Republic's board comprises four Executive Directors and two Non-executive Directors, as set out below:

James Newman, aged 65, Independent Non-Executive Chairman

James is an experienced non-executive chairman and director of both Main Market and AIM companies. He was formerly chairman of Straight plc and Vianet plc and non-executive director of Dignity plc, Scott Wilson Group plc and Richmond Foods plc. He is currently chairman of the Sheffield City Region Local Enterprise Partnership and Finance Yorkshire. James' executive career was as a group finance director at a number of public companies including Kelda Group plc, Bridon plc and Watmoughs (Holdings) plc. He is a Fellow of the Institute of Chartered Accountants and a member of the Association of Corporate Treasurers.

Stephen (Steve) John Gross, aged 44, Chief Executive Officer

Steve is the founder of the Group and has over 30 years' experience in the fishing tackle industry. He is well known in angling circles and is a director and board member of the Angling Trade Association and the Angling Foundation, the two guiding bodies for the UK's fishing tackle trade. He is also an accomplished angler who represented England in competition and was captain of the England under-21 fly fishing team.

Robert Tippett, aged 37, Finance Director

Robert is a qualified chartered certified accountant and has had his own private practice since 2007, which has included work on mergers and acquisitions. He has been working with the Group since 2008.

Paul Hagerty, aged 31, IT Director

Paul joined the Company in 2005. He plays an important role in developing the Group's IT systems, which include stock control and management information. More recently, his focus has been developing the Group's online presence, particularly via its 'Fishing Republic' website. Before joining the Group he worked as a technical director at an independent website development company. He has a background in software programming and development.

Zoe Gross, aged 49, Operations Director

Following a 20 year corporate career with NatWest, Zoe joined the Company in 2009 and is a key part of the management team. Her role involves the operational management of the online and mail order distribution business and the human resources department.

Edward (Ed) Peter McDermott, aged 33, Independent Non-Executive Director

Ed has over 10 years' experience within financial services in the City of London and is currently a corporate finance adviser at Optiva Securities Ltd. He is a former director of AIM-quoted Noricum Gold Limited and Stellar Resources plc. Ed is a keen angler and is an owner of Farlows Lake, a coarse fishery in Buckinghamshire.