2 Sep 2015 07:00
AIM: FISH
Fishing Republic plc
("Fishing Republic" or "the Company" or "the Group")
Maiden half year results
for the six months ended 30 June 2015
KEY POINTS
· Admission to AIM and £1.5m (gross) share placing on 4 June 2015
· H1 results in line with management expectations
· Revenue up by 2% to £1,870,000 (2014: £1,838,000)
· Profit before tax up by 38% to £149,000 (2014: £108,000)
· Earnings per share up to 0.79p (2014: 0.57p)
· Increase in stores planned
· Further investment made to increase online sales
· Good start to trading in H2
James Newman, Non-Executive Chairman, said:
"Fishing Republic's admission to AIM is a significant step forward in the Group's continuing development. The decision to seek a quotation was driven by our belief that there is an exciting opportunity to build a significant presence in what is currently a highly fragmented marketplace. Our ambitions are to grow both organically and via acquisition.
"Trading since the end of June has been good, and we continue to progress potential acquisition opportunities. Overall, the Board expects further progress in the second half of the financial year."
Steve Gross, Chief Executive, said:
"I am pleased to report Fishing Republic's first set of results since joining AIM in early June. Trading results are in line with our expectations and we are pleased to see a material improvement in gross margins, helped by better procurement and working capital utilisation.
"We intend to add further large format 'destination' stores and are also focused on growing our online sales and have added additional resources in this area since our admission to AIM. In addition, we see an opportunity to increase sales of "own brand" products over the next few years."
Enquiries
Fishing Republic plc Steve Gross, Chief Executive Robert Tippett, Finance Director
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+44 (0)1709 724 700 |
Northland Capital Partners Limited Nominated Adviser and Broker Matthew Johnson/ David Hignell (Corporate Finance) John Howes/ Abigail Wayne (Corporate Broking)
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+44 (0) 20 7382 1100 |
KTZ Communications Limited Katie Tzouliadis | +44 (0) 20 3178 6378 |
JOINT REPORT OF THE CHAIRMAN AND CHIEF EXECUTIVE
Introduction
We are delighted to present Fishing Republic's trading results for the six months ended 30 June 2015, which are the Group's first as a publicly quoted company.
The Group was still under private ownership during the majority of the period, with management focused on the IPO as well as other growth initiatives. The business made good progress during the period under review and our successful admission to AIM on 4 June 2015 has marked an important step in the Group's continuing development.
The decision to seek a quotation on AIM was driven by our belief that there is an exciting opportunity to build a significant presence in what is currently a highly fragmented marketplace. Our ambitions are to grow both organically and via acquisition. With the fishing tackle market comprising a large number of small independent retailers, we intend to act as a consolidator in the sector and believe that we are currently the only participant looking to do so, giving the Group the benefit of first-mover advantage.
We intend to add further large format 'destination' stores, with a wide range of products and staffed by people with a passion for fishing and able to provide customers with advice on our product range and on angling. We are also focused on growing our online sales and have already increased resources in this area since our admission to AIM. The Group also has a range of "own brand" products, which generate higher margins and we also see an opportunity to increase sales of these products over the next few years.
Our status as a publicly quoted company will help us achieve our growth ambitions and our move to AIM has already raised the Group's profile in the fishing tackle marketplace, enhancing our position as we negotiate with suppliers and engage with the market as a whole.
Financial Results
Results for the first six months of the financial year are in line with management expectations. Sales rose by 2% to £1,870,000 (2014: £1,838,000) and the Group generated a gross profit of £720,000 (2014: £599,000), an increase of 20%, year on year. Gross margin improved to 38.5% up from 32.6% in the same period last year. This primarily reflected improved procurement and better use of working capital.
Operating profit grew by 34% to £155,000 (2014: £116,000) and profit before tax increased by 38% to £149,000 (2014: £108,000). After a tax charge of £29,000 (2014: £29,000), the profit for the period was £120,000 (2014: £79,000). Basic earnings per share increased to 0.79 pence (2014: 0.57 pence).
There was a cash inflow of £1,500,000 (£953,000 after expenses), following a share placing completed together with the Group's admission to AIM. There was a net cash outflow from operating activities of £203,000, mainly as a result of the usual seasonal increase in stock. Cash at 30 June 2015 stood at £684,000 (31 December 2014: £52,000).
Dividend
The Board has not declared an interim dividend as, in the short term, all surplus cash resources need to be reinvested to develop the Group's businesses. This is in line with the statement made in the Admission Document at the time of flotation.
Review of Operations
Our stores performed in line with management expectations over the period and accounted for approximately 51% of total sales. We now intend to relocate our small store in Hull to new larger premises, which conform to our more typical 'destination' store format, stocking an extensive range of product, including our own brands. As previously reported, we are looking to open a store in Birmingham, which has one of the largest angling clubs in the UK, and are making progress with this objective.
Online sales accounted for the balance of Group sales. These sales are predominantly achieved via third party online retailers and key objectives are to both grow our online basket and increase the proportion of sales generated by the Group's own websites, www.fishingrepublic.net and www.yorkshiregameangling.co.uk.
Together our websites now display over 18,500 different products across all types of fishing disciplines, with our specialist site, www.yorkshiregameangling.co.uk, dedicated to supplying the needs of game and fly fishermen. We have been focusing on initiatives to enhance our websites, and sales from the sites accounted for almost 20% of online sales, up from approximately 10% in the comparative period last year.
Own-brand products represent an area of growth for the Group. They currently contribute approximately 20% of annual Group sales and we see an opportunity to grow this market, with cost effective third party manufacturing already well established in the Far East.
Shareholder Incentive Scheme
We are pleased to launch today a Shareholder Incentive Scheme, which offers shareholders' holding at least 25,000 shares the opportunity to apply for a Shareholder Privilege Card. This card provides holders with access to savings on a par with staff discounts on any purchases made in store or online. The full terms and conditions of the Privilege Card are available on the Company's website, www.fishingrepublic.net, together with details on how to apply.
Staff
On behalf of the Board, we would like to thank all our staff for their hard work and commitment. The Group's success is founded on their talent and dedication.
Outlook
The Group's business is seasonal from a profit perspective, with higher margin products, including consumables, sold in the warmer spring and summer months and lower margin capital items sold in the colder autumn and winter months. Trading since the end of June has been good, and following admission to AIM, the Board believes that the Group is now better positioned to execute its growth ambitions, and continues to progress potential acquisition opportunities.
Overall, the Board expects further progress in the second half of the financial year.
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Income Statement
for the six months ended 30 June 2015
| |||||
| Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Twelve months to 31 December 2014 Audited | ||
| £ |
| £ |
| £ |
|
|
|
|
|
|
| Revenue | 1,870,213 |
| 1,838,285 |
| 3,390,895 |
|
|
|
|
| |
| Cost of sales | (1,150,035) |
| (1,239,068) |
| (1,837,460) |
| Gross profitOther incomeSelling and distribution costs |
720,178
2,000
(389,165) |
|
599,21724,579
(349,872) |
|
1,553,4359,560(724,555) |
| Administrative expenses | (178,448) |
| (158,027) |
| (477,127) |
|
|
|
|
|
|
Operating profit | 154,565 |
| 115,897 |
| 361,313 |
|
|
|
|
|
|
Finance costs | (5,668) |
| (8,374) |
| (66,797) |
|
|
|
|
|
|
Profit on ordinary activities before taxation | 148,897 |
| 107,523 |
| 294,516 |
|
|
|
|
|
|
Income tax expense | (28,521) |
| (28,881) |
| (57,763) |
|
|
|
|
|
|
Profit after taxation |
120,376 |
|
78,642 |
|
236,753 |
|
|
|
|
|
|
Basic earnings per share (pence) Diluted earnings per share (pence) (note 2) | 0.79p
0.79p |
| 0.57p
- |
| 1.72p
- |
|
|
|
|
|
|
Statement of Comprehensive Income
for the six months ended 30 June 2015
| Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Twelve months to 31 December 2014 Audited | ||
| £ |
| £ |
| £ |
|
|
|
|
| |
| Profit for the period |
120,376 |
|
78,642 |
|
236,753 |
| Other comprehensive income |
- |
|
- |
| - |
|
|
|
|
|
|
| Total comprehensive profit for the period attributable to the equity shareholders |
120,376 |
|
78,642 |
|
236,753 |
Statement of Financial Position
at 30 June 2015
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| As at 30 June 2015 Unaudited | As at 30 June 2014 Unaudited | As at 31 December 2014 Audited | ||
| £ |
| £ |
| £ |
| Non-current assets |
|
|
|
|
|
| Intangible assets - goodwill | 12,812 |
| 14,062 |
| 13,437 |
Property, plant & equipment | 138,907 |
| 114,776 |
| 132,641 |
Deferred tax asset | - |
| 61,801 |
| 22,919 |
|
151,719 |
|
190,639 |
|
168,997 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
InventoriesTrade and other receivables | 2,130,688 312,311 |
| 2,101,853 162,873 |
| 1,908,666268,513 |
Cash and cash equivalents | 683,732 |
| 6,189 |
| 51,716 |
|
|
|
|
|
|
| 3,126,731 |
| 2,270,915 |
| 2,228,895 |
Total assets |
3,278,450 |
|
2,461,554 |
| 2,397,892 |
Non-current liabilities Interest bearing loans and borrowings |
248,000 |
|
260,065 |
|
241,254 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade payables Other payables and accruals Non-interest bearing loans from directors Interest bearing loans and borrowings
| 434,050 231,663 4,781 32,000 |
| 640,202 300,235 107,875 56,962 |
| 491,854265,264110,69434,500 |
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|
|
|
|
|
| 702,494 |
| 1,105,274 |
| 902,312 |
|
|
|
|
|
|
Total liabilities | 950,494 |
| 1,365,339 |
| 1,143,566 |
|
|
|
|
| |
| Equity |
|
|
|
|
|
| Called up share capital Share premium | 237,500 2,090,754 |
| 1,375,000 |
| 1,375,000
|
| Reserves - deficit | (298) |
| (278,785) |
| (120,674) |
|
|
|
|
| |
2,327,956 |
| 1,096,215 |
| 1,254,326 |
| Total equity and liabilities | 3,278,450 |
| 2,461,554 |
| 2,397,892 |
Statement of Changes in Equity
For the six months ended 30 June 2015
|
Share Capital |
Share Premium account |
Retained Profit |
Total |
| £ | £ | £ | £ |
At 1 January 2014 | 1,375,000 | - | (357,427) | 1,017,573 |
Profit for the period | - | - | 78,642 | 78,642 |
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|
|
At 30 June 2014 Profit for the period | 1,375,000 - | - - | (278,785) 158,111 | 1,096,215 158,111 |
At 31 December 2014 |
1,375,000 |
- |
(120,674) |
1,254,326 |
Profit for the period Capital reduction | - (1,237,500) | - 1,237,500 | 120,376 - | 120,376 - |
Share issue on IPO | 100,000 | 1,400,000 | - | 1,500,000 |
Share issue costs
| - | (546,746) | - | (546,746) |
| At 30 June 2015 |
237,500 |
2,090,754 |
(298) |
2,327,956 |
Statement of Cash Flows
for the six months ended 30 June 2015
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| Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Twelve months to 31 December 2014 Audited | |||
| £ |
| £ |
| £ | |
| Operating activity |
|
|
|
|
| |
|
|
|
|
| ||
Operating profit | 148,897 |
| 107,523 |
| 294,516 | |
Depreciation charge | 5,260 |
| 5,823 |
| 10,427 | |
Interest expense | 5,668 |
| 8,374 |
| 66,797 | |
Profit on disposal of property, plant and equipment(Increase)/decrease in inventories | - (222,022) |
| - 54,719 |
| (167)247,906 | |
(Increase)/decrease in receivables | (49,400) |
| (71,831) |
| (167,471) | |
Increase/(decrease) in payables | (91,405) |
| 25,951 |
| (157,369) | |
|
|
|
|
| ||
|
|
|
|
| ||
Net cash generated from operations | (203,002) |
| 130,559 |
| 294,639 | |
|
|
|
|
| ||
Investing activity |
|
|
|
| ||
|
|
|
|
| ||
Purchase of property, plant and equipment | (10,900) |
| (4,031) |
| (25,874) | |
Proceeds from disposal | - |
| - |
| 167 | |
|
|
|
|
| ||
|
|
|
|
| ||
Net cash used in investing activities | (10,900) |
| (4,031) |
| (25,707) | |
|
|
|
|
| ||
Financing activity |
|
|
|
| ||
|
|
|
|
| ||
Issue of share capital (net of expenses) | 953,254 |
| - |
| - | |
Loan repayments Loan advance Interest paidFunds introduced by directorsFunds withdrawn by directors |
4,246 (5,668) - (105,914) |
| (15,929) - (8,374) 37,168 (157,162) |
| (32,240) -(66,797)50,000(167,175) | |
|
|
|
|
| ||
|
|
|
|
| ||
Net cash inflow/(outflow) from financing activities |
845,918 |
|
(144,297) |
| (216,212) | |
|
|
|
|
| ||
Net increase/(decrease) in cash and cash equivalents |
632,016 |
|
(17,769) |
| 52,720 | |
|
|
|
|
| ||
Cash and cash equivalents at start of period | 51,716 |
| (1,004) |
| (1,004) | |
|
|
|
| |||
Cash and cash equivalents at end of period |
683,732 |
|
(18,773) |
| 51,716 | |
Notes to the Interim Statement
1. Basis of preparation
The interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 31 December 2015. These policies are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 31 December 2014. They are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 30 June 2015. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34.
The financial information in this statement relating to the six months ended 30 June 2015 and the six months ended 30 June 2014 has neither been audited nor reviewed by the Auditors, pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 31 December 2014 does not constitute the full statutory accounts for that period. The statutory financial statements for the year ended 31 December 2014, submitted for filing with the Registrar of Companies, did not require an Independent Auditors' Report because the company was exempt from the audit requirement under the Companies Act 2006 as a small (as defined), private company. For the purposes of the Admission Document for listing to AIM, the financial statements for the year ended 31 December 2014 prepared under IFRS were audited and the audit opinion was unqualified.
The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. These projections take account of the timing of expected cash inflows and financial commitments over that period. Based upon these projections and the availability of financial resources as required over this period, the directors have a reasonable expectation that the company will meet its future obligations as they fall due and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.
2. Earnings per share
Earnings per share has been calculated on the attributable profit for the period and the weighted average number of shares in issue during the period.
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| Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Twelve months to 31 December 2014 Audited |
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| Profit for the period (£) | £120,376 | £78,642 | £236,753 |
Weighted average shares in issue (no.) | 15,241,713 | 13,750,000 | 13,750,000 |
Weighted average share options (no.) | 180,318 | - | - |
Basic earnings per share (pence) | 0.79p | 0.57p | 1.72p |
Diluted earnings per share (pence) | 0.79p | - | - |
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The earnings attributable to ordinary shareholders is profit after tax. The weighted average number of ordinary shares in issue during each reporting period is used for the purpose of calculating basic earnings per share. Fully diluted earnings per share takes into account share options issued on 5 June 2015 as follows;
- | Unapproved share options for 411,764 shares |
- | EMI share options for 797,034 shares. |
Using the Treasury method, there is considered to be no dilution for share options in issue at the period end date.
3. Share capital
During the six months to 30 June 2015 the following changes in share capital took place:
An issue of 10,000,000 ordinary shares at 15p per share, by way of placing, for a total consideration of £1,500,000 (£953,000 net of expenses) on 4 June 2015.
1,375,000 £1 ordinary shares in Fishing Republic Trading Limited were exchanged for 13,750,000 1p ordinary shares in Fishing Republic plc on the basis of ten 1p shares in Fishing Republic plc issued for each £1 share in Fishing Republic Trading Limited.
4. Interim report
Copies of this interim report are available from Fishing Republic plc, Vulcan Works, Chesterton Road, Eastwood Trading Estate, Rotherham, South Yorkshire S65 1SU and on the Group's website at www.fishingrepublic.net.