Angling Direct Share Discussion Threads

[argylerich] 18/7/2023 15:49

Doubt it's a takeover vehicle, it's structure doesn't make sense.

He must have an input though.

[she-ra] 18/7/2023 15:31

Hope its of some use.

Ted Baker founder who bought Sealskinz back in November.

Is Onward a takeover vehicle maybe?

[argylerich] 18/7/2023 15:27

Very interesting, cheers she-ra

[she-ra] 18/7/2023 14:38

Onward Opportunities 2nd largest shareholder might be of interest here. AD shareholders may want to Google his name with the word "fishing".

[darrin1471] 16/7/2023 10:58

evoque92. Thank you for the heads up on the Onward Opportunities(ONWD)investment and factsheet.
I have ONWD on a watchlist as they have an investment strategy similar to mine. So I am interested that their first core position is in ANG and only a month after I first started to buy.
It is worth noting that Laurence Hulse the lead fund manager of ONWD prior to 09/2022 had worked for Gresham House since 2015 and was almost certainly involved in building Gresham House's stake in ANG which is currently 25.95%
Gresham House and ONWD appeared to buy the 5% Octopus stake in ANG in June.
Gresham House have been a long term holder in ANG. Adding at 50p during the March 20 covid crash, adding at 70p in 09/21 and again at near recent lows.



"With Angling Direct, we believe we have found an outstanding value opportunity hiding in plain sight; an attractive asymmetric risk profile underpinned by a net cash balance (£14m), that is c.65% of the market cap (c.£22m). The company represents either a growth or value investment, depending on various strategic decisions in the coming months. The business has a dominant market position in the
UK, where it is profitable and cash generative from a repeat customer base of anglers, where market share can be grown further. These metrics are targeted to improve under new management supported by a UK consumer recovery. More
recently, the business has been attempting to enter the much larger European market to provide additional earnings growth. Success has been limited so far, with annual losses that are material in the context of overall group profits, albeit
in difficult conditions, whereas the UK business generates an EBITDA that is about double the current group number (which includes European losses) even in the recent tough trading conditions of 2022. Upside comes from when the European strategy starts to bear fruit in the near term and contribute profitable growth to the group, or from when it can be wound down to remove the losses from group profits and opportunity cost, and we would be left with a value investment in a leading UK retailer trading on less than 2x EV/EBITDA. We estimate a 6-month payback on a closure of the European strategy. Either of these outcomes would add more than 50% to EBITDA and this optionality is in the context of our entry valuation on Angling Direct of c.£20m, of which c.£14m is net cash and there is a further c.£16m of stock. ONWD shareholders, who have backed our active and engaged approach, can expect us to be working hard to drive one of these two profitable outcomes on our investment. We have noted with interest the consolidation of angling retailers in the USA and Nordic countries in recent years."

IMO opinion Gresham will have been buying at 50p with an exit strategy of above £1 and will need a takeover at some point to exit the large investment.

Does anybody here know anything about "consolidation of angling retailers in the USA and Nordic countries"

[evoque92] 14/7/2023 08:53

Interesting take on ANG in this factsheet

[argylerich] 03/7/2023 14:36

Darrin worst pollutants are actually milk and silage which have a high Biological Oxygen Demand (BOD) and can kill a river for years and can happen at any time. The storm stuff is more a combination of factors sucking the oxygen out and thus resulting in fish deaths which is often exacerabated if river levels are low. Anyway, so far this year, thigs are nowhere near as bad as last.
Great summary too. ANG is a good medium/long hold and I for one am happy if it stays off the radar short term as I want to pick up some more.

[darrin1471] 03/7/2023 13:36

ArgyleRich. Thanks, I did not know about storms and oxygen levels after dry spells.

[darrin1471] 03/7/2023 13:33

I think ANG got caught up with the other UK online retailers. The sector got a boost after the initial covid shock which then turned sour with shops re-opening and the supply chain issues. ANG in addition had Octopus selling an illiquid share and poor river conditions last summer.
Fundamentally the business and strategy looks sound so imo the share price should recover when online recovers. I bought ANG as a recovery stock but at above 60p I would still hold some as a long term play.
ANG have cash but not enough cash to gamble and lose. Expansion in Europe has to be done carefully at first to see what works.
ANG appear to of changed strategy in the UK with them opening new shops in under serviced areas rather than buying up local businesses. The trial of smaller UK shops also appears sensible.
If the European expansion works along with the smaller UK shops then the share price should recover further allowing fund raising to fund faster expansion.
Online only retail was a investment trend. Omni-channel now looks a better idea so ANG is well place if omni-channel becomes the new trend.

[fevertreeman] 03/7/2023 11:24

All the catalysts here have been negative for the share price up until Gresham's move to go large and take the Octopus stake, which did move the share price positively.

I really despair sometimes with these small-cap management teams. Surely must have dawned on this lot by now that what's needed to generate share turnover is positive newsflow. They had a golden opportunity to strike a positive note with the 22 June trading statement but gave just one line - the bare bloody minimum. They're continuing to sit on cash; there's no sign of any bolt-on deals in Europe, and no sign of any sense of urgency. So share price has nothing to cling on to.

[argylerich] 03/7/2023 08:59

Darrin, yes last summer the prolonged dry heat really did have an adverse effect. So far there has been nothing near those levels.
There have been lots of oxygen/fish death incidents, these are linked to heavy sudden storms after dry spells washing high oxygen demand pollutants into waterways. However these unfortunately are not unusual and aren't the same as the extreme drought issues we saw last summer.

[darrin1471] 03/7/2023 07:48

From memory prolonged dry and very hot weather in Q3 last year led to low river levels in many areas.
Last month may have been the warmest June on record but it was a more pleasant hot for most with temperatures in the high 20s rather than the high 30s seen last July last year.
I'm live in the Midlands where all the lawns are still green. I was in Stratford upon Avon yesterday and the river levels and flow looked normal although they do have a weir.
I did hear of low oxygen levels in Solihull killing fish this morning on the BBC

[argylerich] 02/7/2023 13:04

Different strokes for different folks, but speaking for myself and by far the majority of anglers I know, we prefer going when the weather is good, rather than a howling gale!

[catabrit] 02/7/2023 12:41

I’m no expert and we’d obviously need to speak to Anglers but I concur with Pug here. I think drought / warm weather is a headwind for Angling but I could be wrong. Fewer rivers to fish in. I’ve seen a few anglers down in Richmond, south west London on my runs along the river but when I visited Scotland during the warm weather I honestly do not recall seeing a single angler by the lochs.

[pugugly] 02/7/2023 09:46

Not sure about drought - Water rationing already with us with hosepipe bans - Also global warming and record heat.

[darrin1471] 02/7/2023 09:37

I was surprised nobody highlighted the Q1 trading in the final results in May.
"Total Q1 FY24 sales growth of 11.0%, with growth across all channels, including accelerated growth in Europe"
This was a period of poor weather and we had speculated on this thread that would lead to poor sales.
Current good weather should boost Q2 and we are unlikely to experience drought conditions in Q3 again so Q3 should be very positive.
Current share price is 35% up on 12 month lows but still 50% below pre covid price.

[fevertreeman] 30/6/2023 13:02

Presume that the decent weather in June has been a boon to AD's operations.

[fevertreeman] 13/6/2023 17:04

Well that stake has gone somewhere. Feels like the brake has been released on the share price, with the overhang cleared and hopefully in firm hands. But then again that maybe because (1) fishing season is upon us and (2) the weather is good...

[argylerich] 13/6/2023 15:39

Well there's the first, Octopus divesting.

[briggs1209] 13/6/2023 08:59

YEah, looks like 5% of company changing hands from one entity to another. An RNS will be coming our way and we can find out in a day or two.

[argylerich] 12/6/2023 19:04

10% of company traded today

[sharekitchen1974] 09/6/2023 14:35

That's helpful thanks, I will when I get round to it, just thought a friendly already knowledgeable invested poster might be able to answer my question before I waste my time.

[argylerich] 09/6/2023 07:44

If you're going to put money in, try reading the accounts:-)

[sharekitchen1974] 09/6/2023 07:08

How much debt on the books?

[argylerich] 17/5/2023 07:59

The cash they've invested into the European hub looks like a foundation stone. If you look back over the last couple of investor presentations they have discussed the strong possibility of a small (single digit £m) European acquisition to start leveraging the operation.
It will be interesting to see where their thoughts are on this next week.