Information  X 
Enter a valid email address

Fishing Republic PLC (FISH)

  Print      Mail a friend

Thursday 27 September, 2018

Fishing Republic PLC

Interim Results

RNS Number : 0741C
Fishing Republic PLC
27 September 2018
 

27 September 2018

AIM: FISH

 

 

FISHING REPUBLIC PLC

("Fishing Republic" or "the Group")

 

Interim Results

For the six months ended 30 June 2018

 

KEY POINTS

Summary

Company is in a year of transition and results reflect the challenging period, including the very difficult trading backdrop

New CEO, Daniel Quinn, appointed, with effect from 17 October 2018 - see separate announcement issued today

 

-

highly experienced retailer - joins from GO Outdoors; previously held senior commercial roles at Tesco PLC

 

Financial

Revenues of £3.4m (H1 2017: £4.1m), partly reflected store closures

Loss before exceptional items, interest and taxation, depreciation and amortisation of £1.4m (H1 2017: £0.0m)

Exceptional costs of £0.9m incurred, mainly as a result of reorganisation, store closure costs and a write down of stock values

Operating loss after exceptional items of £2.5m (H1 2017: loss £0.1m)

Reported loss for the period was £2.5m (H1 2017: loss of £0.1m)

Basic loss per share of 5.05p (H1 2017: loss of 0.25p)

Equity placing raised £1.3m (gross) in January and a £0.5m loan was secured in June from existing shareholders

 

Operational

 

Following a comprehensive review of operations, restructuring of the business is ongoing

Senior management team strengthened

Store network and product ranges rationalised

Principal website upgraded and relaunched in May

New distribution centre was opened and became operational in April

 

James Newman, Chairman, said:

 

"Fishing Republic is in a year of transition. Following a comprehensive review of the Group's operations, we have taken firm action in the first six months of the financial year to stabilise the business and to implement changes to improve its performance.

 

"The restructuring of the business was undertaken against very difficult trading conditions - so it has been a particularly challenging period. While the sales environment continues to be tough, with strong competitive pressures, our major shareholders have supported our plans, and we remain confident of the prospects for the business as we navigate through the current challenges. 

 

"We are pleased to welcome Dan Quinn as Chief Executive Officer. He shares the Board's vision that there is a significant opportunity for the Group to build its presence as a multi-channel retailer of fishing tackle and equipment."

 

 

Enquiries:

 

Fishing Republic plc

James Newman, Executive Chairman

 

T: 020 3178 6378 (today)

 

 

 

 

KTZ Communications Limited

 

T: 020 3178 6378

Katie Tzouliadis, Emma Pearson

 

 

 

 

 

Northland Capital Partners Limited

 

T: 020 3861 6625

Nominated Adviser and Broker

 

 

Matthew Johnson, Jamie Spotswood, David Hignell (Corporate Finance)

Rob Rees (Corporate Broking)

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

Introduction

 

The Company is in a year of transition, as we have previously reported. Following changes to the Board in November 2017, and a comprehensive review of the Group's operations, we have taken firm action in the first six months of the financial year to stabilise the business and to implement changes to improve its performance. These changes have included significant organisational and operational initiatives, including key senior management appointments, the closure of underperforming stores and overhead cost reductions.

 

The restructuring of the business was undertaken against very difficult trading conditions and so it has been a particularly challenging period for the Group. Nevertheless, we have remained focused on re-establishing a sound base for the Group's future development. Our major shareholders have supported our plans and we remain confident of the prospects for the business as we navigate through the current challenges.

 

I am particularly pleased to report that our recruitment process for a new Chief Executive Officer has concluded very successfully and that Daniel Quinn will be joining the Board in that role, with effect from 17 October 2018. Daniel has over 26 years' experience in the retail sector, including in senior commercial roles at Tesco PLC, and, latterly, at GO Outdoors, one of the UK's largest retailers of outdoor clothing and equipment, where he was Commercial Director.

 

Financial Results

 

The Group's revenues in the first six months to 30 June 2018 were lower than the same period last year at £3.4m (H1 2017: £4.1m). Overall store sales reduced by £0.5m to £2.7m (H1 2017: £3.2m), with like-for-like store sales decreasing by 22% (H1 2017: up 21%). Online sales over the six months decreased by £0.2m to £0.7m (H1 2017: £0.9m).

 

As anticipated, gross margin in the first quarter was well below last year's level, reflecting our actions to clear old product lines and surplus stock, but there was also downward pressure as a result of the competitive environment, which meant that, while second quarter margins improved, overall gross margin was 27% (H1 2017: 35.3%).   

 

The significant scaling of the Group's operations in 2017, including adding additional resources, meant that selling, distribution and administration expenses were higher year-on-year at £2.5m (H1 2017: £1.6m). However, our restructuring programme has included measures to redress these costs, which should benefit the second half.

 

LBITDA (loss before exceptional items, interest and taxation, depreciation and amortisation) for the half year was £1.4m (H1 2017: £0.0m). 

 

Exceptional costs incurred in the period totalled £0.9m and are mainly accounted for by reorganisation and store closure costs of £0.5m, and an additional write-down of stock values totalling £0.4m.

 

Reflecting the reduction in gross profit and the higher cost base, the Group incurred an operating loss, after exceptional items, of £2.5m (H1 2017: loss of £0.1m). The reported loss for the period was £2.5m (H1 2017: loss of £0.1m), and basic loss per share was 5.05p (H1 2017: loss of 0.25p).

 

Inventories at the half year end, which typically represents the high point in the fishing season, stood at approximately £2.7m at 30 June 2018 (30 June 2017: £5.3m and £3.3m at 31 December 2017). Cash in the bank at 30 June 2018 was £0.5m (30 June 2017: £0.7m).

 

Placing of Shares

 

At the end of January 2018, the Company raised £1.3m (gross) through a placing of 13,000,000 new ordinary shares at a price of 10p per share. The placing was supported by existing shareholders, including Directors, as well as by a number of new shareholders. The Company also issued 1,350,000 ordinary shares at 10p per share as part-payment for consultancy services in respect of the review of the business and operations.

 

Loan

 

On 29 June 2018, the Company agreed a secured loan of £0.5m from existing shareholders. The loan bears an interest rate charge of nine per cent. per annum and is repayable after one year.

 

Review of Operations

 

The trading environment remained tough over the period, affecting both store and online sales, with competitive pressures exacerbated by the exceptionally hot weather, which typically drives a reduction in angling activity.   

 

Stores

 

As previously reported, after undertaking a thorough examination of the performance of our 19 stores, we took decisive action to reconfigure the Group's network in order to generate more acceptable returns.

 

As a result, in early January 2018, we closed our store in Clavering, Essex and, subsequently, in April and May, closed four further stores, in Ipswich, Mildenhall, Swindon and Huntingdon.

 

We also implemented a number of initiatives to address store performance, improving branding and layout, and have introduced new store management incentives. Some of the benefits of these changes were shown in an improvement in like-for-like sales in the latter part of the period, and further initiatives to stimulate sales are being implemented.

 

Online

 

A major focus in the period was the relaunch of the Group's core website and the rationalisation of our specialist websites, in line with our decision to refocus the Group's product range. 

 

We launched the Group's new upgraded website in mid-May, and this has significantly enhanced our online presence, which should help to drive future growth. We are also continuing to move away from third party online sales.     

 

In August, we appointed a new Head of E-commerce, who is working on further initiatives to maximise the potential of this important sales channel. 

 

Logistics and Customer Service

 

We opened a new distribution centre in mid-March 2018, which became fully operational from the beginning of April, receiving and making all deliveries from suppliers and onwards to the stores. This has improved our costs and operational efficiencies and will help to support our high customer service ratings.   

 

Merchandising and Inventory

 

We have instigated a new policy of centrally-controlled buying and also rationalised the Group's product range. As a result, we have refined our offering, including refocusing on premium brands. This has resulted in a further write down of inventory in the period.

 

These changes, together with the new distribution centre, place the Group in a stronger position as we look towards the buying season for 2019, which commences in the autumn.

 

Staff

 

I would like to thank all our staff for their hard work and commitment during a challenging period. We have many talented and knowledgeable people within the Group and their collective skills and energy will help to move the business forward as we make progress with our turnaround initiatives. 

 

Board Appointments

 

We are delighted to welcome Dan Quinn to the Board as Chief Executive Officer with effect from 17 October 2018. For the last six years, Dan has been the Commercial Director of GO Outdoors, which became part of the JD Sports Group plc in 2016. Prior to this, he worked for Tesco PLC for over 20 years where he held a number of senior commercial positions, both in the UK and overseas in Asia and Central Europe. We look forward to working with him to realise the opportunities that exist for the business. Following Dan's appointment, I will resume my role as Chairman in a non-executive capacity. 

 

As previously announced, in early March 2018, we were very pleased to appoint Stephen Kyriacou to the Board as Chief Operating Officer.

 

Outlook

 

We have made significant structural and organisational changes to the Group over the course of the last 10 months, which puts the business in a better position to resume its growth path.

 

Sales have continued to be affected by strong competitive pressures, especially online, although we have seen a small improvement in like-for-like store sales in the third quarter. Further cost savings have been made to help mitigate the shortfall in sales.

 

We welcome Dan Quinn as Chief Executive Officer. He shares the Board's vision that there is a significant opportunity for the Group to build its presence as a multi-channel retailer of fishing tackle and equipment.

 

We would like to thank our shareholders for their continuing support as we continue to implement our turnaround plans.

 

 

James H Newman, OBE

Executive Chairman                                                                                                             

 

 

Income Statement

for the six months ended 30 June 2018

 

 

 

 

 

 

 

 

Six months

to 30 June

2018

Unaudited

 

Six months

to 30 June 2017

Unaudited

 

Twelve months

 to 31 December 2017

Audited

 

£

 

£

 

£

 

 

 

 

 

 

Revenue

3,354,554

 

4,094,653

 

9,153,169

 

 

 

 

 

 

Cost of sales

(2,450,137)

 

 (2,632,451)

 

(6,170,127)

Gross profit before exceptional charges

904,417

 

1,462,202

 

2,983,042

Exceptional provision for inventory write-down

(441,534)

 

-

 

(568,079)

Gross profit after exceptional charges

462,883

 

1,462,202

 

Other income

8,718

 

11,006

 


Selling and distribution costs
 

(1,471,845)

 

(814,088)

 


(2,183,123)

Administrative expenses

(1,033,667)

 

(766,849)

 

(1,778,298)

 

Operating loss before exceptional costs

 

(2,033,911)

 

 

(107,729)

 

 

(1,527,828)

Exceptional costs

(467,802)

 

-

 

(707,464)

 

 

 

 

 

 

Operating loss after exceptional costs

(2,501,713)

 

(107,729)

 

(2,235,292)

Finance costs

(9,229)

 

(9,815)

 

(20,924)

 

 

 

 

 

 

Loss on ordinary activities before taxation

(2,510,942)

 

(117,544)

 

(2,256,216)

 

 

 

 

 

 

Taxation

-

 

23,509

 

41,389

 

Loss after taxation

 

(2,510,942)

 

 

(94,035)

 

 

(2,214,827)

 

 

 

 

 

 

Basic (loss)/earnings per share (pence)

(5.05)

 

(0.25)

 

(5.85)

 

 

 

 

 

 

 

 

 

Statement of Comprehensive Income

for the six months ended 30 June 2018

 

 

 

 

 

Six months to

30 June

2018

Unaudited

 

Six months to

30 June

2017

Unaudited

 

Twelve months to

31 December

2017

Audited

 

£

 

£

 

£

 
Loss for the period

 

(2,510,942)

 

 

(94,035)

 

 

(2,214,827)

 

Other comprehensive income

 

-

 

 

-

 


-

Total comprehensive loss for the period attributable to the equity shareholders

 

(2,510,942)

 

 

(94,035)

 

 

(2,214,827)

 

 

 

Company Registration Number 09196822

Statement of Financial Position

at 30 June 2018

 

 

 

 

 

 

 

 

As at

30 June

2018

Unaudited

 

As at

30 June

2017

Unaudited

 

As at

31 December

2017

Audited

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

Intangible assets

507,483

 

613,880

 

556,246

Property, plant & equipment

1,409,445

 

1,412,847

 

1,589,109

 

 

 

 

 

 

 

1,916,928

 

2,026,727

 

2,145,355

Current assets

 

 

 

 

 

Inventories
Trade and other receivables

2,679,554

282,809

 

5,286,718

453,261

 

3,306,197
218,000

Cash and cash equivalents

516,637

 

681,409

 

360,170

 

 

 

 

 

 

 

3,479,000

 

6,421,388

 

3,884,367

 

Total Assets

 

5,395,928

 

 

8,448,115

 


6,029,722

 

Non-current liabilities

Interest bearing loans and borrowings

 

 

 

                 -

 

 

 

                 -

 

 

 

                 -

Current liabilities

 

 

 

 

 

Trade and other payables

Deferred Tax Liability

Interest bearing loans and borrowings

1,391,082

-

500,000

 

1,681,930

17,880

-

 

1,402,209
-

-

 

 

 

 

 

 

 

1,891,082

 

1,699,810

 

1,402,209

 

 

 

 

 

 

Total Liabilities

1,891,082

 

1,699,810

 

1,402,209

 

 

 

 

 

 

Equity

 

 

 

 

 

Called up share capital

Share premium

522,062

6,302,414

 

378,562

5,057,639

 

378,562

5,057,639

Reserves

(3,319,630)

 

1,312,104

 

(808,688)

 

 

 

 

 

 

Total Equity

3,504,846

 

6,748,305

 

4,627,513

 
Total Equity and Liabilities

 

5,395,928

 

 

8,448,115

 

 

6,029,722

 

 

Statement of Changes in Equity

For the six months ended 30 June 2018

 

 

Share Capital

Share Premium account

Retained Profit

Total

 

£

£

£

£

 

At 1 January 2017

 

378,268

 

5,052,933

 

1,406,139

 

6,837,340

Loss for the period

-

-

(94,035)

125,878

Share issue

294

4,706

-

5,000

Share issue costs

-

-

-

-

 

At 30 June 2017

 

378,562

 

5,057,639

 

1,312,104

 

6,748,305

Profit for the period

-

-

(2,120,792)

(2,120,792)

At 31 December 2017

378,562

5,057,639

(808,688)

4,627,513

Loss for the period

-

-

(2,510,942)

(2,510,942)

Share issue

Share issue costs

143,500

-

1,291,500

(46,725)

-

-

1,435,000

(46,725)

 
At 30 June 2018

 

522,062

 

6,302,414

 

(3,319,630)

 

3,504,846

 

 

 

Statement of Cash Flows

for the six months ended 30 June 2018

 

 

 

 

 

 

Six months

to 30 June

2018

Unaudited

 

Six months

to 30 June

2017

Unaudited

Twelve months to 31 December

2017

Audited

 

£

 

£

£

Operating activity

 

 

 

 

 

 

 

 

 

(Loss)/profit before tax

(2,510,942)

 

(117,544)

(2,256,216)

Depreciation and Amortisation

166,124

 

97,214

252,576

Impairment of tangible assets

7,179

 

-

-

Impairment of intangible assets

40,707

 

-

162,462

Interest expense

9,229

 

9,815

20,924

Loss on disposal of tangible assets

130,511

 

-

49,835

Loss on disposal of intangible assets

-

 

-

33,065

(Increase)/decrease in inventories

626,643

 

(1,030,088)

950,433

(Increase)/decrease in receivables

(64,809)

 

(247,583)

(12,322)

Increase/(decrease) in payables

(11,127)

 

801,874

522,154

 

 

 

 

 

Net cash generated from operating activity

(1,606,485)

 

(486,312)

(277,089)

 

 

 

 

 

Investing activity

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

(63,574)

 

(713,941)

(1,032,250)

Acquisition of intangible assets

(52,520)

 

(169,222)

(370,266)

 

Net cash used from investing activity

 

(116,094)

 

 

(883,163)

 

(1,402,516)

 

 

 

 

 

Financing activity

 

 

 

 

 

 

 

 

 

Issue of share capital (net of expenses)

1,388,275

 

5,000

5,000

Loan introduced

500,000

 

-

-

Loan repayments

-

 

-

-

Interest paid

 (9,229)

 

 (9,815)

(20,924)

Net cash inflow/(outflow) from financing activity

 

1,879,046

 

 

(4,815)

 

(15,924)

 

 

 

 

 

Net increase/(decrease) in cash and cash

equivalents

 

156,467

 

 

(1,374,290)

 

(1,695,529)

 

 

 

 

 

Cash and cash equivalents at start of period

360,170

 

2,055,699

2,055,699

 

Cash and cash equivalents at end of period

 

516,637

 

 

681,409

 

360,170

 

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 Company's full financial statements for the year ending 31 December 2018. 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 2017. 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 2018. 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 2018 and the six months ended 30 June 2017 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 2017 does not constitute the full statutory accounts for that period.  Full audited financial statements for the year ended 31 December 2017 are available on the company's website.

 

The Directors prepare annual budgets and cash flow projections that extend beyond 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.         Exceptional Costs

 

 

 

 

 

 

Six months

to 30 June

2018

Unaudited

Six months

to 30 June

2017

Unaudited

Twelve months

to 31 December

2017

Audited

 

£

£

£

Charge to cost of sales

 

 

 

 

 

Provision for inventory write down

441,534

-

568,079

Charged to operating loss as overheads

 

 

 

Re-organisation costs

185,135

-

393,922

Aborted acquisition costs

-

-

86,472

Store closure costs

241,953

-

64,608

Goodwill & intangible assets written off

40,714

-

162,462

 

Total exceptional costs

 

909,336

 

-

 

1,275,543

 

 

3.         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.

 

 

 

 

 

Six months

to 30 June

2018

Unaudited

Six months

to 30 June

2017

Unaudited

Twelve months

to 31 December

2017

Audited

 

 

 

 

(Loss)/ profit for the period (£)

(2,510,942)

(94,035)

(2,214,827)

Weighted average shares in issue (no.)

49,680,785

37,828,088

37,841,776

Basic (loss)/earnings per share (pence)

(5.05)

(0.25)

(5.85)

 

 

 

 

 

Basic

 

The (loss)/earnings attributable to ordinary shareholders is profit/(loss) after tax. The weighted average number of ordinary shares in issue during the period is used for the purpose of calculating basic earnings per share.

 

Diluted

 

Because a loss is reported in the period, the calculation of diluted earnings per share using the share options in issue would be anti-dilutive.  Therefore, diluted EPS has not been calculated.

 

4.         Share capital  

During the six months to 30 June 2018 the following share issues took place:

 

An issue of 13,000,000 ordinary shares on 1 February 2018 at a price of 10p per placing share to new and existing shareholders.

 

An issue of 1,000,000 ordinary shares on 1 February 2018 at a price of 10p per share as part-payment for consultancy services provided in relation to a review of the business and operations completed in January 2018.

 

An issue of 350,000 ordinary shares on 8 March 2018 at price of 10p per share as payments for eCommerce consultancy services provided to the Company

 

5.         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 company's website at: www.fishingrepublic.com   


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
IR QQLFLVKFEBBL

a d v e r t i s e m e n t