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The specialist retailer has first mover advantage in a fragmented industry
Thursday 18 May 2017 Author: James Crux

The potential to enjoy profitable growth from a fragmented industry means fishing tackle retailer Fishing Republic (FISH:AIM) is a tiddler worth netting at 42p.

New store openings, healthy like-for-like growth metrics and rising online sales are reasons to hook the £14.8m cap, whose main fishing season is off to a good start.

Steered by founder and chief executive Steve Gross, Fishing Republic is one of the UK’s largest fishing retailers by floor space. Selling leading brands as well as own-brand clothing and tackle, typically from out-of-town outlets, Fishing Republic’s extensive product range is a key competitive advantage. Its ‘destination’ stores are able to draw customers from a wide radius.


Hook a winner

Angling is the UK’s sixth largest monthly participation sport and the fishing tackle marketplace is both large and highly fragmented with over 2,000 mainly owner-operated specialists operating in the space.

Smaller retailers lack the bank financing and stock range of larger, ambitious players such as Fishing Republic.

A £3.75m placing last summer is helping to fund the expansion of the store network and the development of Fishing Republic’s digital strategy.

Going swimmingly

Results (24 Apr) for the year to December 2016 revealed 32% growth in profit before tax and exceptional items to £403,000 on sales up 41% to £5.8m, reflecting organic growth and continued store expansion.

Encouragingly, like-for-like store sales were up 16%. Increased marketing and an improved range boosted performance and the full benefits of new stores added in 2016 will come through this year.

Fishing Republic’s online strategy is also going swimmingly; it is successfully transitioning from sales via third-party platforms to higher margin own website sales. These grew 132% to £662,000 to account for 40% of total online sales, up from just 16% in the previous year.

Finishing 2016 with £2.1m net cash in the coffers, Fishing Republic doesn’t pay a dividend currently, as surplus cash is being reinvested to increase the scale of the business.

House broker Northland Capital forecasts adjusted pre-tax profit of £500,000 on £8.6m sales for the current financial year. (JC)

Fishing Republic (FISH:AIM) 39p

Stop loss: 23p

Market value: £14.8m

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