Angling Direct (LSE:ANG) — Final Results

0:01 Good morning, and welcome to the ANGLING DIRECT PLC investor presentation. Throughout today's recorded presentation, attendees will be in listen only mode. Questions are encouraged and can be submitted via the q and a tab situated on the right hand side of your screen. Before we begin, I'd just like to submit the following poll, which I kindly ask you to submit your responses to. I'd now like to hand over to the executive management team. Steve, good morning. Good morning, everyone. Welcome to the January twenty twenty six ANGLING DIRECT results meet. We've got another fantastic year for the business, record numbers in terms of both revenue growth and profit and I'm looking forward to taking you through that detail today. We've put together a highlights page. This sort of covers three key themes for the business in the twelve months to January 26, sort of characterized by customer engagement. You can see there on the slide, we've got a number of customer metrics that we're increasingly focused on, be that the volume of our digital output and the number of customers who are consuming that content.

1:12 The way we're structurally looking at the business in terms of driving an omni channel customer strategy for those who engage with us both physically and digitally being our most valuable and engaged customer base and all the way we're sort of attempting to drive that through our My AD proposition where you're going to see on the screen there some pretty impressive growth numbers in terms of the way we're looking to sort of scale Europe's biggest angling club. Set that against a backdrop where twenty four months ago, Sam and I set out the vision to sort of further consolidate The UK angling market, a substantial category where we felt there was the capability for us to take share at an increasingly speedy rate. We've done that in the twelve months. So the top left hand tile there, UK like for like growth touching on 12%, we think stand out in a retail category.

2:07 And put that against not just revenue growth, the earnings growth that Sam will talk about later on, we're delivering CAGRs at just shy of 20% now in terms of that EBITDA journey. That number now starts with a $5,000,000 number. And indeed, we've built some numbers out there in the market that show further progression for that to come this year. The third element to the sort of highlights is the strategy of development alongside those two themes I've just mentioned. From a European perspective, we've always said that we believe Europe presents the opportunity for the business to further scale in material markets in the longer term after we consolidate The UK market. In the last twenty four months, we've now reduced those European losses by over 50% whilst retaining the optionality for that market as we see sort of some modestly encouraging signs around the green shoots in the European landscape.

3:07 Put all that together in the bottom right hand tile is only twenty four months on from when we last published a set of ambitions for the business. We've upgraded those ambitions again and we'll I'll cover those in more detail when we come to the end of the presentation. How are we tracking against those current strategic objectives that we set out in May 24? I'll briefly touch on each of those as we go down the page. So a UK business with a flight path of $100,000,000 was our ambition back in May 24. We've essentially achieved that this year, 9,200,000, as you'll see on the slide, underpinned by that like for like growth. The component of the business now, what originally was about doing new space and consolidating the market through new space, increasingly our sort of existing substantial customer base is now playing an increased role in that journey towards that 100,000,000 The UK business on a flight path to GBP 6,000,000 adjusted EBITDA.

4:15 Again, as I mentioned, CAGAR just short of 20% on that and we're actually over indexing the way we're growing the profits relative to the revenue journey we've been on. We've seen the return for the investments we've made, which I'll touch on shortly below, really starting to come through the P and L account and more to come from those. The 5.3 number was a result of two upgrades that we put into the market last year. And indeed, we've got a number out in the market for FY 2027 just to shade over GBP 6,000,000 sort of underlying that ambition to get to that GBP 6,000,000 number, which we'll achieve within three years if we deliver that market number. Obviously, one of the key sort of strategic components of how we do that is our MyAD fishing club, 600,000 members, 47% growth.

5:06 It's impressive stats on its own. I think the way we're using that data and we're using and engaging with that customer base is increasingly impressive and important. One of the stats we've included on the page there is we do look at who are our omni channel customers, three ten basis points improvement in terms of the percentage of our customer base who engage with us both physically and digitally. Those customers are well worth over £500 each and we continue sort of focusing on how we access our customers' greater share of their ANGLING wallet. In terms of Europe, developing a sustainable European business, as I said, we've reduced the losses by half and at the same time still maintaining that optionality in Europe, where we see there's a longer term opportunity for the business.

5:54 We continue to be sort of innovative in the way we're approaching the market. Historically, I'd have talked about how we've used now a third party logistics operation. And this year again, we've looked at how we've ranged the business in a more fulsome way by using a just in time stock operation where we're working with our supply partners, reducing the working capital strain of the business as we look to sort of balance the losses against the capital deployed in the European journey. Deploying our surplus liquidity to grow the business beyond the medium term objectives. Now we set that out again twenty four months ago. FY 2026 was our biggest ever investment twelve months. Core component of that was our digital shelf edge labeling investment, just over GBP 2,000,000, four year payback on that where we just look at what we could absolutely measure, a lot more to come from that investment.

6:50 And again, we see that as a fundamental component of how we're going to scale the business and grow the profits into 2027 and beyond. We continue to run our buyback program as out there stated in the market. I'll talk a little bit later on about how we see that evolving. And whilst we see the share price performance remains a little bit sticky, that buyback program where appropriate is good value for shareholders. ANGLING Retail's largest responsible employer, We continue to focus in on all of the things that contribute to the market, so being seen as part of the angling ecosystem. This year, we launched the AD WIN website, which not only is a different way to engage in our customer base, but it's also enabled us to have a very formulaic way of demonstrating how we put value back in to the sort of the fishing ecosystem with 5% of all of the contributions to that website being placed back into activities that are going to support the benefits of ANGLING.

7:59 In terms of the business review, I'll just go through some of the detail on the page we've set out to help sort of folks understand what we've been focusing on and what we've been driving into the business. On the left hand side there, UK customer, I talked about that omnichannel customer being of increasing importance to us. Now as I said, over 20% of our customers now are omnichannel customers. Those customers have a frequency of around eight times. We've increased that from 7.5 times this year. We're increasingly focused on how our store only customers who tend to be our less frequent and less engaged customer base, how can we talk to them in a different way, how can we target them in a different way, so as we drive up the value from that customer base, an increasing or a large slice of our store only customers only visit our stores once a year and we see that as a huge opportunity for us to scale the like for like sales in that ever increasing store portfolio.

9:03 We're using the MyAD data to talk to our customers in an increasingly personalized way, mainly from sort of digital flows in terms of identifying characteristics of customer sets within our data using our Customer Insights platform that we established during the year. And again, we're seeing that as a component of how we are taking substantial share in the digital market, but also growing that omnichannel customer base that I just previously referenced. The bottom bullet, Shop the Range, that is a digital technology that we've put into all of our stores that enable our customers to access our full digital range, which is about three times as large as the average store range, both to their house next day or to the store free of charge. We took about GBP 1,600,000 through that technology this year. That's really helping us push the omnichannel journey, get folks more comfortable with the digital engagement with us and push them sort of increasingly to be more frequent and spend more with us as their retailer of preference.

10:09 In the middle block, our store strategy, we continued the pace of our rollout of stores, another six new sites in the year, 2,500,000 invested. We're increasingly focused on delivering those four year paybacks from those store investments. And we continue to refine the way we look at how we're driving into various catchments. Our traditional model of £1,000,000 store as we build out The UK, we look increasingly at smaller catchments where we need to be more agile in terms of the way we range, resource and plan to execute those stores. As I touched on a moment ago, digital shelf edge laboring, the biggest investment this organization has ever made in one piece of technology.

10:58 That has been a success in terms of implementation. We're fully operational with that technology across all of our store estate and confident in delivering the full year payback and looking for ways to enhance that further. Of that sort of full year payback, around GBP 350,000 a year was colleague time saving. And indeed, we've challenged ourselves to reinvest some of that back into the business this year as we look at how we engage with our customer base in the stores, particularly around those customers who only visit us once, which we see as a real opportunity for the business. Over on the right hand side, UK digital, the theme of increased personalization, enhancing the customer repeat percentage. As I said, we are seeing some real sort of demonstrable progress in the way that we are engaging with that customer base. We think 20% growth is a standout in the digital market in terms of how we're engaging and trading with that customer base.

11:58 And that's been supported by the third bullet down. We think we've got a innovative way of looking at our paid search traffic. We have kept our return on advertising flat in a year where most retailers would have been talking about 15% to 20% increase in cost of clicks. And we've grown the digital business 20% whilst achieving that sort of that flat landscape on ROAS, which again we think is an impressive achievement. Back to the theme of technology in the second bullet, somebody some folks who've been with us on the journey would remember we spent GBP 1,000,000 on an automated packing machine in our UK fulfillment center last year. And again, we've lent into that, refined some of the technology around that investment and we're sort of yielding over $0.02 £5,000,000 in underlying benefit in terms of reduced colleague cost, reduced packaging paper ink against what we have historically seen in the distribution center.

12:58 Finally, down the bottom there AD WIM, which I talked about in terms of how we're sort of doing our reengagement from a community perspective. One of great pieces about that is it's another string to our bow in terms of the way we engage with our customer base. And indeed, our overlap between My AD and AD WIN is only about 50% right now. So it's another customer cohort that gives us some insight in terms of who else can we target, how else can we talk to them differently to engage them in our AD proposition. Europe, we as a management team and a Board believe having a longer term growth opportunity is important to the business. We have done a cracking job of quickly accelerating the consolidation in The UK market.

13:46 We do see the European market displaying very much the signs and the characteristics of that that was observed in The UK market pre COVID. And therefore, we continue with the strategy of retaining our optionality as market conditions become more favorable, whilst at the same time making sure the appropriate amount of risk capital only is allocated to that option. Scaling the business through the just in time operation, reducing working capital constraints, while still offering the customer greater choice, reducing the losses by over 50% in two years, we think is again sticking to the strategy we set out twenty four months ago and very much one we can continue to drive in next year and beyond.

14:34 Commercially, key successes for the business. Our own brand journey continues with Page. That's become an increasingly important component of our gross margin success. I'll let Sam talk about that a little bit more within the financials. 130 basis points again, the second year the team has delivered over 100 basis points improvement in the gross margin. That is fundamentally important to the business in terms of the cost pressures we've seen from National Insurance and Living Wage. We needed some strings to our bow to be able to outcompete those cost pressures and we've certainly done that through leveraging the gross margin over 100 basis points in each of the previous two years. Working capital remains a focus.

15:21 For the first time, we've started to talk about return on capital employed externally about this business. We do see the stock file is our key cog in our return on capital employed calculation. We've grown the COGS. We've grown the sales of this business, whilst at the same time keeping our underlying investment in working capital broadly neutral, slightly positive last year, which again we think is a testament to the way that we're increasingly engaging with the supply chain around optimum ranges, optimum stocking and how we look to drive the range to a more sort of honed and focused offer. And then lastly, the right hand side there, communities and sustainability.

16:06 The AD community fund is now an increasingly important cog of the way we see how we engage with the market. But that doesn't sort of trump everything we've been previously doing around our lime recycling credentials, 3,500,000 meters last year, was 85% of all lime that would actually recycle in The UK came through the AD operation. And again, we're still standing behind the ANGLING Trust water quality monitoring network, the ANGLING Trust in terms of for free disseminating its water quality test kits, be that to existing sponsors or to those who want to get on the journey with the ANGLING Trust and start to collect that data and furnish that fact to the ANGLING Trust such that it gives them a more powerful resource in terms of challenging the various water bodies.

16:54 Finally, from a governance perspective, we've continued to reshape the Board. Neil Williams joined us as a non exec during the year and our Founder, Martin Page, moved to a lifetime President role, retaining his passion and his knowledge for the business, whilst at the same time contemporizing the skills that we've got around the board take. And at that point, I'll hand on to Sam for the financials. Thanks, Steve. Good morning, everybody. So just starting with a few financial headlines on the slide there. And we'll get into some more of the detail behind these over the next few slides. We can see here the progress we've made in FY '26, continuing to build on the FY twenty five momentum in terms of growing the revenues, continuing to build profitability, and continue to invest the cash in the delivery of the medium term objectives whilst also returning excess liquidity to shareholders through the application of our published capital allocation policy.

17:51 So if we just move on to the next slide, we'll get in a bit more in the detail behind some of these stats you can see on the screen there. So starting with revenue in The UK. UK total like for like revenue growth, as Steve said, of 11.9% to £93,600,000. So that reflects the strong growth across both stores and online. UK total like for like continues to be the key metric we look at from a sales perspective for The UK business, and that reflects the increasingly joined up omnichannel proposition from both a customer perspective with us now leveraging that MyAD data and the the and the insights platform, and also as we increasingly leverage the wider cost base and stockpile across both the stores and online channels.

18:40 So in terms of the channel components of that 11.9%, store like for like growth was at 5.8% year on year to 50,800,000, and footfall was the key driver of that of that growth. And online, we saw 20% growth year on year to 42,800,000, and that's really underpinned by session growth. So as you can see, as that then results in overall UK growth of 14.8% to 99,200,000, which as Steve said, that substantially means we've now delivered a 100,000,000 UK revenue target in two years of first publishing that. And also eight shows that 80% of that revenue growth in UK year on year is from the underlying business. So it does continue to be that UK like for like sales growth that's really fueling the overall UK sales and earnings growth.

19:32 Moving to Europe. Overall revenues reduced 4.7% to 4,700,000. The store revenues continue to scale with revenues now at circa 500,000, and that's still on the softer side what we see against the typical UK maturity curve for a store. But that, you know, is to be expected given we don't have the same brand recognition or physical retail in critical mass in The Netherlands yet. And we're still not seeing the expected levels of capital items in the store basket, which is holding back the sales line, but is driving a better than expected gross margin just because we're seeing then, therefore, a higher consumable mix with the store then breaking even in f y twenty six. In Europe, online revenues reduced 9.9% year on year to 4.1 with the key target territories of Germany and The Netherlands reduced by 99.1% respectively, and that really reflects our continued focus on delivering increasingly profitable sales where we search out those sales with unit economics that really support that year on year loss reductions will come on to on the next slide so that we can continue to monitor and evaluate the market dynamics and retain optionality over that significant growth opportunity that Europe represents for us.

20:46 So moving on to gross the gross profit down at the bottom right hand side and starting The UK. As Steve said, we're we've seen a 130 basis point improvement year on year, which really continues that momentum we saw last year where we were a 140 basis points in f y '25 versus f y '24 after only being plus 10 basis points in FY '24 versus FY '23. The key components of the 130 basis points are firstly, 70 basis points through improved supply rebate structures where we're seeing sort of in a broader range of supplier suppliers engaging with us. And that sort of then goes hand in hand with the gross profit growth in terms of more pound load spends against those rebate structures driving the driving the gross profit.

21:34 80 basis points through optimizing third party supplier mix. The classic example there being a sort of brand day lower GP percentage item being replaced by in the range by brand b higher margin GP percentage items. So it's all those day in, out ranging decisions in aggregate, really utilizing and leveraging the data we now have at our fingertips. 40 basis points through the own brand progression, which Steve touched on with gross profit growth year on year of 53% and now that now representing a gross profit penetration in The UK of just over 14. And 10 basis points through service revenue, which is both commercial marketing. So for example, sponsor of Gondola rent in store, spot ads on the website, but then also our in store services such as re reel spooling poll elastication as we rolled out in FY '26 reel servicing.

22:33 So that's up the ladder 200 basis points and then coming down the snake through 40 basis points on additional MyAD promotional activity to ensure we still got compelling offers to help drive customer frequency and to make sure we're still acquiring that valuable customer data through compelling offers and 30 basis points through increased shrinkage against what continues to be a very challenging landscape. Moving into Europe. So the gross margin in the store is in line with expectation based on that category mix I touched on before. Whereas in the digital business, measure isn't the gross profit, but remains to be the contribution ratio, which is the gross profit then less the direct fulfillment cost of the order, so pre overheads, as the European business continues to operate on a negative contribution ratio.

23:26 However, in FY 2026, that contribution ratio has improved 100 basis points year on year, and that's a cocktail of the gross margin moving forward two seventy basis points driven by that focus on increasingly profitable sales. And with the variable cost only eroding that by a 170 basis points, I net into the 100 basis points progression on the contribution ratio with the primary driver of that higher variable cost being the paid search, which continues to be a challenging landscape in in Europe. Moving then to adjusted EBITDA. If I can get this to work. There we go. And, again, starting The UK in that top left hand side. So you can see there the adjusted UK EBITDA grew by 25.5% year on year to 5,300,000, delivering that critical over index we've spoken about before against the sales growth of 14.8 to improve the adjusted EBITDA margin by 40 basis points to 5.3%.

24:28 So we entered FY '26 knowing that the cost headwinds we faced that Steve touched on, particularly around the above inflation national living wage and the employers' NI changes to both the rate and threshold, we'd have about circa 100 basis point impact on the adjusted EBITDA margin. So we start we we finished FY twenty five at 4.9. So if we'd have stood still, we would have been facing into delivery in FY twenty six at 3.9. So our internal target was to try and soak up those 100 basis points of those cost headwinds and hold the EBITDA margin flat 4.9. But because of that strong gross margin progression at 130 and another additional 10 basis points at cost base efficiencies, that allows us to offset that and then also grow the adjusted EBITDA margin by 40 basis points.

25:19 And then moving to Europe just down in the bottom right hand corner, as I've already mentioned, the Utrecht store broke even in the year, which is obviously an important milestone, but the online business remains the the key challenge in terms of continuing to progress the year on year loss reduction. And, really, the key the critical contribution ratio we've touched on that really is what's driving this alongside then really carefully continuing to deploy cost the cost base really carefully over there. And, we've seen some further reduction in the overage year on year, primarily driven by the three PL agreement we rolled out in q four in FY twenty five. So overall in Europe, that results in a further improvement in the adjusted EBITDA losses of 43 and a half percent to about £500,000, which is now down 60% or or 700,000 versus the 1,200,000 loss we saw in the first year in FY '23.

26:12 And importantly, that then means that the adjusted EBITDA loss as a percentage of The UK adjusted EBITDA is improved by over a thousand basis points year on year to 9.1% versus a 33% we bought saw back in FY '23. And then finally, just moving to cash and return on capital and starting with that group cash flow bridge in the top left there, And we'll just pull out some of the key highlights we've not really touched on. So working capital, you can show us there on the screen a naught 600,000 outflow. That also includes a 1,000,000 of stock investment in the FY '26 new space. So, really, there's an underlying net cash inflow in the year of naught 400,000.

26:58 So just to give you a flavor of what's making up that underlying naught 400,000 inflow. So stock is 1,100,000 higher at the end of the year, but that's offset by payables being a million pounds higher. So the underlying working capital deployed into stock is broadly neutral year on year. But in terms of that 1,100,000 higher stock, it is worth noting that at the end of January, we've got an even more concentrated stockpile. So 84% of our stock is now arranged in every location across the business versus about 76% at the f y at the end of f y twenty five. And also the availability in the stockpile at the end of the year was up 270 basis points year on year. So an increase in quality stockpile behind behind that working capital block.

27:46 So then that leaves a residual 1,200,000 inflow. And and really the key standouts there are the positive impact of stronger trading in terms of the VAT timing on cash flows and the timing upside on accruals in terms of the pay the accruals versus payable timing. Moving to interest and parking to one side, just the IFRS 16 charge element of that interest. The underlying interest income in the year is naught 300,000, which is lower year on year, but does reflect both the lower cash levels and the softer interest rate environment. But when we look at the effective interest rate versus prevailing Bank of England rate, we're still at the same sort of effective interest rate, so we're still maximizing that opportunity where we can.

28:32 Moving to CapEx. As Steve touched on, there's a record year of CapEx for the business. The three standouts being the 2,100,000 on the digital shelf edge labeling, 1,500,000 on the six new stores in FY twenty six, and then another couple of £100,000 in terms of scaling web fulfillment where we linked the automated pick and pack capability and added more pick locations to help enable that online growth where we saw that 20% growth in the year. And then finally, just on buybacks there, you can see we've deployed 1,100,000 in the year, which leaves us 1.7 returns since the buyback at the end of January twenty sixteen.

29:18 And as I closed yesterday, that leaves us at 2,000,000 return through the buyback out of 4,000,000, so with another 2,000,000 remaining. The table on the top right there then just pulls out adjusted free cash flow. And what we're trying to do here is just demonstrate the underlying cash flow generation in the business is really improving. And you can see there if we back out the million pounds of new stock sorry, new space stock in FY '26, That £3,800,000 of investment CapEx I just explained in the bridge and the 1,100,000 deployed in a buyback, then you can see that adjusted free cash flow has improved by three and a half to £4,800,000 in a year, really reflecting that underlying underlying cash flow really starting to to build now.

30:05 And then finally, just moving to the chart at the bottom, and we're reducing or introduced group adjusted ROCE to to align with them the the stated target and the upgraded medium term objectives, which we'll come on to shortly. And we're presenting that as adjusted EBIT so that the the EBIT less the IFRS two and IFRS 16 impacts in the same way as we present adjusted EBITDA as a percentage of the reported net assets less cash. And you can see that we've made significant progress in the year with a three seventy basis points improvement year on year to 8.9% as we're delivering on both sides of the equation in terms of delivering that EBIT growth, which would be built over FY '25 and FY '26. And in terms of then the net assets less cash growth under indexing versus both the sales and earnings growth reflecting that adjusted free cash flow dynamic in the table.

31:00 And with that, I'll hand back to Steve. Thanks, Sam. I'll talk a little bit about where we're at now in terms of our FY '27 performance and our plans for the rest of the year, And I'll go on to talk about how we've now upgraded those medium term forecasts for twenty four months on from when we first stated those. So obviously, we're at January year end, February is not a huge opportunity month for us. But you can see on the slide there that we started very strongly with The UK again up in low double digit growth. Following the start of the Middle East conflict as many of you might have seen, bit of pressure in terms of consumer spend. We've certainly seen that come through more laterally in our April numbers. But again, we're still delivering growth in the business, not as strong as we'd seen in February, but still meaningful growth in terms of that customer acquisition and scale in The UK.

32:02 From a cost perspective, we've seen modest amounts of incremental costs, largely through fuel surcharges from our carrier partners in terms of our digital business and customer delivery network. And we've sought savings elsewhere in the business to offset those looking at in particular discretionary spend. As the war persists, we'll keep those under close review. We've got other levers we could look at in terms of where we go on our free delivery threshold. Do we need to augment that again? How do we view that? Where can we see the carriers sort of looking at their fuel surcharges for the rest of the year? We'll keep that under close review. Notwithstanding all of that, we still have the view that we've got a GBP 6,000,000 EBITDA number out in the market for The UK business and we've got a modest loss again for Europe in terms of our ambitions for FY 2027.

33:01 We've not observed anything to date that undermines those ambitions. And indeed, that's given us the confidence to go out and restate those ambitions against that backdrop alongside our incredibly strong liquidity and balance sheet position. So what are those upgraded ambitions? So in the table here, we sort of set out where we were twenty four months ago and now where we're looking to sort of drive towards in the medium term, medium term three to five years. 125,000,000 for The UK business in terms of revenue ambition. Clearly, that's going to have a component of new store space still to come. As I said earlier, those new stores sort of perhaps moderate in terms of their importance of that growth. We see access in our existing customer base now, the data and the tools we've got to increasingly personalize to our customers as a key component of driving those UK like for like sales up against that target of $125,000,000 How do we look at the earnings that attach to that? Clearly, we have had a sustained period of cost headwinds.

34:11 We have seen that abate a little bit. And hence, our view is if we can have manageable cost inflation coming through the business, put that up against the investments in technology, in particular we've made alongside an increasing focus on those customer like for like numbers. We think it's a realistic ambition to grow the adjusted earnings by 33% over the medium term. Third one down, obviously, core component of that is how else we build out MyAD. That as a propositions continues to strengthen. We've got a lot more ideas about how we can add and supplement to that proposition. Over a quarter of a million people have looked at our MyAD rewards page, for instance, that's becoming an increasingly sought after component of what we've got. And there's things aligned to that we can build on in the future.

35:04 Europe, as we've said, material growth component for this business in the longer term. We've sort of honed our language there to make it clear that The Netherlands and The Germany are the first sort of stages of the European growth. And increasingly, we are focusing only on those two territories and that we'll fund any profitable expansion from the cash that we've got on the balance sheet to give folks comfort that we are very much focusing on generating our own capital to drive our growth ambitions. Sam just talked about how we're looking at our ROCE targets now. We see that as an increasingly sort of attractive component of our investor proposition. We have got clear targets in our mind, clear plans how we're going to access that what I call the denominator of the ROCE calculation through reviewing our inventory files. And we think setting out a target ambition of 15%, just under 100% growth in the medium term from where we are today is a realistic ambition for this business.

36:01 Finally, we will keep trying to make a positive impact being seen as part of the ANGLING ecosystem rather than someone who's just taken from it, as we'll keep on with the work with the water quality and the AD community fund will form an increasingly important component of how we're feeding back into the market. Perfect. Thank you both for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions via the q and a tab on the right hand side of your screen. For your reference, a recording of today's presentation will be available on the Investor Meet company platform shortly after the meeting's ended. But for now, guys, as you can see, there are a number of questions which have been submitted.

36:46 Can I please ask you to read out the questions and give your responses where appropriate to do so? And I'll pick up from you at the end. Okay. I'll start, and then I'll let Sam I'll let Sam take some of the go. So question one, given the share price performance, our share buybacks the best use of company cash. I think we first put out our buyback program in December 24. We've been going at it sort of eighteen months now. We are of the view the current share price is good value for a shareholder if we are in a buyback. Clearly, folks may have looked at our investor website. We have had a couple of institutional and large shareholder sellers. Clearly, that puts pressure on the price given the sort of the liquidity of our the traditional liquidity of our stock.

37:38 We'll keep reviewing when it's best to use our firepower in terms of buying that stock because we do believe on a long term basis right now the share price and our ability to buy at that level is very good value for the shareholders. Clearly, we've signposted where we're going to be on cash. Sam talked about our cash generation that continues to be strong. We've got a clear capital allocation policy externally stated. We will continue to review that and make sure we think the buyback is an appropriate component of that capital allocation policy. Links very much to the second question, how near are you to paying out a dividend? I think, as you'd imagine, we continually pressure test that in terms of does that help us to enhance the share register? Are there those out there who would materially buy into our sort of equity story if the small dividend was a component of that?

38:39 Right now, we're not finding sort of compelling evidence that a small dividend would materially change the way folks view our business and the valuation that is being applied to the share price. Notwithstanding that, we have committed externally, we will review that at least annually. So it does form an important component of that capital allocation story. Third question, what characteristics make a new store location sounds just like a bit more what make a new store location successful for ANGLING DIRECT? And are you seeing any changes in customer behavior across new regions? So we use a number of external data points in terms of how we cite our stores. I sort of call it the KFC secret recipe.

39:27 So I'm not going to give you all of the data points we use in terms of how we cite a store. What I would say is, postcode specificity is becoming increasingly important to that as we sort of fill out The UK. Just because we see a blank spot in The UK doesn't automatically mean we put a store there. There are a number of metrics we need to sort of join up and make sure that they fit within our statistical model that we run. Our model is pretty robust. When we back test on that, we've got over a 90% statistical significance in our ability to use those data points for the store to prove out its economics. We have only we only have one store, which is loss making, which we've given notice on that store.

40:15 And so we think there's significant amounts of evidence that we've got the right data points in terms of how we cite those stores. Are we seeing anything new in the customer base in newer locations? Interesting, what we can see now as we take more of the digital market is we get more of a joined up customer base from day one, which helps us with that omnichannel progression. That stat I talked about of three ten basis point improvement in our omnichannel percentage of our customers. That is increasingly important that they're over worth over GBP 500 each. If we can have a digital customer, we can then join up with a physical customer that increasingly helps us drive that frequency and share of wallet journey. Have you seen any measure next question, have you seen any measurable difference in spending behavior between My AD and non My AD members?

41:11 It's difficult to answer the non MyAD members holistically because obviously in the store where they're not a MyAD member, it's very difficult for us to track by impossible for us to track which it is, which individually is who's spending us, isn't a MyAD member. As I said, what we can see is the MyAD omnichannel customer is more engaged than any other customer we've got. The MyAD store only customer, as frequency of just over three, we think there's opportunity to scale that. What we can see digitally is our MyAD customer versus a non MyAD customer digitally, the MyID customer is materially more engaged than the non MyID customer.

41:59 Hence, the wider thing can we going to do in terms of the MyID proposition, what else can we add to that proposition with to sort of form part of the why wouldn't I join concept, which we believe has been so successful in terms of driving those numbers of customers into that proposition. Next one, medium term could be anywhere from three to seven years. Should we infer from the lack of specific commitment for the medium term objectives, this will be delivered towards the end of this sort of time range? This business has never put any targets out until May 24. And when we went out with May 24, we said the medium term. And when we talked about the medium term, we were referencing a period of three to five years.

42:45 We have largely delivered both the revenue and the EBITDA targets within twenty four to thirty six months. We're not signing up for twenty four, thirty six months again on that. But we still see three to five years as a very realistic window in terms of what we believe is the medium term for this business. Next one, you've remained disciplined in Europe while still growing strongly. What milestones would indicate the model is ready to accelerate further internationally? Great question. So there's two challenges in the European market, which again was somewhat what was characterized in The UK market pre COVID is the retail price for premium brands is being traded as a tool by some of the retailers as loss leaders and that isn't a sustainable model. So we very much look at gross margin percentages by basket and by cohort.

43:49 And we track each of the markets that we are attracted to Germany and Netherlands and compare those to The UK and how The UK journey sort of went on those. And notwithstanding, we don't believe we need to be at The UK levels in terms of those gross margin ambitions. We're clear where the bite point on those gross margin ambitions may well be as that market will undoubtedly shake out some of the weaker competition and give someone who's got a proposition, the management team and the capital to go at those opportunities quite quickly. The other aspect is the paid advertising landscape digitally. What we are observing in Europe is originally a rational market in that the more somebody pays for cost per click, the less impression share they get, which tells you that people are overbidding and actually very few are, if any, can win because the more you pay, the less you get.

44:52 We see very much in The UK, our impression share is substantial. And actually, we're able to very clearly see a correlation between what you bid improves or doesn't mean what you get. We need to see those European lines behaving in a much more rational fashion as some of that competition get shaken out linked to the gross margin point where, again, it won't be at the same level as The UK. Undoubtedly, it'd be a little bit higher if you go on the journey, we're clear on where the bite point might need to be on that pay landscape. Marques, Europe has been disappointing again. At what point would you consider closing this to stem the losses further investment on the turnaround? I think back to the point, clearly, UK category at some point will have a ceiling.

45:44 That isn't £125,000,000 That's not the number we've put out. But for a very small loss now as a component of The overall UK EBITDA, when it was £1,000,000 it was a substantial component of The UK EBITDA. This year, it's a very forecast to be a very small EBITDA loss, set that against a north of GBP 6,000,000 EBITDA number. We think it's an appropriate balance of risk capital to retain the option. We're taking the losses out of taking the losses away, closing down the European operation. Yes, it could have a modest impact in terms of that sort of earnings per share ratio.

46:30 But we don't believe fundamentally rerates the stock and if anything, challenges a longer term growth trajectory for the business. Do you want to do the next one? Yes. So next question is what measures are being taken to reduce shrinkage? So probably a few different factors here just to to to talk about. So first one I'd say is avoiding the double whammy of shrinkage and then lost sales. So the worst the worst thing that can happen is have something stolen and then not identify that shrinkage quickly such that we replace it and then miss out on the sales. You end up with a double double whammy impact. So in the over the last year, we sort of doubled down on what I'd call our weekly and monthly and daily routines in store to make sure we identify that any shrinkage as quickly as we can to make sure then we don't miss out on that lost sale.

47:23 Secondly, we sort of also been working on some defensive merchandising solutions. So whether that be sort of twizzle pegs, take car to tilt type options. But, again, that's just that balance between the risk on the sales line of them not having the the product to hand for a customer who who wants to purchase it. And in balancing that, it gets additional colleague cost because, obviously, if you're repenting a a peg and it's got a twizzle peg on that, does obviously take more time. So, again, it's just a balancing act with that we sort of focus on specific SKUs and specific locations where we see the where we see the the shrinkage most prevalent. Alongside that, it's really then about sharing best practice internally. So we've got a lot of experienced store managers who do a great job sort of managing shrinking their stores, and it's kind of helping other store managers in the estate sort of learn how and and learn from their experience and good practice on how to then do that.

48:21 And, also, you know, there is no getting around the fact that actually we are seeing a lot more sort of, I'll call it, organized theft in store where we have sort of groups of people targeting stores, targeting specific product lines, and moving around different stores. And we're so we're much more focused now on sharing that as quickly as we can internally to then make sure we're identifying those people when they come in stores and involving the police where where appropriate as well. So a mix of all of those things, but it remains front and center in our minds. Next one, how do you view priorities for the rest of the cash balance store expansion versus buyback? I think what we'd say on that is the capital allocation policy that we've published, if you like, the board has bucketed up various chunks against those various capital allocation headings. We don't see those two as mutually exclusive.

49:22 There is a case to keep a buyback running where we think it represents good value, and that won't stymie our ability to roll out our store expansion plans that we've got in The UK. Back in February, had we deployed the full buyback, we were forecasting to have around GBP 6,000,000 on the balance sheet. Clearly, we ended up just shy of GBP 11,000,000, GBP 2,000,000 of that was because we didn't spend the buyback. The rest came from sort of strong work on the working capital profile of the business that Sam and the team have been focused on. We think that gives us further optionality in terms of how we look at those capital allocation headings. And indeed, some very small scale UK M and A remains a realistic prospect for the group, particularly in terms of how we think about our own brand proposition.

50:15 Next one, clearly Europe is a big issue. You must be sure it will come good. I think what I'd say in response to that is, as I said, Europe's losses when they were £1,000,000 clearly that was a big issue for this business. As we start to moderate those downs to very low 100,000, it's an appropriate and transparent sort of allocation of what we call risk capital against the size of the opportunity. To the extent that sort of balance between opportunity versus risk capital deployed does move materially against us, we've structured the European business such that we're clear where the various break points are either in our contracts or in our leases such that we're not disproportionately betting capital against the value of the option for this business.

51:07 Next one, please, can you discuss the FY outlook for FY 2027? You usually provide P and L guidance, but this seems to be excluded. Please, can I confirm your guided '27 EBITDA? And can you confirm the expected revenue, John? Yes. So the current guidance in the market for '27 in terms of the adjusted EBITDA is 5.7 not 5.5, 5.7. And the on that is on a group revenue of 109 about 109,000,000, I think, is what's in the market, give or take. And there's a similar question in terms of providing some guidance for free cash flow in FY twenty seven. So depending on if you assume the full buyback gets deployed in the balance of FY twenty seven, I think the broadly, the the closing cash at the end of this year is broadly flat with last year, so around about the £11,000,000 mark.

52:10 Keep going down. That one in. Yeah. Yep. So this one, I won't read the full question because it's quite a long one, but it is talking about how how how can we improve our stock inventory hold to help improve Rocky. So there's two key components to the the stock element of improving the Rocky to get up to that 15% target. The first one is what we call trade packs. So of our 17,000 core UK SKUs, about 60% of them come in what we call a trade pack. So, for example, where we might want to hold two or something, but we they come in tens. So therefore, we gotta hold eight more than we actually want. Now that that can be a pretty painful number, particularly in the winter when we're selling less of those and we're holding more tied up cash in in in those trade packs.

53:03 So that's kind of the first one we're sort of really focusing in on at the moment. And then the other one is availability where our top thousand SKUs drive about 55% of the sales. So if we can improve the availability on those SKUs, what we can do is sort of remove some other SKUs out of the range where we've had to put them into sort of backfill where we've had bad availability in the past. So we're attacking that through sort of, you know, more engagement with the suppliers, particularly around forward orders to really drive those two metrics up in terms of that low you know, lower holding trade packs and better availability. You know, if we can crack those two things, that will get us really pumping towards that 15%. Next one. Please can you discuss ADWIN and how the economics of this business line work?

53:53 So ADWIN is a competitions based website in terms of whether that be spot wins or longer scale competitions. You buy a ticket, it's a piece of technology that external piece of technology in terms of how winners are selected, etcetera, etcetera. We took about GBP 400,000 through that website last year. It was about 8,000,000 tickets sold. And then of those 8,000,000 tickets, we contribute a fixed percentage to the AD community fund, about just over £20,000 went into the AD community fund. Net of that contribution, 400,000 made a positive EBITDA contribution to the business, modest.

54:40 But again, with a largely fixed cost base, that's got the ability to scale into something more interesting over the medium term. Sorry, just skip. I can't read the top of that. That's fine. Next one, I've been a shareholder for almost ten years and despite strong revenue and EBITDA performance over the last decade, shares have consistently underperformed the A market. Please can management indicate how they look to address this issue and change their approach? Have they considered changing brokers, look to change investor communication, understand more capital allocation policy as the board consider that a member. Proving track record of generating shareholder value. I think the answer on that is, yes, actually only over the last five years of this business shown any progression.

55:34 And undoubtedly, when you go back to 2017 and look at the float price, the float price was somewhat challenging against the economic potential of this business. So where we were starting to see some progression in the share price, that has undoubtedly this year been held back by some sort of larger institutional selling. And that as we know, the liquidity of this business has always been relatively If you take that away and then look at some of the engagement we have done with the retail community, Investor Chronicle being a standout when we talk to the retail community, we do see underlying improvement in the price. We continue to review what we're going to do with the wider investment community and at what time we're going to do that against the backdrop of what we know about some of our larger holders and their sort of activity in the stock.

56:33 In terms of the broker, the Board remains sort of believes it's got the appropriate skills in the broker that we're using. History would tell us that changing the broker back in 2020 was the right thing to do against the broker who listed the business. That is not always the answer to this. Consumer is a challenging landscape right now. And we believe the publication of those medium term targets, indeed how we're looking at the capital allocation policy and continue to do that, publish that for the first time in December 2024 will ultimately drive shareholder value for all shareholders. And on that note, that concludes the time we've got for questions and I'll hand back to Mark.

57:22 Brilliant. Thank you both for answering those questions this morning. Before we ask investors to share their feedback, which I know is important to you, Steve, if I could just ask you for a few closing comments to wrap up with, that'd be great. Thanks for everyone for joining. You know, we as a team believe these were standout results in the retail sector. We believe we've put the investments in place and got the team in place to take this business further. And I'd encourage you to look at the new sort of refreshed medium term targets and have a think about how compelling they are and what a great opportunity this is in terms of this business taking more share in the category it's playing. Perfect. Thank you both once again. Ladies and gentlemen, could I ask that you don't close the session just yet as you'll now be automatically redirected to to a a page to give your feedback, which helps the company better understand your views and expectations.

58:11 On behalf of the management team, we'd like to thank you for attending today's presentation. I wish you all a good morning.