Angling Direct (LSE:ANG) — Half year results for the six months ended 31 July 2025

0:01 Good morning, ladies and gentlemen, and welcome to the ANGLING DIRECT PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses, but it's appropriate to do so on the Investor Meet company platform. Before we begin, we would just like to submit the following poll. I would now like to hand you over to the executive management team from ANGLING DIRECT PLC. Steve, good morning, sir. Good morning, everyone. Welcome to ANGLING DIRECT's half year twenty twenty six interim results. I'm with my colleague, CFO, Sam Copeman, will take you through our short presentation, and then I look forward to taking some questions at the end of There we go. So first up, copy of our r and s, some extracts from that. You know, in terms of the half from a financial perspective, record revenues, substantial margin growth, and we're trading, as we set out later on, comfortably ahead of market expectations.

1:19 And the group for the first time is signposting a full year revenue ahead of GBP 100,000,000. Group earnings now, we're looking to upgrade those by about 14% to just over GBP 4,300,000. And again, the business demonstrating its capability in terms of margin expansion and substantial earnings growth. Operationally, in the half, we've continued with substantial strategic delivery, in particular, leveraging MyAD, our loyalty and repeat purchase program, and the benefits of insights from our customers coming through in terms of our customer growth and the revenues we're driving from that customer base. Alongside that, we've continued to invest in the business in terms of looking to develop further efficiencies alongside investing for growth in particularly around technology and new space.

2:18 On the slide right now is, our six medium term objectives that we set out in, May 24, and we continue to look at how we track against those medium term objectives. I'll just briefly run through our progression of each of those, and then we'll cover off as we go through the financials a little bit later, some more detail. So, we set out back in May 24 an ambition ambition to to grow grow the The UK UK business business to over a 100,000,000 revenues. So that was about the time we set that ambition out. That was sort of an ambition of over 30% growth in the revenue line. Right now, we're tracking to be at just shade below 100,000,000 for the year to January 26, and so we're signposting for for the year to '27. We're well placed to deliver that objective, which would be just about two or two just a smidge over two years in terms of delivering that.

3:08 Demonstrating that we're continuing to take share as we're becoming the consolidator of choice in the market. You know, not only is our new space in terms of new stores playing a role, but more importantly, our like for like growth from our existing customer base and existing locations is continuing to demonstrate real strength, like for likes in the period showing substantial growth for the whole of The UK of around just over 14%. In terms of the earnings, adjusted EBITDA growth for the half of over 27% in The UK to just over 4,000,000, 4,100,000. Again, demonstrating our capability to improve both the pound notes as well as the ratio, you know, 60 basis points improvement to just 8% at the half year. And we're signposting for the full year now that, that that UK earnings adjusted EBITDA around for GBP 4,800,000.

4:05 Clearly, there's a little bit of a work still to do to get us to the 6,000,000 ambition, but bridging from that 4.8 to the six, there's two sort of three key building blocks to that. Firstly, you know, leveraging our existing customer base and the investment we've made in our customer insights platform and MyAD. The new space that we've executed in terms of both in in 2025 and in '26, you know, with with with sort of signposting around sort of 14 new locations across those two two years, which will deliver sort of substantial earnings growth for us. And alongside some of the investments we've made in the business, particularly around technology, continue to leverage that, provides a clear platform for further efficiencies in the business to help bridge back to that GBP 6,000,000 ambition.

4:53 We're signposting that to be in 2028. Clearly, as we move through the next few months, in particular, autumn statement, we'll review that again when we we we're clear on the the cost landscape. In terms of growing, creating Europe's largest fishing club, MyAD, and leveraging its value at 21% growth in our members in the half up to just a shade under 500,000, you know, again, demonstrating the appeal of my AD, you know, the why wouldn't I join concept in terms of what it what it offers members. But more importantly, it's giving increasing insight to where our customers shop and behave and interact with us. In particular, we continue to look at our omnichannel customer being the most valuable customer to us. And and you can see there on the slide, you know, our omnichannel customer participation was up a 160 basis points in the half as we start to leverage that new investment in the customer data customer insights platform.

5:52 In Europe, our sort of our our fledgling European business, you know, our ambition is to move that through to a breakeven position, and we continue to look at how we only pursue profitable sales in Europe in a more challenging market landscape. And we made strong progress in the half with a 40% reduction in the losses in that business down to only GBP 200,000. Over the last three years, we've reduced the drag of those losses by around 3x, and continues to sort of offer a longer term growth prospect for the business against an appropriate amount of risk capital being deployed at this point in time. Deployment of surplus liquidity to grow the business. Again, cash deployment in the half. We both backed new space and technology investment. Sam will come on to that when we go through our sort of capital spend later on in the presentation. But we're very much still in the mindset of investing for growth and using that strong balance sheet that we continue to have in line with our capital allocation policy to have sort of primacy of growth for the business whilst being mindful in terms of how we deploy that surplus liquidity just to ensure that the stock remains an attractive investment in terms of relative to its screen price.

7:12 Lastly, ANGLING ANGLING's largest retail responsible employer was still around 500 colleagues, and we're we're continuing to sort of develop our offer both to our colleagues and our wider community. Now we launched the AD community fund in the in the six months, which is around us having a more structured way of supporting both environmental and and community initiatives in terms of the the the retail population sorry, the ANGLING population. And at the same time, we've continued to sponsor the ANGLING Trust's work on water quality and the testing of that. And that's becoming increasingly important as folks have seen in the news flow that continues to be a hot topic. In terms of operational highlights, we've got some good detail in the in the pack that that folks can read. You know, I'll just pull out a few.

7:59 You know, in The UK customer space, you know, that implementation of our customer date data and insights platform, so in the middle of the year was a real sort of milestone for the business. We've got behind that as a team, you know, very quickly, and we and we're increasingly seeing the benefits of that both in terms of our digital conversion rate, our our email traffic open rates, the the way we're able to automate traffic based on previous behaviors, and indeed the way we've contemporized this sort of the the on-site experience in terms of search and recommend. You know, in in the half, we've increased the spend that comes from our MyAD population who are omnichannel customers by over 370 basis points, and and those omnichannel customers continue to spend around £500 a year with us. And so the importance of growing that community to engage with us both physically and digitally is increasingly important.

8:54 In the retail space, the middle bullet there, we've an investment program of just around £2,000,000 in terms of digital digital shelf edge labeling. Again, as the as the cost wins particularly around the living wage and the well signposted national insurance increases, that becomes an an increasing component of how we look at driving efficiencies in the business. We've made some initial rollout of that just before the half, and we're on and we're on course to fully roll it out across the estate before Christmas this year. The bottom bullet there, we've continued to invest outside of digital shelf edge in the technology stack for the store estate. In particular, we've sort of updated our store handheld technology.

9:41 That's around giving colleagues the capability to be on the shop floor rather than out the back. And that and that's really helped us look at how we go for, you know, our rotary, how we look at, when we want the colleagues to be available, and how we see we we can sort of deal with sort of run of the mill task within the store in a more efficient fashion. You know, the colleague ratio to to sales improved 20 basis points in the half, which we think is a particular standout given the cost headwinds from the near 10% coming from the living wage and national insurance. Digitally, on right hand side there, we launched something in the half across the whole estate, but we call it shop the range. That gives, an in store customer the capability to interact with us digitally and, and access the full range that we offer digitally from having it delivered either to their house the next day or back to the store.

10:35 We've sat we've seen that be a real success in terms of sort of engagement from the customer base, and we're trading over £200,000 a month already through that and that technology and that capability. That sort of sort of conflates with the way we're looking at the customer data about how we're looking for customers to engage with us both digitally and physically and prove a bridge sort of as as the first step of someone having an omnichannel experience with us. Over the page, you know, Europe. As I said, you know, the the strategy is very much one of only pursuing profitable sales. You know, we we we set out that we wanna reduce the losses. It would be and we've reduced, as I said, that drag by threefold now over the last three years.

11:21 You know, we continue to balance profitability against the optionality of that of those markets, particularly Germany and The Netherlands, offering some real long term growth prospect of the group as we see the returns in those markets right now, potentially providing the same landscape as The UK a number of years ago in terms of the platform for consolidation and and more commercial returns in in this in the sector. In terms of the the sort of key self help we've done in the six months, you know, we have we have put in place a revised distribution model, third party distribution model, and that's helped reduce our pick cost by over 40 basis points in the half. And alongside that, from a capital deployment aspect, we've scaled up what we call just in time stock capability with a number of our suppliers where where we've increased our range by over 25% without any further working capital investment into the business. That's got the the capability to expand further and and and test how we look at whether we can change the the economics of the basket without materially investing further at this point.

12:28 In the middle section there, commercially, you know, we've always sent out that our own brand strategy is a key leg of how we see margin development. You know, we we moved north of 38% in The UK, 38.4% gross margin at the half, again, demonstrating we can grow the sales line alongside the margin at the same time. Our own brand grew its gross profit by 55% and the sort of the cash penetration of the businesses just close to 14% at the half, again, where we've set ourselves a short term ambition of reaching 50 and we've and we've achieved virtually achieved that within a two year period. In terms of communities and sustainability, just down on the bottom right hand side there, you know, we we talk about protected colleague roles through a targeted pay review. The living the living wage continues to be a challenge for our sector, and we're having to look at increasing, you know, options around, around technology deployment, increasingly AI adoption in terms of how we how we give colleagues more capacity in their day to day role to engage in value add activities as opposed to, turning the handle on rudimentary sort of, non value add tasks.

13:44 At the bottom, we we continue to reshape our board. Our founder at the end of January stepped down from the board as we continue to sort of look to to to refresh how we're bringing sort of new ideas and new and and and new focus into our boardroom. At that juncture, I'll let Sam take you through the financials, and then I'll come back to talk about the focus for the remainder of the year and our outlook. Thanks, Steve. So as usual, just a few headlines, and then we'll get into a bit more detail on the next few slides. So starting in The UK, so we've maintained the revenue and adjusted EBITDA growth momentum that we started building that really accelerated over the second half of FY twenty twenty five. And we've also now delivering progression in the adjusted EBITDA margin in the first half year on year.

14:33 In terms of sales, the strength of the like for like sales performance in the store estate and the online business in aggregate has resulted in the like for like revenue growth of 14.2%. And just as a a a reminder, that was 12.6% in the second half of last year versus 2.2% in the first half last year. Alongside that, the accelerated f y twenty five new space is also scaling in line with what we expected, along with this the one new store in the first half leaving overall UK revenue growth at 17% with that growth transaction volume driven. In terms of the read through of that then into adjusted EBITDA, UK adjusted EBITDA growth again outstrips UK sales growth, meaning the adjusted EBITDA margin grew by 60 basis points year on year and a half, and that's largely through the gross margin development of a 130 basis points, as Steve said, to 38.4, and and that now represents a circus 600 basis point improvement over the last six years.

15:38 The 130 basis points in a half has been primarily through improved supply terms, range architecture, and own brands, and I'll come and talk a bit more about that shortly. But going into this year, we always knew we needed around circa 80 basis points of gross margin progression to offset the cost headwinds in terms of the national living wage increases and particularly the, national, insurance changes for employers. So 50 basis points of the 130, I. 130 less the 80, have then flowed through to the adjusted EBITDA margin along with a further 10 basis points through further leveraging the cost base, and results in that 60 basis points gain in the half year on year. Then moving to Europe, the focus continues to be on earnings accretive growth to deliver the lower losses year on year, so reduce the earnings drag whilst retaining optionality over that growth market.

16:34 For the like for like European business, which is the total European business less the Utrecht store, This primary focus on the loss reduction has delivered a circa 40% improvement in the losses year on year and now represents just 6% of UK adjusted EBITDA. And for the store, the revenues continue to scale year on year with the store now at breakeven in h one, which is a key milestone as we continue to learn and prove out the unit economics of that opportunity. And then finally, on cash, we're 5,500,000 lower year on year at the end of the half, reflecting the continued investment in the medium term, objectives, particularly around the CapEx and working capital and also in terms of then the return of excess liquidity through the buyback to shareholders in line with our capital allocation policy.

17:29 So moving into a bit more detail around revenue and gross profit and, again, starting in The UK. So The UK total like for like growth metric is now a really key metric for us in the business as we become increasingly omnichannel through MyAD, a stockpile that's leveraged across both the channels and as we continue to leverage the cost base. And as I said, that strengthened UK like for like revenue growth we saw in the second half of last year has really been maintained in the first half and is volume driven with store growth underpinned by footfall, which was up circa 14% on a like for like basis, and online growth driven by higher conversion, which was up a 160 basis points or two 23% on a ratio basis. The FY '25 space continues to scale in line of expectation along with the additional new story in h one, and that sort of reflects the opportunity pipeline in terms of we at the moment, we have more greenfield versus acquisition opportunities.

18:28 So external planning timelines come into play a bit more and become a key factor, but we still remain keen on both and and agnostic on acquisition and greenfield opportunities and, you know, being broadly stacking up to the same model in terms of how we're evaluating those opportunities, and we've got a very strong pipeline for h two. As I before, gross margin has progressed a 130 basis points in The UK, and that's against a 140 basis points in f y twenty five versus f y twenty four. So we're very much keeping up our momentum in that area. And just to sort of talk through the key bridging components of the 130 basis points, so 50 basis points is through improved supplier terms, 70 basis points through optimizing the range architecture in terms of the supplier mix, and 30 basis points through own brand progression with that gross profit growth of 55% in the first half.

19:27 Alongside then, an additional 10 basis points to what we call service revenue. The classic examples there being commercial marketing such as when a supplier may sponsor a gondola gondola end in store or where we have now have in store services around real spooling and real servicing. Then we come down the snake by 20 basis points on additional MyAD promotional activity to help drive frequency, but also to ensure we're still acquiring the valuable MyAD data through compelling offers and 10 basis points down the snake through improved shrink sorry, slightly, worse shrinkage. Moving to The UK and start with the Utrecht store. So revenue continues to scale, we still benchmark this performance versus a cohort of similar UK stores. And it continues to operate at the lower end of the expected corridor, but still within that corridor.

20:22 And that's primarily linked to the category mix where if it if it had a similar mix to a UK store between consumable categories and the more capital intensive categories, we would we would see higher sales. But conversely, because we see higher consumable category mix in Europe, we are we're seeing a slightly higher gross margin. So if we would then, as I say, to right size the category mix against what we see in The UK, we would see a lower margin, and therefore, the store would show a similar structural position to the European online business in terms of the competitive pricing environment. So really that pricing continues to be the key factor in terms of proving out the unit economics of the store. In terms of the like for like business excluding Utrecht, the focus is, as I say, is really reducing the losses, and a key component of this has been deprioritizing the French business where the unit economics are better on a gross margin basis, but erode a contribution level. Hence, the focus of what we're in terms of focusing on Germany and The Netherlands.

21:32 And they've gone modestly forward, Germany at naught point 3% and Netherlands at naught point 4%. And we carefully and dynamically participate in those markets given the competitive pricing structure and paid search landscape to make sure we're delivering sales and unit economics that make sure where they are delivering our our loss reduction ambitions. We've also further managed the fixed cost within the European business, particularly some of the initiatives we drove in the second half of last year. For example, the third party logistics agreement, which is also helping to underpin that year on year loss progression. And so overall, the EU gross margin is up 60 basis points, but the focus really is on the bottom line effort around the EBITDA and driving driving the loss ambitions there. So we now, as I said before, seen a 40% improvement in The EU like for like business losses in the first half.

22:31 Moving on to just a little bit more on adjusted EBITDA. And as I've already said, starting in The UK, but as already said, just to briefly reiterate, the 60 basis points is a combination of 50 basis points through the improved gross margin progression and the flow through that into EBITDA alongside 10 basis point improvement through the leveraging of the cost base to give to give that 60 basis points improvement. And in Europe, the store the focus has very much been getting firstly on getting the store to breakeven, which is done in h one, and reducing those losses, as I say, by 40% for the like flight business and 46% for the overall European business to just leave it now just 6% of UK adjusted EBITDA. And then finally, on cash, I'm just working through some of those key components of the bridge there that we haven't already touched upon.

23:25 So start with working capital. At this point in the year, we we'd expect a circa 3,000,000 working capital inflow at the summer working capital low in a steady state business. So if we, for the purposes of this slide, assume that's through that 3,000,000 hits us in July, it probably is more likely in August at the peak trading point. But against that frame of reference, we've got £500,000 of cash held by our broker to execute the buyback that we're unable to report in cash as reported in that working capital movement there on the screen alongside around a million pounds of new space stock, which includes some of the the stores we've done in h two as we started to build those stockpiles in the first half.

24:11 Got a million pounds of, own brand stock, which underpins that 55% own brand gross profit growth in the first half with the balance representing high levels of deal stock in-depth as we go into the August peak trading period and ahead of the Black November, proposition. Moving across the bridge to CapEx. So our CapEx investment is firmly focused on new space in terms of developing the the store estate, but also increasing the efficiency and scale of the web fulfillment operation. And those standouts kind of making up that 2,100,000 we've deployed. 900,000 is the first tranche of cash on the digital shelf edge labeling solution that will that will be rolling out in the second half of the year.

24:56 We've got £400,000 on new space in terms of Chester that we opened in the first half and most of Bradford that opened up very in, very early August. We've got £300,000 on the refit of Walden Cross and the resight of Leicester where we had rent increases that meant we even needed to drive incremental sales or resite of the store. And finally, £200,000 on the scale in the Ratkeys web fulfillment hub where the projects will be delivered in h two, but that improves both our goods in and pick efficiencies. And it also allows us to link up our automated picking and packing technology to drive additional, efficiencies as well. And then just finally, the buyback also continues to run with 1,700,000 deployed to date and 1,100,000 since the January 31, and that's shown there on a net net of cash received basis from the exercise of some options.

25:55 So just to briefly summarize these this before I hand back to Steve. So we continue to progress against our medium term objectives in terms of firstly, strong progression in The UK underpinned by the 14.2% total like for like sales growth and the gross margin progression of 130 basis points delivering that 60 basis points improvement in adjusted EBITDA margins, continuing to reduce the European losses, and getting that store to breakeven being a key milestone. And then thirdly, continuing to deploy cash into CapEx and working capital to underpin the delivery of the medium term objectives as well as then returning excess liquidity through the buyback to shareholders in line with our capital allocation policy.

26:41 Thanks, Sam. I'll just go through some focus areas we've got for the remainder of the second half of full year '26 and as we progress into half one FY twenty seven. Again, we've provided a good amount of detail on the next couple of slides that sort of folks can read at their leisure. I'll just pull out a few of the key points on these slides. So firstly, on The UK customer, the real focus is around how we increasingly the use of MyAD in terms of targeting customers and looking at how they behave, how they shop, and how we increasingly use our shopper marketing to make sure we're putting offers and product in front of the customer who's got high buying intent and the most likely to convert.

27:29 Secondly, the final bullet down there, you know, we don't have a full click and collect capability right now. You know, our shop the range technology that I referenced earlier on doesn't doesn't have that embedded within it. We see that as another string to the bow that we can add, and, we're gonna we're gonna focus our technology team on that over the next quarter as we look to sort of update our infrastructure and be able to offer that as we move into the first half of financial year twenty seven. In the retail column, in the middle there, one of the challenges to us as we continue to take more of The UK market share is there are catchments that we are finding challenging with our existing either scale model or smaller scale model to to to be able to look at unit economics that are that are compelling, and we've challenged ourselves to to have a look at a model that could perhaps offer a different experience in terms of the the shopper and how we could we could look at a different format in terms of accessing those smaller catchments that still form, you know, a a a reasonably material component of The UK market.

28:37 In The UK digital space, you know, whilst whilst MyID obviously forms a key component of the customer acquisition strategy, Outside of that, you know, we continue to look at ways to improve the efficiency of that operation. And in particular, we're focused on how we increasingly join up both our picking automation capability and our packing automation, both of which we've previously invested in with some further investment being able to join up those two capability offers the offers the capability to get ahead of potential changes in the national living wage being signposted for April in 2026. Over the page, Europe, as Sam said, it is very much about us being on the loss reduction path whilst maintaining the optionality of being able to pivot back in and reinvest in that market at the point we see more structural change coming particularly in the gross margin landscape.

29:36 You know, we're balancing our business wide resource allocation against that whilst, ensuring that we can maintain optionality as we increasingly have the data points to establish when might be a more appropriate time for wider participation, firstly in The Netherlands and then more laterally into Germany. On the commercial front, you know, data driven customer engagement has been a theme I've been talking about throughout this presentation. We're increasingly driving that into our supply chain engagements, particularly as we're seeing, you know, our key partners are sort of contemporizing the way they look at data exchange between parties. And we see that as a real a real sort of differentiator as ourselves in the market versus our competition in terms of the way we can plan and trade with that supply chain. It isn't just about terms, it is about efficiency and availability, and we're sort of increasingly focused on that, that triangle of those three points to bring us better value into our supply chain. On the right hand side, community sustainability, you know, just the last bullet there. You know, we we are increasingly engaging in an AI adoption process. You know, how can we use that in our customer service offer? How can we use that in our procurement offer?

30:50 We did we do see ourselves again from an industry standpoint being the best place to extract value from the use of our sort of AI adoption, and we'll increasingly focus into that into the next six months and provide a a more fulsome update as we come into May next year at the full year trade. Finally, our outlook statement there on the screen that we've put up. You know, as I mentioned at the front of the presentation, we have upgraded both our revenue forecast and our EBITDA forecast. You know, just to reiterate, you know, group revenue, we are now signposting past a 100,000,000 for the first time with The UK sort of just slightly beneath the 100,000,000 mark. And then and then an adjusted EBITDA forecast of increasing around 14% up to GBP 4,350,000 for the group. We see those as sort of further demonstration of the strategic progress we've made and leaves us well placed to deliver against those medium term objectives that I set out at the front of the presentation.

31:52 That concludes our formal presentation. We'll now move on to Q and A. And we've got some pre submitted questions, which I'll Sam and I will go through, and then we'll answer any further ones that have come in during the presentation. So I'll read I'll read I'll I'll I'll go first, Sam, and you can take over. So, firstly, what's a realistic goal for the total number of MyID subscribers? How big a number is possible? So, you know, we we have moved past the half a million mark now. So post the post the six month period, we're continuing to, gain new members. You know, The UK license sales are around 750,000. We know from discussions with the environment agency that isn't the same 750,000 people each year. There is a reasonable amount of churn in there. You know, we haven't set out a formal ambition, but clearly, there's a several 100,000 members left to go in terms of how we move into those smaller catchments I talked about earlier on in the focus for sort of the latter part of f y twenty six and f y twenty seven that we see as a, you know, as as a cohort that we we we can attract and then to work with their data and work with them in terms of offering them product and and offers that's appealing to.

33:11 Number two. And generally, much more growth potential is there in The UK in terms of store numbers and online market share participation? So the total UK market based on the most contemporary data, but which is back in 2018 with it, it was north of a £500,000,000 market. Clearly, that's got some aspects in that we're not targeting as a business right now in terms of game fishing, secondhand and and and other elements. You know, we we remain convinced there's a a material sort of component of the market still for us to left to go at, and we need to look increasingly at how we use that sort of store format option to go at those smaller catchments. You know, in in May, when we're in a position having fully evaluated that, we'll clearly come out with a number that is north of a 100,000,000 given where we are right now. But, you know, we we we our our focus is on delivering that 100,000,000 and setting out a clear a clear landscape for where we're gonna go beyond the 100 when we come around to May next year.

34:14 I'll take the next one. Yeah. This is quite a long question, so bear with me. Please, can you help us understand the moving inventories in one h better? You mentioned in your prepared remarks that you had invested £1,500,000 in the new stores, but there was still substantial further investment in in inventory. Which areas of the business was this investment made, own own brand, question mark? And will each such substantial investment be required on a long game basis, or should we expect stronger free cash flow generation? So if we look at the stockholding year on year at the half of July 31, we're just a smidge over £4,000,000 higher year on year. And if you take out the cocktail of new space and owned brands of that, the which is, you know, the thick end of 2,000,000, The rest of that stock growth is really linked to the like for like growth in the underlying business.

35:09 Now what that does point towards is our sort of relatively flat stock turn at the moment, which is an area we're increasingly focused on as we look to sort of get our rocky ambition, particularly for The UK, towards that sort of double digits to sort of low teens, which is our sort of stated aspiration there. And at the moment, we're doing a good job in terms of working the the numerator, but we wanna make some more progress on the denominator of that. And, really, to get that stock turn moving, the key element or big nut for us to crack there is in terms of what we call trade packs. And that's where we might only want one of something, but a supplier will stop them in, say, a 10 pack, and we've gotta commit to the full 10. And somewhere with the ground 60% of our 17,000 core SKUs in The UK are in trade packs. So that's the big opportunity there in terms of managing the inventory and improving our operating cash flow generation.

36:08 Yep. Number four, please can you discuss your views on buyback versus dividend? Shares continue to suffer from a lack of liquidity and despite incredibly strong operational performance continue to de rate. Given the strong cash flow generation, cash balance sheet and manageable investment needs, would you consider a dividend as a means of attracting a new investor base and providing a clear mark of how undervalued the company is? Yes. As you'd imagine, we're in continued dialogue with our broker and sort of our substantial shareholders on this. You know, we we remain of the view investment in the business. Growth is is the key driver for this. You know, we we have got a live buyback in place. That buyback was put in place where the shares were valued at what we believe was a substantial discount to to their their fair value. We continue to to review that on an ongoing basis, and and we're only deploying capital into that buyback where we believe it represents sort of substantial value to the shareholder in terms of buying that back at a discount.

37:19 You know, we we continue to review the dividend option. We are not at the belief right now that that the sort of the level of yield we would be paying on a dividend would attract a substantial new shareholder base relative to what we've we have today. And again, you know, we continue to we'll continue to look at that. You know, we've got a refresh of our buyback on the December 9, and that will form a component of that discussion again. But right now, we're mindful of the liquidity of the stock relative to the buyback program and the need to demonstrate increased growth from our investment. Number five, why have you been so timid in your approach to buybacks given the start valuation disconnect on shares? Operation operating performance is very strong, and this is probably one of the most, most undervalued companies globally.

38:12 I'm not gonna comment on whether it's the most undervalued globally. What I would say is, you know, I I don't think we have been timid. I think we've we've clearly demonstrated and and tested ourselves around the board table around. The buyback is there to do to provide shareholders with real value. And where we've seen it at a substantial discount, we have participated in the buyback, and we continue to review that cap and will continue to review that cap where we believe it offers value. We think, clearly, our shares have rerated. We're up to 55p towards the back end of last week. And we if we take ourselves back to a bit substantial accretion in the price, which reflects the strength of the operational performance. And obviously, the buybacks played a role in sort of ensuring that, that share price has a little bit of stability in it.

39:04 I'll take the next one. Please, can you discuss the competitive dynamics in Europe? You're a company operating at less than 30% gross margin, which is below the lowest levels you've achieved in The UK even when the market was at peak competitiveness. Clearly, you're a smaller player in Continental Europe, but do you feel the challenge is lack of brand awareness? Or is there a structural reason your competition in The Netherlands and Germany are able to make an economic return at circa 25% gross margins, which makes this a harder, a harder market to operate within? So I think the third the first thing I'd just add there is actually in The UK online business at peak competitiveness, we did see margins below 30%. So we have seen this before. So we do feel that the European market is showing some of the signs of what we saw back in The UK kind of pre 2020.

39:59 Now I think not none of or our opinion would have been none of our competitors in Germany and Netherlands are making a what we would consider a commercial return at the gross margins being achieved in Europe at the moment. And nobody I don't think anybody could make, you know, really good economic returns at a circa 25 to 30% gross margin. And what was so we we very much see as a structural challenge in the market, which is really driven by the competitive pricing environment. And we believe that has to change at some point and that some that some point is coming sooner rather than later. And so that's why we're really keen to retain the optionality over that growth opportunity, but whilst reducing the earnings drag on the overall group profits in the meantime.

40:46 Next question is, please, can you discuss UK growth? One, please, can you share the like for like performance for current trading? And two, given the strong growth in the first half, have you won market share, and has this come from mom and pop operators or larger competitors? So I think I we're not gonna get into sort of giving out the like for like sort of, month by month, blow by blow. But what what I think it's fair to say that it's sort of over that August, September period, where we released the sales numbers in our RNS. We definitely saw the back end of August and into and through September softening in our sales, which on the one hand would be expected as we come off the seasonal peak. You know, that would be fairly normal for us. It's made it slightly more challenging such in in in that sort of August into September.

41:36 Last year was very strong, so it's a very tough comparative we're now coming into. And, you know, we are we are seeing some of that. In terms of then the the relative performance against the mom and pop or large competitors, so, yes, we we we think we have outperformed those. We do think that based on some of this data suppliers have shared with us, that the competitors are probably sort of in have seen some growth year on year in the sort of low to mid single digit sort of sales growth year on year. So we're we're of the belief though that, obviously, with our, you know, UK 17% sales growth, we're very much over indexing and and, you know, benefited from that, improved year on year position, sort of more than our fair share, so to speak.

42:25 K. Please, could you discuss a d MyAD in more depth? What benefit does joining MyAD provide your customers? So so there's three three key components to MyAD. So the first is being a member gets you access to prices on products that nonmembers can't access. So, you know, we will differentiate on a on a price ticket in terms of what a member's price is versus a nonmember's price. Clearly, that is only on a a a cohort of the products. It doesn't span all of our products, and and we and we dynamically change those each month. So we we sort of target different angler angler sort of communities as we move through the seasons. That that obviously is a sort of a key attraction. You know, when you when you do transact with us at the till in the store, if you're not a member, it will tell you on the saving you're missing out from. And does and and we can evidence now with suppliers that, you know, having that differentiated pricing can drive more cash for ourselves and for themselves by actually using MyAD as as as the as the mechanism to sort of drive customers into that product.

43:30 Secondly, we've got a number of other components. So, you know, money can't buy competitions being being a great example of where that those sort of things really resonate with the angling community, access to to, you know, notorious anglers and an experiential based, sort of concepts. And then thirdly, we've got member only benefits, which are free and in in terms of sort of complementary products and categories, be that, you know, access to to discounted fishery tickets or or or stuff you're gonna take on the bank, so coffee, etcetera, and and and holidays and such like. So those three components form what we call the why wouldn't I join basis because it's free to join. And and we're obviously seeing that resonate really well with the customer base with our with our increased numbers. And I think, you know, we we will review in time whether there is a cohort or population where we could offer a sort of paid solution in terms of further benefits beyond the sort of the free members only benefits right now. And and we're we're gonna work on that in the next twelve months. But right now, the data acquisition that we get from the customer base is is the real key differentiator we see for the business in terms of how we drive value from.

44:48 The next question is, is there scope for margin improvement? How will this be achieved? So in our sort of high level model of how we would get to the 100,000,000 revenue and 6,000,000 adjusted EBITDA medium term target for The UK, we always built that around having to get the margin to something beginning with a four. So, you know, getting to that magic 40% milestone. And we still see that sort of the the near term target in terms of being able to deliver on the on a 6%, adjusted adjusted EBITDA margin. In terms of how we'll achieve that, I think if we were sort of looking at what what components make up the bridge like what I talked through before, I think the three standouts in the bridge will be supplier terms, continuing to sort of optimize that range architecture, and also continuing with our own brand aspirations alongside them sort of small supporting factors around particularly around our what, you know, what I referred to earlier as our service income in terms of where we are sort of, you know, monetizing our commercial marketing efforts and sort of the in store servicing opportunities.

45:59 So they'll they'll sort of be supporting factors, but really mostly around terms, range architecture, and own brand. Do you wanna scan? We'll just go and try and find the the ones that have come in during during the session. So here we go. So next one, well done on excellent momentum reported in the half one results. Looking ahead to the next five years, what is the single overriding strategic vision for the group? And how were the core pillars of UK, European market penetration, MYOD, data leverage and gross margin develop combined to solidify ANGLING DIRECT as the undisputed leader in the European fish and tackle market, I. E, what will the business look like in five years' time.

46:47 Bobby said a lot in that one. I think we're again, as I said, you know, we we we shoot we're really shooting our medium term objectives right now. There there's plenty addressable market to go at, you know, particularly in Europe, and and we've still got, you know, tens of millions to go at in The UK. You know, we we are of the view that, you know, we we can continue to take share in the category. Clearly, you know, 6,000,000 in The UK is not the limit of our ambition. You know, what will it look like? You know, we we would very much see it as a, you know, our replication of our UK model further afield in Europe and giving us the potential to sort of, you know, scale the business increasingly in that in that earnings number looking to move up towards a double digit EBITDA numbers. Clearly, more more info on that coming in May as we look to then review our medium term targets for The UK.

47:41 Which one's there? Have you not skipped one? Sorry. I'm not. Here we go. Do do you wanna take that one? Like for like. Yeah. Like for like growth is amazing. Can you dig deeper where this growth is coming from and what is what is impacting this growth? So in terms of the the like for like growth in the first half, so the stores were just shy of 10%, and the web was a smidge over 21% in terms of its like for like growth. As I said before, they were transaction volume driven with footfall in being being the key standout driver in store and conversion online. The the the footfall in store, we think, is, you know, testament to our consolidation in the market where we're entering new catchments and successfully sort of taking catchments and and and maturing those newer catchments as well as it then incrementally growing the existing catchments.

48:35 And online, we feel, you know, is is a mix of that conversion is really a mix of how we're more using a different approach for our bidding strategy to make sure that we invest our money smartly there to find find the right customers that come onto the site and convert alongside a metric of the data platform helping with conversion in terms of making sure we've got compelling offers on the screen for the customer. Next one. Could you speak to third party logistics in The UK, specifically whether you use one or more logistics companies? So just for clarity on that, so we've got one UK customer fulfillment shed here in Rackheath in Norfolk, and we've got one own brand distribution center in The Midlands.

49:25 Both both of those are self operated in terms of pick pack. Obviously, we use two two different organizations in terms of our customer fulfillment for for different size of parcels, and then our own brand fulfillment from the The Midlands Distribution Center to our stores is with a third distribution partner. Clearly, we continue to review those rates with those distribution partner, but it is our own, if you like, logistics operation in terms of the pick and pack. It's in Europe where we have pivoted and used a third party given our relative scale and our capability to plumb into their sort of wider operation and use their economies of scale in terms of that pick and pack capability.

50:14 Next one, are you looking for potential shops in Scotland, the South West and Wales to fully cover The UK? So we've got a data led strategy in terms of how we pick catchments and locations. That is increasingly sophisticated in terms of third party data sources that we sort of lean on to to identify those what I call what three words of where where the location needs to be. So it isn't we are deselecting Wales, Scotland, and the Southwest. That is clearly where, you know, where the data points us to, where we've got the most concentration of engaged customer base that we believe we can leverage. You know, I I will just refer you back to you know, there are catchments with a smaller number of licensed sales and and and other factors that we need to look at how we engage, and that might need to be in a different sort of experiential way than we offer the customer today.

51:12 I'll another one here. But, see, you mentioned an increase in shrinkage. Are there plans to reduce this? So you're right. We did have a minus 10 basis points movement in shrinkage in the gross margin bridge. There were two sides to that. We actually saw some sort of green shoots in in store where we've got a 10 basis point improvement in shrinkage, which we're actually, you know, pretty pleased again pretty pleased about because actually that I would describe that as a sort worsening landscape in terms of what we're seeing in store. Online had a a worsening shrinkage position, but we think that will unwind over the second half. We we very prudently account for returns by providing for them in our accounts in full and upfront, whereas actually, we'll then work through a warranty process with some of our suppliers.

52:04 And as as we come off the seasonal peak, we'll catch back up on those. We we expect that to sort of unwind over the second half depending what, you know, what other factors come into play. I'll take another one here as well. Please please can you give us a high level view of how we should expect working capital to move in the second half? So, for those with access to some of the analyst guidance notes, you'll see in there that we we our working capital in our cash flow statement for the year is effectively to only have an outflow for new space. And I think as we go through the second half, that's still our current expectation is the only working capital move will be that outflow on new space. Clearly, what I'm signposting as we move through '27 and into '28 to sort of improve this stock turn is we should see some of that new space get getting offset by an underlying improvement in performance and which will also then help with that generation of the improvement in the operating cash flow.

53:03 Do want us to move it up a smidge? I'll just go back to that next one. There we go. Can you no. Where was where was it? Didn't let no. The one about the capacity on the on The U on The UK distribution. To go down. There was one sorry, we're just struggling to find out the words. One about the This one. Yes, here we go. No, the one about the distribution center. There was one that said, can you talk about the scale of The UK distribution center and its capability to go beyond the 100,000,000 mark? So just again, for clarity on that, we've got one UK customer distribution center. Right now, obviously, we're signposting. We're coming up towards a 40,000,000 digital business here in The UK.

53:50 We're increasingly investing in that, particularly around, as I said, joining up the automated pick and the automated packing. We did last year separate our own brand logistics out to a separate warehouse on a shorter term lease. That's proved an increasingly smart move and underpinned our 55% gross profit increase in the own brand. So we're increasingly confident we've got a business that can scale above GBP 100,000,000 in The UK and the digital components play its role in that. And right now, we're not signposting any volume constraints within either of those sort of operational hubs we've got here in The UK. Next one, do you track the number of active MyID members and what plans are there to increase the number of active members? I think as we said, we're over half a million now. There is an opportunity to scale that substantially further as we look at that sort of churn in terms of license holders.

54:50 And what what what plans have we got to increase the active members? You know, we we are you know, we we we work with our our colleagues in terms of making sure that the benefits are really clear to folks joining that. And, you know, and we'll we'll increasingly push that because we see it as the gateway in terms of that data acquisition, which is what's helping drive our omnichannel participation. Very conscious of time. Last one, are there any plans in the immediate future to expand into The US as the largest retailer fishing angling market? Right now, we remain focused on scaling The UK and then looking at more laterally how we scale the European business in a a in a closer, more approximate addressable market. Never say never, but not in the short to medium term.

55:36 And that with a couple of minutes to go concludes concludes all the q and a. Perfect, guys. If I may just jump back in there. Thank you for your presentation, for being so generous of your time and addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. But Steve, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Yes. No problem. Look, thanks for everyone's time. We wanted to demonstrate this morning that we are making the strategic progress that we committed to back in May 24. We believe we're doing that. We're clear on where our focus areas are, and we're clear what the opportunity is. And we've got a really strong balance sheet and management team that underpins those ambitions. So we're looking forward to sort of coming back and talking to shareholders again in May and looking forward to setting out a further road map for this business.

56:37 Perfect. That's great, Steve. Sam, thank you once again for updating investors this morning. Could I please ask investors not to close this session? You'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This won't take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf management team of ANGLING DIRECT PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.