Angling Direct Leads Our Trio Of UK Penny Stocks

As an experienced investor, I'm always on the lookout for undervalued gems in the UK stock market. Today, I want to share my findings on Angling Direct (ANG), a fishing tackle retailer that has been making waves in the consumer discretionary sector. With a market cap of just £30.25 million, Angling Direct is a penny stock worth considering.



Angling Direct has been on a roll in recent years, with revenue and earnings growth that has outpaced the broader market. In 2023, the company's revenue increased by 10.20% to £81.66 million, while earnings surged by 125.97% to £1.22 million. This impressive performance can be attributed to several strategic moves by the company.

First, Angling Direct has been expanding its store footprint and online presence, opening new stores and acquiring competitors. This expansion strategy has paid off, with store revenue increasing by 8.4% during the key second quarter of trading. Additionally, the company's online sales have continued to grow, with UK online business taking a greater share of the higher ticket item market.



Another key factor driving Angling Direct's growth is its MyAD customer loyalty programme. With over 330,000 members, the programme has contributed to over 75% of UK revenues being transacted through the scheme. This growth in customer loyalty has likely contributed to the increase in earnings and is a testament to the company's ability to build a strong relationship with its customers.

Angling Direct's expansion into Europe has also been a significant driver of growth. The company's European revenue returned to growth in 2023, with sales rising 18.4% and key markets such as Germany, France, and the Netherlands experiencing 32.3% growth. This expansion has been supported by the opening of the company's European distribution center in March 2022, which has generated larger losses than anticipated in its first year. However, the costs of the European expansion have been absorbed within the resilient trading performance of the company's UK operations.

With a strong cash position of £16.96 million, Angling Direct has the financial flexibility to pursue strategic moves that could enhance shareholder value. The company could consider acquisitions to expand its product offerings or enter new markets. Additionally, Angling Direct could explore share buybacks or initiate dividend payments to reward shareholders for their investment.

In conclusion, Angling Direct is a penny stock worth considering for your portfolio. With a history of revenue and earnings growth, a strong cash position, and a strategic focus on expansion and customer loyalty, the company is well-positioned to continue its impressive performance. As always, be sure to do your own research and consider your risk tolerance before making any investment decisions. Happy fishing!