annual report - fishing republic · 4 fishing republic plc annual report for the year ended 31...

ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2015

G A M EC A R P

SEA

CONSUMABLES

C O A R S EL U G G A G E

C L O T H I N G

Fishing Republic was established when we opened our first store in Barnsley in 2005. Since then Fishing Republic has grown to be one of the largest fishing tackle retailers in the UK.

Fishing Republic’s origins date back to 1985 when its Founder and Chief Executive, Steve Gross, aged 13, established a business selling fishing flies and fly tying materials to fishing tackle wholesalers. Operating from physical stores and online, the Group today caters for all types of anglers (coarse, carp, game and sea fishing), supplying a comprehensive

range of products, including leading brands.

Strategic ReportKey Highlights

Chairman’s Statement

Chief Executive’s Report

Financial Review

- Key Performance Indicators

Principal Risks and Uncertainties

Governance Directors’ Report

Governance Report

Financial Statements

Independent Auditor’s Report

Consolidated Income Statement

Consolidated and Company Statement of Financial Position

Consolidated and Company Statement of Changes in Equity

Consolidated and Company Statement of Cash Flows

Notes to the Financial Statements

Contents

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Fishing Republic plc Annual Report for the Year Ended 31 December 20154

www.fishingrepublic.net 5

ContentsStrategic Report

• Admission to AIM and placing to raise gross proceeds of £1.5m in June 2015.

• Encouraging results in line with market expectations.

• Revenue increased by 22% to £4.12m (2014: £3.39m) - with H2 sales up by 45%, year-on-year.

- benefiting from the deployment of capital raised in June.

• Gross profit rose by 21% to £1.88m. (2014: £1.55m)

• Profit before tax and exceptional items up by 3% to £305,000. (2014: £295,000) Reported profit before tax of £5,700. (2014: £295,000)

• Placing of £0.5m in H2 to fund expansion of store network.

- acquisition in December of “Cotswold Angling”, near Swindon, establishes the Group with a presence in the South of England.

- leases signed on three stores, in Hull, Birmingham and Crewe, which opened in Q1 2016.

• Online sales (via third party and own websites) are growing well - up 30% year-on-year.

- own website sales, a key focus, more than doubled in H2.

• Group is well positioned for the commencement of the main fishing season.

Strategic R

eport and Key H

ighlights

Introduction

The Directors present the Strategic Report of the Company for the year ended 31 December 2015, comprising Key Highlights, the Chairman’s Statement, Chief Executive’s Report, Financial Review, Key Performance Indicators and the Review of Principal Risks and Uncertainties.

Key Highlights


Chairman’s Statement

IntroductionI am very pleased to present Fishing Republic’s trading results for the year ended 31 December 2015, which are the Company’s first as a publicly quoted company.

It has been a significant year for Fishing Republic, with the Company successfully joining AIM on 4 June 2015 and raising a total of £2.0m (gross) to support the Group’s growth plans.

Business DevelopmentAs we have previously stated, the Board believes that there is an exciting opportunity for Fishing Republic to build a significant market presence in the highly fragmented fishing tackle market and it is our intention to increase our store network and broaden our geographic presence, as well as to expand the Group’s online sales.

We completed some important developments in the second half of the year, deploying the new funds raised at IPO into our existing business and raising further funds in December to support our store expansion strategy. With these new funds we completed our first acquisition, purchasing Cotswold Angling, near Swindon in December.

This well-established fishing tackle business was an important strategic move and has established our presence in the South of England. We also extended our geographic reach into the West Midlands, with the addition of a store in South Birmingham, and added two further new stores, in Crewe and Hull, with the store at Hull replacing our existing much smaller outlet. All three stores have recently commenced trading, in time for the start of the 2016 fishing season.

The benefits of these strategic moves will be felt in the current financial year together with our ongoing investment in support of our online sales strategy.

Financial ResultsThe Group’s results for the year ended 31 December 2015 are in line with market expectations and it should also be noted that for almost half the year, until 4 June 2015, the Company was in private ownership.

Sales for the year as a whole increased by approximately 22% to £4.12m (2014: £3.39m), with sales in the second half rising by 45% year-on-year. This significant rise reflected the benefit of additional resources spent on online sales and marketing activity as well as improved stock availability in stores as we invested the funds raised at IPO.

The Group’s gross profit increased by 21% to £1.88m (2014: £1.55m) and, although operating profit before exceptional IPO costs decreased by 12% to £321,000 (2014: £366,000), as the Group absorbed the additional costs of being a quoted company and increased marketing expenditure, profit before tax excluding exceptional IPO costs increased by 3% to £305,000 (2014: £295,000), following a reduction in finance charges payable. Reported profit before tax which includes expensed IPO costs of £299,000, was £5,700 (2014: £295,000).

After a tax charge of £37,000 (2014: £58,000), the profit for the period excluding exceptional IPO costs increased to £268,000 (2014: £237,000). Underlying basic earnings per share was 1.36 pence (2014: 1.72 pence). After IPO costs, the Group generated an after tax loss of £31,000 and the reported basic loss per share was 0.16p (2014: earnings per share of 1.72p).

Cash FlowThere was a cash inflow of £2.00m (£1.41m after expenses) following two share placings, respectively raising £1.50m (gross) on 4 June 2015 and £0.50m (gross) on 18 December 2015. There was a net cash outflow from operating activities of £919,000, mainly as a result of reducing creditors and the investment in stock for the new store openings in early 2016. Cash at 31 December 2015 stood at £646,000 (2014: £52,000).

Dividend As we stated at the time of the Company’s admission to AIM, the Board’s objective is to continue to grow the Group’s business and, therefore, the Directors will be reinvesting any surplus cash resources into the Group and are not expecting to recommend a dividend in the short term. However, once the Board considers it commercially prudent for the Company to do so, it intends that the Company will recommend or declare dividends at some future date.


Chairm

an’s Statem

ent

The Board The Board was strengthened at IPO with an additional executive appointment, Paul Hagerty, as IT Director and two non-executive appointments. I was delighted to join as Non-Executive Chairman with Ed McDermott joining as a Non-Executive Director.

In December, we announced the appointment of Russell Holmes as Finance Director with effect from 1 January 2016. Russell has been working with Fishing Republic since 2008, prior to which he has held roles in private practice and industry. He takes over this role from Robert Tippett, whom the Board would like to thank for his significant contribution to the Group over many years and especially during the IPO process.

Outlook The Group has made encouraging progress since joining AIM last June, benefiting from both the deployment of additional funds and a greater market profile.

Operationally, we have had an active start to the new financial year, completing the integration of our acquisition, Cotswold Angling, in Swindon, and preparing our three new stores in Birmingham, Crewe and Hull for opening in time for the new fishing season. All these new stores are now fully operational and our launch events have gone very well, attracting encouraging levels of customer interest. We remain focused on building online sales, particularly from our own websites and our initiatives here are progressing well.

From a trading perspective, the first quarter of the year is traditionally our quietest period, with the fishing season typically starting at the onset of the better spring weather. Trading in the first few months of the new financial year has been in line with the Board’s expectations and the Group is well positioned for the main fishing season.

The Board has a strong pipeline of opportunities to expand the store network and the Group’s geographic reach, and expects the Group to continue to make progress over the current financial year.

James NewmanChairman 11 April 2016


Chief Executive’s Report

IntroductionIt has been an exciting year for Fishing Republic, with our admission to AIM marking an important step in the business’s development. The funds we raised at admission have helped to support a 45% increase in year-on-year sales in the second half and, along with the additional new funds raised in December, we have also been able to expand our store network, both organically and via acquisition, and to grow online sales.

We have ambitious plans for the business and, as we look forward, we expect to make further good progress in executing our growth strategy.

Review of Operations Stores

Our chain of seven stores, located in Barnsley, Doncaster, Hull, Manchester, Rotherham, Sheffield and Sunderland, performed in line with management expectations over the year and generated approximately 55% of the Group’s total sales. Sales from these stores rose by approximately 15% over the prior year, benefiting from additional marketing expenditure and better stock availability in the second half. Our stores are typically situated in out-of-town light industrial sites and operate as ‘destination’ stores, carrying a comprehensive product range, designed to cater for all types of anglers, coarse, carp, game and sea fishing.

In the second half of the year, we signed leases on three additional retail units, in South Birmingham, Hull and Crewe, with the new unit in Hull replacing our existing smaller outlet in that city. All three stores fit our model of ‘destination’ outlets and, as planned, have recently commenced trading in time for the opening of the 2016 fishing season.

In December, we also acquired the business and assets of a well-established fishing tackle retailer, which traded as Cotswold Angling. Established in 2000, and based near Swindon, Cotswold Angling provides us with a presence in the South of England, expanding our geographic footprint. Its integration is now fully complete and we have been very pleased to welcome its co-founder and Director to our senior management team.

Online

Online sales accounted for 45% of Group sales and rose by 30% over the prior year. Currently, a significant percentage of the Group’s online sales are made via third party online retailers and a key objective is to increase the proportion of sales generated by the Group’s own websites, www.fishingrepublic.net and www.yorkshiregameangling.co.uk.

Utilising the cash available following IPO, we have been focusing on initiatives to enhance our own websites, which together now display over 20,000 different products across all types of fishing disciplines. Sales from our own websites have more than doubled over the second half of the year and have continued to grow strongly in the new financial year.

Own-brand products

We have developed a range of our own brand products, working with manufacturers based in the UK and in the Far East. Our key brands include ‘Klobba’ for clothing and ‘Theseus’ for carp fishing products and we also have established brands across other product areas. We see a good opportunity to grow our own brand sales and will look to invest further in this area. Own branded products currently contribute approximately 15% of Group sales.

Growth StrategyThe Group’s growth plans combine both organic and acquisitive growth.

We intend to continue to broaden the Group’s geographic footprint through selective acquisitions of other specialist fishing tackle retailers. These businesses are typically owner-managed, single unit retail operations, which are often run as ‘lifestyle’ businesses. These types of acquisitions will allow us to grow our customer base quickly, both in-store and online, as well as increase the Group’s buying power with manufacturers and suppliers. Our previous experience as a wholesaler of fishing tackle means that we are well placed to identify the businesses which may be available for sale.

In addition, we will also consider opening new stores in fishing communities, which are not well catered for by an existing specialist fishing tackle retailer as we have done in Crewe, Hull and South Birmingham.


Chief E

xecutive’s Report

Building the Group’s web presence is important to us and will be a key driver of growth. We intend to increase on our current own website sales by further enhancing our own websites, both in terms of content and through strategies to drive traffic to the sites. This includes increasing our use of social media to promote the ‘Fishing Republic’ brand and to provide regular updates, including product offers, to new and existing customers. Our increased use of search engine optimisation should also mean that the ‘Fishing Republic’ websites feature more prominently when anglers are searching the internet for fishing tackle products.

Shareholder Incentive Scheme In September, we were pleased to launch a shareholder incentive scheme, which offers shareholders holding at least 25,000 shares the opportunity to apply for a shareholder privilege card. This card provides holders with access to savings on a par with staff discounts on any purchases made in store or online. The full terms and conditions of the privilege card are available on the Company’s website, www.fishingrepublic.net, together with details on how to apply.

StaffIt has been a year of change for the business and I would like to thank all our staff for their hard work, commitment and enthusiasm. The Group’s success reflects the talented team we have and their dedicated efforts are much appreciated.

Outlook We are pleased with the Group’s progress since joining AIM last June and the business is well positioned for the new fishing season. We remain very optimistic about prospects as we look to continue to develop the business.

Steve GrossChief Executive 11 April 2016


Financial Review

Income StatementSales increased by 22% to £4.12m (2014: £3.39m), with gross profit margin stable at 46% (2014: 46%), and gross profit rising by 21% to £1.88m (2014: £1.55m).

Operating profit, before the exceptional costs of the IPO in June 2015, decreased to £321,000 (2014: £366,000), as the Group absorbed the on-going costs of being a quoted company and invested in additional marketing activity to support growth.

Finance costs reduced to £16,000 (2014: £72,000) reflecting the decrease in the Group’s debt. Profit before tax and exceptional items increased by 3% to £305,000 (2014: £295,000), as shown in the table below.

2015 2014Profit before taxation 5,718 294,516Exceptional items (see below) 299,040 -Profit before tax and exceptional items 304,758 294,516

Statement of Financial PositionNet assets at 31 December 2015 stood at £2.93m, (2014: £1.25m). Inventories (carried at the lower of cost and net realisable value) at the year-end totalled £2.45m, an increase of £538,000 on the value at 31 December 2014. Included in this figure was £133,000 of inventory held at our store in Swindon (formerly ‘Cotswold Angling,’ which was purchased in December 2015), as well as stock for the three new stores opened in the first quarter of 2016. Increased stock availability has been a key driver of sales during the second half of 2015.

Total liabilities decreased to £708,000 (2014: £1.14m) reflecting a reduction in trade creditors as we took advantage of early payment discounts. Group borrowings comprise a bank loan, which at 31 December 2015 stood at £268,000 (2014: £276,000).

Cash FlowAt the year end, the Group’s cash and bank balances totalled £646,000 (2014: £52,000).

Proceeds from the share issues in June and December totalled £2.00m gross, with costs of £294,000 deducted from equity and £299,000 deducted through the Income Statement (as above), to leave £1.41m net of costs.

£956,000 has been invested in working capital in the year to support growth (2014: £77,000), primarily through increased stock levels and reduced creditors. A further £135,000 (2014: £26,000) has been invested in fixed assets.

Russell Holmes FCCAFinance Director 11 April 2016

Key Performance IndicatorsThe Directors consider the following to be the KPIs of the Group:

2015 2014Group sales £4.12m £3.39mGross profit percentage 45.6% 45.8%Net profit (before tax and exceptional items) percentage 7.4% 8.7% Average customer baskets Own website platforms £52.88 £45.74Third party website platforms £13.21 £16.14In store £21.92 £22.23


Financial Review

Principal R

isks and Uncertainties

The Board has a policy of reviewing key business risks and oversees the development of processes to ensure that these risks are managed appropriately.

The key risks identified by the Board are split into business risks, operational risks and financial risks and are summarised below:

Business RisksA decline in consumer spending or a change in consumer preferences.

The Group’s sales depend on consumer spending, which is influenced by factors beyond the Group’s control, including consumer confidence, general economic conditions in the UK and general global macroeconomic conditions. A significant decline could have a material adverse effect on the Group’s business, results of operations or financial condition.

The Board regularly reviews business strategy to determine how sales can be achieved or bettered and in doing so considers wider economic and industry specific trends that affect the Group and the competitive position of its product offering to determine the most appropriate sales strategies.

Weather conditions.

The Group’s sales are sensitive to weather conditions. In general, the Group sees a reduction of sales, in particular consumables such as bait, lines and hooks, during the winter period as customers tend not to go fishing when the weather is less favourable. Consequently, prolonged periods of bad weather could adversely affect the Group’s business.

The Group’s product offering and staff hours are adjusted in line with seasonality to reduce the impact on profitability.

Operational RisksFailure of the Group’s information technology, network or communications systems.

The efficient operation of the Group’s business is dependent on its key operational business systems. Any significant disruption to these information technology or communications systems could have an adverse effect on the proper functioning of the Group’s businesses and therefore the Group’s financial condition.

The Group has a robust enterprise management system and communications network. Its dedicated in-house IT team works under the IT Director to monitor the proper functioning and suitability of the Company’s IT systems. Operating from the Group’s head office, the team is responsible for resolving any IT-related issues as they arise.

Financial RisksCurrency fluctuations could materially adversely affect the Group’s results.

The Group’s results can be affected by fluctuations in currency exchange rates. The Group’s sales are denominated in pounds sterling. However, the Group sources a large amount of its products from outside the UK and in particular from the Far East, where the principal currency of purchase is US dollars. The Group’s non-UK purchases in US dollars give rise to an exposure to changes in exchange rates between pounds sterling and US dollars.

The Directors regularly monitor foreign exchange rates and may use forward contracts to fix exchange rates for future purchases to mitigate against the risk of currency fluctuations. The Group may also source substitute goods from the European market.

This report was approved by the board on 11 April 2016 and signed on its behalf by:

Steve GrossChief Executive Officer 11 April 2016

Principal Risks and Uncertainties


Governance

Statement of Directors’ ResponsibilitiesThe Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applicable law. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules of the London Stock Exchange for companies trading securities on the AIM Market.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are further responsible for ensuring that the Strategic Report and the Directors’ Report and other informationincluded in the Annual Report and Financial Statements are prepared in accordance with applicable law in the United Kingdom.

Results and DividendsThe loss for the year, after taxation and exceptional IPOcosts, amounted to £31,458.

The Directors do not recommend the payment of a dividend.

Capital StructureFollowing the successful introduction to the AIM market on 4 June 2015, another placing occurred in December 2015 and full details of changes in the capital structure are disclosed in Note 22.

Directors’ ReportThe Directors present their report together with the Group financial statements for the year ended 31 December 2015.

The Governance section comprises the Directors’ Report and Governance Report.


Governance

Directors’ R

eportDirectorsThe Directors who served during the year and up to the date of signing the financial statements, unless stated, were:

ExecutiveS J GrossR Holmes (Appointed 1 January 2016)R Tippett (Resigned 31 December 2015)P HagertyZ Gross

Non-ExecutiveJ H Newman (Also Chairman)E McDermott

All the Executive Directors are due to retire by rotation and are eligible for re-election at the forthcoming Annual General Meeting.

Directors’ InterestsThe interests of the Directors in the shares of Fishing Republic plc at 31 December 2015 were as follows;

Director Number of ordinary shares of 1pS J Gross 8,967,500 Z Gross 2,100,000J H Newman 133,335R Tippett 97,989

Certain Directors were granted options to subscribe for the Company’s shares, the terms of which are disclosed in Note 27. The Directors’ interests in options at 31 December 2015 were as follows;

Director Number of ordinary shares of 1pR Tippett 176,470P Hagerty 176,470 J Newman 117,647E McDermott 117,647 All of the above options were granted in the year and held at 31 December 2015. No options were held in the Company or Group at 1 January 2015.

ShareholdersAt 31 December 2015 the Company had been notified of the following shareholdings amounting to more than 3% of the Parent Company’s share capital of 26,875,000 ordinary shares of 1p:

Shareholder Number of % of voting rights ordinary sharesS J Gross 8,967,500 33.4Miton Group plc 4,895,833 18.2Z Gross 2,100,000 7.8J H Gross 1,362,500 5.1P Turner 1,237,500 4.6

Disclosure of Information to AuditorsEach of the persons who are Directors at the time when this Directors’ Report is approved has confirmed that:

• so far as that Director is aware, there is no relevant audit information of which the Company’s Auditor is unaware, and

• that Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information.

Charitable and Political DonationsThere were no donations during the year.

Post Balance Sheet EventsSince the year end, the Company has continued to expand its store network with the opening of three stores in the first quarter of 2016, one of which replaced and represented a significant upgrade to an existing store.

AuditorsThe Auditors, Crowe Clark Whitehill LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Annual General MeetingThe Annual General Meeting will be held at midday on 17 May 2016 at the Company’s registered office. This report was approved by the Board on 11 April 2016 and signed on its behalf by

Steve GrossDirector 11 April 2016

James Henry Newman

Aged 66 years, Independent Non-Executive Chairman

James is an experienced Non-Executive Chairman and Director of both Main Market and AIM companies. He was formerly Chairman of Straight plc and Vianet plc and a Non-Executive Director of Dignity plc, Scott Wilson Group plc and Richmond Foods plc. He is currently Chairman of Finance Yorkshire and recently retired as the founder Chairman of the Sheffield City Region Local Enterprise Partnership. James’ executive career was as a Group Finance Director at a number of public companies, including Kelda Group plc, Bridon plc and Watmoughs (Holdings) plc. He is a Fellow of the Institute of Chartered Accountants and a member of the Association of Corporate Treasurers.

Stephen (Steve) John Gross

Aged 45 years, Chief Executive Officer

Steve is the founder of the Group and has over 30 years’ experience in the fishing tackle industry. He is well known in angling circles and is a Director and Board member of the Angling Trade Association and the Angling Foundation, the two guiding bodies for the UK’s fishing tackle trade. He is also an accomplished angler who represented England in competition and was captain of the England under-21 fly fishing team.

Russell Holmes FCCA

Aged 31 years, Finance Director

Russell qualified as a Chartered Certified Accountant in 2010 and has been working with Fishing Republic since 2008. He was appointed to the Board in 2016 after playing a key role in the significant expansion of the business.

Governance Report

Corporate GovernanceAlthough the rules of AIM do not require the Company to comply with the UK Corporate Governance Code (“the Code”), the Company fully supports the principles set out in the Code and will attempt to comply wherever possible, given both the size and resources available to the Company.

The Board of Directors currently comprises the Non-Executive Chairman, Chief Executive Officer, three other Executive Directors and one further Non-Executive Director. The Board considers that this structure is suitable for the Company having considered the specific skills and experience deemed necessary.

The Executive and Non-Executive Directors


Governance R

eport

Zoe Gross

Aged 50 years, Operations Director

Following a 20 year corporate career with NatWest, Zoe joined the Group in 2009 and is a key part of the management team. Her role involves the operational management of the online and mail order distribution business and the human resources department.

Paul Hagerty

Aged 32 years, IT Director

Paul joined the Company in 2005 and plays an important role in developing the Group’s IT systems, which include stock control and management information. More recently his focus has been developing the Group’s online presence, particularly via its ‘Fishing Republic’ website. Before joining the Group he worked as a technical Director at an independent website development company. He has a background in software programming and development.

Edward Peter McDermott

Aged 33 years, Independent Non-Executive Director

Ed has over 10 years’ experience within financial services in the City of London and is currently a corporate finance adviser at Optiva Securities Limited. He is a former Director of AIM-quoted Noricum Gold Limited and Stellar Resources plc. Ed is a keen angler and is an owner of Farlows Lake, a coarse fishery in Buckinghamshire.

Role of the BoardThe Board’s role is to agree the Group’s long-term direction and strategy and monitor achievement of its business objectives. The Board meets monthly for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic and operational matters.

The Non-Executive Directors are considered by the Board to be independent under the terms of the Code, independent of management and free from any business or other relationship, which could materially interfere with the exercise of their judgement.

The Board delegates certain of its responsibilities to the Audit and Remuneration Committees of the Board. These Committees operate within clearly defined, written Terms of Reference.



Audit CommitteeThe Audit Committee, composed entirely of the two Non-Executive Directors, is chaired by Edward McDermott. The Committee meets at least twice a year and assists the Board in meeting responsibilities in respect of external financial reporting and internal controls.

The Audit Committee also keeps under review the scope and results of the annual financial audit. It also considers the cost-effectiveness, independence and objectivity of the Auditors, taking account of any non-audit services provided by them.

Remuneration CommitteeThe Remuneration Committee also comprises the Non-Executive Directors and is chaired by James Newman. The Remuneration Committee meets at least once a year to determine the appropriate remuneration for the Company’s Executive Directors, ensuring that this reflects their performance and that of the Group, and to demonstrate to shareholders that executive remuneration is set by Board members, who have no personal interest in the outcome of their decisions.

The Group has recently initiated a performance bonus scheme for the Executive Directors, to start in 2016. The objective of adopting the scheme is to provide the appropriate reward and incentive for the successful financial performance of the Group in line with the Company’s Aims and Strategy. The Company also has in place an HM Revenue and Customs approved share option scheme and unapproved options to subscribe for shares. These have been granted to many of the Directors and employees. Directors’ emoluments are disclosed in Note 10 to the financial statements and details of Directors’ options are disclosed in the Directors’ report.

Conflicts of InterestCompanies Act 2006 permits the Directors of public companies to authorise Directors’ conflicts and potential conflicts, where appropriate. There are considered to be no conflicts of interest apart from those identified in Note 24 to the financial statements.

Corporate ResponsibilityThe Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group’s development, the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders.

In establishing businesses in different regions, however, the objective will be to engage positively with local communities and stakeholders as necessary.

ShareholdersThe Board seeks to protect shareholders’ interests by following, where appropriate, the guidelines in the Code and the Directors are always prepared, where practicable, to enter into a dialogue with shareholders to promote a mutual understanding of the objectives of the Group. The Annual General Meeting provides the Board with an opportunity to informally meet and communicate directly with investors.

EnvironmentThe Board recognises that its activities can have an impact, to some extent, on the local environment with regard to packaging etc. The Group’s activities are carried out to achieve a minimal environmental impact and this policy is regularly reviewed.

EmployeesThe Group encourages its employees to understand all aspects of the Group’s business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed.

The Company has adopted an Anti-corruption Policy and Code of Conduct.

Governance Report Continued


Governance R

eport Continued

Suppliers The Group recognises that the goodwill of its suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has instituted a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. The amount shown in the Consolidated and Company Statement of Financial Position in respect of trade payables at the end of the financial year represents 31 days of average daily purchases (2014: 130 days).

Health and SafetyThe Board recognises it has a responsibility to provide strategic leadership and direction in the development of the Group’s Health and Safety strategy in order to protect all of its stakeholders. The Company takes into account its Health and Safety Policy to clearly define roles and responsibilities and in order to identify and manage risk.

This report was approved by the board on 11 April 2016 and signed on its behalf by:

Steve GrossChief Executive Officer 11 April 2016


Financial Statements

Independent Auditor’s Reportto the Members of Fishing Republic plc for the year ended 31 December 2015

We have audited the financial statements of Fishing Republic plc for the year ended 31 December 2015 which comprise the Consolidated and Company Statements of Financial Position, Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statements of Cash Flows and the related Notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and Auditors

As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.

Opinion on Financial Statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and the Parent Company’s affairs as at 31 December 2015 and of the Group’s loss for the year then ended;

• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

• the Parent Company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.

Michael Jayson (Senior Statutory Auditor)For and on behalf of Crowe Clark Whitehill LLP, Statutory Auditor. Manchester, United Kingdom

11 April 2016

Crowe Clark Whitehill LLP is a limited liability partnership registered in England and Wales (registered no. OC307043).


Financial Statem

entsC

onsolidated Income S

tatement

Consolidated Income Statement

Fishing Republic plcYear ended 31 December 2015

2015 2014 Notes £ £

Revenue 5 4,124,257 3,390,895Cost of sales (2,243,036) (1,837,460)

Gross profit 1,881,221 1,553,435Other income 6 2,057 9,560Selling and distribution expenses (1,050,066) (888,130)Administration expenses (512,415) (308,732)

Operating profit before exceptional costs of IPO 320,797 366,133Exceptional costs of IPO treated as an expense 23 (299,040) -

Operating profit after exceptional costs of IPO 21,757 366,133Finance costs 7 (16,039) (71,617)

Profit on ordinary activities before taxation 8 5,718 294,516Taxation 12 (37,176) (57,763)

(Loss)/profit after taxation (31,458) 236,753Other comprehensive income - -

Total comprehensive income attributable to the equity owner (31,458) 236,753

Earnings per share - pence 11 (0.16) 1.72


Consolidated and Company Statement of Financial Position

Fishing Republic plcAs at 31 December 2015

Group Company Group Company 2015 2015 2014 2014 Notes £ £ £ £

Non-current assets Property, plant & equipment 13 181,291 - 132,641 -Intangible assets 14 84,987 6,384 13,437 -Deferred tax asset 15 - - 22,919 -Investments 16 - 514,500 - -

266,278 520,884 168,997 -

Current assets Inventories 17 2,446,905 - 1,908,666 -Trade and other receivables 18 236,323 753,560 213,513 -Deferred tax asset 15 40,743 14 55,000 -Cash and cash equivalents 19 646,303 271,902 51,716 100

3,370,274 1,025,476 2,228,895 100

Total assets 3,636,552 1,546,360 2,397,892 100

Non-current liabilities Interest bearing loans and borrowing 21 243,677 - 241,254 -

Current liabilities Trade and other payables 20 440,108 2,058 867,812 -Loans and borrowing 21 24,000 - 34,500 -

464,108 2,058 902,312 -

Total liabilities 707,785 2,058 1,143,566 -

Equity Share capital 22 268,750 268,750 1,375,000 100Share premium 1,574,649 1,574,649 - -Revenue reserve 1,085,368 (299,097) (120,674) -

Total equity 2,928,767 1,544,302 1,254,326 100

Total equity and liabilities 3,636,552 1,546,360 2,397,892 100

The financial statements were approved and authorised for issue by the Board on 11 April 2016 and were signed on its behalf by S J Gross, Chief Executive Officer.


Consolidated and C

ompany S

tatement of Financial Position

Statem

ent of Changes in E

quity

Statement of Changes in Equity


Consolidated Share Share Retained Total Capital Premium Profit Equity £ £ £ £

Balance at 1 January 2014 1,375,000 - (357,427) 1,017,573Profit after taxation for the financial year - - 236,753 236,753

Balance at 31 December 2014 and brought forward at 1 January 2015 1,375,000 - (120,674) 1,254,326Loss after taxation for the financial year - - (31,458) (31,458)Capital reduction (1,237,500) - 1,237,500 -Issue of shares 131,250 1,868,750 - 2,000,000Share issue costs deducted from equity - (294,101) - (294,101)

Balance at 31 December 2015 268,750 1,574,649 1,085,368 2,928,767

Company Share Share Retained Total Capital Premium Profit Equity £ £ £ £

Balance at 1 January 2014 - - - -Issue of shares 100 - - 100

Balance at 31 December 2014 and brought forward at 1 January 2015 100 - - 100Loss after taxation for the financial year - - (299,097) (299,097)Issue of shares 268,650 1,868,750 - 2,137,400Share issue costs - (294,101) - (294,101)

Balance at 31 December 2015 268,750 1,574,649 (299,097) 1,544,302


Consolidated and Company Statement of Cash Flows


Group Company Group Company 2015 2015 2014 2014 Notes £ £ £ £

Operating activity Total profit before tax 5,718 (299,097) 294,516 -Depreciation charge 15,078 - 10,427 -Interest expense 16,039 - 71,617 -Profit on disposal of plant and equipment - - (167) -(Increase)/decrease in inventories (538,239) - 247,906 -(Increase) in receivables (23,850) (753,574) (167,471) -(Decrease)/increase in payables (393,607) 2,058 (157,369) -

Net cash outflow/(inflow) from operating activity (918,861) (1,050,613) 299,459 -

Investing activity Purchase of property, plant and equipment (58,872) - (25,707) -Acquisition of intangible assets (76,406) (6,384) - -Acquisition of subsidiary undertakings - (377,100) - -

Net cash (outflow) from investing activity (135,278) (383,484) (25,707) -

Financing activity Loan repayments in year (8,077) - (32,240) -Interest paid (16,039) - (71,617) -Amount introduced by directors - - 50,000 -Amount withdrawn by directors (33,057) - (167,175) -Proceeds from share issue net of costs 1,705,899 1,705,899 - 100

Net cash inflow/(outflow) from financing activity 1,648,726 1,705,899 (221,032) 100

Cash and cash equivalents at start of year 51,716 100 (1,004) -

Cash and cash equivalents at period end 19 646,303 271,902 51,716 100


Consolidated and C

ompany S

tatement of C

ash Flows

Notes to the Financial S

tatements

Notes to the Financial Statements

1. General InformationFishing Republic plc is a public company incorporated and domiciled in England. The Company is traded on the Alternative Investment Market (“AIM”) of the London Stock Exchange.

The registered office and principal place of business is:Vulcan Works Chesterton Road, Eastwood Trading Estate, Rotherham, South Yorkshire, S65 1SU.

Other business locations are detailed in Note 4.13.

2. Principal ActivitiesThe principal activities of the Group are the retailing, production and wholesaling of fishing equipment.

3. Basis Of PreparationThe financial statements have been prepared in accordance with IFRS as adopted by the EU issued by the International Accounting Standards Board (“IASB”), including related Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

Standards, amendments and interpretations not yet effective

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in some cases have not yet been adopted by the EU.

The Directors have reviewed the potential impact of the introduction of the above accounting standards and interpretations (including the consequential amendments) and consider that they will either be not relevant or immaterial to Fishing Republic plc’s operations.

In particular, it is considered that IFRS 15 Revenue from Contracts with Customers will not have an impact upon a straightforward retail business. In January 2016, the IASB issued IFRS 16 Leases, which will replace IAS 17. Under the new requirements, lessees will be required to recognise assets and liabilities arising from both operating and finance leases on the balance sheet. The expected effective date is 1 January 2019. The EU has not yet adopted this standard.

Basis of consolidation

The Group’s financial statements consolidate the financial statements of Fishing Republic plc and its subsidiary undertakings, Fishing Republic Trading Limited and Fishing Republic Retail Limited.

On the basis that the main objective of the effective Group reconstruction and AIM listing was to facilitate raising finance for the future expansion of the business, and that the ultimate equity holders and their rights were unchanged following the transaction, it is deemed appropriate to adopt the merger method of accounting in respect of the business combination.

There is no guidance within IFRS in relating to merger accounting and therefore the principles set out in UK GAAP, FRS 102 section 19.27 to 19.33 have been adopted:

• the carrying values of the assets and liabilities of the parties are not adjusted to fair value;

• the results and cash flows of all the combining entities are brought into the consolidated financial statements from the beginning of the financial year in which the combination occurred;

• the comparative information has been restated by including the total comprehensive income for all combining entities for the previous reporting period, and their statement of financial position for the previous reporting date; and

• the difference, if any, between the nominal value of the shares issued plus the fair value of any other consideration given, and the nominal value of the shares received in exchange is shown as a movement on other reserves in the consolidated financial statements.

Fishing Republic plc Year ended 31 December 2015


Comparative figures for the year ended 31 December 2014

The Group came into existence upon the listing on 4 June 2015, when the entire issued share capital of Fishing Republic Trading Limited (formerly known as Lureflash International Limited) was acquired (Note 26).

As described above, comparative figures are presented in accordance with merger accounting principles. These are effectively the results and financial position of the single trading entity Lureflash International Limited for the year ended 31 December 2014. Comparative figures effectively present the results and financial position of the same business and are therefore comparable.

Presentation of company statement of comprehensive income

In accordance with section 408 of the Companies Act 2006, Fishing Republic plc is exempt from the requirement to present its own Statement of Comprehensive Income. The amount of loss for the financial year recorded within the financial statements of Fishing Republic plc was £299,097 (2014: nil).

Going Concern

The Directors have reviewed the future viability and going concern position of the Group for the foreseeable future, based upon forecasts and anticipated cash flows extending for a period of at least 12 months from the date of approval of the financial statements. The Directors have accordingly prepared the financial statements on the going concern basis.

4. Significant Accounting Policies 4.1 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of Fishing Republic plc’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:

(a) Income taxes and deferred taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. Fishing Republic plc recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made. The Directors consider at eachbalance sheet date the extent to which trading losses are recoverable by reference to forecast profitability.

Accordingly, deferred tax assets are recognised to the extent that recoverability is reasonably foreseen.

(b) Provisions and adjustment to inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

(c) Costs of raising finance

In accordance with IAS 32, only directly attributable transaction costs incurred as a result of the issue of equity instruments are deducted from equity (share premium). Other costs of the IPO, not considered to be directly attributable to the issue of shares, are expensed and charged to the income statement for the year. In assessing which costs fall into each category, an element of judgement is necessary and apportionment methods have been adopted in accordance with available technical guidance.

(d) Capitalisation of software development costs

Some internal employment costs of technology specialists specifically attributable to the acquisition, development and testing of new operational software are capitalised as intangible assets, providing these meet the criteria established and the definition of an asset under the guidance within IAS 38 - Intangible Assets; identifiability, control over a resource and existence of future economic benefits. If the expenditure does not meet the required criteria it is expensed as incurred.

4.2 Functional and foreign currencies

(a) Functional and presentation currency

The financial information is presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The financial information is presented in British Sterling (“£”), which is the Group’s functional currency and the presentation currency.

(b) Transactions and balances

Transactions in foreign currencies are converted into British Sterling on initial recognition, using exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using the exchange rates at the date the values were determined. All exchange differences are recognised in the profit or loss for the year.

4.3 Financial instruments

Financial instruments are recognised in the statements of financial position when Fishing Republic plc has become a party to the contractual provisions of the instruments.Financial instruments are classified as liabilities or equity



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in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when Fishing Republic plc has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value.

Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/ deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(a) Financial assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets or available-for-sale financial assets as appropriate.

Loans and receivables financial assets

Trade and other receivables that have fixed or determinable payments and are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables for which the recognition of interest would be immaterial.

(b) Financial liabilities

All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

(c) Equity instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

4.4 Property, plant and equipment

(a) Owned assets

Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses, if any. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to the location and condition for its intended use.

(b) Depreciation

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line basis to write off the depreciable amount of the assets net of the estimated residual values over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated.

The principal annual rates used for this purpose are:

Estimated useful livesFreehold property 50 yearsShort leasehold 4 yearsPlant and machinery 6.67 yearsFixture and fittings 6.67 yearsMotor vehicles 4 yearsComputer equipment 4 years

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

(c) Cost

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to Fishing Republic plc and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which Fishing Republic plc is obliged to incur when the asset is acquired, if applicable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset.


4.5 Impairment

(a) Impairment of financial assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.

An impairment loss in respect of receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(b) Impairment of non-financial assets

The carrying values of assets, other than those to which IAS 36 – Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value in use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised immediately and charged to the income statement.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

4.6 Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of goods for resale is determined on a weighted average basis and comprises the purchase price and incidental costs, such as transportation and duty, incurred in bringing stock to its present location and condition.

Net realisable value represents the estimated selling price less the necessary incremental costs to achieve the sale.

4.7 Income taxes

Income tax for the year comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity.

4.8 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less.

4.9 Employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group.



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4.10 Related parties

Related party transactions are identified and disclosed based upon the following criteria.

(a) A person or a close member of their family is related to the Group if that person:

• has control or joint control; • has significant influence; or • is a member of the key management personnel of the parent undertaking

(b) An entity is related to the Group if any of the following conditions apply:

• they are members of the same group; • the entity is controlled or jointly controlled by a person identified in (a) above; and • a person identified in (a) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

4.11 Revenue and other income

(a) Sale of goods

Revenue from the sale of goods is measured at fair value of consideration received or receivables, net of returns and trade discounts where applicable. Revenue is recognised upon delivery of goods when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably.

(b) Other income

Other income are recognised on an accrual basis, based upon amounts receivable for the financial period. Interest income is recognised using the effective interest method.

4.12 Intangible fixed assets

(a) Goodwill

Goodwill represents the excess of the consideration paid for an acquired business over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is subject to annual impairment review in accordance with 4.4(b) above.

(b) Software Development

Costs that are directly attributable to the design and testing of identifiable and unique software controlled by the Group for its own use are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use;• management intends to complete the software product and use it;• there is an ability to use the software product;• it can be demonstrated how the software product will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use the software product are available; and• the expenditure attributable to the software product during its development can be reliably measured.

Internally generated software products and development costs for the Group’s own use are deemed to have a finite useful life and are amortised on a straight-line basis over their estimated useful lives of eight years. The amortisation charge is recognised in administration expenses.

(c) Trademarks

Trademarks are carried at acquisition cost. They are deemed to have indefinite useful lives and are reviewed for impairment annually.

4.13 Operating segments

An operating segment is a component that engages in distinct business activities from which it earns revenues and incurs expenses, including revenues and expenses relating to transactions with other business components.

During 2015, Fishing Republic plc operated with eight retail branches in the UK; Rotherham (including Head Office), Manchester, Barnsley, Doncaster, Hull, Sheffield, Sunderland, and Swindon. There are also internet sales, administered and supplied from Head Office.

Branches are separate retail units and produce and report regular operating results, but strategy, management, controls and re-stocking are all centralised at Head Office. Based upon reported branch results, the chief operating decision makers are able to control the network. It is considered that, although branches are geographically dispersed retail outlets, they are not autonomous, distinct business segments operating in their own right and the Company has one single operating business segment being that of the retail of fishing tackle and equipment.


5. RevenueRevenue represents the net invoiced value of goods sold, after allowances for returns and trade discounts.

6. Other Income

2015 2014 £ £

Rent - 7,560Sundry income 2,000 2,000Interest receivable 57 -

2,057 9,560

7. Finance Costs

2015 2014 £ £

Bank loan interest 11,126 15,347Bank interest 277 757Other interest and finance costs 4,636 55,513

16,039 71,617

8. Profit before Taxation

Profit before taxation is arrived at after charging: 2015 2014 £ £ Audit fee 8,100 8,000Auditor’s fees for non-audit services: - In relation to the flotation in June 2015 42,875 -- In relation to the 2015 interim report 1,500 -Depreciation of property, plant and equipment 10,221 9,177Key management personnel - Directors’ remuneration 86,171 10,995Interest expense 16,039 71,617(Profit)/loss on disposal of plant and equipment - (167)Staff costs: - salaries and other benefits 534,085 491,394- social security costs 36,211 34,966

9. Staff Costs Staff costs for Group, including Directors’ remuneration, were as follows: 2015 2014 £ £

Wages and salaries 614,712 491,394Social security costs 41,755 34,966

656,467 526,360

All staff are employed by Fishing Republic Trading Limited. There are no staff costs in the Company.



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10. Key Management PersonnelKey management personnel are considered to be the Directors of Fishing Republic plc. Their aggregate remuneration for the year ended 31 December 2015 was £96,970 (2014: £10,088) for their services to the Group;

2015 2014 Capitalised Net charge to software income Emoluments development statement Emoluments £ £ £ £

SJ Gross 31,268 1,846 29,422 5,044Z Gross 19,602 19,602 5,044P Hagerty 17,500 15,938 1,562 R Tippett 6,100 6,100 J Newman 12,500 12,500 E McDermott 10,000 10,000

96,970 17,784 79,186 10,088

During the year, certain Directors were granted options to subscribe for 588,234 ordinary shares at an exercise price of 17p. Details are disclosed in the Directors’ Report. The associated charge potential to the Income Statement has not been provided for on grounds of materiality (see Note 27).

11. Earnings per ShareEarnings per share has been calculated on the attributable profit for the period and the weighted average number of shares in issue during the period. Earnings per share before exceptional IPO costs have also been disclosed on the basis that these are “one-off” costs of the flotation and the result after deducting these expenses does not reflect the operating result of the business.

2015 2014 £ £

(Loss)/profit for the year (£) (31,458) 236,753Profit before IPO costs charged to income statement (£) 267,582 236,753Weighted average shares in issue - Number 19,623,288 13,750,000Basic (loss)/earnings per share (pence) (0.16) 1.72Earnings per share before exceptional IPO costs Basic earnings per share (pence) 1.36 1.72

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

12. Income tax Group Group 2015 2014 £ £

Deferred tax charge; Reversal of timing differences 37,176 57,763

Reconciliation of income tax expense to profit before taxation:

Profit before taxation 5,718 294,516

Tax thereon at the applicable tax rate of 20% 1,144 58,903Tax effects of: Non-deductible expenses 62,824 11,738Non-taxable income and capital allowances (26,792) (8,635)Other - (4,243) Total tax charge 37,176 57,763


13. Property, Plant and EquipmentYear ended 31 December 2015 - Group

Plant, Freehold Short Fixtures equipment property leasehold & fittings & vehicles Total 2015 2015 2015 2015 2015Cost £ £ £ £ £

At 1 January 2015 160,790 14,774 372,598 119,383 667,545Additions - 2,790 47,675 8,407 58,872

At 31 December 2015 160,790 17,564 420,273 127,790 726,417

DepreciationAt 1 January 2015 52,096 14,774 362,560 105,474 534,904Charge for the year 3,201 116 3,976 2,929 10,222

At 31 December 2015 55,297 14,890 366,536 108,403 545,126

Net Book Value At 31 December 2015 105,493 2,674 53,737 19,387 181,291

At 1 January 2015 108,694 - 10,038 13,909 132,641

Year ended 31 December 2014 - Group Plant, Freehold Short Fixtures equipment property leasehold & fittings & vehicles Total 2014 2014 2014 2014 2014Cost £ £ £ £ £

At 1 January 2014 160,790 14,774 361,446 104,662 641,672Additions - - 11,152 14,721 25,873

At 31 December 2014 160,790 14,774 372,598 119,383 667,545

DepreciationAt 1 January 2014 48,895 14,774 357,396 104,662 525,727Charge for the year 3,201 - 5,164 812 9,177

At 31 December 2014 52,096 14,774 362,560 105,474 534,904

Net Book Value At 31 December 2014 108,694 - 10,038 13,909 132,641

At 1 January 2014 111,895 - 4,050 - 115,945

(a) All property, plant and equipment is held in subsidiary undertakings and is located in the UK.

(b) Freehold property has been pledged to the bank as security for banking facilities granted to Fishing Republic plc as disclosed in Note 21.



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14. Intangible AssetsYear ended 31 December 2015 - Group

Software Goodwill Trademarks development Total 2015 2015 2015 2015Cost £ £ £ £

At start of year 25,000 - - 25,000Additions - 6,384 70,024 76,408

At 31 December 25,000 6,384 70,024 101,408

Amortisation & ImpairmentAt start of year 11,563 - - 11,563Amortisation charge - - 3,608 3,608Impairment losses 1,250 - - 1,250

At 31 December 12,813 - 3,608 16,421

Net Book Value At 31 December 12,187 6,384 66,416 84,987

At start of year 13,437 - - 13,437

An impairment loss of £1,250 (2014: £1,250) has been recognised in respect of goodwill. Based upon their recent acquisition, trademarks are not considered to be impaired.

During the year ended 31 December 2014, there were no movements in goodwill apart from an impairment write down of £1,250.

Company

Within the Company financial statements are trademarks acquired during the year and at a carrying value equivalent to cost of £6,384 (2014: £nil).

15. Deferred Tax Asset

Group Company Group Company 2015 2015 2014 2014 £ £ £ £

Deferred tax asset recognised in respect of trading losses: 40,743 14 77,919 -

Non-current assets - - 22,919 -Current assets 40,743 14 55,000 - The applicable tax rate is the small companies’ rate of 20 percent. The Directors have assessed the recoverability of losses at each balance sheet date by reference to projected taxable profits.


16. Investments In Subsidiary Undertakings - Company

Company Company 2015 2014 £ £

Share capital owned in Fishing Republic Trading Limited 137,500 -Share capital owned in Fishing Republic Retail Limited 377,000 -

At 31 December 514,500 -

During the year, Fishing Republic plc acquired 100% of the issued share capital of Fishing Republic Trading Limited and Fishing Republic Retail Limited. Both subsidiary undertakings are registered in the United Kingdom and their principalactivities are the retail of fishing equipment.

17. Inventories


At cost: Finished goods for resale 2,446,905 - 1,908,666 -

At 31 December 2,446,905 - 1,908,666 -

In relation to inventories included above:

• all were carried at acquisition cost and none at realisable value, less costs to sell;

• there were no write downs recognised as an expense in the period; and

• the cost of inventories recognised as an expense (cost of goods sold) in the year ended 31 December 2015 totalled £2,243,036 (2014: £1,837,460).

There is no material difference between the replacement cost of inventory and the carrying value in the financial statements.

18. Trade and Other ReceivablesThe vast majority of the Group’s sales are cash retail. In the limited instances of sales on credit, normal trade credit terms range up to 60 days. Other credit terms are assessed and approved on a case by case basis.


Trade receivables 8,187 - 9,429 -Other receivables 104,550 753,560 47,978 -Prepayments - flotation costs (note below) - - 126,261 -Prepayments - other 123,586 - 29,845 -

At 31 December 236,323 753,560 213,513 -

Included in prepayments for 2014 were IPO related costs incurred up to 31 December 2014 in anticipation of the expected flotation.



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19. Cash and Cash Equivalents


Cash in hand 7,960 - 6,189 100Short-term bank deposits 638,343 271,902 45,527 -

At 31 December 646,303 271,902 51,716 100

20. Trade and Other Payables Group Company Group Company 2015 2015 2014 2014 £ £ £ £

Trade payables 244,274 2,058 491,854 -Other taxes and social security costs 14,003 - 9,824 -Accruals 21,855 - 24,748 -VAT payable 77,203 - 186,594 -Non-interest bearing loans from directors 77,638 - 110,694 -Other payables 5,135 - 44,098 -

At 31 December 440,108 2,058 867,812 -

21. Loans And Borrowing

Group Company Group Company 2015 2015 2014 2014Non-current: £ £ £ £

Bank loans 243,677 - 241,254 -

Current: Bank loans 24,000 - 34,500 -

Total loans and borrowing 267,677 - 275,754 -

Fishing Republic plc’s interest-bearing bank borrowings are secured by a first legal charge on freehold property at Kilnhurst, Rotherham, a debenture representing a charge over the Company’s assets, and those of Fishing Republic Trading Limited, and are also supported by a legal charge over freehold property in Rotherham and Barnsley (owned personally by SJ & Z Gross).


22. Share Capital and Reserves

2015 2015 2014 2014 No. £ No. £

Allotted, called up and fully paid Ordinary shares of 1p each Balance at start of year (10p shares) 13,750,000 1,375,000 13,750,000 1,375,000Capital reduction (conversion to 1p shares) - (1,237,500) - -New shares issued in the year (Note 23) 13,125,000 131,250 - -

Balance at 31 December 26,875,000 268,750 13,750,000 1,375,000

The ultimate equity holders and their rights were unchanged following the transaction and therefore merger accounting has been applied to the business combination;

Share capital at 1 January 2015 relates to the closing share capital of Lureflash International Limited before the Group reconstruction and IPO, 13,750,000 ordinary shares of 10p each, £1,375,000.

On 20 May 2015, there was a capital reduction to reduce the share capital to 13,750,000 ordinary shares of 1p, £137,500.

Subsequent changes following the IPO are detailed in Note 23.

23. Flotation and Changes in Share CapitalOn 4 June 2015, Fishing Republic plc successfully floated on the Alternative Investment Market (“AIM”), issuing 10,000,000 ordinary 1p shares for consideration of £1,500,000. Total IPO associated costs were £548,606 and the net amount raised was therefore £951,394.

In relation to the costs of the IPO, using a method of apportionment where necessary, those considered directly attributable to the issue of shares, £249,566, were deducted from equity and costs of £299,040 were expensed and charged to the Income Statement for the year as an exceptional item.

13,750,000 1p ordinary shares were issued on the same date to acquire the entire issued share capital of Fishing Republic Trading Limited (formerly Lureflash International Limited) in a share for share exchange (see Note 26).

A further placement on 17 December 2015 of 3,125,000 ordinary 1p shares raised consideration of £500,000, net £455,465 after attributable costs of £44,535.



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24. Related Party Disclosures

(a) Identification of related parties

Fishing Republic plc has related party relationships with its subsidiary undertakings, Directors and shareholders, key management personnel and entities in which a Director, SJ Gross, has a controlling financial interest.

(b) Related party disclosures

Fishing Republic plc

During the year, Fishing Republic plc made a loan to Fishing Republic Trading Limited. At the year end, £752,885 was included in receivables of Fishing Republic plc.

Fishing Republic Retail Limited

During the year, Fishing Republic Retail Limited made a loan to Fishing Republic Trading Limited. At the year end, £207,327 was included in receivables of Fishing Republic Retail Limited.

Fishing Republic Trading Limited

All the trade in the year went through Fishing Republic Trading Limited. The financial statements of Fishing Republic Trading Limited included the following transactions and balances with related parties:

2015 2014 £ £

Klobba Limited, a company controlled by SJ Gross; Sales - 51,516 AK Construction (South Yorkshire) Limited, a company controlled by SJ Gross; Other receivables 2,996 2,996 Dearne Valley Property Limited, a company controlled by SJ Gross; Sales (employee costs re-charged) - 3,000Other payables 1,994 43,098

Wickham Homes (Northern) Limited, a company controlled by SJ Gross; Other receivables 396 396

Current liabilities included the following amounts owed to Directors;SJ Gross 77,638 60,694JH Gross - 50,000

Directors’ loans have no fixed repayment terms and are therefore classified as repayable on demand. No interest is charged.

Directors’ remuneration is disclosed in Note 10 and relates entirely to salaried remuneration. Seven of the branch properties from which the Company operates its retail business are owned by the Directors, SJ and Z Gross. Rents of £30,000 (2014: £nil) were payable by the Group for the year and SJ and Z Gross hold bonds for £10,000 under rental arrangements.


25. Financial InstrumentsFishing Republic plc’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk), credit risk and liquidity risk. Fishing Republic plc’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Fishing Republic plc’s financial performance.

There were no financial assets or liabilities classified either as ‘held to maturity’ or as ‘fair value’ through the profit and loss during the year.

25.1 Financial Risk Management Policies

Fishing Republic plc’s policies in respect of the major areas of treasury activity are as follows:

(a) Market Risk

(i) Foreign currency risk Fishing Republic plc has limited exposure to foreign currency risk on purchases in US Dollars from China. This is managed by fixing rates within a window for settlement. No balances at 31 December 2015 are denominated in currencies other than GBP Sterling and there were no open forward currency contracts at the year end.

(ii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fishing Republic plc’s exposure to interest rate risk arises mainly from interest-bearing financial liabilities. Fishing Republic plc’s policy is to obtain the most favourable interest rates available.

(iii) Interest rate risk sensitivity analysis The Group’s debt levels are low and the total interest charge was £16,039 for the year. It is considered that in this context the interest rate risk is not material.

(b) Credit Risk

Fishing Republic plc’s exposure to credit risk, or the risk of counterparties defaulting is minimal because this is a retail, cash-based business and trade receivables were £8,187 in total. Fishing Republic plc would manage its exposure to any potential credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), Fishing Republic plc minimises credit risk by dealing exclusively with high credit rating counterparties.

(i) Credit risk concentration profile Fishing Republic plc does not have any major concentration of credit risk related to any individual customer or counterparty.

(ii) Exposure to credit risk As Fishing Republic plc does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets at the end of the reporting periods. All of these expenses are to UK entities.

(iii) Age analysis The age analysis of Fishing Republic plc’s trade receivables at the end of the reporting periods was as follows: 2015 2014 £ £

Not past due and not impaired 238 489Past due but not impaired: - 2 to 4 months 152 976- over 4 months 7,797 7,964

8,187 9,429

(iv) Trade receivables that are past due but not impaired No impairment allowance is necessary in respect of these trade receivables on grounds of materiality



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(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. Fishing Republic plc practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting periods based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting periods):

Weighted Average Contractual Over Effective carrying Undiscounted Within 1 – 5 5 Rate amount cash flows 1 Year Years Years % £ £ £ £ £

As at 31 December 2015Trade payables - 244,274 244,274 244,274 - -Other payables andaccruals - 195,834 195,834 195,834 - -Interest-bearing bankborrowings 3.76 267,677 270,654 43,885 175,542 51,227

Total financial liabilities 707,785 710,762 483,993 175,542 51,227

Weighted Average Contractual Over Effective carrying Undiscounted Within 1 – 5 5 Rate amount cash flows 1 Year Years Years % £ £ £ £ £

As at 31 December 2014Trade payables - 491,854 491,854 491,854 - -Other payables andaccruals - 375,958 375,958 375,958 - -Interest-bearing bank borrowings 3.76 275,754 319,596 50,976 175,542 93,078

Total financial liabilities 1,143,566 1,187,408 918,788 175,542 93,078

25.2 Capital Risk Management

There was no change in Fishing Republic plc’s approach to capital management during the financial period under review.The debt-to-equity ratio of Fishing Republic plc at the end of the financial year is not presented as its cash and cash equivalents exceeded the total debts.

25.3 Classification of Financial Instruments

As at 31 December 2015 2014 £ £

Financial assets Trade receivables 8,187 9,429Cash and bank balances 646,303 51,716

654,490 61,145

Financial liabilities Trade payables 244,274 491,854Other payables and accruals 195,834 375,958Interest-bearing bank borrowings 267,677 275,754

707,785 1,143,566


25.4 Fair values measurement

At 31 December 2015 and 2014, there were no financial instruments carried at fair values. The fair values of the financial assets and financial liabilities approximated their carrying amounts due to the relatively short-term maturity. The fair values are determined by discounting the relevant cash flows at rates equal to the current market interest rate plus appropriate credit rating, where necessary.

26. Business Combinations(a) Acquisition of subsidiary undertakings (Note 16) On 4 June 2015, Fishing Republic plc acquired the entire issued share capital of Fishing Republic Trading Limited (formerly Lureflash International Limited) for consideration equal to the nominal value of shares issued, £137,500. The consideration was satisfied by the issue of 13,750,000 ordinary shares of 1p.

On 13 July 2015, Fishing Republic plc acquired the entire issued share capital of the newly incorporated Fishing Republic Retail Limited for consideration of £377,000.

The business combinations have been accounted for using merger accounting and therefore:

• the carrying values of the assets and liabilities of the parties are not adjusted to fair values and the combination consolidates assets and liabilities at book values. Therefore, no goodwill arises;

• the results and cash flows of all the combining entities are brought into the consolidated financial statements from the beginning of the financial year in which the combination occurred. The results of the Group reflect the consolidated results of the parent and its two subsidiaries for the full year ended 31 December 2015. The combined profits of the subsidiary undertakings for the year were £267,639, the loss incurred by the parent was £299,097 and the Group consolidated loss was therefore £31,458; and

• comparative information includes the total comprehensive income for combining entities for the previous reporting period and the statement of financial position for the previous reporting date, effectively relating to the single entity Lureflash International Limited.

(b) Acquisition of trade and assets of Cotswold Angling Limited On 15 December 2015, the trade and assets of Cotswold Angling Limited in Swindon were acquired. The consideration paid was equivalent to the agreed inventory valuation of £130,000. In the opinion of the Directors, goodwill and other assets acquired are not material and the transaction has therefore been reflected as an acquisition of trading stock.

27. Share Based PaymentsDuring the year, share options were granted to Directors and employees in relation to 1,511,739 ordinary shares of 1p each.

Options can be exercised at an exercise price of 17p per share three years from the grant date and those remaining unexercised after 10 years from the grant date expire. Options issued to employees are forfeited if the employee leaves the Company. In addition, the Company has issued warrants to Directors outside the approved scheme on varying terms and conditions.

The Directors have assessed the estimated fair values of the options granted during the year, using the Black-Scholes-Merton Option Pricing Model on the basis of reasonable assumptions. Based upon the valuation derived, the annual charge to income statement is not considered material to the financial statements.



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28. Operating Lease CommitmentsAs detailed in Note 4.13, the business operated from eight locations during the year and retail/ warehouse premises are rented under operating lease agreements.

As disclosed in Note 24, seven of the branch properties are leased from the Directors (SJ and Z Gross) on commercial terms and one branch was acquired in December 2015, the current lease being negotiated.

The lease terms are from 4 June 2015 for 25 years, all expiring on 4 June 2040. No contingent rent is payable. Leases are eligible for renewal on expiry. Future minimum lease payments under non-cancellable operating leases are:

2015 2014 Land & Land & buildings buildings £ £

Business retail premises;

Within one year 75,000 -One to two years 100,000 -Two to five years 300,000 -Over five years 1,742,466 -

Lease payments recognised in the loss for the period amounted to £30,000 (2014: £nil). There were no formal lease arrangements in place previously, no rent charges, and therefore no commitment.

29. Subsequent EventsIn early 2016, the following new trading sites were established: a new larger store in Hull and new start-ups in South Birmingham and Crewe.

Company InformationFishing Republic plcVulcan Works, Chesterton Road, Eastwood Trading Estate, Rotherham, S65 1SU01709 724 [email protected]

Company No. 09196822

AdvisersRegistrarsShare Registrars LimitedSuite E, First Floor, 9 Lion & Lamb Yard,Farnham, Surrey, GU9 7LL AuditorCrowe Clark Whitehill LLP3rd floor, The Lexicon, Mount StreetManchester, M2 5NT Nominated Adviser and BrokerNorthland Capital Partners Limited60 Gresham Street, 4th Floor, London, EC2V 7BB Financial PRKTZ CommunicationsNo. 1 Cornhill, London, EC3V 3ND SolicitorWalker Morris LLPKings Court, 12 King Street, Leeds, LS1 2HL

annual report - fishing republic · 4 fishing republic plc annual report for the year ended 31...

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