Pure Fishing has financial rating upgraded following strong third quarter

A strong third quarter performance by Pure Fishing has seen its financial rating raised by Moody’s Investors Service.

The organisation, which provides ratings, research and data on businesses, has upgraded the world’s largest supplier of fishing tackle’s Corporate Family Rating (CFR), following a Q3 that has resulted in a better operating performance year-to-date than previously expected.

Moody’s wrote in its report: “Pure Fishing’s rating reflects its relatively moderate scale with revenues of $545m and its high financial leverage with debt/EBITDA at 7x8x for the last 12 month period ending September 30, 2020. The company’s products are concentrated within the mature and discretionary fishing product category and a prolonged period of high unemployment or weak economic conditions will negatively impact its operating results. Pure Fishing has customer concentration with its top customer accounting for around 20% of sales. Governance factors include the group’s aggressive financial policies under private equity ownership, including elevated financial leverage.

“The rating also reflects Pure Fishing’s strong market presence in the fishing products industry and its portfolio of long-standing, well-recognised brands among fishing enthusiasts. It has good geographic diversification and benefits from strong diversification within fishing gear.

“Consumer demand for its products has been very strong year-to-date as consumers are spending more on outdoor activities such as fishing due to social distancing measures because of the Coronavirus pandemic. Moody’s expects fishing products utilisation to remain elevated into the first half of 2021. Pure Fishing’s adequate liquidity reflects its relatively healthy cash balance of $72.2m and $74m available on its $125m revolver, which provides financial flexibility to fund operating seasonality and anticipated working capital investments over the coming quarters needed to improve service levels.”