Pure Fishing at ‘elevated risk of default’ after 14.6% drop in sales
Originally published in Angling International
The financial rating of Pure Fishing has been downgraded as sales at the world’s largest supplier of fishing tackle declined by nearly 15% last year.
Moody’s Investment Services lowered Pure Fishing’s Corporate Family Rating – long-term ratings that reflect the likelihood of a default on a corporate family’s debt – and Probability of Default Rating both to Caa2 (very high risk).
“The rating downgrade and negative outlook reflects Pure Fishing’s unsustainable capital structure and the elevated risk of default over the next 12 to 18 months given its very high financial leverage,” said Oliver Alcantara, AVP-Analyst at Moody’s. “We expect that demand and industry headwinds will persist in 2023 and the company has limited financial flexibility to absorb prolonged revenue pressures given its constrained liquidity.
Pure Fishing reported ‘meaningfully lower operating results’ in fiscal 2022, with year-on-year revenue declining 14.6% as persistently high inflation and weakening macro-economic conditions pressurised consumer demand for its product.
In addition, said Moody’s, the elevated level of inventory has negatively impacted reorders.
