TIDMSIS
RNS Number : 3493I
Science in Sport PLC
21 March 2018
21 March 2017
SCIENCE IN SPORT PLC
("SiS" or the "Company")
FINAL RESULTS
FOR THE YEARED 31 DECEMBER 2017
Science in Sport plc (AIM: SIS), a leading sports nutrition
company that develops, manufactures and markets sports nutrition
products for professional athletes and sports enthusiasts, is
pleased to announce its audited final results for the year ended 31
December 2017.
Financial Highlights
-- Revenues increased by 28% to GBP15.62 million (2016: GBP12.24
million) significantly ahead of market growth forecast for the
sports nutrition sector, with particularly strong growth in online
channels and international markets;
-- New product development continued to be a key growth driver,
and delivered GBP0.9m of sales in the year (2016: GBP0.8m)
contributing 27% to overall revenue growth;
-- Gross profit increased to GBP9.32m (2016: GBP7.38m)
reflecting continuing factory efficiencies which have maintained
gross margin close to 60%;
-- Underlying operating loss* of GBP1.70m (2016: GBP0.80m) in
line with growth strategy and expectations, reflecting continued
investment in brand awareness, e-commerce and international
expansion. Core UK business delivered operating profit of
GBP0.6m;
-- Cash and cash equivalents of GBP16.57m (2016: GBP6.13m)
reflect funds raised in December 2017.
* excludes depreciation and amortisation and non-cash share
based payments
Operational Highlights
-- Consistent investment in the Science in Sport brand resulted
in record levels of brand awareness and usage;
-- 55% of revenue was derived from online channels (2016: 49%),
exceeding the 50% target set for 2017;
-- Continued investment in the Science in Sport e-commerce platform:
o Delivered 58% year on year growth, contributing 30% of
revenues
-- Revenue from International customers grew 60% across both
Core and International segments, and 28% (2016: 22%) of total Group
revenue was derived from these customers;
-- Innovation and new product development including;
o Rego Rapid Recovery Plus developed with Team Sky
o Further extension of the Whey 20 portfolio
o Strong launch pipeline for 2018;
-- Continued efficiency improvements in factory underpinned margin;
-- Best in world banned substance testing regime introduced January 2017;
-- New brand partnerships including British Cycling, USA
Triathlon, Rock'n'Roll Marathon, Cycling Australia and Celtic FC.
In January 2018, the Company signed a 3 year exclusive strategic
partnership with Manchester United Football Club.
Stephen Moon, Science in Sport's CEO, said: "This was another
period of very strong growth, the fifth consecutive year where SiS
has significantly outstripped this sector. We saw outperformance in
all online channels and international markets. Our strategy of
consistent investment in brand equity, our e-commerce platform and
product innovation underpinned this success. Continuing
improvements in factory and supply chain efficiencies underpinned a
very robust gross margin. Our core business in the UK and EU was
profitable at EBITDA level and we commenced our investment in the
strategic markets of the USA and Italy.
We are looking forward to another year of strong revenue growth
in 2018. We expect gross margin to be consistent, given further
factory efficiencies and favourable raw material prices. Our
innovation pipeline for 2018 and beyond is very healthy and will
continue to be a key driver of progress. We are investing
substantially to develop our businesses in the USA and Italy and in
addition we have launched our new Football business, underpinned by
our recently announced exclusive nutrition partnership with
Manchester United."
For further information:
Science in Sport plc +44 (0) 20 7400 3700
Stephen Moon, CEO
Elizabeth Lake, FD
Cenkos Securities NOMAD
and Broker +44 (0) 20 7397 8900
Bobbie Hilliam - NOMAD
Nick Searle - Sales
About Science in Sport plc
Science in Sport plc is a leading sports nutrition company that
develops, manufactures and markets sports nutrition products for
professional athletes and sports enthusiasts. SiS is a strong brand
in the elite athlete community - in the 2016 Rio Olympics, 34
medal-winning athletes or teams used SiS products (compared with 24
in 2012).
The SiS core product ranges include: SiS GO, comprising energy
powders, isotonic gels, energy bars and shots; SiS REGO, including
protein-based recovery powders; SiS Protein, products specifically
designed to contribute to athletes' lean muscle mass growth and
maintenance; SiS Supplements, comprising BCAA Perform, Creatine,
Beta Alanine and L Glutamine; SiS Athlete Health, vitamins and
supplements range designed to support and maintain immune function,
digestive health and bone health. SiS products are sold in a range
of retail channels, including specialist sport retailers, major
grocers, high street retailers and e-commerce websites.
SiS is currently the official sports nutrition partner to
professional cycling organisations Team SKY, British Cycling,
Cycling Australia and USA Cycling. SiS is also a partner to British
Triathlon & USA Triathlon. Along with supplying over 40
professional English & Scottish League football teams, SiS is
Sports Nutrition Partner to the world's most popular football club,
Manchester United FC. In addition, Olympians Sir Chris Hoy MBE, and
Mark Cavendish MBE are Brand Ambassadors.
SiS was founded in 1992 and is headquartered in Hatton Garden,
London. Its manufacturing facility is in Nelson, Lancashire.
SiS shares are traded on the AIM market of the London Stock
Exchange under the ticker symbol SIS.
For further information, please visit www.scienceinsport.com
CHAIRMAN'S AND CEO'S JOINT REVIEW
Overview and Strategy
We are delighted to announce a strong set of results for the
year ended 31 December 2017. Revenue of GBP15.6m for the year was
28% ahead of the same period in 2016 and saw the Company deliver a
fifth consecutive year of strong revenue growth. This was well
ahead of the 8% CAGR forecast by Euromonitor for 2017 for the
sports nutrition sector in the UK.
The Company's growth strategy is predicated on consistent
investment in science and innovation, developing brand awareness,
building e-commerce capability and reach through its
scienceinsport.com e-commerce platform and developing new
International markets. In our core UK market, we remain committed
to a multi-channel distribution strategy in all Online and Retail
channels. We underpin growth by seeking to maintain and improve
gross margin, while controlling overhead growth, to benefit from
operational gearing.
The Board believes there continue to be significant
opportunities for the Company over the next few years and in order
to maximise this SiS raised GBP14.8 million before costs in
December 2017 to fund growth in key strategic International
markets, as well as a move into a new sport, Football. In January
2018 we were pleased to announce our partnership with Manchester
United Football Club, which includes access to players and
followers of the world's most popular football club. The Company
will continue to invest in the development of its e-commerce
business, including a dedicated site to support our Football
strategy. If appropriate, we will consider acquisitions to
complement our existing product range and to deliver synergies from
our distribution, e-commerce and supply chain capabilities.
Brand and Range
Our brand strategy is to consistently invest in building equity
in the SiS brand, which is widely recognised by professional and
elite athletes. SiS is a leader in science and innovation,
supported by world-class in-house expertise, together with a range
of collaborations with academic institutes, elite athletes and
sports teams.
The Science in Sport brand is trusted by professional and
Olympic athletes in a range of sports, across the world. A key
component of this trust is our approach to preventing banned
substances entering its supply chain and finished products. In line
with this, Science in Sport is the only brand globally to hold both
Informed Sport Site Certification and Informed Sport Product
Certification. Each year an internal review of the banned substance
prevention regime takes place within the Company, and from January
2018 an upgraded system was implemented to continually improve and
evolve the controls and systems within the Company. The Company
regime is built on the following pillars:
- Every single batch of Science in Sport finished product which
leaves the Company's factory is screened against the 2018 World
Anti-Doping Agency (WADA) list. Banned substances including
steroids are tested to the level of 10 Nanograms per gram, and
stimulants to 100 Nanograms per gram.
- Batches (sampled at the beginning, during and end of each
product batch) receive the recognised and respected Informed Sport
certificate. Finished product testing is the final and most
effective step that we have to ensure product assurance.
- Raw material batch testing, in addition to testing on finished
goods, for any product deemed 'high-risk'
- Full trace management of all raw materials from raw material
base and manufacturing supplier, through to finished goods
manufactured per production batch. This allows the Company to
demonstrate to athletes the source of ingredients and all parties
involved in the manufacturing process.
- Rigorous screening of all ingredient suppliers, including
annual auditing. All suppliers are required to be certified to a
recognised Quality Management system that is approved by The Global
Food Safety Initiative.
- In house product screening within the Company's production
facility in Nelson, Lancashire, including swab testing for banned
substances and conducting surprise third-party inspections
throughout the year
SiS is a trusted brand which is used widely by enthusiasts and
elite athletes in a growing range of endurance sports. These
customers include cyclists, triathletes, rowers, tennis players and
runners. More recently the brand has started to extend into new
sports including professional football at the highest level and
international rugby.
SiS products are endorsed by the Company's Brand Ambassadors,
including Sir Chris Hoy MBE and Mark Cavendish MBE. SIS is an
official nutrition supplier to professional cycling teams Team Sky
along with national associations British Cycling, Cycling
Australia, USA Cycling, USA Triathlon and British Triathlon. The
Company works closely with its Ambassadors and partners on product
innovation. SIS also benefits from a close relationship with
organisations and training centres focused on athlete development,
including the English Institute of Sport.
SiS products are designed to sustain performance, to aid
recovery and to build lean muscle. The core product range fuels
five key athlete needs groups:
Energy - Bars, shots, gels and powders to give athletes
energy
Hydration - Gels, tablets and powders to keep athletes energised
and hydrated
Recovery - Powder range to aid athlete's recovery
post-exercise
Rebuild - Powders, gels and bars to build and maintain lean
muscle mass
Athlete Health - Vitamins and supplements range designed to
support and maintain immune function, digestive health and bone
health amongst athletes.
Overview of the financial year
The year ended 31 December 2017 saw sales up 28% at GBP15.6
million (2016: GBP12.2 million). E-commerce sales, both from our
own website and Third-party Online retailers were particularly
strong, reflecting the continued investment in brand awareness and
e-commerce technology and management. Our International channels
also grew significantly over the period under review. We believe
that in our marketplace of endurance sport nutrition we delivered
sector leading revenue growth, both organic growth and by taking
market share from key competitors.
The underlying operating loss was in line with management
expectations at GBP1.7 million (2016: GBP0.8 million) and this
reflected continued investment in marketing, sales and e-commerce
of GBP8.0 million (2016: GBP5.9 million).
Overheads excluding sales and marketing were GBP3.0 million
(2016: GBP2.2 million) for the year. Within this amount is GBP0.5
million spend on Testing and Projects (2016 GBP0.1 million) and a
foreign exchange loss on the revaluation of subsidiary loans of
GBP0.1 million (2016: GBP0.1 million gain).
Depreciation and amortisation costs of GBP0.6 million (2016:
GBP0.4 million), non-cash share-based payments related to short and
long-term management incentive schemes of GBP1.6 million (2016:
GBP1.6 million), resulted in a pre-tax loss of GBP3.9 million
(2016: pre-tax loss GBP2.8 million).
Net cash and cash equivalents at the year-end were GBP16.6
million (31 December 2016: GBP6.1 million). The increase in cash is
due to an equity fundraise completed in December 2017 which raised
GBP14.8 million before costs.
Non-cash share-based payments amounting to GBP1.6 million (2016:
GBP1.6 million), which have been excluded from underlying operating
loss, continue to reflect the grant of options to employees under
the Company Long Term Incentive Plan ("LTIP") and the Short Term
Incentive Plan ("STIP").
Sales Channels
The Company's sales channels comprise our own E-commerce
platform, Third-Party Online retailers, Heartland of independent
sports retailers, major Grocers, High Street Chains and
International sales distributors.
Our E-commerce platform was a focus again during 2017 and
delivered 58% growth, as we continued to invest in developing our
consumer database and driving stronger conversion and improved
loyalty. Third-Party Online retailers, led by Wiggle, Chain
Reaction and Amazon also delivered another year of outstanding
growth, as we continued to invest in this channel. Overall 55% of
revenue was derived from online channels, being both the Company's
own E-commerce platform and Third-Party Online retailers, and we
expect this growth to continue in 2018.
We have continued to work closely with the leading five major
Grocery chains during what has been a challenging year for grocers.
Like-for-like growth of 8% was in line with the category. High
Street revenue grew 11% in 2017 after a decline in 2016, with the
sales growth being driven by one of the leading sports retailers.
The Heartland of independent cycle and running shops also saw
growth in a challenging market, with sales growing 5% and we remain
committed to our distribution in this important and opinion leading
channel.
International sales, defined as sales to an end consumer outside
of the UK through any channel, grew 60% and some 28% of total
revenues came from existing and new overseas markets. Sales in the
US were GBP0.4m against GBP0.1m in 2016, and in Italy sales grew
over 100% from GBP0.3m to GBP0.6m. We are investing in these
markets and expect to see accelerated growth as set out in our
equity fundraise announcement released on 14 November 2017. Sales
in Australia grew by 28% from GBP0.5m to GBP0.7m, significantly
outgrowing the market in this geography. In addition, our strategic
Heartland distributor Shimano performed exceptionally well again
across all geographies in Europe.
Product Innovation
Trust, quality and innovation are the key qualities for which
SiS is recognised and we continue to invest in this strategically
important area. Once again, innovation has been a key driver of
growth, with 6% of sales and 27% of total revenue growth coming
from new products, continuing the trend of the previous three
years.
Key highlights during the financial year were;
o Rego Rapid Recovery Plus developed with Team Sky
o Further extension of the Whey 20 portfolio
o Strong launch pipeline for 2018;
Renowned for our innovation and product development in
conjunction with elite athlete insight, we have worked with Team
Sky and developed and launched Rego Rapid Recovery Plus. This is an
enhanced version of Rego with more carbohydrate and whey protein
which is absorbed faster than soy protein, and was launched
exclusively on our website. The introduction of two new flavours
extending our novel WHEY20 range of ready to consume protein in
2017 has broadened the appeal of our patented product, ahead of
sustained activity planned for 2018. In a study completed by
Northumbria University, WHEY20 was proven to significantly reduce
the loss of important muscle proteins, attenuated muscle stiffness
and result in faster recovery of muscle strength. These findings
clearly demonstrate WHEY20 improves muscle recovery and have been
published in the journal of Applied Nutrition, Physiology and
Metabolism.
In line with our strategy we continuously invest in science and
new product development and innovation and as a result, the
pipeline for new products in 2018 is very strong. We are also
investing in major new technologies for future product
development.
Supply chain
Gross margin at our Nelson, Lancashire manufacturing facility
was 59.7%, a slight decrease from the previous period which
reflects the increase in International business and the associated
costs of shipping and duties. The factory has continued to achieve
record efficiencies in production and picking and packing. There
has been benign raw material pricing at the start of 2018.
As highlighted earlier within Brand and Range from January 2018
an upgraded system of banned substance testing has been
implemented.
The low-cost base of the Nelson site, together with the controls
afforded in the banned substance testing programme, continue to
provide a strategic advantage for the Company.
People
The Company has continued to invest in its employees. Key
highlights within the organisation for the financial year have been
as follows;
o Decentralised commercial teams are now in place in key
strategic international markets, being the US and Italy. The
Company has also put in place a standalone commercial team focused
on the Football market.
o High quality individuals have been recruited in e-commerce and
customer service teams to support high growth in both core and new
International markets and to enhance levels of customer
service.
o Continued investment in, and development of key staff
We continued to further strengthen e-commerce and customer
service teams in 2017 to support high growth in both core and new
International markets and to enhance our level of customer
service.
The Board wishes to thank all the team in London and Nelson and
the strategic International markets for their professionalism,
enthusiasm and dedication in delivering another sector leading
performance for the Company.
Outlook
We are seeking to achieve further strong revenue growth in 2018
and the year has started well for us. International growth,
Football and e-commerce are our key strategic focus, with brand
investment and science and innovation underpinning growth.
We continue to invest heavily in brand awareness in all markets,
as well as aggressively building our e-commerce consumer database
and seeking to improve conversion and loyalty.
Continued investment in the website will see further enhanced
functionality launching in the first quarter, this will improve our
e-commerce metrics and drive further growth
We look forward to 2018 with optimism as we continue to build
SiS to become the global leader in the endurance sports nutrition
market.
John Clarke Stephen Moon
Chairman CEO
FINANCIAL REVIEW
Revenue
The Company has continued to grow strongly during the year ended
31 December 2017, with sales up 28% at GBP15.62 million (2016:
GBP12.24 million). Revenue growth has been achieved through a
particularly strong performance across the e-commerce, third-party
online retailers and international channels and reflects the
continued investment in the business across all channels. The
investment in, and focus on, online sales has resulted in 55% of
business revenues being derived from e-commerce sales across our
own platform and third parties.
Our International growth strategy has delivered significant
growth with 28% of revenues now coming from International customers
(2016: 22%)
In 2017, the Company also continued to invest in product
innovation and launched a number of new products.
Gross margin
The Company generated a gross profit of GBP9.32 million (2016:
GBP7.38 million) with the gross margin achieving a percentage of
revenue of 59.7% (2016: 60.3%). The factory has delivered further
efficiencies which have covered the increase in cost of raw
materials, however the margin overall is slightly lower due to the
impact of selling more through our overseas subsidiaries,
increasing the shipping and duty costs.
Underlying operating loss
The underlying operating loss of GBP1.70 million (2016: GBP0.8
million) reflects the ongoing investment in sales and marketing to
drive revenue growth, together with ex plan investment in the
e-commerce teams to drive revenue growth in overseas markets and
the UK market. Operating loss is in line with management
expectations.
The Group's cost base and its resources have been, and will
continue to be, tightly managed within budgets approved and
monitored by the Board. If a growth opportunity is identified then
ex-plan investment will be approved.
The Group has chosen to report underlying operating loss as the
Directors believe that the operating loss before depreciation,
amortisation, non-cash share based payments and exceptional items
provides additional useful information for shareholders on
underlying trends and performance. This measure is used for
internal performance analysis. A reconciliation of underlying
operating loss to loss from operations is presented on the face of
the consolidated statement of comprehensive income.
Share based payments
The Company operates both a Short Term Incentive Programme
("STIP") and a Long Term Incentive Programme ("LTIP"). Together the
Share Option Plan ("SOP") was approved by the Remuneration
Committee in June 2014 in line with the proposal contained in the
Company's AIM Admission document in August 2013. A new LTIP was
approved by the Remuneration Committee in September 2016, following
the completion of the previous three year LTIP at the end of
2015.
Accordingly, the Company has recognised a share based payment
charge totalling GBP1.58 million in the year ended 31 December 2017
(2016: GBP1.57 million).
The Company intends to put in place a new incentive scheme
following the equity raise in December 2017 and will update
shareholders on this matter in due course.
Taxation
The current tax charge is GBPNil (2016: GBPNil) due to the loss
made in the year. The deferred tax credit of GBP0.25 million (2016:
GBP0.15 million) is primarily due to the recognition of a deferred
tax asset in respect of taxable losses created in the year.
Losses and dividends
The loss attributable to equity holders of the parent for the
year ended 31 December 2017 was GBP3.61 million (2016: GBP2.64
million) and the basic and diluted loss per share was 7.7p (2016:
6.2p). The Directors are not recommending the payment of a dividend
(2016: GBPNil).
Capital structure and funding
On 4th December 2017 the Company raised GBP14.8 million before
costs by the issue and allotment of 21,211,365 Ordinary Shares at a
placing price of 70 pence per share. The placing was undertaken
with new and existing institutional shareholders and was
oversubscribed. The placing has enabled the Company to fund the
working capital required to underpin further revenue growth and
also to expand further in the US and Italian markets, as well as
launch in Football as a new source of athletes.
The latest placing introduced a number of new and significant
institutional investors onto the shareholder register of the
Company. The Directors believe establishing a broader institutional
shareholder base is in the long term interests of the Company.
Going concern
The Company made a loss after tax for the year attributable to
owners of the parent of GBP3.61 million (2016: GBP2.64 million) and
expects to make a further loss in the year ending 31 December
2018.
The net increase in cash and cash equivalents in the year ended
31 December 2017 was GBP10.44 million (2016: GBP2.62 million
decrease). At 31 December 2017 the Company had cash balances of
GBP16.57 million (2016: GBP6.13 million). As noted above, the
Company raised additional cash of GBP14.02 million (net of
associated costs) on 4 December 2017.
The Directors have prepared projected cash flow information for
a period including 2 years from the date of approval of these
financial statements.
Accordingly, the Directors have a reasonable expectation that
the Company will have sufficient cash to meet all liabilities as
they fall due for a period of at least 12 months from the date of
approval of these financial statements. For these reasons, they
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Consolidated statement of comprehensive income
Year Year
ended ended
31 December 31 December
2017 2016
Notes GBP000 GBP000
------------------------------------- ------ ------------ ------------
Revenue 2 15,615 12,243
Cost of goods (6,300) (4,865)
------------------------------------- ------ ------------ ------------
Gross profit 9,315 7,378
Underlying operating loss (1,704) (799)
Depreciation and amortisation (567) (419)
Share based payments charge (1,581) (1,572)
Loss from operations 3,4 (3,852) (2,790)
Finance income - 1
Finance costs - (4)
------------------------------------- ------ ------------ ------------
Loss before taxation (3,852) (2,793)
Taxation 5 246 149
Loss for the year (3,606) (2,644)
------------------------------------- ------ ------------ ------------
Other comprehensive income
Exchange differences on translation
of foreign operations 78 (50)
------------------------------------- ------ ------------ ------------
Total comprehensive loss
for the year (3,528) (2,694)
------------------------------------- ------ ------------ ------------
Loss per share to owners
of the parent
Basic and diluted - pence 6 (7.7p) (6.2p)
------------------------------------- ------ ------------ ------------
All amounts relate to continuing operations.
Consolidated statement of financial position
As at As at
31 December 31 December
2017 2016
Notes GBP000 GBP000
----------------------------------- ------ ------------ ------------
Assets
Non-current assets
Intangible assets 1,359 884
Property, plant and equipment 793 798
Deferred tax 10 1,332 1,086
----------------------------------- ------ ------------ ------------
Total non-current assets 3,484 2,768
----------------------------------- ------ ------------ ------------
Current assets
Inventories 7 2,713 2,238
Trade and other receivables 8 2,851 2,217
Cash and cash equivalents 16,570 6,130
----------------------------------- ------ ------------ ------------
Total current assets 22,134 10,585
----------------------------------- ------ ------------ ------------
Total assets 25,618 13,353
----------------------------------- ------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables 9 (2,810) (2,534)
Total current liabilities (2,810) (2,534)
----------------------------------- ------ ------------ ------------
Net current assets/(liabilities) 19,324 8,051
Total net assets 22,808 10,819
----------------------------------- ------ ------------ ------------
Capital and reserves attributable
to
owners of the parent company
Share capital 6,683 4,322
Share premium reserve 22,339 10,331
Employee benefit trust reserve (397) (215)
Other reserve (907) (907)
Foreign exchange reserve 28 (50)
Retained deficit (4,938) (2,662)
----------------------------------- ------ ------------ ------------
Total equity 22,808 10,819
----------------------------------- ------ ------------ ------------
Consolidated statement of cash flows
Year Year
Ended Ended
31 December 31 December
2017 2016
Notes GBP000 GBP000
------------------------------------- ------ ------------ ------------
Cash flows from operating
activities
Total comprehensive loss for
the year (3,606) (2,644)
Adjustments for:
Amortisation 307 160
Depreciation 260 261
Loss on sale of fixed assets 17 -
Net finance cost - 3
Taxation 5 (246) (149)
Share based payment charge 1,581 1,572
------------------------------------- ------ ------------ ------------
Operating cash outflow before
changes in working capital (1,687) (797)
------------------------------------- ------ ------------ ------------
Changes in inventories (475) (767)
Changes in trade and other
receivables (635) (968)
Changes in trade and other
payables 271 921
------------------------------------- ------ ------------ ------------
Total cash outflow from operations (2,526) (1,611)
------------------------------------- ------ ------------ ------------
Cash flow from investing activities
Purchase of property, plant
and equipment (255) (402)
Purchase of intangible assets (799) (558)
Interest received - 1
Net cash outflow from investing
activities (1,054) (959)
------------------------------------- ------ ------------ ------------
Cash flow from financing activities
Proceeds from issue of share 14,848 -
capital
Expenses paid on share issues (828) -
Repayment of borrowings - (49)
Interest paid - (4)
------------------------------------- ------ ------------ ------------
Net cash inflow from financing
activities 14,020 (53)
------------------------------------- ------ ------------ ------------
Net increase in cash and cash
equivalents 10,440 (2,623)
Opening cash and cash equivalents 6,130 8,753
------------------------------------- ------ ------------ ------------
Closing cash and cash equivalents 16,570 6,130
------------------------------------- ------ ------------ ------------
Consolidated statement of changes in equity
Employee
benefit Foreign
Share Share trust Other exchange Retained Total
capital premium reserve reserve reserve deficit Equity
GBP000 GBP000 GBP000 GBP000 GBP'000 GBP000 GBP000
At 31 December
2015 4,025 10,228 (61) (907) - (1,269) 12,016
------------------------- ---------- ---------- --------- ---------- ---------- ----------- ---------
Issue of shares
-consideration
relating to
sponsorship
services 4 January
2016 22 103 - - - - 125
Issue of shares
to EBT on 23
March 2016 275 - (275) - - - -
Exercise of
share options - - 121 - - (121) -
Share based
payments - - - - - 1,372 1,372
Total comprehensive
expense for
the period (50) (2,644) (2,694)
At 31 December
2016 4,322 10,331 (215) (907) (50) (2,662) 10,819
------------------------- ---------- ---------- --------- ---------- ---------- ----------- ---------
Issue of shares
- consideration
related to sponsorship
9 January 2017 16 109 - - - - 125
Placing and
open offer 4
December 2017 2,121 12,727 - - - - 14,848
Transaction
cost of placing (828) (828)
Issue of shares
to EBT - 23
March 2017 224 - (224) - - - -
Exercise of
share options - - 42 - - (42) -
Share based
payments - - - - - 1,372 1,372
Total comprehensive
expense for
the period - - - - 78 (3,606) (3,528)
At 31 December
2017 6,683 22,339 (397) (907) 28 (4,938) 22,808
------------------------- ---------- ---------- --------- ---------- ---------- ----------- ---------
1. Accounting policies
Basis of preparation
This final results announcement for the year ended 31 December
2017 has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
("IFRSs") as adopted for use in the European Union and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The accounting policies applied are consistent with
those set out in the Science in Sport plc Annual Report and
Accounts for the year ended 31 December 2017.
The financial information contained within this final results
announcement for the year ended 31 December 2017 and the year ended
31 December 2016 is derived from but does not comprise statutory
financial statements within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2016 have been filed with the Registrar of Companies and
those for the year ended 31 December 2017 will be filed following
the Company's annual general meeting. The auditors' report on the
statutory accounts for the year ended 31 December 2017 and the year
ended 31 December 2016 is unqualified, does not draw attention to
any matters by way of emphasis, and does not contain any statement
under section 498 of the Companies Act 2006.
2. Segmental reporting
The Group's operating segments are determined based on the
Group's internal reporting to the Chief Operating Decision Maker
(CODM). The CODM has been determined to be the Chief Executive
Officer, with support from the Board and senior management team.
The performance of operating segments is assessed on earnings
before interest, tax and depreciation, excluding equity-settles
share option charges recognised under IFRS 2 "Share-based
payment".
The Core segment manufactures and sells sports nutrition in the
UK through SiS.com, third-party etailers, grocers, high street and
heartland bike shops. Also included in this segment is sales to
Europe (excluding Italy) through distributors and online.
Core International Total
Group
Year ended 31 December GBP'000 GBP'000 GBP'000
2017
------------------------------- -------- -------------- ----------
External revenue 13,904 1,711 15,615
------------------------------- -------- -------------- ----------
Segment loss before recharges (72) (1,632) (1,704)
------------------------------- -------- -------------- ----------
Recharge International
costs 671 (671) -
------------------------------- -------- -------------- ----------
Segment profit/(loss) 599 (2,303) (1,704)
------------------------------- -------- -------------- ----------
Depreciation and amortization (567) (567)
------------------------------- -------- -------------- ----------
Share based payment charge (1,581) (1,581)
------------------------------- -------- -------------- ----------
Loss from operations (1,549) (2,303) (3,852)
------------------------------- -------- -------------- ----------
Loss before taxation (1,549) (2,303) (3,852)
=============================== ======== ============== ==========
Revenue from one customer of GBP2,181,333 individually exceeds
10% of Group revenue (2016: one, GBP1,867,000). All non-current
assets, except for an immaterial amount of fixed assets, are
located in the UK.
Turnover by geographic destination Year ended Year ended
may be analysed as follows: 31 December 31 December
2017 2016
GBP000 GBP000
United Kingdom 11,217 9,495
EU excluding the UK 2,880 1,922
Australia 680 530
Rest of the World 838 296
15,615 12,243
--------------------------------------- -------------- -------------
3. Operating expenses
Year ended Year ended
31 December 31 December
2017 2016
GBP000 GBP000
------------------------------- ------------- -------------
Sales and marketing costs 7,982 5,931
-------------------------------- ------------- -------------
Operating costs 3,037 2,246
Depreciation and amortisation 567 419
Share based payment charge
(1) 1,581 1,572
Exceptional costs - -
Administrative expenses 5,185 4,237
Total operating expenses 13,167 10,168
--------------------------- ------- -------
(1) Includes associated social security costs of GBP83,000 (31
December 2016: GBP75,000) and consideration in respect of
sponsorship services of GBP125,000 (31 December 2016:
GBP125,000).
4. Loss from operations
Loss from operations is stated Year Year
after charging: ended ended
31 December 31 December
2017 2016
GBP000 GBP000
------------------------------------- -------------- -------------
Depreciation of property, plant
and equipment 260 261
Amortisation of intangible assets 307 160
Research and development costs 339 337
Grant income in respect of research
and development tax credits 125 262
Foreign exchange losses/(gains) 121 (69)
Loss on disposal of property, plant 17 -
and equipment
Operating lease costs 196 177
5. Taxation
Year
ended Year ended
31 December 31 December
2017 2016
GBP000 GBP000
--------------------------------------- -------------- -------------
Current tax income
United Kingdom corporation tax - -
Adjustment in respect of prior - -
period
Total current tax income - -
Deferred tax
Effect of change in tax rates - -
Origination and reversal of temporary
differences 246 149
Tax on loss for the period 246 149
--------------------------------------- -------------- -------------
The tax assessed for the year is different from the standard
rate of corporation tax in the UK. The differences are explained
below:
Loss before tax 3,852 2,793
------------------------------------------ ------ ------
Loss before tax multiplied by
the standard rate of corporation
tax
in the UK of 19% (2016: 20%) 741 559
Effects of:
Expenses not deductible for tax
purposes (289) (183)
Additional deduction for R&D expenditure (72) (36)
Share scheme deduction (14) (16)
Effect of changes in tax rate (3) (3)
Adjustment in respect of previous
period (94) (172)
Capital allowances in excess of
depreciation (23)
------------------------------------------ ------ ------
Total tax credit for the year 246 149
------------------------------------------ ------ ------
At 31 December 2017 UK tax losses of the Company available to be
carried forward are estimated to be GBP4,259,000 (31 December 2016:
GBP4,011,000).
Deferred tax balances are valued at the rate of 18% in these
accounts to the extent that timing differences are expected to
reverse after this later date.
6. Loss per share
Basic and diluted loss per share is calculated by dividing the
loss attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the period. The exercise
of share options would have the effect of reducing the loss per
share and is therefore anti-dilutive under the terms of IAS 33
'Earnings per Share'
Year Year
ended ended
31 December 31 December
2017 2016
Loss for the year/period attributable
to owners of the parent - GBP000 (3,606) (2,644)
Weighted average number of shares 46,695,814 42,527,844
Basic and diluted loss per share
- pence (7.7p) (6.2p)
--------------------------------------- ------------- -------------
7. Inventories
31 December 31 December
2017 2016
GBP000 GBP000
---------------- ------------ ------------
Raw materials 883 824
Finished goods 1,830 1,414
2,713 2,238
---------------- ------------ ------------
There is a provision of GBP27,000 included within inventories in
relation to the impairment of inventories (31 December 2016:
GBP23,000).
During the year inventories of GBP4,852,000 (31 December 2016:
GBP3,651,000) were recognised as an expense within cost of
sales.
8. Trade and other receivables
31 December 31 December
2017 2016
GBP000 GBP000
--------------------------------------- ------------ ------------
Trade receivables 1,947 1,678
Less: provision for impairment
of trade receivables (43) (42)
--------------------------------------- ------------ ------------
Trade receivables - net 1,904 1,636
Other receivables 436 334
--------------------------------------- ------------ ------------
Total financial assets other than
cash and cash equivalents classified
as loans and receivables 2,340 1,970
Prepayments and accrued income 511 247
--------------------------------------- ------------ ------------
Total trade and other receivables 2,851 2,217
--------------------------------------- ------------ ------------
9. Trade and other payables
31 December 31 December
2017 2016
GBP000 GBP000
------------------------------------- ----------- -----------
Trade payables 1,222 1,130
Accruals 1,382 1,324
------------------------------------- ----------- -----------
Total financial liabilities measured
at amortised cost 2,604 2,454
Other taxes and social security 206 80
Total trade and other payables 2,810 2,534
------------------------------------- ----------- -----------
The Directors consider that the carrying amount of these
liabilities approximates to their fair value.
All amounts shown fall due within one year.
10. Deferred tax
Deferred tax is calculated in full on temporary differences
under the liability method using a tax rate of 18% (31 December
2016: 18%). Details of the deferred tax asset and liability,
amounts recognised in profit or loss and amounts recognised in
other comprehensive income are as follows:
Credited/
(charged)
to income
statement
At 31 December in the At 31 December
2016 year 2017
GBP000 GBP000 GBP000
---------------------------- ----------------- ----------- -----------------
Capital allowances
in excess of depreciation (103) (10) (113)
Unutilised tax losses 722 45 767
Other short term timing
differences 467 211 678
(1,086) 246 1,332
---------------------------- ----------------- ----------- -----------------
A deferred tax asset of GBP1,332,000 (31 December 2016:
GBP1,086,000) has been recognised in respect of tax losses and
other temporary differences where the Directors believe it is
probable that these assets will be recovered. The Directors
consider it appropriate to recognise a deferred tax asset in
respect of tax losses on the basis that the losses incurred to date
are as a result of the Group's current strategy to invest in
growing revenue and they therefore consider it reasonable to
conclude that suitable taxable profits against which losses can be
utilised will be generated in the foreseeable future.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SELFMSFASEID
(END) Dow Jones Newswires
March 21, 2018 03:00 ET (07:00 GMT)
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