TIDMSIS
RNS Number : 5438G
Science in Sport PLC
18 March 2020
18 March 2020
SCIENCE IN SPORT PLC
("Company" or "Group")
Final Results for the Year Ended 31 December 2019
Science in Sport plc (AIM: SIS), the premium performance
nutrition company serving elite athletes, sports enthusiasts and
the gym lifestyle community, is pleased to announce its audited
final results for the year ended 31 December 2019.
HIGHLIGHTS
-- A 23% increase in Group revenue to GBP50.6m (2018: pro
forma(1) GBP41.0m, reported GBP21.3m), reflecting the first full
year contribution of PhD and strong organic growth by both brands.
PhD delivered record revenue growth of 23% (pro forma(1) ), and the
SiS brand delivered 24% revenue growth contributing to a 6-year 25%
revenue Compound Annual Growth Rate ("CAGR");
-- Integration of PhD completed on time and in full including
launch of PhD.com, new E-Commerce fulfilment operation and
installation of protein powder line at the Nelson factory
-- Online revenue, a key strategic focus for the Group, grew
strongly up 36% to GBP16.4m (2018: pro forma(1) GBP12.1m);
-- Strategic markets of USA and Football grew 92% and 94%
respectively, in line with expectations, to GBP3.9m in total;
-- International Retail revenue up 41% to GBP12.3m (2018: pro
forma(1) GBP8.7m), with strong growth in existing markets in Europe
and Asia, plus new territories including PhD launching in Saudi
Arabia and SiS expanding into Latin America;
-- Innovation-driven new products delivered 25% of total Group
revenue growth and included PhD's vegan Smart Bar Plant, SiS's
Protein20 bars and the SiS Football range;
-- Group gross margin of 44% (2018: 45% pro forma(1) ) impacted
by one-off items from inventory and global whey commodity
pricing;
-- Underlying operating loss(2) of GBP0.3m (2018: loss of
GBP2.7m) in line with growth strategy and market expectations,
reflecting continued investment in brand awareness, e-commerce and
international expansion;
-- Cash and cash equivalents of GBP5.4m (2018: GBP8.0m) in line with market expectations; and
-- Post period end the Group continues to perform in-line with
expectations, with Covid-19 preparations having been in place for
some weeks.
(1) pro forma revenue is compared with full year 2018 results
for PhD and SiS brands as set out in the Financial Review
(2) excludes depreciation, amortisation, non-cash share-based
payments, costs relating to the acquisition and integration of PhD
Nutrition, IFRS 16 Lease payments and foreign exchange variances on
intercompany balances (see Note 1)
Stephen Moon, Science in Sport's Chief Executive Officer,
commented:
"2019 was a transformational year for Science in Sport as we
integrated the PhD business as planned and continued our strategic
growth focus on e--commerce and international, positioning the
Group for the next stage of its growth.
Our preparations for Covid-19 disruption have been underway for
several weeks and measures include buying sensitive raw materials,
securing the supply chain operation, and remote working for
commercial and operations staff. Costs are being managed very
tightly and contingency plans are in place. We are well prepared to
protect the Company and its workforce should the impact from
Covid-19 become extended."
For further information:
Science in Sport plc
Stephen Moon, Chief Executive Officer
James Simpson, Chief Financial
Officer +44 (0) 20 7400 3700
Liberum
Nominated adviser and broker
Bidhi Bhoma
James Greenwood
William Hall +44 (0) 20 3100 2000
Buchanan Communications +44 (0) 20 7466 5000
Financial PR ScienceInSport@buchanan.uk.com
Mark Court
Vicky Hayns
Tilly Abraham
Notes to Editors
About Science in Sport plc
Science in Sport plc is a leading sports nutrition business that
develops, manufactures and markets innovative nutrition products
for professional athletes, sports and fitness enthusiasts and the
gym lifestyle community. The Company has two highly regarded
brands: PhD Nutrition, a premium protein brand targeting gym
lifestyle and sports enthusiasts, and SiS, a leading brand among
elite athletes and professional sports teams.
The two brands are sold internationally through multiple retail
channels, both traditional and online, including major supermarkets
and high street chains, specialist sports retailers and e-commerce
sites including Amazon and the brands' own websites. Selling
through multiple retail channels enables the Company to address the
full breadth of the performance nutrition market currently
estimated at approximately GBP11 billion worldwide.
PhD is one of the UK's leading protein brands with a reputation
for high quality and product innovation. Since its launch in 2005,
the brand has grown rapidly, based on its core protein powders. The
range now comprises powders, bars, flapjacks, drinks and other
products including the high protein, low sugar range, PhD Smart.
PhD brand ambassadors include extreme fitness athlete Ross Edgley,
rapper Bugzy Malone, WBA international champion Jordan Gill and
Team GB Olympic sprinter Asha Philip.
SiS, founded in 1992, has a core range comprising gels, powders
and bars focused on energy, hydration and endurance. SiS is the
official sports nutrition supplier to many professional cycling
teams and organisations including Team INEOS, British Cycling,
Cycling Australia, USA Cycling and USA Triathlon. SiS supplies more
than 100 professional football clubs in the UK and Europe and is an
official partner to the Rock 'n' Roll Marathon Series. SiS brand
ambassadors include Olympians Sir Chris Hoy MBE, Mark Cavendish MBE
and Adam Peaty MBE.
Science in Sport is headquartered in London. Its shares joined
the AIM market of the London Stock Exchange in August 2013 and
trade under the ticker symbol SIS.
For further information, please visit www.scienceinsport.com
CHAIRMAN'S STATEMENT
"2019 was a transformational year for the Group. We successfully
integrated the commercial, operational and online elements of PhD,
whilst delivering record revenue growth. Our strategy of investment
in brand equity and science-led product innovation for both of our
premium brands remains unchanged. Strategic routes to market are
e-commerce and international and we have invested in both of these
areas, to position the business to be a global leader in premium
performance nutrition.
We are in uncertain times given the current Covid-19 crisis and
the Board are working closely with the executive management team on
contingency planning."
Overview
We are delighted to announce another strong set of results for
the year ended 31 December 2019. Group revenue was GBP50.6m, 23%
ahead of the same period in 2018 on a pro forma basis(1) .
Underlying operating loss(2) was GBP0.3m (2018: loss of GBP2.7m)
in line with market expectations and reflected continued investment
in our online and international businesses. Reported loss before
tax was GBP5.1m (2018: loss of GBP6.0m).
Our cash position remains strong with a year-end balance of
GBP5.4m (2018: GBP8.0m).
Our long-term priority continues to be further developing the
e-commerce opportunity and seeking strong growth in international
markets. Science-led innovation will continue to be a growth driver
for the business.
We continue to see further margin improvement opportunities from
supply chain optimisation following the integration of PhD and
favourable channel and product mix.
The Board continues to be focused on building shareholder value
through improving profitability and driving our strategic growth
markets towards profitability.
Our strategy remains unchanged, focusing on science-led
innovation, building brand equity, taking our share of e-commerce
business and developing global markets.
Our people
The continued strength of the Group is due to the hard work and
dedication of all the people who work for our PhD and SiS brands. I
would like to thank them all for their contribution, especially for
the commitment and focus they have shown throughout this year,
during the integration of the PhD business and for delivering
another sector leading performance.
This year we have strengthened the executive management team and
senior leadership by attracting experienced talent from
market-leading businesses to drive the next stage of our growth. In
addition, we have continued to invest in existing employees who are
being supported through professional training relevant to their
functional areas, as well as other relevant role-specific
training.
Development of the Board
It is the Board's task to ensure the Group is managed for the
long-term benefit of all shareholders, with effective and efficient
decision-making. Corporate governance is an important part of that
role, reducing risk and adding value to our business.
Since the period end the Company has appointed Roger Mather to
the Board and nominated him as Chair of the Audit Committee. Tim
Wright, an existing Board member, has been nominated as Chair of
the Remuneration Committee.
The culture of the Group is to be entrepreneurial and
innovative, always committed and striving for excellence, as our
consumers do. Acting responsibly is critical to our business
performance and the Group takes its obligations to act responsibly
very seriously.
Further detail is included in the Corporate Social
Responsibility section of the Annual report but some examples of
actions taken to support our values this year include; our market
leading banned substance testing programme, the significant
investment in innovation and support provided to our employees to
help them excel in their chosen sports.
JOHN CLARKE
Non-Executive Chairman
17 March 2020
CHIEF EXECUTIVE'S REPORT
Strategic intent
Our intent is for the Group to become the world's leading
premium performance nutrition business through its PhD and SiS
brands. This is underpinned by the following key principles and
strategic actions:
-- Continuing to drive growth for both brands through a science
and innovation-led pipeline, including current and new technologies
and formats;
-- Developing the manufacturing facility and international
logistics footprint to underpin market leading gross margins;
-- Continued investment in building the equity in both the PhD
and SiS brands to drive sales through increased awareness and
usage;
-- Developing our online business through a combination of our
own proven e-commerce platform and key marketplace channels;
and
-- Extending our international presence in all major global
markets, using an omni-channel approach to maximise the
opportunity.
The Board believes there continues to be a significant growth
opportunity, both organic and inorganic, to extend our existing
product range and deliver synergies from our distribution,
e-commerce and supply chain capabilities.
Online
Our PhD.com and scienceinsport.com e-commerce platforms are
central to our growth strategy in our key domestic and
international markets and we were pleased to deliver revenue of
GBP10.1m, up 39% (pro forma(1) ) compared with the previous year.
Our new PhD.com e-commerce business launched online in the second
half and had a strong finish to the year.
2020 will see PhD.com as a priority in the UK and we also intend
to launch new sites for both of our brands in key markets including
Germany and Italy. To support this growth, we have now completed a
major recruiting campaign, which has seen an influx of new talent
from leading brands including Heineken and Virgin Active.
Marketplace channels including Amazon and TMall are an integral
part of our strategy and in some international markets are seen as
the lead growth channel. Revenue was GBP6.2m for the year, 30%
ahead of 2018 (pro forma(1) ). A new Head of Marketplace joined the
team in January 2020, and we will continue to recruit and develop
talent to underpin our growth ambition for this channel.
International
Distributor serviced international markets grew 42% (pro
forma(1) ) to GBP12.3m in 2019. This included strong organic growth
in existing markets for both brands, including PhD in the Middle
East and China, and SiS in Europe. New markets opened up for PhD
included Russia, Saudi Arabia and Turkey. SiS made inroads into the
Middle East and several Latin American markets including Colombia
and Brazil.
We continued to invest in our SiS brand in the USA and delivered
92% revenue growth year-on-year, with gross margin improving given
the favourable channel and product mix. We made strong progress
with our own e-commerce platform, our Amazon business and through
retail distributors, this latter channel being important for
awareness and product trial. During the year we carried out
extensive consumer research to assess the potential for the PhD
brand and this delivered highly promising data which we will act on
in due course.
Our SiS businesses in Italy and Australia grew revenues by 66%
and 46% respectively, again with progress made in e-commerce,
Amazon and through running and cycling retail channels. The
Australian business was breakeven in 2019 and we expect the Italian
business to become profitable in 2020.
UK Retail
The retail environment continues to be challenging in our core
market. Despite this, our success in delivering innovation and
bringing our category presence to bear through our brand portfolio
resulted in new distribution and strong organic growth in the
grocery channel. Innovation and new distribution drove growth in
Tesco and Sainsbury's, while we gained new listings for PhD in Aldi
and for SiS in Lidl.
We continued to develop our High Street business, with Holland
& Barrett representing a major source of revenue for the Group.
The third-party online channel was challenging, although given our
focus on our own e-commerce platform and Amazon, this was
expected.
Overall, revenue from our UK retail business grew by 8% (pro
forma(1) , which was a pleasing result given the climate in the
high street and independent channels.
Football
We continue to invest in this channel and believe it represents
a long-term strategic initiative. As well as being official
nutrition partners to Manchester United, Arsenal and Celtic, we
sell products to more than 100 elite clubs across the UK, Europe
and the USA. Our sisfootball.com e-commerce platform is also
performing strongly, and overall revenue from our Football business
grew 94% year-on-year.
Supply Chain
The integration of PhD into our supply chain was a major focus
in the year. We opened a new e-commerce fulfilment facility to
combine operations for both the PhD and SiS brands in June 2019
which is performing very effectively and delivering high levels of
customer service. A new protein powder filling line was
commissioned during November, on time and in line with cost
estimates and we expect this project to payback in under 14
months.
Gross margin for the overall business was 44%, slightly down on
45% pro forma(1) 2018 margin. This was driven by one-off inventory
costs, together with increased whey protein costs in the final
months of the year. We remain positive on gross margin given we
expect further manufacturing efficiencies and favourable channel
and product mix benefits.
Outlook
We have planned for a further strong year of revenue growth in
2020 with innovation, e-commerce and international expansion being
key drivers. With integration of the PhD and SiS brands complete,
we expect to deliver further cost savings as a result of supply
chain efficiencies.
COVID-19 preparations
At present trading is in line with expectations. While we are
seeing sharply reduced revenue in Italy, China revenues have
recovered in March and we have received strong forward orders. We
are working with key customers to ensure their inventory protects
the next weeks of consumer demand.
Preparations for Covid-19 related disruption have been in place
for some weeks. Several months cover of certain sensitive raw
materials are secured. Our Nelson manufacturing site and two
third-party logistics operations have been isolated from each other
and shift patterns in both operational units have also been
separated, with cleaning processes taking place between shifts. Our
office based teams in all functions, including e-commerce
operations and customer service, have commenced a full work from
home policy.
The situation is being monitored daily and management has
developed contingency plans to protect the Company and its
workforce should the impact from Covid-19 become extended.
STEPHEN MOON
Chief Executive Officer
17 March 2020
(1) pro forma revenue is compared with full year 2018 results
for PhD and SiS brands as set out in the Financial Review
(2) excludes depreciation, amortisation, non-cash share-based
payments, costs relating to the acquisition and integration of PhD
Nutrition, IFRS 16 Lease payments and foreign exchange variances on
intercompany balances (see Note 1)
FINANCIAL REVIEW
Revenue
The Group has continued to grow strongly during the year ended
31 December 2019, with revenue increasing 137% to GBP50.6m (2018:
GBP21.3m) driven by the full year effect of the PhD acquisition.
Pro forma revenue growth was 23%.
Revenue growth was achieved through a particularly strong
performance across e-commerce, third-party online retailers and
international channels and reflects the continued prioritised
investment in these strategic channels. This investment resulted in
these channels delivering 83% of revenue growth in the year.
Gross margin
The Group generated a gross profit of GBP22.2m (2018: pro forma
GBP18.4m, reported GBP12.0m) achieving a gross margin of 44%,
compared with 45% pro forma gross margin in 2018. Gross margin was
slightly lower due to one-off inventory impacts and whey global
commodity prices. The Group's reported gross margin was 56% in 2018
however, this only included PhD results for part of December. Gross
margin improvement is a key opportunity for the combined business
through initiatives such as insourcing PhD protein manufacture and
scale benefits in areas including purchasing and logistics.
PhD Pro forma
Pro forma comparatives are based on the 2018 full year results
for PhD and SiS brands. PhD was acquired by SiS plc on 6 December
2018, consequently, results for PhD from acquisition date only are
consolidated in these accounts.
For comparability pro forma full year figures for 2018 and 2019
for both PhD and SiS are shown below
2019 2018 (unaudited)
GBP'000 SiS PhD Total SiS PhD Total
--------------- --------- --------- --------- -------- --------- ---------
Revenue 24,601 25,972 50,573 19,813 21,161 40,974
Cost of goods (10,702) (17,664) (28,366) (8,287) (14,245) (22,532)
Gross Profit 13,899 8,308 22,207 11,526 6,916 18,442
---------------- --------- --------- --------- -------- --------- ---------
Underlying operating loss
The underlying operating loss of GBP0.3m(*) (2018: loss of
GBP2.7m) reflects the ongoing investment in science and innovation,
building brand equity, developing our e-commerce capability and
international expansion. The operating loss is in line with market
expectations. Loss from operations was GBP5.0m (2018: loss of
GBP6.0m)
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
Board believes that the operating loss before items such as
depreciation, amortisation, non-cash share based payments and PhD
acquisition related expenses provides additional useful information
for Shareholders to assess cash profit performance. This measure is
used for internal performance analysis. A reconciliation of
underlying operating loss to loss from operations is presented in
Note 1.
Working capital
As at 31 December 2019 the Group held inventory of GBP6.1m (31
December 2018: GBP7.1m). Inventory levels decreased, despite 23%
pro forma revenue growth, due to improved working capital
management. Trade and other receivables were GBP10.9m (31 December
2018: GBP8.9m).
Cash position
The cash balance as at 31 December 2019 was GBP5.4m (31 December
2018: GBP8.0m). During the year cash use primarily relates to
investment in brand, new product development, working capital
requirements, and the new in-house powder production line.
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 published in August 2013. A new
LTIP scheme for financial years 2019-2021 is in place, though no
options were granted in 2019 and consequently no charge has been
recognised in the year. The Company has recognised a share based
payment charge for the STIP scheme of GBP0.6m for the year (2018:
GBP1.5m).
Taxation
The current tax charge is GBPNil (2018: GBPNil) due to the loss
made in the year. The deferred tax charge of GBP0.5m (2018: GBP0.1m
credit) is primarily due to an unprovided deferred tax asset on
losses carried forward. The Group has estimated tax losses of
GBP14.1m, which the Group will look to use to cover future
profits.
Losses and dividends
The loss attributable to equity holders of the parent for the
year was GBP5.6m (2018: GBP5.9m) and the basic and diluted loss per
share was 4.6p (2018: loss of 8.2p). The payment of a dividend
cannot be recommended due to negative retained earnings.
Going concern
The Group made a loss after tax for the year attributable to
owners of the parent of GBP5.6m (2018: loss of GBP5.9m) and expects
to make a further loss after tax in the year ending 31 December
2020.
The net decrease in cash and cash equivalents in the year ended
31 December 2019 was GBP2.6m (2018: GBP8.6m increase). As at 31
December 2019 the Group had cash balances of GBP5.4m (31 December
2018: GBP8.0m).
The Directors have prepared projected cash flow information for
a period ending 31 December 2021.
We have enacted contingency plans to protect cash reserves as
the priority in response to the Covid-19 coronavirus outbreak.
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
2019 2018
Notes GBP'000 GBP'000
--------------------------------------- ------ ------------ ------------
Revenue 3 50,573 21,318
Cost of goods (28,366) (9,363)
--------------------------------------- ------ ------------ ------------
Gross profit 22,207 11,955
Operating expenses 4 (27,252) (17,950)
--------------------------------------- ------ ------------ ------------
Loss from operations 5 (5,045) (5,995)
Finance income 4 5
Finance cost (23) -
Loss before taxation (5,064) (5,990)
Taxation 6 (554) 115
--------------------------------------- ------ ------------ ------------
Loss for the year (5,618) (5,875)
Other comprehensive income
Cash flow hedges (181) -
Exchange differences on translation
of foreign operations 67 (125)
Income tax relating to these items 33 -
--------------------------------------- ------ ------------ ------------
Total comprehensive loss for the year (5,699) (6,000)
--------------------------------------- ------ ------------ ------------
Loss per share to owners of the parent
Basic and diluted - pence 7 (4.6p) (8.2p)
---------------------------------------- ------- -------
All amounts relate to continuing operations.
Consolidated statement of financial position
As at As at
31 December 31 December
2019 2018
Notes GBP'000 GBP'000
--------------------------------------- ------ ------------ ------------
Assets
Non-current assets
Intangible assets 33,066 33,742
Right of use assets 689 -
Property, plant and equipment 1,771 1,033
Deferred tax 11 919 1,430
--------------------------------------- ------ ------------ ------------
Total non-current assets 36,445 36,205
--------------------------------------- ------ ------------ ------------
Current assets
Inventories 8 6,141 7,102
Trade and other receivables 9 10,927 8,939
Cash and cash equivalents 5,371 8,002
--------------------------------------- ------ ------------ ------------
Total current assets 22,439 24,043
--------------------------------------- ------ ------------ ------------
Total assets 58,884 60,248
--------------------------------------- ------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables 10 (9,954) (7,970)
Lease liabilities (164)
Hire purchase agreement (77) -
Derivative financial liabilities (181) -
Total current liabilities (10,376) (7,970)
--------------------------------------- ------ ------------ ------------
Non-current liabilities
Lease Liabilities (530) -
Hire purchase agreement (309) -
Deferred tax 11 (2,472) (2,461)
--------------------------------------- ------ ------------ ------------
Total non-current liabilities (3,311) (2,461)
--------------------------------------- ------ ------------ ------------
Total liabilities (13,687) (10,431)
Net assets 45,197 49,817
--------------------------------------- ------ ------------ ------------
Capital and reserves attributable to owners
of the Parent company
Share capital 12,282 12,197
Share premium reserve 48,829 48,464
Employee Benefit Trust reserve (193) (372)
Other reserve (907) (907)
Foreign exchange reserve (30) (97)
Cash flow hedge reserve (148) -
Retained deficit (14,636) (9,468)
--------------------------------------- ------ ------------ ------------
Total equity 45,197 49,817
--------------------------------------- ------ ------------ ------------
These consolidated financial statements were approved and
authorised for issue by the Board on 17 March 2020 and signed on
its behalf by:
Stephen Moon
Director
Company number 08535116
Consolidated statement of cash flows
Year Year
ended ended
31 December 31 December
2019 2018
Notes GBP'000 GBP'000
-------------------------------------------- ------- ------------ ------------
Cash flows from operating activities
Loss for the financial year (5,618) (5,875)
Adjustments for:
Amortisation 2,129 555
Amortisation of right-of-use asset 156 -
Depreciation 489 371
Taxation 554 (115)
Share based payment charge 1,165 1,922
----------------------------------------------------- ------------ ------------
Operating cash outflow before changes
in working capital (1,125) (3,142)
----------------------------------------------------- ------------ ------------
Changes in inventories 961 (2,070)
Changes in trade and other receivables (1,988) (1,707)
Changes in trade and other payables 2,072 503
----------------------------------------------------- ------------ ------------
Total cash outflow from operations (80) (6,416)
----------------------------------------------------- ------------ ------------
Cash flow from investing activities
Purchase of property, plant and equipment (920) (519)
Purchase of intangible assets (1,453) (945)
Acquisition of subsidiary, net of cash
acquired - (28,363)
Net cash outflow from investing activities (2,373) (29,827)
----------------------------------------------------- ------------ ------------
Cash flow from financing activities
Gross proceeds from issue of share capital - 27,920
Principal repayments of lease liabilities (150) -
Interest paid on lease liabilities (24) -
Finance income (4) (5)
Share issue costs - (240)
Net cash inflow from financing activities (178) 27,675
----------------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (2,631) (8,568)
Opening cash and cash equivalents 8,002 16,570
----------------------------------------------------- ------------ ------------
Closing cash and cash equivalents 5,371 8,002
----------------------------------------------------- ------------ ------------
Consolidated statement of changes in equity
Share Share Employee Other Foreign Cash Retained Total
capital premium Benefit reserve exchange flow deficit equity
Trust reserve hedge
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2017 6,683 22,339 (397) (907) 28 - (4,938) 22,808
Total comprehensive
loss for the
year - - - - (125) - (5,875) (6,000)
Transactions
with owners
Issue of shares:
- Issued in
return for
sponsorship
services 57 368 - - - - - 425
- Placing 4,840 24,197 - - - - - 29,037
Transaction
costs of placing - (1,357) - - - - - (1,357)
- Consideration
shares issued
on acquisition
of PhD 583 2,917 - - - - - 3,500
Issue of shares
to EBT 34 - (34) - - - - -
Issue of shares
held by EBT
to employees - - 59 - - - (59) -
Share based
payments - - - - - - 1,404 1,404
At 31 December
2018 12,197 48,464 (372) (907) (97) - (9,468) 49,817
-------------------- --------- --------- --------- --------- ---------- --------- --------- --------
Total comprehensive
loss for the
year - - - - 67 (148) (5,618) (5,699)
Transactions
with owners
Issue of shares:
- Issued in
return for
sponsorship
services 85 365 - - - - (450) -
Issue of shares
held by EBT
to employees - - 179 - - - (179) -
Share based
payments - - - - - - 1,079 1,079
At 31 December
2019 12,282 48,829 (193) (907) (30) (148) (14,636) 45,197
-------------------- --------- --------- --------- --------- ---------- --------- --------- --------
Notes to the consolidated financial statements
1. Accounting policies
This final results announcement for the year ended 31 December
2019 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 2019.
The financial information contained within this final results
announcement for the year ended 31 December 2019 and the year ended
31 December 2018 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 2018 have been filed with the Registrar of Companies and
those for the year ended 31 December 2019 will be filed following
the Company's annual general meeting. The auditors' report on the
statutory accounts for the year ended 31 December 2019 and the year
ended 31 December 2018 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 .
Use of non-GAAP profit measure - underlying operating loss
The Directors believe that the operating loss before
depreciation, amortisation, share based payments, IFRS 16, costs
relating to the acquisition of PhD and the restructuring due to
this acquisition, and intercompany balance retranslation variances
as a measure provides additional useful information for
Shareholders on underlying trends and performance. This measure is
used for internal performance analysis. Underlying operating loss
is not defined by IFRS and therefore may not be directly comparable
with other companies' adjusted profit measures. It is not intended
to be a substitute for, or superior to IFRS measurements of
profit.
A reconciliation of the underlying operating loss to statutory
operating loss is provided below:
2019 2018
(GBP'000) (GBP'000)
Loss from operations (5,045) (5,995)
PhD acquisition and integration costs 637 599
Share-based payment expense 1,165 1,922
Depreciation & amortisation 2,774 926
IFRS 16 lease payments (175) -
Foreign exchange variances on intercompany
balances 297 (161)
Underlying operating loss (347) (2,709)
=========== ===========
IFRS 16 Leases
Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and
IFRIC 4 Determining whether an Arrangement Contains a Lease.
IFRS 16 provides a single lessee accounting model, requiring the
recognition of assets and liabilities for all leases, together with
options to exclude leases where the lease term is 12 months or
less, or where the underlying asset is of low value. IFRS 16
substantially carries forward the lessor accounting in IAS 17, with
the distinction between operating leases and finance leases being
retained.
The Group adopted IFRS 16 using the modified retrospective
approach, with recognition of transitional adjustments on the date
of initial application (1 January 2019), without restatement of
comparative figures. The Group elected to apply the practical
expedient to not reassess whether a contract is, or contains a
lease at the date of initial application. Contracts entered into
before the transition date that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed. The definition of a lease
under IFRS 16 was applied only to contracts entered into or changed
on or after 1 January 2019.
As permitted under IFRS 16 for leases previously classified as
operating leases under IAS 17, The Group elected to
(a) Rely on previous assessments as to whether leases are
onerous as opposed to preparing an impairment review under IAS 36
as at the date of initial application; and
(b) Apply the exemption not to recognise right-of-use assets and
liabilities for leases with less than 12 months of lease term
remaining as of the date of initial application.
(c) Not to recognise lease liabilities for some leases of low value contracts.
2. Segmental reporting
Operating segments are identified on the basis of internal
reporting and decision making. The Group's Chief Operating Decision
Maker ("CODM") is considered to be the Board, with support from the
senior management teams, as it is primarily responsible for the
allocation of resources to segments and the assessments of
performance by segment.
The Group's reportable segments have been split into the two
businesses, SiS and PhD Nutrition. Operating segments are reported
in a manner consistent with the internal reporting provided to the
CODM as described above. The reportable segments have changed from
prior year (the segments in the prior year being Core, USA, Italy,
Australia and Football are now shown as part of the SiS Segment
disclosed below). In 2020 the Group's segments are customer
channel. The single largest customer makes up 9.2% of revenue and
is not separately identified in segmental reporting.
The Board uses revenue, reviewed regularly, as the key measure
of the segment's performance.
2019 2018
SiS PhD Total SiS PhD Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Sales 24,601 25,972 50,573 19,813 1,505 21,318
---------------------------- -------- -------- --------- -------- -------- ---------
Gross profit 13,899 8,308 22,207 11,526 429 11,955
Advertising and promotions (5,978) (1,961) (7,939) (5,391) (90) (5,481)
Carriage (3,279) (1,273) (4,552) (1,988) (75) (2,063)
---------------------------- -------- -------- --------- -------- -------- ---------
Trading contribution 4,642 5,074 9,716 4,147 264 4,411
Other operating expenses (14,761) (10,406)
---------------------------- -------- -------- --------- -------- -------- ---------
Loss from Operations (5,045) (5,995)
============================ ======== ======== ========= ======== ======== =========
3. Revenue from contracts with customers
The group operates in four primary revenue channels. Management
monitors revenue on this basis. E-Commerce is the phd.com and
scienceinsport.com e-commerce platform , Export relates to
customers out of the UK (that doesn't relate to E-commerce or
Market place), UK Retail includes the grocers and high street and
Market place relates to Amazon and eBay platforms.
2019 2018
SiS PhD Total SiS PhD Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------- -------- -------- -------- -------- --------
E-Commerce 8,657 1,513 10,170 6,362 37 6,399
Export 5,252 7,069 12,321 3,941 436 4,377
Retail 8,044 13,802 21,846 7,926 973 8,899
Marketplace 2,648 3,588 6,236 1,584 59 1,643
--------
Total sales 24,601 25,972 50,573 19,813 1,505 21,318
------------- -------- -------- -------- -------- -------- --------
Turnover by geographic destination of sales may be analysed as
follows
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
United Kingdom 32,751 14,062
Rest of Europe 9,174 3,849
Australia 1,416 755
Rest of the World 7,232 2,652
Total sales 50,573 21,318
-------------------- -------------- -------------
4. Operating expenses
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
-------------------------------------- -------------- --------------
Sales and marketing costs 17,527 10,813
--------------------------------------- -------------- --------------
Operating costs 5,149 3,690
Depreciation and amortisation 2,774 926
Share based payment charge (1) 1,165 1,922
Costs associated with integration of
PhD (2) 637 599
Administrative expenses 9,725 7,137
Total operating expenses 27,252 17,950
--------------------------- ------- -------
(1) Includes associated social security costs of GBP87,000 (31 December 2018 - GBP93,000) and consideration in respect of sponsorship services of GBP450,000 (31 December 2018 - GBP425,000).
(2) Integration costs of PhD Nutrition into the Group amounted
to GBP637,000 (2018 GBP599,000) this relates mainly to
restructuring and the powder production line installation.
5. Loss from operations
Loss from operations is stated after charging: Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
----------------------------------------------------- -------------- -------------
Amortisation of intangible assets 2,129 555
Amortisation of right-of-use assets 156 -
Depreciation of property, plant and equipment 489 371
Research and development costs 232 320
Grant income in respect of research and development
tax credits (215) (60)
A&P/Marketing costs 7,939 5,481
Foreign exchange variances on intercompany
balances 297 (161)
6. Taxation
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
--------------------------------------------------- -------------- -------------
Current tax income
United Kingdom corporation tax - -
Adjustment in respect of prior period - (4)
--------------------------------------------------- -------------- -------------
Total current tax income - (4)
Deferred tax
Effect of change in tax rates (100) -
Origination and reversal of temporary differences (454) 119
Tax on loss for the period (554) 115
--------------------------------------------------- -------------- -------------
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 5,064 5,990
-------------------------------------------------- --------- -------
Loss before tax multiplied by the standard
rate of corporation tax
in the UK of 19% ( 2018 - 19%) 962 1,138
Effects of:
Expenses not deductible for tax purposes (6) (7)
Unprovided deferred tax asset on losses carried
forward (1,482) (575)
Additional deduction for R&D expenditure 98 (34)
Share scheme deduction (33) (147)
Effect of changes in tax rate (100) (31)
Adjustment in respect of prior periods - (229)
Other 7 -
Total tax credit for the period (554) 115
-------------------------------------------------- --------- -------
Tax on each component of other comprehensive income is as
follows
2019 2018
Before Tax After Before Tax After
tax tax tax tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- -------- -------- --------
Loss recognised on hedging instrument (181) 33 (148) - - -
Exchange gains on the translation
of foreign operations 67 - 67 (125) - (125)
Total (114) 33 (81) (125) - (125)
--------------------------------------- -------- -------- -------- -------- -------- --------
At 31 December 2019 UK tax losses of the Company available to be
carried forward are estimated to be GBP14,117,000 ( 31 December
2018 - GBP10,100,000). In the deferred tax note (11) the
recoverability of the deferred asset against future profits is
assessed.
Deferred tax balances are valued at the rate of 19% in these
accounts to the extent that timing differences are expected to
reverse after this later date.
7. 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 ended Year ended
31 December 31 December
2019 2018
Loss for the year attributable to owners
of the parent - GBP'000 (5,618), (5,875)
Weighted average number of shares 122,716,318, 71,422,400
Basic and diluted loss per share - pence (4.6p) (8.2p)
------------------------------------------ ------------- ------------
The number of vested but unexercised share options is 6,080,901
(2018 - 5,428,949).
8. Inventories
31 December 31 December
2019 2018
GBP'000 GBP'000
---------------- ------------ ------------
Raw materials 1,551 2,164
Finished goods 4,590 4,938
6,141 7,102
---------------- ------------ ------------
There is a provision of GBP131,000 included within inventories
in relation to the impairment of inventories (31 December 2018 -
GBP116,000). During the period inventories of GBP28,236,000 (year
ended 31 December -2018 GBP9,094,000) were recognised as an expense
within cost of sales.
9. Trade and other receivables
31 December 31 December
2019 2018
GBP'000 GBP'000
----------------------------------------------------- ------------ ------------
Trade receivables 9,415 7,513
Less: provision for impairment of trade receivables (51) (43)
----------------------------------------------------- ------------ ------------
Trade receivables - net 9,364 7,470
Other receivables 517 480
----------------------------------------------------- ------------ ------------
Total financial assets other than cash and
cash equivalents classified as amortised cost 9,881 7,950
Prepayments and accrued income 1,046 989
----------------------------------------------------- ------------ ------------
Total trade and other receivables 10,927 8,939
----------------------------------------------------- ------------ ------------
Trade receivables represent debts due for the sale of goods to
customers.
Trade receivables are denominated in local currency of the
operating entity and converted to Sterling at the prevailing
exchange rate as at 31 December 2019. The Directors consider that
the carrying amount of these receivables approximates to their fair
value. All amounts shown under receivables fall due for payment
within one year. The Group does not hold any collateral as
security.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure
expected credit losses on a collective basis, trade receivables and
contract assets are grouped based on similar credit risk and
aging.
The expected loss rates are based on the Group's historical
credit losses experienced over 2019, this is due to SiS using SAP
which has provided more visibility over debtors. PhD has also
looked at credit loss over the 2019 year as this is the first full
year under SiS plc ownership. The historical loss rates are then
adjusted for current and forward-looking information affecting the
Group's customers.
At 31 December 2019 the lifetime expected loss provision for
trade receivables is as follows:
31 December 2019 More than More than
60 days 90 days
past due past due Total
Expected loss rate (%) 2% 10%
Gross carrying amount (GBP'000) 224 463
Loss provision (GBP'000) 5 46 51
--------------------------------- ------------------ ---------- -------
31 December 2018
--------------------------------- ------------------ ---------- -------
Expected loss rate (%) 2% 7%
Gross carrying amount (GBP'000) 501 475
--------------------------------- ------------------ ---------- -------
Loss provision (GBP'000) 10 33 43
--------------------------------- ------------------ ---------- -------
10. Trade and other payables
31 December 31 December
2019 2018
GBP'000 GBP'000
-------------------------------------- ------------ ------------
Trade payables 5,680 4,661
Accruals 3,354 2,631
-------------------------------------- ------------ ------------
Total financial liabilities measured
at amortised cost 9,034 7,292
Other taxes and social security 920 678
-------------------------------------- ------------ ------------
Total trade and other payables 9,954 7,970
====================================== ============ ============
The Directors consider that the carrying amount of these
liabilities approximates to their fair value.
All amounts shown fall due within one year.
11. Deferred tax
Deferred tax is calculated in full on temporary differences
under the liability method using a tax rate of 19% ( year ended 31
December 2018 - 19%). Details of the deferred tax asset and
liability, amounts recognised in profit or loss and amounts
recognised in other comprehensive income are as follows:
Year ended 31 December 2019: Asset Liability Net (Charged)/ (Charged)/
credited credited
to profit to equity
or loss
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- ---------- -------- ----------- -----------
Accelerated capital allowances - (382) (382) (63) -
Available losses 761 - 761 (564) -
Other temporary and deductible
differences 507 - 507 84 -
Business combinations - (2,472) (2,472) (11) -
Cash flow hedges 33 - 33 - 33
-------------------------------- -------- ---------- -------- ----------- -----------
Net tax assets/ (liabilities) 1,301 (2,854) (1,553) (554) 33
-------------------------------- -------- ---------- -------- ----------- -----------
Set-off of tax (382) 382 - - -
Net tax assets/ (liabilities) 919 (2,472) (1,553) (554) 33
================================ ======== ========== ======== =========== ===========
(Charged)/
credited
to profit
Year ended 31 December 2018: Asset Liability Net or loss
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------- -------- ---------- -------- -----------
Accelerated capital allowances - (319) (319) (206)
Available losses 1,325 - 1,325 558
Other temporary and deductible differences 424 - 424 (254)
Business combinations - (2,461) (2,461) 21
Tax asset/ (liabilities) 1,749 (2,780) (1,031) 119
Set-off of tax (319) 319 - -
Net tax assets/ (liabilities) 1,430 (2,461) (1,031) 119
-------------------------------------------- -------- ---------- -------- -----------
Recoverability of deferred tax asset:
SiS (Science in Sport) Limited has a cumulative assessed tax
loss of GBP14.1m as at 31 December 2019 , this has increased by
GBP4m from 2018. The loss is split into pre 1 April 2017 losses of
GBP4.2m and post 1 April 2017 losses of GBP9.9m. SiS will utilise
its assessed tax losses in the coming years against future expected
profits. Assessed losses from before 1st April 2017 can only be
used against SiS (Science in Sport) Limited profit whereas assessed
tax losses from after 1st April 2017 can be used to offset the
future profits from SiS (Science in Sport) Limited and PhD
Nutrition Ltd profits .
Tax losses have been recognised to the extent that they are
considered recoverable based on short term forecast taxable
profits.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FFFVVVTIDLII
(END) Dow Jones Newswires
March 18, 2020 03:00 ET (07:00 GMT)
Science In Sport (LSE:SIS)
Historical Stock Chart
From Apr 2024 to May 2024
Science In Sport (LSE:SIS)
Historical Stock Chart
From May 2023 to May 2024