TIDMSIS
RNS Number : 6264L
Science in Sport PLC
14 January 2021
14 January 2021
SCIENCE IN SPORT PLC
("Company" or "Group")
Pre-Close Trading Update and Notification of Final Results
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 an update on
trading for the financial year ended 31 December 2020.
Trading Update
The Group performed well during the year, delivering an adjusted
EBITDA* profit of GBP1.1 million (FY19: loss of GBP0.3 million), as
we strengthened the key building blocks of long-term profitable
growth. Our Online business grew strongly by 39% to GBP25.0
million. Q4 Online performance was 65% higher than the
corresponding period in FY19. While the COVID pandemic adversely
affected our Retail business, total revenues of GBP50.3 million
were in line with the previous year (FY19: GBP50.6 million). Online
sales were 50% of total revenues, compared with 38% in FY19, and we
see this strong channel switch continuing.
A step-change in gross margin was achieved, moving up five
percentage points year on year to 49%. The gross margin was 50% for
the second half, reflecting further benefits flowing through. The
improvement resulted from Supply Chain efficiencies, together with
sales channel shift to our Digital platform and improved
pricing.
Improved gross margin, higher return on digital marketing
investment, and tight cost control resulted in an adjusted EBITDA*
of GBP1.1 million (FY19: GBP0.3 million loss). The balance sheet is
strong, with GBP10.5 million of cash (FY19: GBP5.4 million),
including GBP4.2 million net proceeds from the placing in
April.
Operational Highlights
Key SiS growth markets of Australia, Football, Italy and the USA
contributed 28% of total SiS revenue at GBP7.2 million and were
cash positive overall. The USA made good progress with 35% revenue
growth to GBP3.6 million, and cash burn is significantly
reduced.
Online as a share of total Group revenue increased to 50%,
sharply up from 38% in FY19. PhD.com revenues grew 105% to GBP3.2
million and gained strong momentum during the final quarter.
Retail was adversely affected by COVID, mainly the UK, which
delivered revenues of GBP16.1 million (FY19: GBP21.8 million). The
GBP9.3 million of International revenues were 14% behind last year
(FY19: GBP10.8 million). We saw a good recovery in several markets
and resilient rate of sale in key UK product lines in Q4, and we
remain optimistic.
While we held some Innovation back given the pandemic, sales
from new products still contributed well at GBP2.2 million, some 4%
of total Group revenues. The 2021 new product pipeline is extremely
strong.
We significantly strengthened the team in the final quarter,
including key senior hires in Online, Technology, and Customer
Experience to support our strategic growth initiatives in Online
and International.
Supply Chain Investment
We have agreed to heads of terms for a new Supply Chain facility
in Blackburn. The lease commences in December 2021, and we expect
to be fully operational in Q1 2022. The 160,000 square foot
facility will consolidate the Group's operations into one site and
give us the headroom to grow to more than GBP150 million in
revenue. We are to install a new 8-lane gel manufacturing plant in
the facility to meet the continued strong growth in this highly
profitable product line.
Of the GBP4.3 million total costs, GBP2.2 million is for works
related to the new site, and GBP2.1 million for the gel blending,
filling and packing line. GBP2.1 million is to be funded from cash
reserves, together with GBP2.2 million of equipment leasing
finance. The project is expected to contribute to EBITDA in FY22,
and to deliver cash payback in FY23, through increased operating
efficiencies.
Notification of Final Results
The Company expects to announce its Final Results for the year
ended 31 December 2020 on Wednesday 17 March 2021. Management will
give an investor presentation on the Investor Meet Company platform
at 14:00 GMT on that day.
*excludes depreciation, amortisation, share-based payments, 2019
PhD acquisition costs and foreign exchange variances on
intercompany balances
Stephen Moon, Science in Sport's Chief Executive Officer,
commented:
"Delivering a robust EBITDA profit was a key goal for the year,
and this was achieved through a focus on developing our fundamental
building blocks of long-term profitable growth. We have realised
all expected synergies from the PhD acquisition and saw a strong
performance in all supply chain dimensions. This, together with our
strategic shift to online, saw a step change in gross margin.
Our online business's very strong momentum in all markets is
exciting, and this has carried into the new year. While retail took
the pandemic's brunt, there are promising signs of recovery in this
cash generative channel, and we remain optimistic.
Building brand equity and having a strong innovation pipeline
remains central to our strategic platform. I am pleased to say we
continue to make consistently good progress in both of these
areas.
Our long-term and proven profitable growth strategy remains
unchanged. To that end, we have commenced investment in technology
to drive our online business, together with securing a new supply
chain site, as we look to the next strategic growth phase.
Whilst it is too early to reinstate market guidance, given the
current COVID-19 lockdown, we are well funded and remain very
optimistic about the long term growth prospects for the Group."
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
Richard Lindley
James Greenwood
Will Hall +44 (0) 20 3100 2000
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 active-nutrition brand targeting
the gym lifestyle community, and SiS, a leading endurance nutrition
brand among elite athletes and professional sports teams.
The two brands are sold internationally through our own phd.com
and scienceinsport.com digital platform, together with third-party
online sites including Amazon and Tmall. We have extensive retail
distribution in the UK and internationally, including major
supermarkets, high street chains and specialist sports retailers.
This omnichannel footprint enables the Company to address the full
breadth of the sports nutrition market currently estimated at
approximately GBP11 billion worldwide.
PhD is one of the UK's leading active nutrition brands with a
reputation for high quality and product innovation. The brand has
grown rapidly, based on its core protein powders, since its launch
in 2005. The range now comprises powders, bars and supplements
including the high protein, low sugar range, PhD Smart. PhD brand
ambassadors include leading fitness influencers Ross Edgley and Obi
Vincent. The PhD brand is an official partner to the Tough Mudder
Challenge and Race Series.
SiS, founded in 1992, has a core range comprising gels, powders
and bars focused on energy, hydration and recovery. SiS is the
official sports nutrition supplier to many professional teams and
organisations including INEOS Grenadiers Cycling Team, Team INEOS
UK (America's Cup Team) and Manchester United Football Club. SiS
supplies more than 100 professional football clubs in the UK,
Europe and USA, and is Performance Research Partner to the English
Football Association.
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 phd.com and
scienceinsport.com
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