Trading Update

RNS Number : 1923H

Science in Sport PLC

02 December 2020

 

2 December 2020
 

SCIENCE IN SPORT PLC

("Company" or "Group")

Trading Update

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 current financial year, ending 31 December 2020.

The business is performing well, driven by continued momentum in our Online business and substantial improvements in gross margin, with both factors leading to the business transitioning into being profitable on an EBITDA level for 2020.

Online channels continue to perform very strongly and this has offset some of the downturn caused in our Retail channels by the COVID-19 pandemic. Total Online revenues are ahead 39% year on year at £23 million to the end of November. Online sales are expected to grow to approximately 51% of total revenue for the full year, compared with 38% in 2019.

Very good progress has been made with our PhD.com digital business, up 108% to the end of November versus the same period in 2019. Our USA business is up 32% year on year and cash burn is significantly reduced, given the gross margin improvement to 74% and a streamlined operating model.

Group gross margin for the year is forecast to be up by four percentage points to approximately 48%, compared with 44% in 2019. Gross margin to date for the second half is up a further two percentage points to 50% and we see this as a sustainable base. The improvement is driven by Online pricing and promotion strategy, together with strategic Supply Chain initiatives flowing through in the second half of the year.

Given strong momentum in Online channels and some recovery in Retail following the severe downturn in April and May, we expect Group revenue for 2020 will be in the region of £49.8 million, versus £50.6 million in 2019.

We expect to report underlying EBITDA^* of approximately £1.0 million for the year, net of COVID-related exceptional costs of £0.3 million, versus a full-year loss of (£0.3 million) in 2019. The business has generated a positive EBITDA each month from June 2020 onwards.

The cash position is strong and we expect to close the year with approximately £10 million, having generated cash of around £0.5 million in 2020, this after capital investment in our production capacity and technology platform.

*excludes depreciation, amortisation, share-based payments, 2019 PhD acquisition costs and foreign exchange variances on intercompany balances

The Company will issue a Pre-Close Trading Statement in early January 2021.

Stephen Moon, Science in Sport's Chief Executive Officer, commented:

"I am pleased to announce the business is performing well. We bounced back strongly following our decisive actions in March and April to restructure the business and strengthen the balance sheet. Our focus has been accelerating our long-term growth strategy and investing in our online business, and this has successfully delivered for us.

We have invested in technology and talent to drive our online business across global territories for 2021 onwards, and we have continued to drive innovation and brand equity to underpin our premium margin business.

A new supply chain unit is planned for late 2021. This will build further on the substantial progress made in gross margin during this year, and we expect to make progress throughout the strategic planning period.

Whilst it is too early to reinstate guidance for the longer term, once the COVID-19 pandemic abates, we are well positioned to take advantage of profitable growth opportunities in all major global regions."

For further information:

Science in Sport plc Stephen Moon, Chief Executive Officer James Simpson, Chief Financial Officer	[phone]
Liberum Nominated adviser and broker Bidhi Bhoma James Greenwood William Hall	[phone]

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 digital, including major supermarkets and high street chains, specialist sports retailers and digital sites including Amazon and the brands' websites. They enable the Company to address the full breadth of the performance nutrition market currently estimated at approximately 11 billion worldwide.

PhD is one of the UK's leading protein 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, flapjacks, drinks and other products including the high protein, low sugar range, PhD Smart. PhD brand ambassadors include endurance athlete Ross Edgley, WBA international champion Jordan Gill, and leading fitness influencer 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 endurance. 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), British Cycling, Cycling Australia, USA Cycling and USA Triathlon. SiS supplies more than 100 professional football clubs in the UK, Europe and USA, and is an official partner to Manchester United Football Club. 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 phd.com and scienceinsport.com  

 

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