Highlights
· Revenues increased 28% to £8.27 million (H1 2016: £6.48 million) demonstrating continued strong growth, with the Company's e-commerce platform delivering 87% growth across all markets. All e-commerce channels now account for 51% of total revenues (H1 2016: 46%).
· International performed strongly with growth of 55%, driven by increased investment in the USA and Italy which are trading in line with expectations, as is the Australian business. International revenue accounts of 27% of total revenue (H1 2016: 22%).
· Strategic investment in international market expansion and e-commerce business resulted in underlying operating loss of £1,141k* in line with expectations and growth strategy (H1 2016: -£369k).
· Core UK and EU business break even at the half year and on track for profitable second half, given first half phasing of marketing investment.
· Increased input prices on raw materials and growth in protein products have been absorbed through increased efficiencies, leaving overall gross profit unchanged at 58.8%.
· New product development and launches continued with GO Caffeine Shots launched in H1, and further acceleration in H2 with WHEY20 relaunched in July 2017 and GO Energy + Immune Gel and REGO Rapid Recovery Plus launched in August 2017.
· Increased investment in marketing was focused on driving brand awareness in international markets and on growing our e-commerce business customer database by 38% from the beginning of the period.
· Significant investment in systems and people in all markets to support growth strategy.
· Cash and cash equivalents of £3.9 million (H1 2016: 6.7 million) reflecting investment in international markets, e-commerce platform and investment in systems in all markets to support the accelerated growth.
* excludes depreciation, amortisation, and share based payments
Stephen Moon, Science in Sport's CEO, said: “I am pleased that we have had such a strong start to the year in a difficult market of rising input costs and uncertain consumer spending. We have achieved yet another period of substantial growth, which was in line with our expectations, and saw revenues increase 28% year on year.”
“We have invested heavily in international markets during the first half and trading is in line with expectations in Australia, Italy and the USA. We have also seen exceptionally strong growth from our own e-commerce platform. Our strategy of focusing on online and international growth is delivering results.”
“Operating losses are in line with expectations and reflect our investment in category leading growth in new markets and digital channels. The core business is expected to be profitable at EBITDA level for the full year and we will continue to invest in strategic international markets. Costs remain tightly controlled and gross margin is very robust in a difficult climate. We remain confident in our growth-led strategy.”