Science in Sport Plc - Half Year Trading Update 2021
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Science in Sport plc
("Science in Sport" or "the Company")
Half Year Trading Update
Returning to 20%+ Revenue Growth
Science in Sport, the premium performance nutrition company serving elite athletes, sports enthusiasts and the active lifestyle community, is pleased to announce a trading update for the first six months of its current financial year ending 31 December 2021.
After an encouraging start in January and February, sales continued to recover well, gaining momentum through the second quarter, with record monthly sales in June. This period of profitable growth, together with positive prospects for the second half, including new product launches, places the Company in a strong position to meet market expectations for the full year.
Revenue for the first six months increased by 24% to c. £29.3m, over the same period last year (H1 2020: £23.6m). Both brands, PhD Nutrition, an active lifestyle nutrition brand, and SIS, a leading endurance nutrition brand among elite athletes and professional sports teams, contributed strong double-digit growth, generating sales of £13.4m and £15.9m respectively (H1 2020: PhD, £11.7m, and SIS, £11.9m). New product launches accounted for 26% of revenue growth in H1.
Underlying EBITDA1 profit increased to £0.6m, continuing the strong upward trend (H1 2020: loss of £0.2m), and after an estimated one-off £0.6m negative impact from Brexit. Gross margin increased to 52% (H1 2020: 48%), driven by supply chain efficiencies and continued sales shift to online.
The Company's capital investment programme was accelerated, with £2.7m expended in the first half, compared to £0.9m in the same period last year. This investment supported the launch of a new customer data platform, which will drive ongoing online sales growth, and the first phase of investment at the new supply chain facility in Blackburn, which is currently scheduled to open in late Q1 2022. Significant further investment is planned in H2.
Reflecting the accelerated investment, the Group's cash position at 30 June 2021 was £8.2m (31 December 2020: £10.5m), slightly better than expected. The Company has an £8.0m debt facility, which remains unused.
1 before interest, tax, depreciation, amortisation, share based payments and foreign exchange variance on intercompany balances
Online sales rose strongly, up by 44% to £15.7m (H1 2020: £10.9m). Online sales via the Group's own digital platforms were up by 35% and via third-party marketplace sites up by 53%.
In the important market of the US, sales increased by 60% to £2.4m (H1 2020: £1.5m), and PhD and SiS websites were launched in Japan and South Korea, supporting international expansion plans. Further site launches in the Middle East and India are scheduled for the second half.
Online sales accounted for 54% of total sales in the first half (H1 2020: 46%), and remain a key focus of investment as part of the strategic growth plan.
Despite being adversely impacted by pandemic restrictions, UK retail sales rose by 8% to £8.4m (H1 2020: £7.7m). International retail sales at £5.2m were 6% ahead (H1 2020: £4.9m). These results were after exiting over 60 sub-scale accounts in late 2020, as part of a refocusing on key accounts in scale markets.
Date of publication of interim results
The Board expects to publish interim results in mid September 2021 when it will provide a further update on current trading.
Stephen Moon, CEO of Science in Sport plc, said:
"The Group has regained its growth momentum after the unprecedented global disruption of the pandemic in 2020, returning to 20%+ growth rates. This very encouraging performance reflects the progress achieved in 2020 and the strength of our premium brands, and will help to drive strong underlying EBITDA growth.
"Growth is across all key markets, especially online, which is a key strategic area for us. Online sales increased by 44%, and now account for 54% of total sales, up from 46% a year ago, underpinned by our increased investment in online technology. Retail sales both in the UK and internationally moved past last year's comparatives and have further to go.
"Prospects for further progress in the second half look strong, and our long-term growth strategy remains unchanged."