Highlights
· Revenues increased 20% to £9.93 million (H1 2017: £8.27 million) demonstrating continued strong growth, with the Company's e-commerce platform delivering 30% growth across all markets. All e-commerce channels now account for 53% of total revenues (H1 2017: 51%).
· Investment in H1 driving strong momentum into H2, full year revenue outlook in line with expectations.
· International markets performed strongly with growth of 53%, half the growth being driven by increased investment in the USA and Italy which are trading in line with expectations, as is the Australian business. International revenue accounts for 34% of total revenue (H1 2017: 27%).
· Increased strategic investment in International market expansion and e-commerce platform to capture the strong growth resulted in an increased underlying operating loss of £1.64 million* (H1 2017: -£1.14 million). The planned increased investment, against a backdrop of tightly controlling costs, will lead to a larger than expected EBITDA loss for the full year vs market expectations.
· Core business** is profitable at the half year for the first time with £0.3 million EBITDA including £0.6 million loss in new strategic vertical of Football, compared with breakeven H1 2017, continuing the trend from H2 2017.
· Delivered against Company objective of maintaining gross profit margin which remained consistent with H1 2017 at 59%.
· New product development continued to be a key growth driver and delivered £0.6 million of sales (H1 2017: £0.2 million) contributing 35% to overall revenue growth and strong second half pipeline in place.
· Increased investment in marketing was focused on driving brand awareness in International markets and on growing the e-commerce business customer database by 22% net to 645k, despite 248k opting out under new GDPR legislation.
· Significant investment in a major upgrade to the e-commerce platform, logistics and financial systems and people in all markets to support growth strategy.
· Cash and cash equivalents of £10.7 million (H1 2017: £3.9 million) post fund raise in November 2017. Funds have been utilised for investment in International markets, e-commerce platform and investment in systems in all markets to support accelerated growth.
· The Company is pleased to announce the appointment of Liberum Capital Limited as nominated advisor and sole broker with immediate effect.
* excludes depreciation, amortisation, and share based payments
** core is defined as UK, EU and ROW, excluding strategic markets USA, Italy & Australia, but including Football.
Stephen Moon, Science in Sport's CEO, said: “I am pleased that we had a strong start to the year. We have achieved yet another period of substantial growth, which saw revenue increase 20% year on year, in line with expectations. Post period end we have seen very strong growth in the three months to August as new initiatives generate increased revenue in H2 as planned.”
“The pace of change from offline to online across the retail market is accelerating faster. The SIS brand is well placed to take advantage of this structural shift and we continue to invest in our people, technology and brand awareness to underpin our growth ambitions. We launched our football business during the first quarter, having secured an exclusive nutrition partnership with Manchester United and we have already seen an impact on sales to elite clubs. Growth from our own e-commerce platform has accelerated strongly following commissioning our new web platform across all strategic markets. Our strategy of focusing on online and international growth continues to deliver results.”
“Group operating losses reflect the increased investment in new international markets, football and our e-commerce platform. The core business has moved into profit at the half year for the first time as we leverage the advantage of a strong gross margin and tightly controlled costs. Having reached the milestone of profitability in our core business and with promising early signs in the USA, we are very confident for the future of the SIS brand.”