TIDMSIS
RNS Number : 6883M
Science in Sport PLC
18 September 2019
18 September 2019
SCIENCE IN SPORT PLC
("SiS", "Company" or "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2019
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 its unaudited
results for the 6 months ended 30 June 2019.
HIGHLIGHTS
-- Group revenue increased 150% to GBP24.87 million (H1 2018:
GBP9.93 million), reflecting the first full six-month contribution
from PhD Nutrition Ltd ("PhD"), following its acquisition on 6
December 2018, and strong organic growth from the SiS brand
- 16% like-for-like increase in PhD revenue to GBP12.40m (H1
2018 pro forma: GBP10.68m*), representing record growth for the PhD
brand
- 26% increase in SiS revenue to GBP12.47 million (H1 2018:
GBP9.93 million) up from 20% growth in H1 2018
- 56% growth in total revenue from international markets (H1
2018: 49%), which now accounts for 33% of total revenue across both
brands
-- PhD performing in line with expectations; the integration of
the PhD and SiS brands is progressing well; both brands are
benefiting from shared distribution channels and the opening of an
e-commerce fulfilment facility at our Nelson site
-- Continued focus on e-commerce sales with SiS.com sales up 52%
in the half year and PhD.com successfully relaunched in April
2019
-- New product development remains a key growth driver for both
brands; new products delivered 32% of total Group sales growth in
the first half with successful product launches including PhD's
Smart Bar Plant and SiS's innovative Football range
-- Substantial increase in Group gross profit to GBP11.15
million (H1 2018: GBP5.86 million) including GBP4.13 million from
PhD
- Group gross margin on a like-for-like basis of 44.8% (H1 2018:
45.9%). Gross margin expected to be in line with year end
expectations
-- Underlying operating loss** of GBP0.60 million (H1 2018: loss
of GBP1.70 million) in line with expectations and reflecting the
EBITDA contribution from PhD in the first six months of 2019
-- Cash and cash equivalents of GBP5.03 million (FY 2018:
GBP8.00 million H1 2018: GBP10.66 million)
-- Appointment of James Simpson, a highly experienced consumer
sector and e-commerce executive, as Chief Financial Officer with a
start date of 26 September 2019
* for meaningful comparison, pro forma numbers have been used
for PhD H1 2018 when the business was not owned by the Group
** excludes depreciation, amortisation, and share based
payments, and transaction costs related to the acquisition of
PhD
Stephen Moon, Science in Sport's CEO, said:
"The integration of the PhD and SiS brands remains firmly on
track and we are particularly excited by the potential of the
PhD.com e-commerce business. Important milestones achieved in the
first half include relaunching the PhD.com website, opening an
e-commerce fulfilment facility and exploiting international
distribution synergies, as well as the integration of teams across
both brands.
"Introduction of the new protein powder line at our Nelson site
remains on track to enable in-house PhD powder manufacture with a
go-live date of November 2019.
"We remain confident of delivering on full year expectations,
and of the future growth of both our brands. Investment in
performance innovation, brand awareness, e-commerce, International
and effective manufacturing will underpin expected growth in 2020
and beyond."
For further information:
Science in Sport PLC +44 (0) 20 7400 3700
Stephen Moon, CEO
Liberum
NOMAD and Broker
Bidhi Bhoma
James Greenwood +44 (0) 20 3100 2227
Buchanan Communications +44 (0) 20 7466 5000
Financial PR ScienceInSport@buchanan.uk.com
Mark Court
Vicky Hayns
Tilly Abraham
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 online, including major supermarkets
and high street chains, specialist sports retailers and e-commerce
sites including Amazon and the brands' own websites. They enable
the Company to address the full breadth of the performance
nutrition market currently estimated at approximately GBP10 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 launch in 2005.
The range now comprises powders, bars, flapjacks, drinks and other
products including the high protein, low sugar range, PhD Smart.
PhD is the exclusive sports nutrition supplier to David Lloyd Clubs
and its brand ambassadors include rapper Bugzy Malone, WBA
international champion Jordan Gill and Team GB Olympic sprinter
Asha Philip.
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 cycling
teams and organisations including Team INEOS, British Cycling,
Cycling Australia, USA Cycling and USA Triathlon. SiS supplies more
than 80 professional football clubs in the UK and is an official
partner to British Triathlon and the Rock 'n' Roll Marathon Series.
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 www.scienceinsport.com
BUSINESS REVIEW
Overview and Strategy
We are delighted to report another strong set of results, both
financially and operationally. The six months to 30 June 2019
include the first full six-month contribution from PhD Nutrition
Ltd ("PhD"), which was acquired by the Group on 6 December 2018 and
which continues to trade in line with our expectations. The Group's
half year sales were up 150% to GBP24.87 million, from GBP9.93
million for the same period last year, reflecting the PhD
acquisition and strong organic growth from the SiS brand.
On a like for like basis*, including pre-acquisition revenue
from PhD, the six-month revenue growth was 20.6%. On a constant
currency basis this was reduced slightly by 0.2% to 20.4% due to
the impact of the weakening of Sterling versus the US Dollar.
The Core*** SiS brand and the PhD brand have continued to
perform well in the half year, each delivering GBP0.8 million
EBITDA (together GBP1.6 million) after allocation of central
overheads to investment markets. This profitability is enabling
further investment in growth opportunities. See Note 2 Segmental
Reporting for further detail.
The Group continues to invest in brand awareness to broaden
visibility and availability of our product across all channels.
Brand awareness and usage is at record levels for both brands, and
our brand attributes show significant strength versus our
competitive set.
Integration of the PhD and SiS businesses is firmly on track. We
opened a Group e-commerce fulfilment facility at our site in
Nelson, Lancashire, in June 2019 to enable the insourcing of
picking, packing and distribution of e-commerce sales. The
insourcing of PhD protein powder manufacture, with the opening of a
state of the art powder line at our Nelson site is on track for
November. The UK sales teams were integrated in August, in order to
offer key customers a full category offering of performance
nutrition.
Investment in our e-commerce platform and financial and
logistics systems continues to facilitate effective logistics and
high customer service levels for both brands in all markets.
The Board has identified significant growth opportunities for
the Group over the next few years. To exploit these opportunities
the Group will continue to consistently invest in performance
innovation, brand awareness, e-commerce, International and
effective manufacturing. Our profitable Core business provides the
resource to invest in these areas, as well as new initiatives
including Football.
E-commerce
E-commerce remains a key growth channel in all of our strategic
markets, which comprise UK, Australia, Italy and the USA. The SiS
brand's online sales were up 52% in the half year to GBP4.29
million and key metrics, including average order value, traffic and
database, grew strongly.
The online potential of PhD.com is also significant. We
relaunched PhD.com on our Magento 2 e-commerce platform in April
2019 and commenced investment in the platform in May. Current
customer acquisition and trading metrics are as we would expect at
this stage.
Third-party online sales channels for PhD fell by 4% to GBP2.5m
as we deliberately rationalised non-core online customers. Within
this category, Amazon sales grew 10%. SiS third-party online sales
increased 12% to GBP2.5 million in the period.
International
International markets continue to perform strongly with growth
in the first half of 56%. Over half the growth is being driven by
increased investment in the USA and expansion in global
distribution across both PhD and SiS brands. International revenue
accounts for 33% of total revenue for the Group and we expect this
percentage to rise over the second half of the year.
Further digital marketing spend has been channeled into the
strategic International markets of Italy and the USA. We have
continued to invest for growth in these markets in the first half,
and we saw growth of 84% and 129% respectively. SiS Australia grew
50% to GBP518k in the period, with SiS.com growing at 76%.
The importance of China as a strategic growth market is emerging
with Group revenue of GBP0.88 million in the period, an increase of
125% year on year.
We are developing our trading relationship with Amazon in
several International markets, including the USA, Australia and
Italy. We saw particularly strong growth in the USA, where the
channel is strategically important. We continue to develop our
business in China on third-party online platforms, including TMall,
for both of our brands.
Export markets have grown significantly in the period through
the Group's network of distributors with like for like growth
across both brands of 41%. We are making progress in developing our
brands synergistically in International markets. PhD has been
launched via SiS distributors in Russia and Turkey whilst SiS has
been launched via PhD distributors in Lebanon, Saudi Arabia and
UAE. We have combined both brands under the control of the existing
PhD distributor in China.
In addition we have carried out consumer testing and research
for the PhD range in the USA and intend to launch via the existing
SiS operation in due course.
UK Retail Channels
Traditional retail channels (Grocers, High Street and Heartland)
grew 14% in the period, with the PhD brand growing at 15% and the
SiS brand at 11%.
The growth in PhD was primarily driven by the Smart Bar range
across all channels with significant growth continuing in Holland
& Barrett and Grocers, with the PhD Grocers sales channel
growing at 11%.
The SiS brand gained further distribution in Tesco and
Sainsbury's following the launch of Protein20, a range of high
protein, low sugar bars, helping drive revenue growth of 41% for
the SiS Grocers sales channel, more than compensating for the
continued decline in High Street and managed consolidation in
Heartland.
Partnerships
The SiS brand's partnership with Manchester United Football Club
("MUFC") is helping to drive revenue growth in our Football
vertical. More than 85 elite clubs currently purchase SiS products,
including some top flight European clubs. During the half year, the
SiS brand launched a new football range for players of all levels,
which was developed in partnership with MUFC. The launch of our
Football website (www.sisfootball.com) underpins education and
product trial, which are key to gaining long term leadership in the
sport as well as driving sales. Sales were GBP484k and this
represents growth of 106%. We remain committed to this
strategically important long-term growth initiative.
In cycling, the SiS brand was appointed in May 2019 as exclusive
nutrition provider to Team INEOS, the world's most successful
cycling team (formerly known as Team Sky). SiS's innovative
approach to fuelling and hydrating Team INEOS helped to support the
team's recent successes including first and second places in this
year's Tour de France.
Product Innovation
In the first half, 32% of total Group sales growth was delivered
through new products. The key launches in the first six months were
the PhD vegan Smart Bar Plant, and the SiS brand's innovative range
for footballers of all levels. PhD's Smart Bar Plant was launched
in May this year and has already become PhD's fourth best-selling
product line.
We are excited about the remainder of 2019; both brands have
further vegan product launches during the second half, most notably
the SiS Plant20, a vegan protein bar launched in August 2019, and
PhD's Plant Powders.
We have continued to invest in this strategic foundation and
have a strong pipeline of novel products. We expect innovation
revenue growth to be consistent with the contribution to sales made
in previous periods, and to continue to underpin our growth going
forward and maintain our position as the leading premium
performance nutrition business.
Financial Summary
Group revenue in the six months to 30 June 2019 was up 150% at
GBP24.87 million (H1 2018: GBP9.93 million). International and
e-commerce sales growth was particularly strong, reflecting the
continued investment in our e-commerce platform and brand
awareness.
The PhD brand traded in line with expectations in the six month
period, with half year sales up 16% at GBP12.40 million (H1 2018
pro forma GBP10.68 million*). International sales were up 58%,
while UK sales were up 7%.
The SiS brand's sales were up 26% in the period at GBP12.47m (H1
2018: GBP9.93m) driven by international growth, up 54%. Growth in
the UK was up 10% and sales from the SiS website were up strongly
at 52%.
Gross profit for the Group of 44.8% (H1 2018: 45.9%) on a like
for like basis is reflective of retail distribution investment and
one-off inventory costs for SiS, plus increased distribution of
Smart Bars for PhD.
After accounting for leases under IFRS 16, the underlying
operating loss** of GBP0.60 million (H1 2018: GBP1.64 million
loss). This includes continued investment in marketing, sales and
e-commerce across all markets of GBP9.24 million (H1 2018: GBP7.25
million) on a like for like basis, which continued to drive revenue
growth in the period. Investment in the SiS brand was GBP6.83
million (H1 2018: GBP5.66 million) and the PhD brand was GBP2.41m.
The Core UK and EU business is profitable across both brands, a
trend that is expected to continue in H2 2019.
Total comprehensive loss for the period was GBP2.68 million
(2018:GBP2.65 million).
Overheads excluding sales and marketing costs, were GBP2.51
million (H1 2018: GBP1.85 million). On a like for like basis for
the six months they were GBP2.51 million (H1 2018: GBP2.21m). The
increase was primarily due to premises and IT costs relating to
business expansion and PLC costs.
Cash and cash equivalents at the period end were GBP5.03 million
(FY 2018: GBP8.00 million; H1 2018: GBP10.66 million). Cash outflow
of GBP2.97 million since the year end represents continued
operational investment as planned to support the strongly growing
International and e-commerce businesses. There has been significant
investment in PhD.com in terms of moving the website to the Magento
2 platform, investment in purchasing the PhD.com domain name, and
in-sourcing picking and packing, which is driving improved
metrics.
People
Post the acquisition of PhD we have integrated teams across the
business and harmonised terms and conditions across the Group. We
have also continued to invest in key roles to accelerate our
continued growth. Investment in training and skills across all
sites has continued and we continue to develop talent
internally.
Richard Wyborn joined the executive management team as Strategic
Projects Director on 11 March 2019 and has led major integration
projects, as well as the 2022 strategy review and other current
growth related projects.
On 11 September 2019, we announced the appointment of James
Simpson as Chief Financial Officer. James has significant financial
management experience gained across e-commerce and consumer
industries and we look forward to his joining the Group on 26
September 2019.
James's appointment followed the decision by Elizabeth Lake, our
former Chief Financial Officer, to accept a position at another
business. Elizabeth left the Group on 10 September 2019 and the
Board thanks her for her robust contribution to the Group during
her three years as Chief Financial Officer.
Outlook
The integration of the PhD and SiS brands remains firmly on
track and we are particularly excited by the potential of the
PhD.com e-commerce business. Important milestones achieved in the
first half include relaunching the PhD.com website, opening an
e-commerce fulfilment facility and exploiting international
distribution synergies, as well as the integration of teams across
both brands.
Introduction of the new protein powder line at our Nelson site
remains on track to enable in-house PhD powder manufacture with a
go-live date of November 2019.
We remain confident of delivering on full year expectations and
of the future growth of both our brands. Investment in performance
innovation, brand awareness, e-commerce, International and
effective manufacturing will underpin expected growth in 2020 and
beyond.
Stephen Moon
Chief Executive Officer
* for meaningful comparison, pro forma numbers have been used
for PhD H1 2018 when the business was not owned by the Group
** excludes depreciation, amortisation, share based payments,
and transaction costs related to the acquisition of PhD
*** SiS core is defined as UK, EU and ROW, excluding strategic
markets Football, USA, Italy & Australia
Consolidated statement of comprehensive income
Six months ended 30 June 2019
Unaudited Unaudited Audited
six months six months twelve
ended 30 ended months
June 2019 30 June ended
IFRS 16 2018 31 December
adjusted 2018
Notes GBP'000 GBP'000 GBP'000
------------------------------------ ------ ------------ ------------ -------------
Revenue 24,872 9,934 21,318
Cost of goods (13,723) (4,073) (9,363)
------------------------------------ ------ ------------ ------------ -------------
Gross Profit 11,149 5,861 11,955
Total Costs (11,751) (7,504) (14,503)
Underlying operating profit/(loss) (602) (1,643) (2,548)
Depreciation and amortisation (1,322) (276) (926)
Share-based payment charges 3 (742) (819) (1,922)
Costs associated with acquisition
of PhD (397) - (599)
------------------------------------ ------ ------------ ------------ -------------
Loss from operations (3,063) (2,738) (5,995)
Finance income 5 - 5
Finance costs (23) -
Loss before taxation (3,081) (2,738) (5,990)
Taxation 4 426 145 115
------------------------------------ ------ ------------ ------------ -------------
(Loss) and total comprehensive
expense for the period (2,655) (2,593) (5,875)
------------------------------------ ------ ------------ ------------ -------------
Exchange difference on translation
of foreign operations (22) (59) (125)
Total comprehensive income for
the period (2,677) (2,652) (6,000)
------------------------------------ ------ ------------ ------------ -------------
(Loss) per share to owners of the
parent
Basic and diluted 5 (2.2p) (3.8p) (8.2p)
------------------------------------ ------ ------------ ------------ -------------
All amounts relate to continuing operations
Consolidated statement of financial position
30 June 2019
Unaudited Unaudited Audited
six months six months twelve
ended 30 ended 30 months
June 2019 June 2018 ended
IFRS 16 31 December
adjusted 2018
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ ---------------
Assets
Non-current assets
Goodwill 17,398 - 17,398
Intangible assets 16,126 1,772 16,344
Plant and equipment 1,133 817 1,033
Right of use assets 1,449 - -
Deferred tax 1,732 1,476 1,430
Total non-current assets 37,838 4,066 36,205
------------------------------------- ------------ ------------ ---------------
Current assets
Inventories 8,560 4,780 7,102
Trade and other receivables 11,798 5,379 8,939
Cash and cash equivalents 5,034 10,659 8,002
Total current assets 25,392 20,819 24,043
------------------------------------- ------------ ------------ ---------------
Total assets 63,230 24,884 60,248
------------------------------------- ------------ ------------ ---------------
Liabilities
Current liabilities
Trade and other payables (11,528) (3,910) (7,970)
IFRS 16 short term lease
liability (219)
Total current liabilities (11,747) (3,910) (7,970)
------------------------------------- ------------ ------------ ---------------
Net current assets 13,645 16,909 16,073
------------------------------------- ------------ ------------ ---------------
Non-current liabilities
IFRS 16 long term lease (1,266) - -
liability
Deferred Tax (2,336) - (2,461)
------------------------------------- ------------ ------------ ---------------
Total non-current liabilities (3,602) - (2,461)
------------------------------------- ------------ ------------ ---------------
Total Liabilities (15,349) (3,910) (10,431)
Total net assets 47,881 20,975 49,817
------------------------------------- ------------ ------------ ---------------
Capital and reserves attributable
to
owners of the parent company
Share capital 6 12,282 6,774 12,197
Share premium reserve 48,828 22,707 48,464
Employee benefit trust (372) (405) (372)
Merger reserve (907) (907) (907)
Foreign exchange reserve (119) (31) (97)
Retained earnings (11,831) (7,163) (9,468)
Total Equity 47,881 20,975 49,817
------------------------------------- ------------ ------------ ---------------
Consolidated statement of cash flows
Unaudited Unaudited Audited
six months six months twelve
ended 30 ended 30 months
June 2019 June 2018 ended 31
December
2018
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------ ------------ ----------
Cash flows from operating activities
(Loss)/profit after tax (2,655) (2,593) (5,875)
Adjustments for:
Amortisation 928 130 555
Depreciation 394 146 371
Net finance (income)/expense 18 - (5)
Taxation (426) (145) (115)
Share-based payment charges 742 819 1,922
Operating cash (outflow)/inflow before
changes in working capital (999) (1,643) (3,147)
-------------------------------------------- ------------ ------------ ----------
Changes in inventories (1,458) (2,067) (2,070)
Changes in trade and other receivables (2,859) (2,528) (1,707)
Changes in trade and other payables 3,570 1,049 503
Total cash outflow from operations (1,746) (5,189) (6,421)
-------------------------------------------- ------------ ------------ ----------
Cash flow from investing activities
Purchase of property, plant and equipment (388) (170) (519)
Purchase of intangible assets (708) (551) (945)
Acquisition of subsidiary, net of
cash acquired - (28,363)
Interest received 5 - -
Net cash outflow from investing activities (1,091) (721) (29,827)
-------------------------------------------- ------------ ------------ ----------
Cash flow from financing activities
Proceeds from issue of share capital - - 27,920
Expenses paid on share issues - - (240)
Principal paid on lease liabilities (108) - -
Interest paid on lease liabilities (23) - -
Net cash (outflow)/inflow from financing
activities (131) - 27,680
-------------------------------------------- ------------ ------------ ----------
Net (decrease)/increase in cash and
cash equivalents (2,968) (5,911) (8,568)
Opening cash and cash equivalents 8,002 16,570 16,570
Closing cash and cash equivalents 5,034 10,659 8,002
-------------------------------------------- ------------ ------------ ----------
Consolidated statement of changes in equity
Share Capital Share Preference Other Foreign Retained Total
Premium Shares/EBT Reserve exchange earnings/(deficit) Equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
Balance at 31 December
2017 6,683 22,339 (397) (907) 28 (4,938) 22,808
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
Comprehensive Income
Loss for the period (2,593) (2,593)
Issue of sponsorship
shares - consideration 57 368 425
Transactions with
owners
recorded directly in
equity
Issue of shares to the
EBT - 34 (34) -
10 May 2018
Exercise of share
options 26 (26) -
Recognition of
share-based 394 394
payments charge
FX on translation of foreign
subs (59) (59)
Balance at 30 June 2018 6,774 22,707 (405) (907) (31) (7,163) 20,975
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
Comprehensive Income
Loss for the period (3,282) (3,282)
Issue of shares -
consideration 5,423 27,114 32,537
Transaction cost of
placing (1,357) (1,357)
Transactions with
owners
recorded directly in
equity
Exercise of share
options 33 (33)
Recognition of
share-based 1,010 1,010
payments charge
FX on translation of
foreign subs (66) (66)
Balance at 31 December
2018 12,197 48,464 (372) (907) (97) (9,468) 49,817
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
Comprehensive Income
Loss for the period (2,655) (2,655)
Issue of sponsorship
shares - consideration 85 364 449
Recognition of
share-based
payments charge 292 292
FX on translation of
foreign subs (22) (22)
Balance at 30 June 2019 12,282 48,828 (372) (907) (119) (11,831) 47,881
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
Balance at 30 June 2019
pre IFRS 16 12,282 48,828 (372) (907) (119) (11,803) 47,909
------------------------ -------- --------- ------------ --------- ---------- -------------------- --------
EBT Own shares held by the Employee Benefit Trust ('EBT') which
will be used to settle options held by employees under the Group's
Employee Share Option Plan.
Other reserve The other reserve arose as a result of applying
the principles of reverse acquisition accounting following the
demerger of SiS (Science in Sport) Limited from Provexis plc and
represents the difference between the capital reserves of Science
in Sport plc (the legal acquirer) and those of SiS (Science in
Sport) Limited (the legal acquire).
Notes to the interim financial information
For the six months ended 30 June 2019
1. Basis of preparation
This interim report has been prepared using the same accounting
policies as those applied in the annual financial statements for
the year ended 31 December 2018, except for the adoption of IFRS
16, and those expected to be adopted in the financial statements
for the year ending 31 December 2019 which will include IFRS
16.
IFRS 16 Leases
Effective 1 January 2019, IFRS 16 has replaced IAS 17 and IFRC 4
Determining whether an arrangement contains a lease.
The Group adopted IFRS 16 using the modified retrospective
approach, without restatement of comparative figures. On adoption
of IFRS 16, the Group recognised right-of-use assets and lease
liability in relation to leases of office and factory space and
cars, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the
remaining lease payments discounted using the Group's incremental
borrowing rate as at 1 January 2019, the rate applied was
3.75%.
The right-of-use assets were measured as follows;
-- Office and factory space: Right of use assets are measured at
an amount equal to the lease liability;
-- Cars: Right of use asset measured as an amount equal to the lease liability.
Included in profit and loss for the period are GBP113k of
amortisation of right-of-use assets and GBP23k of finance expense
on lease liabilities.
The Directors believe that the operating loss before
depreciation, amortisation and impairment of intangibles,
share-based payments and exceptional items measure provides
additional useful information for shareholders on underlying trends
and performance. This measure is used for internal performance
analysis.
Underlying operating loss is not defined by IFRS and therefore
many not be directly comparable with other companies' adjusted
profit measures. It is not intended to be suitable substitute for,
or superior to IFRS measurements of profit. A reconciliation of
underlying operating profit to statutory operating profit is set
out on the face of the statement of comprehensive income.
The condensed financial information herein has been prepared
using accounting policies consistent with International Financial
Reporting Standards in the European Union (IFRS). While the
financial figures included in this interim report have been
prepared in accordance with IFRS applicable for interim periods,
this interim report does not contain sufficient information to
constitute an interim financial report as defined in IAS 34.
The Company has taken advantage of the exemption not to apply
IAS 34 'Interim Financial Reporting' since compliance is not
required by AIM listed companies.
This interim report does not constitute statutory accounts as
defined in section 434 of the Companies Act 2006 and has been
neither audited nor reviewed by the Company's auditors BDO LLP,
pursuant to guidance issued by the Auditing Practices Board.
The interim report should be read in conjunction with the annual
financial statements period ended 31 December 2018.
The statutory Accounts for the last period ended 31 December
2018 were approved by the Board on 19 March 2019 and are filed at
Companies House. The report of the auditors on those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498 of the
Companies Act 2006.
The unaudited interim report was authorised by the Company's
Board of Directors on 17 September 2019.
2. Segmental reporting
The Directors have determined that six operating segments exist
under the terms of International Financial Reporting Standard 8
"Operating Segments". The Group is organised between core business
which covers all sales made from the UK entity (this will include
sales into International markets through both the UK website and
International distributors, as well as third party etailers,
grocers, high street and heartland bike shops), Football (includes
sales to consumers in football), PhD Nutrition sales and sales in
each of the International subsidiaries in the US, Australia and
Italy. The performance of operating segments is assessed on
earnings before interest, tax and depreciation, excluding
equity-settled share option charges recognised under IFRS 2
"Share-based payment".
Segment Revenue Segment Profit****
---------------------------------------- ----------------------------------------
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six twelve six months six twelve
ended months months ended months months
30 June ended ended 30 June ended ended
2019 30 June 31 December 2019 30 June 31 December
IFRS 2018 2018 IFRS 2018 2018
16 adjusted 16 adjusted
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------------- ---------- ------------- ------------- ---------- -------------
Core*** 9,424 8,364 16,047 860 984 2,033
USA 1,170 512 1,373 (1,455) (1,301) (2,451)
Italy 880 478 983 (126) (322) (608)
Australia 518 345 755 (116) (346) (545)
Football 484 235 655 (588) (658) (1,113)
PhD*** 12,396 - 1,505 823 - 136
------------------------------- ------------- ---------- ------------- ------------- ---------- -------------
24,872 9,934 21,318 (602) (1,643) (2,548)
------------- ---------- ------------- ------------- ---------- -------------
Depreciation and amortisation (1,322) (276) (926)
Share based payments (742) (819) (1,922)
Costs associated with
acquisition of PhD (397) - (599)
------------- ---------- -------------
Loss from operations (3,063) (2,738) (5,995)
------------- ---------- -------------
*** SiS and PhD Core is the UK, EU and ROW excluding strategic
investment markets Football, USA, Australia and Italy
**** EBITDA after allocation of central costs to all markets
Segment revenue reported above represents revenue generated from
external customers.
The June 2018 numbers have been restated due to the change in
the composition of operating segments at the end of 2018.
3. Operating expenses
Unaudited Unaudited Audited
six months six months twelve months
ended 30 ended 30 ended 31
June 2019 June 2018 December
IFRS 16 adjusted 2018
GBP'000 GBP'000 GBP'000
------------------------------- ------------------ ------------ ---------------
Sales and marketing
costs 9,239 5,655 10,753
------------------------------- ------------------ ------------ ---------------
Operating Costs 2,512 1,849 3,750
Depreciation and amortisation 1,322 276 926
Share-based payments 742 819 1,922
Costs associated with
acquisition of PhD 397 - 599
------------------------------- ------------------ ------------ ---------------
Administrative Costs 4,973 2,944 7,197
Total costs 14,212 8,599 17,950
------------------------------- ------------------ ------------ ---------------
The H1 2019 share based payments charge includes GBP449k for
sponsorship shares issued to brand ambassadors together with the
charge for the 2019 STIP of GBP293k. There is no charge shown for
an LTIP scheme as this is currently being developed by the Board
for the years 2019 - 2021, once the scheme is in place a charge for
2019 will be calculated.
4. Taxation
The corporation tax and deferred tax for the six months ended 30
June 2019 has been calculated with reference to the estimated
effective tax rate on the operating results for the full year.
5. Loss per share
Basic and diluted loss per share is calculated by dividing the
loss attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the period.
Unaudited Unaudited Audited
six months six months twelve months
ended 30 ended 30 ended 31
June 2019 June 2018 December
IFRS 16 adjusted 2018
GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ ------------ ---------------
(Loss) for the financial period (2,655) (2,593) (5,875)
Number of shares Number Number Number
'000 '000 '000
Weighted average number of
shares-basic and diluted 122,612 67,376 71,422
EPS Summary
Basic and diluted loss per
share (2.2p) (3.8p) (8.2p)
--------------------------------- ------------------ ------------ ---------------
6. Share Capital
The number of ordinary shares in issue as at 30 June 2019 is
122,819,029 shares (31 December 2018 121,967,803).
On 11 January 2019 416,667 ordinary shares were issued as
consideration related for sponsorship services.
On 4 March 2019 194,174 ordinary shares were issued as
consideration related for sponsorship services.
On 27 March 2019 240,385 ordinary shares were issued as
consideration related for sponsorship services.
The number of shares held by the EBT and referred to as Treasury
shares was 3,726,036 (30 June 2018: 4,055,270, 31 December 2018:
3,726,036)
7. Cautionary statement
This document contains certain forward-looking statements with
respect to the financial condition, results and operations of
business. These statements involve risk and uncertainty as they
relate to events and depend on circumstances that will incur in the
future. Nothing in this interim report should be construed as a
profit forecast.
8. Copies of the interim report
The interim report for the six months ended 30 June 2019 can be
downloaded from the Company's website www.scienceinsport.com.
Further copies can be obtained by writing to the Company Secretary,
Science in Sport plc, 16-18 Hatton Garden, Farringdon, London, EC1N
8AT.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FDLLFKKFBBBK
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September 18, 2019 02:01 ET (06:01 GMT)
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