SCIENCE IN SPORT
PLC
("Group" or
"Company")
Half Year Pre-Close Trading
Update and Board Changes
Science in Sport plc (AIM:
SIS), the premium performance nutrition
company serving elite athletes, sports enthusiasts, and the active
lifestyle community, is pleased to announce it's unaudited pre
close trading update for the for the six months ended 30th June
2024 ("the Period" or "H1 FY24") as well as the appointment
of Christopher Welsh as Chief Financial Officer (CFO), with Dan
Lampard taking on the role of Chief Operating Officer, having
joined the Group as CFO in 2022. Megan Blaylock will also be
joining as Chief Commercial Officer at the end of July
2024.
Half
Year Pre-Close Trading Update - H1 FY24
The Board is pleased to report that
the Group's performance improved throughout H1 FY24 as the Group
made significant strategic progress following the appointment of a
new leadership team and a detailed operational review completed in
the previous year. Whilst the strength of
our two core brands, SiS and PhD, is unquestionable, the prior
strategy of focusing on top line growth across all channels and
markets has been reset so that the business can address the huge
growth opportunities and demand for SIS in particular from a solid
platform. The resetting of marginal revenue
channels and a pivot towards controlled profitable growth has
reduced revenue in the short term but importantly, margins have and
should continue to improve due to significant operational cost
efficiencies and more disciplined pricing.
H1 FY24 EBITDA is anticipated to be
in-line with expectations despite lower revenues, with the
focus in the Period shifting to higher margin, controlled growth.
The Group estimates H1 FY24 will be Underlying EBITDA of c.£2.0m
(FY22 £1.1m), up 77% as the cost rationalisation programme and
review of the business operating model begins to benefit.
Furthermore, a cost reduction was notable from the
exiting of a number of uncommercial marketing
contracts where further savings are anticipated throughout the
remainder of FY24.
The Group estimates closing H1 FY24
with revenue of c.£25.5m (FY22: £34.4m), a reduction of 27% from H1
FY23 due to a shift in sales towards a royalty based model in
certain export regions as well as a conscious step back from
marginal revenue channels to prioritise profitable, cash generative
growth. Management anticipates that full
FY24 year on year revenues will decrease due to these actions but
in the medium term management continue to
expect sustained revenue growth via effecting marketing and strong
commercial execution with profit margin growth
prioritised.
Gross profit margin improved by 3
percentage points to 45% (H1 FY23: 42%), with the underlying
improvement in the operating model better reflected by the
significantly improved trading contribution margin of 25% (H1 FY23:
20%) from the lower cost base. A robust
operational cost review and rationalisation programme has been
undertaken and is anticipated to deliver annualised aggregate cost
savings in excess of £6m compared to the run rate prior to
leadership changes.
Net debt[1] is
expected to be £13.8m (H1 FY23: £13.2m) as annualised cost saving
actions are yet to be fully realised in cash generation, management
anticipates continued margin improvements resulting in cash
generation and significant deleveraging in the medium
term.
Current trading outlook:
· Underlying EBITDA performance is anticipated to continue to
strengthen in H2 FY24 as operational and marketing cost savings
annualise.
· Underlying EBITDA and Trading Contribution margins anticipated
to strengthen as the business focuses on high margin sales channels
and continued focus on cost efficiency.
· Management anticipate that full year FY24 year on year
revenues will decrease in the short term as marginal revenue
channels are reset or restructured as the business pivots in to
more profitable routes to market. Beyond FY24 management expect
sustained revenue growth via effective marketing and strong
commercial execution.
· New
operating model being embedded post the recent restructuring; with
a primary focus on controlled growth over the medium term; and
continued margin improvements resulting in cash generation and
deleveraging.
Dan Wright, Executive Chairman
commented:
"The Board is pleased to report that
the Group performed strongly in H1 FY24 delivering substantial
growth in Underlying EBITDA year on year with profitability margins
improving at both a gross and a trading contribution level. This is
underpinned by the resetting of the cost base following detailed
review of operating costs. Whilst the business has consciously
stepped away from low margin revenue streams in the short term, we
do anticipate controlled and sustained revenue and profit growth in
the medium term."
Executive Appointments
The Board is pleased to announce the
appointment of Christopher Welsh as CFO, with Dan Lampard taking on
the role of Chief Operating Officer, having joined the Group as CFO
in 2022. Megan Blaylock will also be joining as Chief Commercial
Officer (a non-plc board position) at the end of July
2024.
Chris Welsh is a Chartered
Accountant and brings a wealth of financial experience and was
formerly CFO at AIM company Accrol Group Holdings plc until the
recent acquisition by Navigator Paper UK Limited. He has also
held senior roles in large global businesses including as Head of
Financial Reporting at INEOS Enterprises. Chris has significant
experience in M&A, and multi-national consolidation in addition
to being skilled in technical accounting, audit management -
delivering on multi-national and multi-firm audits, and
tax.
Megan Blaylock is a McKinsey alumnus
and joins from Glanbia Performance Nutrition, where she led the
global commercial team for the Body & Fit division. She has
extensive experience in strategic development and commercial
execution with a proven track record of delivering growth in
multi-national markets.
Dan Wright, Executive Chairman
commented:
"We are delighted to welcome Chris
to the Board. He is an experienced financial executive who he has
been operating at the highest standard, and brings a refreshed
commitment, energy and acumen to the Board which will help deliver
our strategic objectives."
"The appointment of Megan as Chief
Commercial Officer significantly strengthens our executive and
commercial team, her capability, industry experience and passion
will help accelerate the delivery of our strategy and we are
delighted that she will join in July"
"I would also like to take this
opportunity to thank Dan for his significant contribution to the
Group as CFO, Dan hands over to Chris a much strengthened finance
team and infrastructure. Dan will now take on the role of Chief
Operating Officer and we look forward to continue benefiting from
his wealth of experience.
"The following information is
disclosed in respect of Christopher Welsh pursuant to Rule 17 and
Schedule 2(g) of the AIM Rules for Companies.
The names of all companies and
partnerships of which Christopher James Welsh, aged 34, is, or has
been a director or partner at any time in the previous five years
are set out below:
Previous directorships or partnerships (in the last five
years)
|
Accrol Papers Limited
|
Accrol UK Limited
|
John Dale (Holdings)
Limited
|
Leicester Tissue Company
Limited
|
Accrol Group Holdings Plc
|
Art Tissue Ltd
|
Accrol Holdings Limited
|
John Dale Limited
|
LTC Parent Ltd
|
Severn Delta Limited
|
Christopher Welsh has no personal
interest in the ordinary shares of Science in Sport plc. Save as
set out in this announcement, there are no further details to be
disclosed under Rule 17 or Schedule 2(g) of the AIM Rules for
Companies in respect of Mr Welsh.
Ends
Science in Sport plc
|
T: 020 7400 3700
|
Dan Wright, Executive
Chairman
Daniel Lampard Chief Operating
Officer
|
|
|
|
Liberum (Nominated Adviser
and Broker)
|
T: 020 3100 2000
|
Richard Lindley
John More
Anake Singh
|
|
About Science in Sport plc
www.sisplc.com
Headquartered in London, 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
active lifestyle community. The Company has two highly regarded
brands, PhD Nutrition, a premium active-nutrition brand targeting
the active lifestyle community, and SiS, a leading endurance
nutrition brand among elite athletes and professional sports
teams.
The two brands sell through the
Company's phd.com and scienceinsport.com digital platforms,
third-party online sites, including Amazon and ebay, and extensive
retail distribution in the UK and internationally, including major
supermarkets, high street chains and specialist sports retailers.
This omnichannel footprint enables the Company to address the full
breadth of the sports nutrition market.
PhD is one of the UK's leading
active nutrition brands with a reputation for high quality and
product innovation. The brand has grown rapidly since its launch in
2005. The range now comprises powders, bars, and supplements,
including the high protein, low sugar range, PhD Smart.
SiS, a leading endurance nutrition
business founded in 1992, has a core range comprising gels, powders
and bars focused on energy, hydration, and recovery. SiS is an
official endurance nutrition supplier to over 320 professional
teams, organisations, and national teams worldwide. SiS supplies
more than 150 professional football clubs in the UK, Europe, and
the USA.
SiS is Performance Solutions partner
to Ineos Grenadiers cycling team, and Tottenham Hotspur and CGC
Nice football clubs.
For further information, please
visit phd.com and scienceinsport.com