REG - Science in Sport PLC - Half Year Trading Update and Board Changes

Science in SportAnnouncement

28/06/2024 07:00

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RNS Number : 2469U  Science in Sport PLC  28 June 2024

 

 

 

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  (#_ftn1) 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 (http://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

 

 1  (#_ftnref1) Net debt is reported on a Pre-IFRS16 basis

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