Financial Highlights
· Revenues increased by 30% to £12.24 million (2015: £9.45 million) significantly ahead of market growth, with particularly strong growth in Online channels and International markets
· New product development continued to be a key growth driver and delivered £0.8 million of sales in the year (2015: £0.6 million) and contributed 29% of growth
· Newly launched Australian business performed ahead of plan, USA and Italy businesses established in Q3
· Gross profit increased to £7.4 million (2015: £5.5 million) with gross margin improving 1.8% to 60.3%, reflecting factory efficiency improvements
· Underlying operating loss* of £0.8 million (2015: £0.25 million) in line with expectations and growth strategy, reflecting continued investment in brand awareness, e-commerce and International expansion
· Cash and cash equivalents of £6.13 million (2015: £8.75 million)
· Strong start to 2017 sales, core UK and EU market forecast to be EBITDA positive this year
*excludes depreciation and amortisation, non-cash share based payments and exceptional items
Operational Highlights
· Consistent investment in brand resulted in further improvements in brand awareness and usage
· 49% of revenue derived from Online channels, forecast to exceed this in 2017
· Continued investment in e-commerce platform:
o Delivered 100% year on year growth
o Germany, Italy, Netherlands and USA site launches in Q3
· Innovation and new product development:
o Novel Whey 20 ready to consume protein performed ahead of plan
o Strong launch pipeline for 2017 and major new technologies being developed for 2018
· Significant line efficiency improvements in factory underpinned margin improvement
· Investment in e-commerce logistics systems improved service levels and reduced costs
· Further enhanced world-class banned substance testing regime introduced January 2017
· New brand partnerships including British Cycling, USA Cycling and Liverpool FC
· Continued investment in people:
o Elizabeth Lake joined as Finance Director July 2016 and Tim Wright as Non-executive Director in September 2016
o Science capability further enhanced with appointment of Dr Rob Child and Dr James Morton, globally recognised sports science experts
Stephen Moon, Science in Sport's CEO, said: “This was a year of exceptional revenue growth for SiS where we continued to outperform our peers and grab market share in the highly attractive endurance sports nutrition sector. In line with our growth strategy, we continued to invest heavily in brand equity, marketing, product innovation, e-commerce and International markets, with the benefits evident in both our 30% increase in revenues and growing brand awareness in all markets.”
“Online and International growth has been particularly strong during 2016. Our new Australian business delivered sales ahead of plan and in the second half we launched e-commerce websites in the USA, Italy, Germany and Netherlands. Our scienceinsport.com business doubled in size in the year.”
“Our model is working, we have exceeded our revenue growth targets, and we are committed to our strategy of investing in science, brand, e-commerce and International markets. We expect our core UK and EU business to be EBITDA profitable in 2017 and we will deploy cash to support growth in International markets.”