Date:
|
22 October 2024
|
On behalf of:
|
Sosandar plc ('Sosandar' or 'the
Company')
|
Embargoed until:
|
0700hrs
|
Sosandar plc
Trading Update
Focus on sustained profitability and transitioning to a true
multi-channel retailer
Sosandar plc (AIM: SOS), the women's
fashion brand, creating quality, trend-led products for women of
all ages, is pleased to provide a trading update covering the
six-month period ended 30 September 2024.
The Company is delighted that it has
successfully opened its first three physical stores in the UK, as
it continues to further expand its multiple routes to market. The
period under review, once again, reflects the prioritisation of
margin enhancement and profitability with substantial positive
swings in both.
Highlights
·
|
Revenue of £16.2m (H1 FY24: £22.2m)
as the Group continued to transition away from price promotional
activity outside the major scheduled sale events
|
·
|
Strong gross margin of 62.2%, versus
55.4% in the previous year, reflecting margin enhancement
prioritisation
|
·
|
£0.6m substantial positive swing to
£0.7m pre-tax loss from £1.3m pre-tax loss in H1 FY24 as a result
of margin enhancement and continued careful cost
management
|
·
|
Robust net cash of £7m, reflecting
timing of inbound stock for the Autumn/Winter collection and
capital expenditure for Sosandar's roll-out of own stores (£8.3m at
31 March 2024)
|
·
|
Successfully opened Sosandar's first
three own stores, with strong trading in all three, coupled with a
demonstrable uplift in traffic to the website in the areas where
the stores are located
|
·
|
Trading in October across all
channels has started strongly, with revenue being ahead of last
year which represents a substantial positive swing compared with
H1. It is evident that the strategy to focus on margin is paying
off as customers become used to paying full price on
Sosandar.com
|
·
|
FY25 revenue expectations moderated
to £40m; pre-tax profit expectations unchanged given continuing
margin strength, evolution of customer engagement strategy and
careful management of other overheads
|
·
|
The Board reiterates its confidence
in Sosandar's longer-term growth trajectory
|
A highlight of the period has been
the Company's transition towards becoming a true multi-channel
retailer with the opening of its own stores, currently in Marlow,
Chelmsford, and the Metrocentre in Gateshead, and soon to open in
St David's centre, Cardiff. These locations were carefully selected
for being affluent, thriving locations where Sosandar customers
over-index. The Group's multi-channel model enables it to capture
part of the £60bn per annum clothing market transacted in physical
stores in the UK and will accelerate profitable growth. We are
pleased with the progress of our store portfolio thus far, with
sales tracking in line with our expectations, plus increased
traffic to the website in the areas where the stores are located.
It remains our expectation that the store roll out programme will
be funded entirely from our existing financial
resources.
Sosandar continues to benefit from
its strong third-party partnerships, including Next and Marks &
Spencer in the UK. Our partnership with The Iconic in Australia has
also started well. The Company launched in store with Arnotts in
Dublin, Ireland, in September, after initially selling online
through Arnotts' website. Sosandar has seen strong demand from
customers in Ireland via its own website. Being in store with
Arnotts, the oldest and largest department store in Ireland, is
also helping to cement the brand's presence in the
country.
Sosandar's success with third party
partners and its ability to roll out its own stores reflects our
strong brand presence and unique products that resonate not just
with women in the UK but increasingly internationally. We are
committed to maintaining the quality of our design and growing our
brand presence, and we continue to review opportunities to leverage
our brand equity and create additional growth avenues.
Current Trading and
Outlook
Trading in October has started well
across all channels, with revenue being ahead of last year which
represents a substantial positive swing compared with H1, and a
continuation of a strong gross margin as we head towards our
seasonal peak. Due to our continued prioritisation of profitability
at this stage of the Company's development, we are moderating our
FY25 revenue expectation to £40m. Our FY25 profit expectations are,
however, unchanged in light of the continued strength and upward
trajectory of our gross margin, selective use of marketing,
significant reduction in price promotional activity and careful
management of other overheads.
We continue to focus on margin
enhancement as we begin to drive sustainable profitable growth. Our
medium-term strategic goal is to deliver a pre-tax profit of at
least £10m (as derived from our previously disclosed objectives of
a pre-tax profit margin of at least 10% and £100m+ revenues). The
Board reiterates its confidence in Sosandar's prospects, both for
the remainder of FY25 and in the longer-term growth
opportunity.
Ali
Hall and Julie Lavington, Co-CEOs commented:
"The opening of
our first three own stores marks a key point in the Company's
development, as we move towards becoming a true multi-channel
retailer. We are incredibly proud of seeing the Sosandar brand on
thriving high streets and are delighted with the reception we have
received so far. The feedback on our product range and store
environment from both new and existing customers has been
fantastic, which shows the power of the Sosandar brand. We have hit
the ground running with strong footfall and conversion, and have
also seen a demonstrable uplift in traffic to our website in the
areas where our stores are located.
We
remain committed to delivering in line with our growth strategy,
focusing on margin enhancement to improve profitability, and we are
already seeing the results of this in our performance. This has
continued into October and we remain excited for what lies ahead
for Sosandar."
*
Sosandar believes that, prior to publication of this announcement,
market expectations for the year ending 31 March 2025 are currently
revenue of £45.6 million and pre-tax profits of £1.0
million.
Conference call
Sosandar is hosting a Q&A call
for analysts and investors today at 8:30am to discuss the Trading
Update. If you would like to register for the call, please
follow this link: https://bit.ly/SOS_H1_trading_update
Enquiries
Sosandar plc
|
www.sosandar.com
|
Julie Lavington / Ali Hall, Joint
CEOs
|
c/o Alma PR
|
Steve Dilks, CFO
|
|
Singer Capital Markets
Peter Steel / Tom Salvesen / Alaina
Wong
|
+44 (0) 20 7496 3000
|
Alma Strategic Communications
|
+44 (0) 20 3405 0205
|
Sam Modlin / Rebecca Sanders-Hewett
/ Kinvara Verdon
|
sosandar@almastrategic.com
|
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon
the publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
About Sosandar plc
Sosandar is a women's fashion brand
in the UK targeting style conscious women who have graduated from
lower quality, price-led alternatives. The Company offers this
underserved audience fashion-forward, affordable, quality clothing
to make them feel sexy, feminine, and chic. The business sells
predominantly own-label exclusive product designed and tested
in-house.
Sosandar's product range is diverse,
providing its customers with an array of choice for all occasions
across all women's fashion categories. The company sells through
Sosandar.com and its own stores, and has a number of high value
brand partnerships including with Next and Marks &
Spencer.
Sosandar's success has been built on
an exceptional product range, seamless customer experience and
impactful, lifestyle marketing, all of which is underpinned by
combining innovation with data analysis. Our growth strategy is
focused on continuing to grow brand awareness and expand our
addressable market and routes to market, reaching customers
wherever they wish to shop. This is achieved both through
direct to consumer channels and through chosen third party
partners.
Sosandar was founded in 2016
and listed on AIM in 2017. More information is available at
www.sosandar-ir.com.