Sports nutrition firm issues bullish update
Lancashire sports nutrition firm Science in Sport (SiS) has reported increased revenues and sales in a pre-close trading update for the year to December 31, 2018.
The business, which has a Nelson manufacturing operation, said it achieved group sales of £21.3m, up from £15.6m in 2017, including a 25-day contribution of £1.5m from PhD Nutrition following acquisition completion on December 6.
Underlying sales growth rose 27% to £19.8m, compared with £15.6m, with second half growth accelerating to 34%, following first half investment in growth initiatives.
Strong SiS online sales growth achieved a 29% increase to £11.2m, underpinned by SiS.com, which grew sales at 40% to £6.4m following significant investment in a new e-commerce platform launched in March.
Also, the rapid pace of SiS international growth continued, increasing 55% to £6.8m.
SiS said the final results for the year are expected to be in line with market expectations and will be announced on March 20.
During the year SiS has reported ahead of sector norm revenue growth in the profitable core business, underpinned by on-plan delivery in the strategic markets of USA, Italy and Australia.
There were launches in several new markets, including China.
Elite ambassador agreements were sealed with Olympic and World Champion swimmer Adam Peaty and cyclist Mark Cavendish.
SIS also became the Official Sports Nutrition Partner of Manchester United. SIS also partners with Sir Chris Hoy, British Cycling, Cycling Australia, USA Cycling, USA Triathlon, Rock n Roll Marathon and Team Sky.
In December, SIS acquired the premium performance nutrition brand, PhD Nutrition, for £32m. The transformational deal doubles the size of the company, extends its product range, and enhances its international presence.
SiS chief executive Stephen Moon said: “Our consistent strategy of investment in brand and innovation produced a strong performance in line with our expectations.
“We remain committed to an omni-channel strategy, however our focus on the growth drivers of the SiS.com business and developing international markets produced exceptional results.
“We were delighted to have secured the PhD Nutrition business and its excellent management team and integration is on track to maximise the combined potential.”
He added: “Over the coming years our ambition is to build the world’s leading premium performance nutrition business.
“The board remains confident of continued strong growth in 2019 and beyond.”
Financial experts Liberum issued a note after the SiS update today, recommending the stock as a ‘buy’.
The advisor said: “SiS has delivered a very strong performance with H2 sales growth accelerating from the H1 run-rate.
“This performance has been driven by key initiatives such as investment in technology, new product development and channel support.
“The strong H2 performance secures our FY forecasts and outlook now moves into FY19E where numerous near-term catalysts exist.
“We see the first full-year from PhD contributing strongly and the capture of meaningful synergies could surprise on the upside.
“Structural growth dynamics remain strong and the nascent opportunities in international markets alongside a robust UK performance (a continuation from FY18E) should bode well for the year ahead.
“We see significant value upside and highly recommend a strong BUY.”
