Science in Sport to re-set in 2024 and return to ‘sustained revenue growth’ in 2025

Science in Sport, the sports nutrition firm with a key supply chain site in Blackburn, has reported lower revenues and deeper losses for the year ending December 31, 2023, but said it is poised to return to sustained revenue growth in 2025 following its recent management shake-up.
In March this year the firm declared that “poor strategic decisions” had previously led to an “inflated operating structure”.
There was a changing of the guard at the top last October when CEO Stephen Moon stepped down with immediate effect to be replaced by current executive chairman, Dan White, who initiated a new management structure.
Today’s results show the size of the task to turn round the company, with turnover declining to £62.7m, down from £63.8m in the previous year, and pre-tax losses widening from £10.6m in 2022, to £11.3m.
The board has recommended no final dividend be paid to shareholders, as in 2022, as it seeks to de-leverage the group and re-invest in its future prospects. It said it hopes to review returns to shareholders when conditions improve and financial performance permits.
Science in Sport described the 2023 figures as a “resilient performance, delivered under challenging circumstances with a new leadership team in place in the final quarter of FY 2023 driving significant change throughout the business”.
It said the current financial year, ending December 31, 2024, is progressing well, with a restructure of the executive and leadership team, a significant operational cost review and rationalisation programme under way to deliver annualised aggregate cost savings in excess of £6m compared to the run rate prior to the leadership changes.
During the reporting period the group achieved a record revenue trading month in March, with April, May, and June all setting records for the respective months, which demonstrate a strong underlying demand for products, but routes to market have been reviewed and re-set to deliver improved profitability margins.
The group formed an exclusive partnership in the US with thefeed.com, which is the number one endurance sports nutrition direct to consumer business in the US. With this new partnership Science in Sport has seen a notable improvement in contribution in this jurisdiction throughout FY23.
Its Amazon marketplace sales saw a 13% increase, driven by strong growth from SiS products in the UK and Europe.
Alongside the leadership changes the group significantly reduced A&P spend to ensure the business focused on profitability and cash generation rather than short term unsustainable revenue targets, it revealed.
A significant number of uncommercial marketing contracts have been exited and further savings will be made throughout 2024. Marketing spend will be aligned to identifiable commercial traction.
The group revealed it continues to successfully integrate its state-of-the-art 160,000 sq ft manufacturing and logistics facility in Blackburn to one combined supply chain site following launch in 2022.
Actions implemented from the final quarter of FY23 under the new leadership have underpinned improvements in profitability in trading contribution of £3.5m (+37.6%) and in underlying EBITDA of +£4.7m year-on-year. The total operational cost savings are estimated to deliver an annualised benefit in excess of £6m, the majority of which will be delivered from the second half of financial year 2024 onwards.
Dan Wright
Focusing on the first half of 2024, and future trading, Dan Wright said today: “The group has made significant strategic progress with a full business review completed in the year. Whilst the strength of our two core brands, SiS and PhD, is unquestionable, the relentless pursuit of top line growth led to some poor historic strategic decisions and an inflated operating structure.
“Since joining the board in October 2023, and establishing the new leadership team, the immediate focus has been managing cash outflow and stabilising the relationship with our various stakeholders. The prior strategy of aggressive top line growth across all channels and markets has been re-set, with the revised model of controlled growth whilst delivering sustainable cash generative profitability at improved margins from a reduced cost base.”
He added: “To date, a number of significant cost rationalisation actions have been taken, benefiting the final quarter of 2023 and providing a stable platform for 2024 in order for the business to re-set. Whilst we anticipate a short term reduction of year on year revenue in FY24, EBITDA performance has continued to strengthen and remains in line with previous expectations.
“Underpinning the group’s new operating approach, and at the core of the business, are two very strong brands operating in an expanding marketplace.
“With confidence in the revised operating model, the new leadership team is taking the opportunity to re-engage with our core customers, shareholders and financing partners.
“We expect to return to sustained revenue growth in 2025 and beyond and whilst cognisant of the challenges ahead are extremely excited about the opportunity to deliver a profitable and cash generative branded consumer goods business and substantial shareholder value associated with it.”