City round-up: Science in Sport; Surface Transforms; Manx Financial Group

Sport nutrition firm, Science in Sport, published its interim figures today, showing lower turnover, but lower pre-tax losses, too.

It said the results reflect the start of a restructuring that began in late 2023 under executive chairman, Dan Wright, who is spearheading the revival of the business that has a key supply chain site in Blackburn.

During the six months to June 30, 2024, the business recorded sales of £25.7m, a 25.4% reduction on the same period a year ago.

Pre-tax losses stood at £2.460m, compared with £3.267m in 2023.

Adjusted net debt fell slightly from £13.8m to £13.2m.

The company said the fall in revenues was due to the shift of certain overseas revenue to royalty streams, working capital constraints in H1 FY24 resulting in poor stock availability to certain key accounts and the active steps to reduce unprofitable revenue and excessive discounting.

These factors were most prevalent in the PhD product offering where sales have declined by 44.8%. The SiS product sales were more robust but revenue still declined by 8.9% primarily due to stock availability constraints. Management expect revenue to stabilise and grow from these levels heading in to FY25.

Operating costs have been reduced by £3.6m, or 21% as cost saving measures take effect.

And, subsequent to the balance sheet date, the group completed an equity raise of £8.5m (gross) in July to fund growth in the short and medium term via investments in inventory and working capital, selective CAPEX and effective market penetration.

The business said its prior strategy of aggressive top line growth across all channels and markets has been reset, with the model of controlled growth while delivering sustainable cash generative profitability at improved margins from a reduced cost base at the forefront of everything it does.

It said gross proceeds of £8.5m from the equity raise are starting to drive improvements within the business with investment made into inventory improving product availability and reliability of service to key customers in H2, with working capital pressures easing.

The business has agreed amended and extended banking arrangements to 2027, providing additional flexibility in accessing liquidity to fund growth, demonstrating the continued confidence in the group’s operating performance from a key business stakeholder.

Executive chairman, Dan Wright, said: “The board is pleased to report that the restructuring started late in 2023 began to deliver much stronger operating margins, with Underlying EBITDA improvement of 74% year on year on the anticipated lower level of sales as the group undergoes a necessary reset.

“Following the recent appointments of Chris Welsh as Chief Financial Officer and Megan Blaylock as Chief Commercial Officer, as well as Dan Lampard moving to Chief Operating Officer, we now have a broader team in place structured for success through extensive experience in strategic development and commercial execution across all areas of the business.”

He added: “The group has made a positive start to the second half of the year and whilst there are still key trading periods ahead, the board considers that the revenue and profitability of H1 FY24 should be a baseline from which we anticipate controlled and sustained revenue and profit growth in the medium term.

“This will be underpinned by our strong brands continuing to perform well in their respective market places, the launch of new product lines, the annualised impact of the rebasing of the operating cost model, as well as efficiencies in the operating model and availability of key inventory items following targeted investment from our recent significantly oversubscribed equity raise.”  

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Andrew Kitchingman (courtesy Mpac Group)

Surface Transforms, the specialist brakes manufacturer based in Knowsley, has appointed Andrew Kitchingman as non-executive chair, with immediate effect.

It said he is an experienced public company director, including being non-executive chair of Mpac Group since 2016, and also a non-executive director of Andrew Sykes Group and London Security Group.

Prior to his non-executive career, he spent many successful years in corporate finance, working for both consultancy firms and stockbrokers, including KPMG, Hill Samuel, Albert E Sharp, Brewin Dolphin and WH Ireland, across a wide range of business sectors, both public and private. Andrew is also a Fellow of the Institute of Chartered Accountants in England and Wales.

David Bundred will step down as chair and retire from the board with immediate effect.

Andrew Kitchingman said: “I would like to thank my predecessor, David Bundred, for his service over the last 12 years. The company has excellent technology and plenty of demand for its products. The short term priorities will focus on operational excellence, efficiency and tight management of working capital.”

David Bundred said: “I am pleased to be handing over to such an experienced chair as Andrew whom I am confident will lead the company into the next stage of its development to seize the opportunities for the company, and our shareholders and employees.

“I am proud of the team’s performance over the last 12 years in turning a concept into a product that is so world beating that we have been awarded contracts of £390m from some of the world’s leading automotive OEMs (original equipment manufacturers).

“Establishing a scaled-up manufacturing process has taken longer than planned. However, capacity has been built and yield continues to improve.

“This success could not have been achieved without the dedication and effort of a remarkable team. I want to thank all of you.”

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Douglas Grant, Manx Financial

Financial services group Manx Financial Group has acquired the remaining 49.9% interest in Payment Assist for £5million. 

The deal was completed on 13 September 2024 which finalises a process that started in May 2022, when the AIM listed group bought a 50.1% interest in Payment Assist through its Manx Ventures business with an option to acquire the rest for £5 million.

Following discussions between Manx Ventures and Payment Assist shareholders Neil Jeffrey, Colin Ellard, Spencer Wrench and Simon Bevan the deal was brought forward and they will all leave the board and receive no further dividends, thus saving Manx Financial up to £4 million.

Jeffery and Ellard will resign as directors of Payment Assist, employees James Smeed and Marcus Gregory will remain on the board, while Jeffrey will remain employed until 31 December 2024 and be retained as a consultant for three more years.

Manx Financial owns Conister Bank, an independent bank established in 1935 providing niche funding facilities to SMEs from £1m to £20m, with a focus on the renewable energy sector.

Douglas Grant, CEO of the Group stated: “We have worked with Payment Assist for over nine years through our banking subsidiary, Conister Bank Limited and held a majority stake in the business for over two years. During this time, we have grown the business, and it now makes sound financial sense for the Group to bring forward its opportunity to acquire the remaining shareholding. Payment Assist’s customer focused, short-term lending products remain in great demand during these uncertain economic times. This is a major acquisition for the Group, not only in terms of deploying our liquidity safely, but also in continuing to progress our growth strategy in niche markets.”

The deal will be funded from the Group’s existing cash resources. Payment Assist revenue as at 31 December 2023 was £10.822 million, Profit before Tax was £2.363 million with a Net Asset Value at that date of £1.786 million.