Science in Sport plc (AIM: SIS), the premium performance nutrition company serving elite athletes, sports enthusiasts and the gym lifestyle community, is pleased to announce its audited final results for the financial year ended 31 December 2020.
During a challenging year, the Group performed well, delivering an underlying EBITDA1 profit of £1.1m (2019: loss of £0.2m) as we strengthened the critical building blocks of long-term profitable growth.
Revenue of £50.4m was in line with the prior year (2019: £50.6m), as Online grew 39% year on year and increased to 50% of total Group sales.
Gross margin improved to 49% (2019: 44%) due to Supply Chain efficiencies, together with sales channel shift to our Digital platform and improved pricing. 50% gross margin was achieved for the second half, reflecting further benefits flowing through.
Key SiS growth markets of Australia, Football, Italy and the USA contributed 28% of total SiS revenue at £7.2m. The USA made good progress with 33% revenue growth to £3.5m and significantly reduced cash burn.
UK Retail was adversely affected by COVID-19 delivering revenues of £16.1m (2019: £21.8m). The £9.3m of International Retail revenue was 14% behind last year (2019: £10.8m). We saw a good recovery in several markets and a resilient rate of sale in key UK product lines in Q4.
While we held some Innovation back given the pandemic, sales from new products still contributed well at £2.2m, some 4% of total Group revenues. The 2021 new product pipeline is extremely strong.
The balance sheet remained strong, with £10.5m of cash (2019: £5.4m) and an £8m unused flexible credit facility. We raised £4.2m net in April 2020 to strengthen the balance sheet, given the COVID-19 pandemic.
Announced a new 160,000 sq. ft. Supply Chain site, together with a new gel processing and packing line. The site will open in Q1 2022 and will support growth to around £150m in revenue.
CURRENT TRADING AND OUTLOOK
Trading for January and February is in line with the same period in 2020, despite the current COVID-19 lockdown in the UK and other key markets. We have continued to make gross margin improvements, and this will underpin EBITDA progress.
Our Online business continues to perform very well with strong growth of 65% versus the same period in 2020, representing 54% of group sales and offsetting the adverse effect of COVID-19 on UK Retail. We continue to see good recovery in our International Retail business.
Trading in March is in line with plan, and we are well placed for growth as lockdown lifts in our key markets.
1 excludes depreciation, amortisation, share-based payments, 2019 PhD acquisition costs and foreign exchange variances on intercompany balances
Stephen Moon, Science in Sport's Chief Executive Officer, commented:
"Delivering a robust underlying EBITDA profit was a key goal for 2020, and this was achieved through a focus on developing our fundamental building blocks of long-term profitable growth. We realised all expected synergies from the PhD acquisition and saw strong performance across the whole supply chain. Together with our strategic shift to online, this underpinned a step change in gross margin.
The very strong momentum in our online business continues into 2021 with growth in all markets. We see recovery in international retail, and the US business is well ahead of last year. Revenue is on track for the first half, despite continued lockdown restrictions in many key markets. We are well-positioned to accelerate as restrictions are lifted.
Our long-term and proven profitable growth strategy remains unchanged. We have demonstrated the business's resilience in 2020 and are continuing to invest for growth in the key strategic areas of online and technology. This year will see us roll out our premium brands to several key European and Asian markets.
Whilst it is too early to reinstate market guidance, given the current COVID-19 lockdown, we are well funded and remain very optimistic about the long-term growth prospects for the Group".