Latest Results

Interim Results
for the 9 months ended 31 December 2017

Sosandar PLC (AIM: SOS.L), the online women's fashion brand, announces its unaudited interim results for the nine months ended 31 December 2017. On 2 November 2017 Sosandar was admitted to trading on the AIM market of the London Stock Exchange following a reverse acquisition of Thread 35 Ltd by Orogen plc.

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Financial Highlights

The table below highlights financial performance for the 9 months to 31 December 2017 and prior year comparative.

  9 Months ended 31 December 2017 9 Months ended 31 December 2016*
Revenue £861,443 £140,818
Gross Profit £408,883 £71,991
Gross Margin 47.5% 51.1%
Operating Loss £(2,129,632) £(1,000,824)
EBITDA £(2,023,632) £(994,826)

*The Sosandar website went live in September 2016.

Operational Highlights

  9 Months ended 31 December 2017 9 Months ended 31 December 2016*
Sessions 983,933 320,882
Conversion rate 1.93% 0.89%
Number of orders 19,002 2,858
Average order value £96.25 £95.69
Facebook Followers 31,354 8,587
Instagram Followers 6,560 240
Customer Database 36,328 3,713

*The Sosandar website went live in September 2016.

Ali Hall and Julie Lavington, Joint CEOs, commented:

"We are delighted with the progress being made within the business, which continues to exceed management expectations. Awareness of Sosandar is growing ever stronger and the coverage and recognition that our products receive is promising for a brand so early in its lifecycle.

"The fundraising in November has enabled us to increase our product range and we are already seeing good traction in our higher price point categories, including leather, outerwear and footwear. Our target market is affluent and has been long underserved and we continue to look forward to the future with great confidence."

 

Introduction

In March 2017 Sosandar plc (formerly Orogen plc) ("the Company") announced its intention to dispose of its mineral assets with a change of strategy and plans to become a cash shell.

In May 2017 the Company announced the suspension of trading in its shares on AIM and the proposed acquisition of Thread 35 Ltd ("Sosandar") which culminated in the announcement on 2 November 2017 of the acquisition of the entire issued share capital of Sosandar and the re-admission of the Company to AIM at a market capitalisation of £16.1m. At the time of admission, the Company raised £5.3m before expenses by means of a placing.

About Sosandar

Sosandar was successfully launched in September 2016 after 10 months of extensive preparation including building a product range, website, management team, supplier and logistic network from scratch.

Its inception was the result of the founders' combined 35 years' experience in the media and fashion industries where they identified an increasingly growing market of women who have graduated from other online high street brands and were now looking for affordable clothing with a premium, trend-led aesthetic but felt largely underserved.

Since its launch, the brand has been well received. As a result the business has experienced consistent growth in orders, aided by increasing social media and email databases and an audience that is responding well to a combination of product and content.

Brand engagement has not been limited to customers; Sosandar has been well received by celebrities, social media influencers and the fashion press. The Company's products have been worn by the likes of Holly Willoughby and Fearne Cotton and included in style sections of This Morning TV and the Sunday Times, which is a notable achievement for a brand so early in its lifecycle.

Post fundraising

The fundraising has enabled the business to build on its positive start, expanding the product range and stock levels of popular products to make sure there is sufficient supply for growth. The funds have also provided working capital to begin testing on new acquisition channels and continued investment in digital platforms and initiatives.  

As a result, since its admission to AIM, the business has experienced improvements across a range of KPIs including website sessions, conversion rates and average order values which have enabled top line growth to exceed management expectations. There are also promising signs of how these customers are repeat ordering which provides a strong baseline for future performance.

Economies of scale that come with increasing order quantities will be leveraged to improve margins on proven products alongside continued investment in product range expansion and accumulating data on customer preferences to enhance future design.

Similarly, investment will continue in testing new marketing initiatives utilising the data available on top performing customers to identify the channels that yield customers with the greatest long-term value whilst continually improving efficiencies in the areas that have proved successful to date.

Investment will also continue across web and digital platforms to enhance customer experiences and frictionless online journeys through analysis of customer shopping habits.

Once a foothold has been established in the UK online women's fashion market, longer term opportunities exist to expand geographically into international markets and to provide complementary products outside of womenswear and the business continues to research these areas to identify value generating opportunities.

 

Financial Overview

The table below highlights financial performance for the 9 months to 31 December 2017 and prior year comparative.

  9 Months ended 31 December 2017 9 Months ended 31 December 2016*
Revenue £861,443 £140,818
Gross Profit £408,883 £71,991
Gross Margin 47.5% 51.1%
Operating Loss £(2,129,632) £(1,000,824)
EBITDA £(2,023,632) £(994,826)

*The Sosandar website went live in September 2016. Prior to this the Company had no revenues.

The business is focused on expanding its customer base and building the brand awareness through development of exceptional product and a seamless customer experience. The below represent the key KPIs for both order performance and engagement:

  9 Months ended 31 December 2017 9 Months ended 31 December 2016*
Sessions 983,933 320,882
Conversion rate 1.93% 0.89%
Number of orders 19,002 2,858
Average order value £96.25 £95.69
     
  As at 31 December 2017 As at 31 December 2017
Facebook Followers 31,354 8,587
Instagram Followers 6,560 240
Customer Database 36,328 3,713

*The Sosandar website went live in September 2016.

  • The number of visitors has increased year on year but most importantly the business is attracting relevant traffic through increased understanding of our customer and focused advertising. This increased focus has helped improve conversion rate which has more than doubled and helps the efficiency of marketing spend.
  • By driving relevant traffic to the website the business has also been able to avoid discounting and protect average order value.
  • The database growth enables the use of data led, personalised communications to engage with both customers and those prospects who did not purchase immediately. They also provide platforms to promote the brand identity and new product in a cost-effective way helping to reduce longer term cost of acquisition.
  • The data available in the business is growing rapidly and being used to enhance lifetime values, repeat rates and active customer KPIs but the age of the business means that comparatives are not yet available.

Ali Hall and Julie Lavington, Joint CEOs, commented

"We are pleased to report strong trading ahead of expectations for the 9 months to the end of December 2017. The business is trading ahead on KPIs, as well as achieving strong PR coverage and a level of brand engagement that is notable for such an early stage business.

Orders, average order value, traffic and conversion are all performing ahead of expectations. We are seeing strong growth in both new customer acquisition and repeat order rates.

Sosandar's target demographic has responded positively to the brand and we continue to secure a highly affluent customer demographic. The underserved market that we have identified is responding well to our unique in-house designs and prints, the quality of our products across clothing and footwear, the desirability of the Sosandar brand and the keen price point.

PR coverage continues to go from strength to strength across all forms of national media from national newspapers such as The Times and The Daily Mail, to regular coverage on ITV. Celebrity endorsements have accelerated with our clothes being worn by a host of celebrities. In addition, a growing tide of fashion influencers are embracing the brand in their Instagram posts.

The decision to invest deeper in marketing and in the highest calibre of photography and video has accelerated our growth rate and has put us in a strong position as we enter our next year of trading. We are already seeing encouraging early spring trading that has been unaffected by the poor weather, which is testament to the brand's growing momentum.

Additionally we have invested in broadening the product range and have seen excellent rates of sell through including higher price point items such as leather, outerwear and footwear.

We have also seen the benefit of building a mobile first platform with consumers increasingly shopping on smartphones.

In addition, we are proud of our great customer service and first-class logistics operated by Clipper. 

Moving forward our three-tiered approach is to broaden the range, buy deeper, and engage in a more diversified marketing strategy while focusing on data driven marketing efficiencies and digital investment to improve customer journeys.

We believe that the results to date demonstrate considerable potential and opportunity in this underserved market.  Sosandar's unique offering and market positioning puts us in a very strong position to achieve another year of very strong growth in 2018.

Since our admission to AIM on 2 November 2017, we have seen an encouraging acceleration of our business and the new funds raised have allowed us to ramp up marketing investment and has seen a substantial acquisition of customers. This increased momentum has delivered new customers, repeat orders and total revenues ahead of forecast, in particular November 2017 and December 2017 were very strong and this momentum has continued into the first three months of this year. We will continue to invest in our marketing and digital strategy and look forward to further substantial growth."

 

Results

In considering the financial extracts below, you should have regard to note 2 which explains the basis of preparation of the interim results for the Group.

Consolidated Statement of Comprehensive Income
For the period to 31 December 2017

  Notes 9 months to
31 December 2017
Unaudited
9 months to
31 December 2016
Unaudited
17 Months to
31 March 2017
Audited
Continuing operations   £'000 £'000 £'000
         
Revenue   861 141 278
         
Cost of sales   (452) (69) (173)
    ────── ────── ──────
Gross profit   408 72 105
         
Administrative expenses   (2,538) (1,076) (1,931)
    ────── ────── ──────
Operating loss   (2,130) (1,004) (1,826)
         
Deemed cost of reverse   (1,439) - -
         
Reverse acquisition cost   (1,539) - -
Finance income   - 3 3
    ────── ────── ──────
Loss before income tax   (5,108) (1,001) (1,823)
         
Income tax   - - -
    ────── ────── ──────
Loss for the period   (5,108) (1,001) (1,823)
         
Other comprehensive income   - - -
    ────── ────── ──────
Total comprehensive loss for the period   (5,108) (1,001) (1,823)
    ═══════ ═══════ ═══════
         
Total comprehensive loss attributable to the owners of the company   (5,108) (1,001) (1,823)
    ═══════ ═══════ ═══════
    (5,108) (1,001) (1,823)
Loss per share 4      
Basic & Diluted loss per share - pence   (7.44) (0.014) (1844)
    ═══════ ═══════ ═══════

The profit and loss account has been prepared on the basis that all operations are continuing operations.

 

Consolidated Statement of Financial Position
As at 31 December 2017

  Notes As at
31 December 2017
Unaudited
As at
31 December 2016
Unaudited
As at
31 March 2017
Audited
ASSETS   £'000 £'000 £'000
Non-current assets        
Intangibles   53 55 55
Property, plant & equipment   170 175 210
    ────── ────── ──────
    223    230 265
    ────── ────── ──────
CURRENT ASSETS        
Inventories   473 299 363
Trade and other receivables   478             36 61
Cash and cash equivalents   5,328 302 338
    ────── ────── ──────
    6,279    637 762
    ────── ────── ──────
TOTAL ASSETS   6,502    867 1,027
    ═══════ ═══════ ═══════
EQUITY        
Shareholders' Equity        
Called up share capital 5 1,068    1 1
Share premium   26,863    2,130 2,743
Capital redemption reserve   4,648 - -
Share based payment reserve   630  - -
Reverse acquisition reserve   (20,125) - -
Accumulated deficit   (7,107) (1,400) (1,999)
    ────── ────── ──────
Total Equity   5,977    731 745
    ────── ────── ──────
LIABILITIES        
Current liabilities        
Trade and other payables   525        136 282
    ────── ────── ──────
TOTAL LIABILITITES   525 136 282
    ────── ────── ──────
         
TOTAL EQUITY AND LIABILITIES   6,502    867 1,027
    ═══════ ═══════ ═══════

 

Consolidated Statement of Changes in Equity
For six month to 31 December 2017

  Called up
Share
Capital
Share
premium
Capital
redemption
reserve
Share
based
payments
reserve
Reverse
Acquisition
Reserve
Accumulated
deficit
Total
Equity
  £ £ £ £ £ £ £
Thread 35 Limited              
               
Balance at 1 April 2016 1 2,130 - - - (400) 1,731
Loss for the period - - - - - (1,001) (1,001)
Issued during the period - - - - - - -
  ────── ────── ────── ────── ────── ────── ──────
Balance at 31 December 2016 1 2,130 - - - (1,401) 730
  ────── ────── ────── ────── ────── ────── ──────
Loss for the period - - - - - (598) (598)
Issue shares during the period - 613 - - - - 613
  ────── ────── ────── ────── ────── ────── ──────
Balance at 31 March 2017 1 2,743 - - - (1,999) 745
  ────── ────── ────── ────── ────── ────── ──────
Sosandar Plc              
               
Balance at 30 June 2017 4,884 15,535 - 610 - (18,032) 2,997
               
Loss for the period to acquisition - - - - - (438) (438)
Issue of shares 832 11,328 - - - - 12,160
Cancellation of shares (4,648) - 4,648 - - - -
Reverse Acquisition reserve - - - - (20,125) 18,470 (1,655)
Options issued in the period - - - 20 - - 20
Loss for the period - - - - - (5,108) (5,108)
  ────── ────── ────── ────── ────── ────── ──────
Balance at 31 December 2017 1,068 26,863 4,648 630 (20,125) (7,107) 5,977
  ────── ────── ────── ────── ────── ────── ──────

 

Consolidated Statement of Cash Flows
For the period to 31 December 2017

    9 months to
31 December 2017
Unaudited
9 months to
31 December 2016
Unaudited
17 Months to
31 March 2017
Audited
    £'000 £'000 £'000
Reconciliation of loss before income tax to cash outflow from operations        
Operating loss   (2,130) (1,004) (1,823)
(Increase) in inventories   (110) (293) (363)
(Increase)/decrease in trade and other receivables   1,544 24 (26)
(Decrease)/increase in trade and other payables   148 62 278
Reverse acquisition costs   (989) - -
Depreciation   101 5 27
Amortisation   5 1 1
Share based payments   20 - -
    ────── ────── ──────
Net cash outflow from operations   (1,411) (1,205) (1,906)
         
Interest received   - 3 3
    ────── ────── ──────
Net cash outflow from operating activities   (1,411) (1,202) (1,903)
         
Cash flows from investing activities        
Addition of property, plant and equipment   (40) (135) (237)
Addition of intangible assets   (3) (55) (55)
Acquisition, net of cash acquired   (3,534) - -
    ────── ────── ──────
Net cash (outflow)/inflow from investing activities   (3,577) (190) (292)
         
    ────── ────── ──────
Cash flows from financing activities        
Share issues   9,978 - 788
    ────── ────── ──────
Net cash inflow from financing activities   9,978 - 788
    ────── ────── ──────
         
Taxation   - - -
         
Increase/(decrease) in cash and equivalents   4,990 (1,392) (1,407)
         
Cash and cash equivalents at beginning of period   338 1,694 1,745
    ────── ────── ──────
Cash and cash equivalents at end of period   5,328 302 338
    ══════ ══════ ══════

 

Notes

Notes to the Financial Statements are available in the printable PDF version

 

Page last updated: 29 March 2018