Latest Results

Full Year Results

A year of strong revenue growth, substantial reduction in EBITDA losses and a strong start to the new financial year with Q1 FY22 revenue up 256% YoY

Sosandar PLC (AIM: SOS), the online women's fashion brand, is pleased to announce its financial results for the year ended 31 March 2021 and an update on trading for Q1 of the current financial year.

FY2021 Financial Highlights

• Revenue growth of 35% to £12.2m (FY2020: £9.03m), representing a strong performance in a volatile trading environment
• Stable gross margin of 48.0% (FY2020: 48.5%), despite the effective use of promotional activity during lockdown periods
• Narrowed EBITDA loss to £2.92m (FY2020: £7.66m) as a result of increasing scale, improved ROI on marketing and ongoing focus on cost management
• Year-end cash of £3.93m (FY2020: £5.33m) with low cash burn since July 2020 (£4.40m)

 FY2021 Operational Highlights

• Diversification and continued expansion of product range, offering customers a broader choice of product for all occasions:

• 60% increase in new styles
• New categories of loungewear, active and leisure wear launched, now becoming a key part of the product range
  • Successful expansion of casual and smart-casual clothing ranges with denim, knitwear and outerwear performing particularly well
  • Successful launch with John Lewis, Next and Marks & Spencer
  • Engaged and loyal customer base:
    • 40% increase in repeat orders to 189,703 (FY2020: 135,983)
    • Average order frequency improved by 23% to 2.08 (FY2020: 1.69)
  • Strong conversion rate of 3.09% (FY2020: 2.67%) driven by the expanded range which is resonating well with customers
  • Average order value (AOV) of £82.70 (FY2020: £97.14) due to the changes in the product mix with higher sales of lower value items such as loungewear, knitwear and activewear

Post-period Highlights:

• Q1 2022 was a record quarter for revenue with each month improving sequentially:
  • Revenue of £5.7m up 256% against Q1 FY21 (lockdown period last year)
  • Q1 increased 45% against Q4 driven by very strong sales of spring summer product from early in the season
• Number of orders tripled year on year with a record quarter for both new and repeat orders with cost of acquisition less than half of pre pandemic levels
  • Versus Q4 FY21, both new and repeat orders increased by 40%
• Active customers increased by 23% on Q4 FY21
• Increase in sales across all key categories with both casual and going out styles selling very quickly.  Stand out winners have been dresses, tops, knitwear and denim
• Further expansion of the product range with Marks & Spencer, John Lewis and Next to support strong sales in all categories
• Successful fundraise of £5.43m (after expenses) completed May 2021, substantially oversubscribed and with support shown from both institutions and retail investors:
  • Proceeds provide the balance sheet flexibility to capitalise on opportunities available, specifically the significant potential to accelerate growth with third party retailers
  • Cash of £9.10m as at 30 June 2021
• Appointment of Steve Dilks to the Company’s Board as Chief Financial Officer in May 2021

FY2021 KPIs

 Ali Hall and Julie Lavington, Co-CEOs commented:

"We are delighted to report a year of very strong growth and performance alongside considerable operational progress. We have continued to expand and further diversify our product range, using targeted spending to maximise ROI and demonstrated strong cash retention, resulting in a significant growth in revenue and reduction in EBITDA losses. The performance of our team over the last year has been truly exceptional and we are incredibly proud of what they have achieved.

Whilst there is wider uncertainty around the ongoing effects of the pandemic, we are incredibly optimistic about what the future holds for Sosandar. Following the fundraise in May, we now have the financial flexibility to allow us to accelerate growth with third parties. Alongside this, we delivered a record first quarter of trading in Q1 FY22 with strong sales in colourful dresses, tops and denim as our customers prepare for the summer months.  

With a clear growth plan and numerous opportunities ahead of us, we are now well placed to accelerate towards profitability.”

CHAIRMAN’S STATEMENT

The year ended 31 March 2021 was another period of strong growth and performance for Sosandar against a backdrop of sustained turbulent trading conditions. We have continued to adapt, learn and mature over the course of the year with the business now in an incredibly strong position to take advantage of the opportunities that lie ahead.

We have diversified our product range, targeted spending to maximise ROI and demonstrated strong cash retention. During the year, we were delighted to establish partnerships with retail stalwarts Next, John Lewis and Marks and Spencer. The success of these partnerships to date proves the desirability of the Sosandar brand, and we look forward to the many opportunities for growth with our retail partners going forward.

Our people

This year, more than ever, we have seen the quality of our team shine through. The executive team have continued to show exemplary leadership and all our staff have displayed an incredible passion for the business over the past year. I would like to take this opportunity to thank them for their tireless dedication, hard work and ongoing enthusiasm for our business and customers.

I would also like to thank all our customers, partners, suppliers, and shareholders for their continued support throughout the year.  I look forward to achieving further successes together in the future.

In May, post-period end, we were pleased to welcome Steve Dilks to the Company’s Board as Chief Financial Officer. Steve joined Sosandar in September 2020 and, since then, his experience and expertise have added significant value to the business. As Finance Director and now as CFO, Steve provides great confidence to the Board, offers substantial commercial contributions and is proving to be a great asset to the business.

Bolstered financial position

Post-period end we were pleased to raise gross proceeds of approximately £5.77m through a substantially oversubscribed Placing, Subscription and PrimaryBid offer.

The proceeds will provide us with the balance sheet flexibility to enable us to capitalise on the opportunities for growth both on our own site and through retail partners in the coming months and beyond.

The Board would again like to take this opportunity to extend its thanks for the support shown from new and existing shareholders, both institutional and retail.

Responsible business

At Sosandar, we understand that our business has an impact on the world around us and we are committed to making this impact a positive one. Our ‘responsible fashion business’ framework is broken into the three key areas: Ethical operations (a fair, transparent and collaborative supply chain), Environmental sustainability (minimising the footprint left on the natural world) and Fabulous Sosandar (an inclusive and uplifting workplace).

In January 2021, we switched most of our consumer packaging from cardboard boxes to Green PE polythene bags made from a by-product of the sugar cane process. They are recyclable, carbon neutral and sustainable.  Moving forward, we are exploring the best method with which to roll out recycled and/or recyclable packaging across the rest of our supply chain. Excitingly, we are also trialling more sustainable yarns and fabrics such as recycled polyester, organic cotton and Lenzing Ecovero sustainable viscose in our product range, with early feedback encouraging.

Running a responsible business is a continually evolving challenge, and we look to constantly develop our actions in this area. We know that sustainability, already at the core of our business, must continue to be at the forefront of our minds as we take each next step to grow Sosandar and expand our influence. As we grow in size and scale as a company, we will further expand our activity, with an ambition to increase the positive, lasting impact Sosandar has on the fashion industry. 

More detail on the Company’s ‘responsible fashion business’ framework can be found in our Strategic Report section of the Annual Report and Accounts.

Corporate Governance

The Board continues to be committed to maintaining and enhancing its corporate governance framework, ensuring that it is robust and effective.  In particular, the framework is designed to ensure all opportunities and risks are fully evaluated and that decisions are made based on robust assessment in order to deliver long term value creation.

The Covid-19 pandemic presented our business with unique challenges throughout the year. The Board met very regularly and worked more closely and flexibly than ever to provide support, guidance, challenge and oversight. The agility of our business was exemplified by the rapid pivot towards conservation of cash and careful cost management as soon as the nature of the pandemic emerged in early 2020. All of our teams have worked incredibly hard and they should be proud of the way Sosandar overcame the challenges we were faced with and subsequently thrived over the last 15 months.

Post year-end, the Board completed a review of the Long-Term Incentive Plan (LTIP) in place for key executives in the business. This resulted in the Board establishing a new LTIP to include a further five people so that all eight key senior staff and departmental heads are participants. The Board believes the revised scheme appropriately motivates and incentivises the senior team, who play such a key role in driving the Company’s growth strategy.

Outlook

Looking ahead, we remain confident and excited about the Group’s positive outlook. We have demonstrated our flexibility this year and as a result have emerged as a more mature, agile and resilient business, positioning us well to react to potential future changes in the external environment and capitalise on the numerous exciting, long term growth opportunities.

In view of the continuing uncertainty surrounding the extent of the impact of Covid-19, we continue to plan cautiously for a wide range of outcomes. As we have done since March, we will endeavour to manage the business carefully, foster our partnerships and continue to grow our existing customer base. The Board is therefore confident that there is a successful year of growth ahead and an exciting long-term future for Sosandar.

Bill Murray
Date: 19 July 2021

Financial Review

KPI’s

The financial performance of the Group during the year has been very strong despite the unprecedented impact and challenges faced as a consequence of COVID-19. Strong revenue growth, a significant reduction in EBITDA losses and effective preservation and utilisation of cash highlight the strength and agility of the Group; able to not only to withstand the headwinds but to maximise the opportunity despite the changing external environment.

During the year we saw our successful launches with John Lewis and Next in August 2020 and Marks and Spencer in March 2021 helping to further accelerate both brand awareness and incremental profitability.  

Gross Profit

The gross margin remained stable at 48.0% (FY2020 48.5%) despite a higher proportion of promotional activity in order to ensure that inventory sold through, in particular during ‘lockdown’ periods.   The restrictions placed on consumers resulting in them not being able to go ‘out-out’ for much of the reporting period has been successfully managed with margins increasing through the final quarter as restrictions loosened.

Inventory levels and product sell through are closely monitored and significant energy is invested in ensuring the correct level of stock is ordered to fulfil the projected demand.   

Administrative Expenses

During the year there has been a focus on managing the cash position of the Group and as a consequence administrative costs have reduced by 25% to £8.7m (FY2020 £11.7m).    For the most part the focus during H1 FY2021 was on preserving cash and engaging with the existing customer database, including prospects on our database which had increased substantially during the six months prior to the pandemic.   Customer acquisition activity recommenced in September with a substantial improvement in the return on investment as a greater number of new customer orders were generated from half the cost.   This improvement reflected the expanded product range and the data driven learnings from the activity undertaken in H2 FY2020 as each element of the marketing mix was optimised.

Cashflow

The Group had a net position of £3.93m at 31 March 2021 (FY2020 £5.33m) which had only dropped marginally since July 2020 (£4.40m) demonstrating successful management throughout these unprecedented times.

The cash position was further strengthened post period end with an oversubscribed placing and PrimaryBid offer which raised gross proceeds of £5.77m.   The Group intends to use the proceeds to:

• capitalise on the growth opportunity with its third party retail partners where currently on average only nine per cent of the product range is available for sale.  In particular, focus will be on investing in stock from the Autumn / Winter 2021 season onwards, including increasing both the number of styles and the number of units per style to be sold through the third party partner websites;
• provide additional funding to engage with other third party partners in the UK and internationally; and
• provide additional working capital and further balance sheet flexibility to support other incremental growth initiatives.

Company statement of financial position
For the Year ended 31 March 2021

In accordance with the provisions of the Companies Act 2006, the Company has not presented a statement of profit or loss and other comprehensive income. The Company's loss for the year was £18,851k (2020: £95k profit).

Company statement of Cash flows
For the Year ended 31 March 2021

Company statement of changes in equity
For the Year ended 31 March 2021

Share capital is the amount subscribed for shares at nominal value.         

Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of share issue expenses.

Share-based payments reserve relate to the charge for share-based payments in accordance with International Financial Reporting Standard 2.

Retained earnings represent the cumulative loss of the Company attributable to the equity shareholders.