TIDMSOS
RNS Number : 8884V
Sosandar PLC
12 April 2023
Date: 12 April 2023
On behalf of: Sosandar plc ('Sosandar' or 'the Company')
Embargoed until: 0700hrs
Sosandar plc
Trading Update & Progress on Growth Strategy
A milestone year, delivering revenue up 44% YoY and first full
year of profitability
Sosandar PLC (AIM: SOS), one of the fastest growing fashion
brands in the UK, creating quality, trend-led products for women of
all ages, provides the following trading update for its financial
year ended 31 March 2023.
Highlights for the financial year ended 31 March 2023:
-- Revenue of GBP42.5m, up 44% year-on-year (FY22: GBP29.5m)
-- First full year of profitability, delivering PBT of at least GBP1.6m, a substantial positive
swing of GBP2.2m vs GBP0.6m loss in FY22
-- Gross margin maintained at 56.1% (FY22: 56.0%) despite growth in revenue through lower margin
wholesale channel
-- Unique product continues to resonate with loyal customer base through Sosandar.com:
o Number of orders increased by 22% to 620,977 of which 148,382 were from brand new customers
and 472,595 were from existing customers
o Conversion rate increased to 4.1% from 3.9%
o Average order value up 8% to GBP97.27 (FY22: GBP90.39)
o Number of active customers increased 19% to 264,832
o Average order frequency increased 3% to 2.34 times per annum
-- Performance of third party partners continues to go from strength to strength, and successful
launch with Sainsbury's in Q4 FY23 with significant combined contribution expected in the
current financial year and beyond
-- Ongoing planned investment in inventory to facilitate further growth, following equity fundraise
in February 2023
-- Accelerated investment in strategic growth initiatives in the final quarter of FY23 to capture
further market share focused on:
o Operations - including key hires
o Technology platform
o International strategy
-- Net cash of GBP10.5m as at 31 March 2023 (GBP4.2m as at 30 September 2022), following the
successful equity fundraise of GBP5.5 million of net proceeds in February
Strong financial performance
Following on from a record Q3, January and February trading at
sales and gross margin level was in line with the Board's
expectations and as the Spring / Summer product started to land
through March, the Company saw increased demand with sales for the
month ending 32% up YoY against March FY22.
Sosandar has continued to deliver on its growth strategy,
demonstrated by revenue, gross margin, scale economies and profit
before taxation ("PBT") all increasing substantially year-on-year.
Delivering such strong growth over the year, despite the
challenging consumer backdrop, once again proves Sosandar's ability
to deliver a unique quality product offering and highly effective
marketing strategy, that resonates with its customer base.
Accelerated investment in growth initiatives
In order to capitalise on the strong trading in FY23 and prepare
for further momentum in FY24, the Company brought forward
investment in some growth initiatives in the latter part of Q4 FY23
that were originally planned for FY24. These investments are
centred around operations, technology platforms and international
strategy , which will help support and develop the Company's future
growth initiatives. FY23 PBT is, as a result, marginally below
market consensus*, predominantly due to the bringing forward of
people and recruitment costs. The Company is fortunate to have
found the right people in the latter part of FY23 and this will
enable it to capitalise on the opportunities ahead quicker.
These hires have further strengthened Sosandar's operational
capabilities and include the recruitment of an ecommerce Director,
Commercial International Director and Head of Operations. Their
significant experience will help the Company continue to execute
its growth strategy as it enters into its next phase of development
and invests for future growth.
To ensure that Sosandar customers can engage with the brand
through as many channels as possible and its technology platform is
constantly evolving, the Company has commenced the development of a
mobile app which is expected to be launched in Q2 FY24. In
addition, the Company has also invested in personalisation and
segmentation tools for Sosandar.com. Both of these developments
will further underpin customer acquisition, retention, order
frequency and average order value ("AOV"), as well as build the
infrastructure to take advantage of international
opportunities.
The Company has been exploring and researching opportunities to
serve its targeted international customer base whilst remaining
conscious of managing costs and implementation risk. Following
this, Sosandar announces that it has signed an agreement with
Global-e, the world's leading platform to enable and accelerate
global, direct-to-consumer, cross-border ecommerce, that will allow
the Company to transact and fulfil orders worldwide in a
cost-effective manner. This offering is expected to go live in Q1
FY24. In addition, Sosandar is in active dialogue with a number of
potential international third-party partners and expects to be able
to provide an update on this in the coming months.
Unique product continues to resonate with loyal customer
base
The Company's unique product range continues to resonate with
its target audience and has driven resilient growth with both new
and repeat customers. The planned fast-tracked development of key
product lines was successful, resulting in all identified lines
meeting or exceeding management expectations. Across the period,
every product category experienced growth, with knitwear, formal
tailoring, coats and partywear performing exceptionally well
throughout the Winter season. The new launch of categories, such as
summer occasion wear and swim and beach wear, have had a positive
start and are expected to be some of the fastest growing areas for
the Group in H1 FY24.
Third party partners continue to progress from strength to
strength
The period under review has seen another robust trading
performance across both the Sosandar website and via third party
partners. Sosandar.com is the anchor of the Company's success and
is the lifestyle hub where customers receive the most diverse
choice and constant newness. Trading with our now well-established
third party partners, John Lewis, Marks and Spencer, Next, The Very
Group and JD Williams, has been extremely strong, with a record
quarter for the Company delivered through third parties in Q3 FY23
followed by a strong Q4. Throughout the period, the amount of stock
allocated to each partner was increased to meet the rising demand
generated through these channels.
Successful launch with Sainsbury's online and progress for
in-store launch on track
In January, the Company announced that it had entered into an
agreement to sell a curated collection of its products through J
Sainsbury ('Sainsbury's'). Through this wholesale agreement, a
selected range has begun to be sold online in March with promising
results. The in-store launch is on track to commence with our
best-selling styles and accessories in selected stores in August
2023, in time for the important Autumn/Winter season, as
Sainsbury's increases its collaborations with fashion brands to
provide new and existing customers with a broader selection of
products. The partnership, which includes the Company's first
in-store presence, provides Sosandar with the opportunity to become
a truly omnichannel retailer.
Strong cash position
The Company successfully raised GBP5.5 million (net of expenses)
in February 2023, with both existing and new investors showing
support for the business and its plans for future growth. The
proceeds will enable the Company to:
- accelerate the execution of its omnichannel strategy through further investment in stock;
- increase provision of Sosandar's product range in-store with third party partners;
- create further balance sheet headroom to fast-track other growth initiatives; and
- accelerate investment in the Company's proven customer acquisition model.
* The Board believes that consensus market expectations for the
year ended 31 March 2023 are revenues of GBP42.45m and PBT of
GBP1.9m.
Conference call
Sosandar is hosting a Q&A call for analysts and investors
today at 8:30am to discuss the Trading Update. If you would like to
register for the call, please follow this link:
https://bit.ly/SOS_FY_TU
Ali Hall and Julie Lavington, Co-CEOs commented:
"We are delighted to be reporting a milestone year. Sosandar has
grown from a true start-up business just six years ago to a brand
which is delivering multi-million-pound revenue and is profitable.
This growth has been delivered against a backdrop of highly
challenging macro-economic conditions and our sustained performance
against this backdrop is testament to how well our product
resonates with our customers. We are incredibly proud to have
Sosandar clothes now being sold in the UK's biggest retailers, and
we have now built the infrastructure to start serving our target
customers internationally. We would like to thank all of our team
for their hard work and dedication, this performance wouldn't have
been possible without them.
We continue to invest in and expand our product range, offering
our customers an even greater selection of on-trend, affordable,
long lasting, lifestyle appropriate clothes. We are already seeing
strong demand for our fast-tracked ranges of summer occasionwear as
well as beach and swimwear. In addition, our performance with
selected third-party partners continues to go from strength to
strength and we were delighted to secure a new partnership with
another renowned British retailer, Sainsbury's. This partnership
has elevated our strategy from pureplay to an omnichannel brand and
will enable us to provide our large but underserved demographic
with more opportunities to purchase our unique and diverse
products.
While the macro-economic environment remains challenging, and we
remain highly vigilant, we continue to demonstrate that our
differentiated model is capable of achieving sustained profitable
growth. We remain confident in the long-term opportunity for
Sosandar, as reflected in Q4 FY23 in the acceleration of our
investment in the next stage of our development. We see a number of
opportunities for further growth both on our own site and through
our third party partners in the coming months and beyond as we
continue to move forward with our objective to make Sosandar one of
the largest womenswear brands globally."
Enquiries
Sosandar plc www.sosandar.com
Julie Lavington / Ali Hall, Joint CEOs c/o Alma PR
Steve Dilks, CFO
Singer Capital Markets
Peter Steel / Tom Salvesen / Alaina +44 (0) 20 7496
Wong 3000
+44 (0) 20 3405
Alma PR Limited (Financial PR) 0205
Sam Modlin / Matthew Young sosandar@almapr.co.uk
This announcement contains inside information for the purposes
of the retained UK version of the EU Market Abuse Regulation (EU)
596/2014 ("UK MAR").
About Sosandar plc
Sosandar is one of the fastest growing women's fashion brands in
the UK targeting style conscious women who have graduated from
price-led alternatives. The Company offers this underserved
audience fashion-forward, affordable, quality clothing to make them
feel sexy, feminine, and chic. The business sells predominantly
own-label exclusive product designed in-house.
Sosandar's product range is diverse, providing its customers
with an array of choice for all occasions across all women's
fashion categories. The company sells through Sosandar.com and has
brand partnerships in place with Next, John Lewis, Marks &
Spencer, The Very Group, JD Williams and J Sainsbury.
Sosandar's strategy is to continue growing brand awareness and
expand its customer database, whilst also further driving its high
levels of customer retention. This is achieved through its
exceptional products, seamless customer experience and impactful,
lifestyle marketing activities all of which is underpinned by
combining innovation with data analysis.
Sosandar was founded in 2016 and listed on AIM in 2017. More
information is available at www.sosandar-ir.com
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END
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