Interim Results

RNS Number : 6883M

Science in Sport PLC

18 September 2019

 

18 September 2019

SCIENCE IN SPORT PLC

("SiS", "Company" or "Group")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

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 unaudited results for the 6 months ended 30 June 2019.

HIGHLIGHTS

·      Group revenue increased 150% to £24.87 million (H1 2018: £9.93 million), reflecting the first full six-month contribution from PhD Nutrition Ltd ("PhD"), following its acquisition on 6 December 2018, and strong organic growth from the SiS brand

-     16% like-for-like increase in PhD revenue to £12.40m (H1 2018 pro forma: £10.68m*), representing record growth for the PhD brand

-     26% increase in SiS revenue to £12.47 million (H1 2018: £9.93 million) up from 20% growth in H1 2018

-     56% growth in total revenue from international markets (H1 2018: 49%), which now accounts for 33% of total revenue across both brands

·      PhD performing in line with expectations; the integration of the PhD and SiS brands is progressing well; both brands are benefiting from shared distribution channels and the opening of an e-commerce fulfilment facility at our Nelson site

·      Continued focus on e-commerce sales with SiS.com sales up 52% in the half year and PhD.com successfully relaunched in April 2019

·      New product development remains a key growth driver for both brands; new products delivered 32% of total Group sales growth in the first half with successful product launches including PhD's Smart Bar Plant and SiS's innovative Football range
 

·      Substantial increase in Group gross profit to £11.15 million (H1 2018: £5.86 million) including £4.13 million from PhD

-     Group gross margin on a like-for-like basis of 44.8% (H1 2018: 45.9%). Gross margin expected to be in line with year end expectations

·      Underlying operating loss** of £0.60 million (H1 2018: loss of £1.70 million) in line with expectations and reflecting the EBITDA contribution from PhD in the first six months of 2019 

·      Cash and cash equivalents of £5.03 million (FY 2018: £8.00 million H1 2018: £10.66 million)

·      Appointment of James Simpson, a highly experienced consumer sector and e-commerce executive, as Chief Financial Officer with a start date of 26 September 2019

* for meaningful comparison, pro forma numbers have been used for PhD H1 2018 when the business was not owned by the Group

** excludes depreciation, amortisation, and share based payments, and transaction costs related to the acquisition of PhD

Stephen Moon, Science in Sport's CEO, said: 

"The integration of the PhD and SiS brands remains firmly on track and we are particularly excited by the potential of the PhD.com e-commerce business. Important milestones achieved in the first half include relaunching the PhD.com website, opening an e-commerce fulfilment facility and exploiting international distribution synergies, as well as the integration of teams across both brands. 

"Introduction of the new protein powder line at our Nelson site remains on track to enable in-house PhD powder manufacture with a go-live date of November 2019.

"We remain confident of delivering on full year expectations, and of the future growth of both our brands. Investment in performance innovation, brand awareness, e-commerce, International and effective manufacturing will underpin expected growth in 2020 and beyond."

For further information:

Science in Sport PLC		[phone]
Stephen Moon, CEO
Liberum NOMAD and Broker Bidhi Bhoma James Greenwood		[phone]
Buchanan Communications Financial PR Mark Court Vicky Hayns Tilly Abraham	[phone] [e-mail]

About Science in Sport plc

Science in Sport plc is a leading sports nutrition business that develops, manufactures and markets innovative nutrition products for professional athletes, sports and fitness enthusiasts and the gym lifestyle community. The Company has two highly regarded brands: PhD Nutrition, a premium protein brand targeting gym lifestyle and sports enthusiasts, and SiS, a leading brand among elite athletes and professional sports teams.

The two brands are sold internationally through multiple retail channels, both traditional and online, including major supermarkets and high street chains, specialist sports retailers and e-commerce sites including Amazon and the brands' own websites.  They enable the Company to address the full breadth of the performance nutrition market currently estimated at approximately £10 billion worldwide.

PhD is one of the UK's leading protein brands with a reputation for high quality and product innovation. The brand has grown rapidly, based on its core protein powders, since launch in 2005. The range now comprises powders, bars, flapjacks, drinks and other products including the high protein, low sugar range, PhD Smart. PhD is the exclusive sports nutrition supplier to David Lloyd Clubs and its brand ambassadors include rapper Bugzy Malone, WBA international champion Jordan Gill and Team GB Olympic sprinter Asha Philip.

SiS, founded in 1992, has a core range comprising gels, powders and bars focused on energy, hydration and endurance. SiS is the official sports nutrition supplier to many professional cycling teams and organisations including Team INEOS, British Cycling, Cycling Australia, USA Cycling and USA Triathlon. SiS supplies more than 80 professional football clubs in the UK and is an official partner to British Triathlon and the Rock 'n' Roll Marathon Series. SiS brand ambassadors include Olympians Sir Chris Hoy MBE, Mark Cavendish MBE and Adam Peaty MBE.

Science in Sport is headquartered in London. Its shares joined the AIM market of the London Stock Exchange in August 2013 and trade under the ticker symbol SIS.

For further information, please visit www.scienceinsport.com

 

BUSINESS REVIEW

Overview and Strategy

We are delighted to report another strong set of results, both financially and operationally. The six months to 30 June 2019 include the first full six-month contribution from PhD Nutrition Ltd ("PhD"), which was acquired by the Group on 6 December 2018 and which continues to trade in line with our expectations. The Group's half year sales were up 150% to £24.87 million, from £9.93 million for the same period last year, reflecting the PhD acquisition and strong organic growth from the SiS brand.

On a like for like basis*, including pre-acquisition revenue from PhD, the six-month revenue growth was 20.6%. On a constant currency basis this was reduced slightly by 0.2% to 20.4% due to the impact of the weakening of Sterling versus the US Dollar.

The Core*** SiS brand and the PhD brand have continued to perform well in the half year, each delivering £0.8 million EBITDA (together £1.6 million) after allocation of central overheads to investment markets. This profitability is enabling further investment in growth opportunities. See Note 2 Segmental Reporting for further detail.

The Group continues to invest in brand awareness to broaden visibility and availability of our product across all channels. Brand awareness and usage is at record levels for both brands, and our brand attributes show significant strength versus our competitive set.

Integration of the PhD and SiS businesses is firmly on track. We opened a Group e-commerce fulfilment facility at our site in Nelson, Lancashire, in June 2019 to enable the insourcing of picking, packing and distribution of e-commerce sales. The insourcing of PhD protein powder manufacture, with the opening of a state of the art powder line at our Nelson site is on track for November. The UK sales teams were integrated in August, in order to offer key customers a full category offering of performance nutrition.  

Investment in our e-commerce platform and financial and logistics systems continues to facilitate effective logistics and high customer service levels for both brands in all markets.

The Board has identified significant growth opportunities for the Group over the next few years. To exploit these opportunities the Group will continue to consistently invest in performance innovation, brand awareness, e-commerce, International and effective manufacturing. Our profitable Core business provides the resource to invest in these areas, as well as new initiatives including Football. 

E-commerce

E-commerce remains a key growth channel in all of our strategic markets, which comprise UK, Australia, Italy and the USA. The SiS brand's online sales were up 52% in the half year to £4.29 million and key metrics, including average order value, traffic and database, grew strongly.

The online potential of PhD.com is also significant. We relaunched PhD.com on our Magento 2 e-commerce platform in April 2019 and commenced investment in the platform in May. Current customer acquisition and trading metrics are as we would expect at this stage.

Third-party online sales channels for PhD fell by 4% to £2.5m as we deliberately rationalised non-core online customers. Within this category, Amazon sales grew 10%. SiS third-party online sales increased 12% to £2.5 million in the period.

International

International markets continue to perform strongly with growth in the first half of 56%. Over half the growth is being driven by increased investment in the USA and expansion in global distribution across both PhD and SiS brands. International revenue accounts for 33% of total revenue for the Group and we expect this percentage to rise over the second half of the year.

Further digital marketing spend has been channeled into the strategic International markets of Italy and the USA. We have continued to invest for growth in these markets in the first half, and we saw growth of 84% and 129% respectively. SiS Australia grew 50% to £518k in the period, with SiS.com growing at 76%.

The importance of China as a strategic growth market is emerging with Group revenue of £0.88 million in the period, an increase of 125% year on year.

We are developing our trading relationship with Amazon in several International markets, including the USA, Australia and Italy. We saw particularly strong growth in the USA, where the channel is strategically important. We continue to develop our business in China on third-party online platforms, including TMall, for both of our brands.

Export markets have grown significantly in the period through the Group's network of distributors with like for like growth across both brands of 41%. We are making progress in developing our brands synergistically in International markets. PhD has been launched via SiS distributors in Russia and Turkey whilst SiS has been launched via PhD distributors in Lebanon, Saudi Arabia and UAE. We have combined both brands under the control of the existing PhD distributor in China.

In addition we have carried out consumer testing and research for the PhD range in the USA and intend to launch via the existing SiS operation in due course.

UK Retail Channels

Traditional retail channels (Grocers, High Street and Heartland) grew 14% in the period, with the PhD brand growing at 15% and the SiS brand at 11%.

The growth in PhD was primarily driven by the Smart Bar range across all channels with significant growth continuing in Holland & Barrett and Grocers, with the PhD Grocers sales channel growing at 11%.

The SiS brand gained further distribution in Tesco and Sainsbury's following the launch of Protein20, a range of high protein, low sugar bars, helping drive revenue growth of 41% for the SiS Grocers sales channel, more than compensating for the continued decline in High Street and managed consolidation in Heartland.

Partnerships

The SiS brand's partnership with Manchester United Football Club ("MUFC") is helping to drive revenue growth in our Football vertical. More than 85 elite clubs currently purchase SiS products, including some top flight European clubs. During the half year, the SiS brand launched a new football range for players of all levels, which was developed in partnership with MUFC. The launch of our Football website (www.sisfootball.com) underpins education and product trial, which are key to gaining long term leadership in the sport as well as driving sales. Sales were £484k and this represents growth of 106%. We remain committed to this strategically important long-term growth initiative.

In cycling, the SiS brand was appointed in May 2019 as exclusive nutrition provider to Team INEOS, the world's most successful cycling team (formerly known as Team Sky). SiS's innovative approach to fuelling and hydrating Team INEOS helped to support the team's recent successes including first and second places in this year's Tour de France.

Product Innovation

In the first half, 32% of total Group sales growth was delivered through new products. The key launches in the first six months were the PhD vegan Smart Bar Plant, and the SiS brand's innovative range for footballers of all levels. PhD's Smart Bar Plant was launched in May this year and has already become PhD's fourth best-selling product line.

We are excited about the remainder of 2019; both brands have further vegan product launches during the second half, most notably the SiS Plant20, a vegan protein bar launched in August 2019, and PhD's Plant Powders.

We have continued to invest in this strategic foundation and have a strong pipeline of novel products. We expect innovation revenue growth to be consistent with the contribution to sales made in previous periods, and to continue to underpin our growth going forward and maintain our position as the leading premium performance nutrition business.

Financial Summary

Group revenue in the six months to 30 June 2019 was up 150% at £24.87 million (H1 2018: £9.93 million). International and e-commerce sales growth was particularly strong, reflecting the continued investment in our e-commerce platform and brand awareness.

The PhD brand traded in line with expectations in the six month period, with half year sales up 16% at £12.40 million (H1 2018 pro forma £10.68 million*). International sales were up 58%, while UK sales were up 7%.

The SiS brand's sales were up 26% in the period at £12.47m (H1 2018: £9.93m) driven by international growth, up 54%. Growth in the UK was up 10% and sales from the SiS website were up strongly at 52%.

Gross profit for the Group of 44.8% (H1 2018: 45.9%) on a like for like basis is reflective of retail distribution investment and one-off inventory costs for SiS, plus increased distribution of Smart Bars for PhD.

After accounting for leases under IFRS 16, the underlying operating loss** of £0.60 million (H1 2018: £1.64 million loss). This includes continued investment in marketing, sales and e-commerce across all markets of £9.24 million (H1 2018: £7.25 million) on a like for like basis, which continued to drive revenue growth in the period. Investment in the SiS brand was £6.83 million (H1 2018: £5.66 million) and the PhD brand was £2.41m. The Core UK and EU business is profitable across both brands, a trend that is expected to continue in H2 2019.

Total comprehensive loss for the period was £2.68 million (2018:£2.65 million).

Overheads excluding sales and marketing costs, were £2.51 million (H1 2018: £1.85 million). On a like for like basis for the six months they were £2.51 million (H1 2018: £2.21m). The increase was primarily due to premises and IT costs relating to business expansion and PLC costs.

Cash and cash equivalents at the period end were £5.03 million (FY 2018: £8.00 million; H1 2018: £10.66 million). Cash outflow of £2.97 million since the year end represents continued operational investment as planned to support the strongly growing International and e-commerce businesses. There has been significant investment in PhD.com in terms of moving the website to the Magento 2 platform, investment in purchasing the PhD.com domain name, and in-sourcing picking and packing, which is driving improved metrics.

People

Post the acquisition of PhD we have integrated teams across the business and harmonised terms and conditions across the Group. We have also continued to invest in key roles to accelerate our continued growth. Investment in training and skills across all sites has continued and we continue to develop talent internally.

Richard Wyborn joined the executive management team as Strategic Projects Director on 11 March 2019 and has led major integration projects, as well as the 2022 strategy review and other current growth related projects. 

On 11 September 2019, we announced the appointment of James Simpson as Chief Financial Officer. James has significant financial management experience gained across e-commerce and consumer industries and we look forward to his joining the Group on 26 September 2019.

James's appointment followed the decision by Elizabeth Lake, our former Chief Financial Officer, to accept a position at another business. Elizabeth left the Group on 10 September 2019 and the Board thanks her for her robust contribution to the Group during her three years as Chief Financial Officer.

Outlook

The integration of the PhD and SiS brands remains firmly on track and we are particularly excited by the potential of the PhD.com e-commerce business. Important milestones achieved in the first half include relaunching the PhD.com website, opening an e-commerce fulfilment facility and exploiting international distribution synergies, as well as the integration of teams across both brands.

Introduction of the new protein powder line at our Nelson site remains on track to enable in-house PhD powder manufacture with a go-live date of November 2019. 

We remain confident of delivering on full year expectations and of the future growth of both our brands. Investment in performance innovation, brand awareness, e-commerce, International and effective manufacturing will underpin expected growth in 2020 and beyond.

Stephen Moon                                                               

Chief Executive Officer                                    

* for meaningful comparison, pro forma numbers have been used for PhD H1 2018 when the business was not owned by the Group

** excludes depreciation, amortisation, share based payments, and transaction costs related to the acquisition of PhD

*** SiS core is defined as UK, EU and ROW, excluding strategic markets Football, USA, Italy & Australia

Consolidated statement of comprehensive income

Six months ended 30 June 2019

		Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018	Audited twelve months ended 31 December 2018
	Notes	£'000	£'000	£'000
Revenue		24,872	9,934	21,318
Cost of goods		(13,723)	(4,073)	(9,363)
Gross Profit		11,149	5,861	11,955
Total Costs		(11,751)	(7,504)	(14,503)
Underlying operating profit/(loss)		(602)	(1,643)	(2,548)
Depreciation and amortisation		(1,322)	(276)	(926)
Share-based payment charges	3	(742)	(819)	(1,922)
Costs associated with acquisition of PhD		(397)	-	(599)
Loss from operations		(3,063)	(2,738)	(5,995)
Finance income		5	-	5
Finance costs		(23)	-
Loss before taxation		(3,081)	(2,738)	(5,990)
Taxation	4	426	145	115
(Loss) and total comprehensive expense for the period		(2,655)	(2,593)	(5,875)
Exchange difference on translation of foreign operations		(22)	(59)	(125)
Total comprehensive income for the period		(2,677)	(2,652)	(6,000)
(Loss) per share to owners of the parent
Basic and diluted	5	(2.2p)	(3.8p)	(8.2p)

All amounts relate to continuing operations

Consolidated statement of financial position

30 June 2019

				Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018		Audited twelve months ended 31 December 2018
				£'000		£'000		£'000
Assets
Non-current assets
Goodwill				17,398		-		17,398
Intangible assets				16,126		1,772		16,344
Plant and equipment				1,133		817		1,033
Right of use assets				1,449		-		-
Deferred tax				1,732		1,476		1,430
Total non-current assets				37,838		4,066		36,205
Current assets
Inventories				8,560		4,780		7,102
Trade and other receivables				11,798		5,379		8,939
Cash and cash equivalents				5,034		10,659		8,002
Total current assets				25,392		20,819		24,043
Total assets				63,230		24,884		60,248
Liabilities
Current liabilities
Trade and other payables				(11,528)		(3,910)		(7,970)
IFRS 16 short term lease liability				(219)
Total current liabilities				(11,747)		(3,910)		(7,970)
Net current assets				13,645		16,909		16,073
Non-current liabilities
IFRS 16 long term lease liability				(1,266)		-		-
Deferred Tax				(2,336)		-		(2,461)
Total non-current liabilities				(3,602)		-		(2,461)
Total Liabilities				(15,349)		(3,910)		(10,431)
Total net assets				47,881		20,975		49,817
Capital and reserves attributable to
owners of the parent company
Share capital			6	12,282		6,774		12,197
Share premium reserve				48,828		22,707		48,464
Employee benefit trust				(372)		(405)		(372)
Merger reserve				(907)		(907)		(907)
Foreign exchange reserve				(119)		(31)		(97)
Retained earnings				(11,831)		(7,163)		(9,468)
Total Equity				47,881		20,975		49,817

Consolidated statement of cash flows

	Unaudited six months ended 30 June 2019		Unaudited six months ended 30 June 2018		Audited twelve months ended 31 December 2018
	£'000		£'000		£'000
Cash flows from operating activities
(Loss)/profit after tax	(2,655)		(2,593)		(5,875)
Adjustments for:
Amortisation	928		130		555
Depreciation	394		146		371
Net finance (income)/expense	18		-		(5)
Taxation	(426)		(145)		(115)
Share-based payment charges	742		819		1,922
Operating cash (outflow)/inflow before changes in working capital	(999)		(1,643)		(3,147)
Changes in inventories	(1,458)		(2,067)		(2,070)
Changes in trade and other receivables	(2,859)		(2,528)		(1,707)
Changes in trade and other payables	3,570		1,049		503
Total cash outflow from operations	(1,746)		(5,189)		(6,421)
Cash flow from investing activities
Purchase of property, plant and equipment	(388)		(170)		(519)
Purchase of intangible assets	(708)		(551)		(945)
Acquisition of subsidiary, net of cash acquired			-		(28,363)
Interest received	5		-		-
Net cash outflow from investing activities	(1,091)		(721)		(29,827)
Cash flow from financing activities
Proceeds from issue of share capital	-		-		27,920
Expenses paid on share issues	-		-		(240)
Principal paid on lease liabilities	(108)		-		-
Interest paid on lease liabilities	(23)		-		-
Net cash (outflow)/inflow from financing activities	(131)		-		27,680
Net (decrease)/increase in cash and cash equivalents	(2,968)		(5,911)		(8,568)
Opening cash and cash equivalents	8,002		16,570		16,570
Closing cash and cash equivalents	5,034		10,659		8,002

Consolidated statement of changes in equity

	Share Capital			Share Premium	Preference Shares/EBT	Other Reserve	Foreign exchange reserve	Retained earnings/(deficit)	Total Equity
		£'000		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2017		6,683		22,339	(397)	(907)	28	(4,938)	22,808
Comprehensive Income
Loss for the period								(2,593)	(2,593)
Issue of sponsorship shares - consideration		57		368					425
Transactions with owners
recorded directly in equity
Issue of shares to the EBT -		34			(34)				-
10 May 2018
Exercise of share options					26			(26)	-
Recognition of share-based								394	394
payments charge
FX on translation of foreign subs							(59)		(59)
Balance at 30 June 2018		6,774		22,707	(405)	(907)	(31)	(7,163)	20,975
Comprehensive Income
Loss for the period								(3,282)	(3,282)
Issue of shares - consideration		5,423		27,114					32,537
Transaction cost of placing				(1,357)					(1,357)
Transactions with owners
recorded directly in equity
Exercise of share options					33			(33)
Recognition of share-based								1,010	1,010
payments charge
FX on translation of foreign subs							(66)		(66)
Balance at 31 December 2018		12,197		48,464	(372)	(907)	(97)	(9,468)	49,817
Comprehensive Income
Loss for the period								(2,655)	(2,655)
Issue of sponsorship shares - consideration		85		364					449
Recognition of share-based
payments charge								292	292
FX on translation of foreign subs							(22)		(22)
Balance at 30 June 2019		12,282		48,828	(372)	(907)	(119)	(11,831)	47,881
Balance at 30 June 2019 pre IFRS 16		12,282		48,828	(372)	(907)	(119)	(11,803)	47,909

EBT                              Own shares held by the Employee Benefit Trust ('EBT') which will be used to settle options held by employees under the Group's Employee Share Option Plan.

Other reserve             The other reserve arose as a result of applying the principles of reverse acquisition accounting following the demerger of SiS (Science in Sport) Limited from Provexis plc and represents the difference between the capital reserves of Science in Sport plc (the legal acquirer) and those of SiS (Science in Sport) Limited (the legal acquire). 

Notes to the interim financial information

For the six months ended 30 June 2019

1. Basis of preparation

This interim report has been prepared using the same accounting policies as those applied in the annual financial statements for the year ended 31 December 2018, except for the adoption of IFRS 16, and those expected to be adopted in the financial statements for the year ending 31 December 2019 which will include IFRS 16.

IFRS 16 Leases

Effective 1 January 2019, IFRS 16 has replaced IAS 17 and IFRC 4 Determining whether an arrangement contains a lease.

The Group adopted IFRS 16 using the modified retrospective approach, without restatement of comparative figures. On adoption of IFRS 16, the Group recognised right-of-use assets and lease liability in relation to leases of office and factory space and cars, which had previously been classified as operating leases.

The lease liabilities were measured at the present value of the remaining lease payments discounted using the Group's incremental borrowing rate as at 1 January 2019, the rate applied was 3.75%.

The right-of-use assets were measured as follows;

·      Office and factory space: Right of use assets are measured at an amount equal to the lease liability;

·      Cars: Right of use asset measured as an amount equal to the lease liability.

Included in profit and loss for the period are £113k of amortisation of right-of-use assets and £23k of finance expense on lease liabilities.

The Directors believe that the operating loss before depreciation, amortisation and impairment of intangibles, share-based payments and exceptional items measure provides additional useful information for shareholders on underlying trends and performance. This measure is used for internal performance analysis.

Underlying operating loss is not defined by IFRS and therefore many not be directly comparable with other companies' adjusted profit measures. It is not intended to be suitable substitute for, or superior to IFRS measurements of profit. A reconciliation of underlying operating profit to statutory operating profit is set out on the face of the statement of comprehensive income.

The condensed financial information herein has been prepared using accounting policies consistent with International Financial Reporting Standards in the European Union (IFRS). While the financial figures included in this interim report have been prepared in accordance with IFRS applicable for interim periods, this interim report does not contain sufficient information to constitute an interim financial report as defined in IAS 34.

The Company has taken advantage of the exemption not to apply IAS 34 'Interim Financial Reporting' since compliance is not required by AIM listed companies.

This interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and has been neither audited nor reviewed by the Company's auditors BDO LLP, pursuant to guidance issued by the Auditing Practices Board.

The interim report should be read in conjunction with the annual financial statements period ended 31 December 2018.

The statutory Accounts for the last period ended 31 December 2018 were approved by the Board on 19 March 2019 and are filed at Companies House. The report of the auditors on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 of the Companies Act 2006.

The unaudited interim report was authorised by the Company's Board of Directors on 17 September 2019.

2. Segmental reporting

The Directors have determined that six operating segments exist under the terms of International Financial Reporting Standard 8 "Operating Segments". The Group is organised between core business which covers all sales made from the UK entity (this will include sales into International markets through both the UK website and International distributors, as well as third party etailers, grocers, high street and heartland bike shops), Football (includes sales to consumers in football), PhD Nutrition sales and sales in each of the International subsidiaries in the US, Australia and Italy. The performance of operating segments is assessed on earnings before interest, tax and depreciation, excluding equity-settled share option charges recognised under IFRS 2 "Share-based payment".

	Segment Revenue			Segment Profit****
	Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018	Audited twelve months ended 31 December 2018	Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018	Audited twelve months ended 31 December 2018
	£'000	£'000	£'000	£'000	£'000	£'000
Core***	9,424	8,364	16,047	860	984	2,033
USA	1,170	512	1,373	(1,455)	(1,301)	(2,451)
Italy	880	478	983	(126)	(322)	(608)
Australia	518	345	755	(116)	(346)	(545)
Football	484	235	655	(588)	(658)	(1,113)
PhD***	12,396	-	1,505	823	-	136
	24,872	9,934	21,318	(602)	(1,643)	(2,548)
Depreciation and amortisation				(1,322)	(276)	(926)
Share based payments				(742)	(819)	(1,922)
Costs associated with acquisition of PhD				(397)	-	(599)
Loss from operations				(3,063)	(2,738)	(5,995)

*** SiS and PhD Core is the UK, EU and ROW excluding strategic investment markets Football, USA, Australia and Italy

**** EBITDA after allocation of central costs to all markets

Segment revenue reported above represents revenue generated from external customers.

The June 2018 numbers have been restated due to the change in the composition of operating segments at the end of 2018.

3. Operating expenses

	Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018	Audited twelve months ended 31 December 2018
	£'000	£'000	£'000
Sales and marketing costs	9,239	5,655	10,753
Operating Costs	2,512	1,849	3,750
Depreciation and amortisation	1,322	276	926
Share-based payments	742	819	1,922
Costs associated with acquisition of PhD	397	-	599
Administrative Costs	4,973	2,944	7,197
Total costs	14,212	8,599	17,950

The H1 2019 share based payments charge includes £449k for sponsorship shares issued to brand ambassadors together with the charge for the 2019 STIP of £293k. There is no charge shown for an LTIP scheme as this is currently being developed by the Board for the years 2019 - 2021, once the scheme is in place a charge for 2019 will be calculated. 

4. Taxation

The corporation tax and deferred tax for the six months ended 30 June 2019 has been calculated with reference to the estimated effective tax rate on the operating results for the full year.

5. Loss per share

Basic and diluted loss per share is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares in issue during the period.

	Unaudited six months ended 30 June 2019 IFRS 16 adjusted	Unaudited six months ended 30 June 2018	Audited twelve months ended 31 December 2018
	£'000	£'000	£'000
(Loss) for the financial period	(2,655)	(2,593)	(5,875)
Number of shares	Number	Number	Number
	'000	'000	'000
Weighted average number of shares-basic and diluted	122,612	67,376	71,422
EPS Summary
Basic and diluted loss per share	(2.2p)	(3.8p)	(8.2p)

6. Share Capital

The number of ordinary shares in issue as at 30 June 2019 is 122,819,029 shares (31 December 2018 121,967,803).

On 11 January 2019 416,667 ordinary shares were issued as consideration related for sponsorship services.

On 4 March 2019 194,174 ordinary shares were issued as consideration related for sponsorship services.

On 27 March 2019 240,385 ordinary shares were issued as consideration related for sponsorship services.

The number of shares held by the EBT and referred to as Treasury shares was 3,726,036 (30 June 2018: 4,055,270, 31 December 2018: 3,726,036)

7. Cautionary statement

This document contains certain forward-looking statements with respect to the financial condition, results and operations of business. These statements involve risk and uncertainty as they relate to events and depend on circumstances that will incur in the future. Nothing in this interim report should be construed as a profit forecast.

8. Copies of the interim report

The interim report for the six months ended 30 June 2019 can be downloaded from the Company's website www.scienceinsport.com. Further copies can be obtained by writing to the Company Secretary, Science in Sport plc, 16-18 Hatton Garden, Farringdon, London, EC1N 8AT.

 

END

 

 

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