Half Year Trading Update

RNS Number : 1728D

Sosandar PLC

18 October 2022

 

Date:	18 October 2022
On behalf of:	Sosandar plc ('Sosandar' or 'the Company')
Embargoed until:	0700hrs

Sosandar plc

Half Year Trading Update

Trading in line with FY23 market expectations. Revenue +72% yoy and the second six-month period of positive PBT

Sosandar, one of the fastest growing fashion brands in the UK, creating quality, trend-led products for women of all ages, is pleased to provide the following trading update covering the six-month period ended 30 September 2022.

Trading throughout H1 FY23 has been strong with continued revenue growth and our second six-month period of positive PBT. This performance, set against a challenging macroeconomic backdrop, illustrates that Sosandar has a proven, agile model and continues to execute successfully in line with its stated strategy.  

Period Highlights:

· Net revenue of £20.9 million, a 72% increase against the same period in the prior year (H1 FY22: £12.2m) · PBT of £0.1m, a substantial positive swing vs (£1.08m) loss in H1 FY22, being the second six-month period of positive PBT following H2 FY22

· Success of unique product offering and increasing brand awareness shown by growth across KPIs: o  Number of orders increased on Sosandar.com by 43% to 347,137, of which 80,935 were new orders and 266,202 were repeat orders o  Average order frequency up 8% to 2.41 times o  Website visits up 25% to over 7.7m o  Conversion rate increased to 4.5% (H1 FY22: 3.9%) o  Strong Average Order Value up 4% to £90 (H1 FY22: £86) o  Active customers up 33% to 254,601

· Gross margin at 54.4% (H1 FY22: 56.5%) reflecting a more normal post Covid trading period with a planned end of season sale in August

· Net cash of £4.2m as at 30 Sept 2022 (FY22: £7.0m) reflecting planned earlier delivery of Autumn stock than the prior year to facilitate deliveries into third party partners. In addition, the Company is starting to import more via lower cost sea freight which accelerates use of cash

This strong performance, across all metrics, is testament to the Company's strategy, unique product offering and increasing brand awareness across its target market. The Company's broad product range, with new styles available daily, and highly effective marketing, continues to drive strong growth with both new and repeat customers.

The Company's strategy to accelerate sales growth by identifying and fast-tracking the development of key product lines has been successful with all identified lines meeting or exceeding our expectations. Across the period, every single product category was in growth, with holiday and beach wear, formal tailoring and dresses performing exceptionally well throughout summer and into September.

Trading on Sosandar.com and through the Company's concession partners has been strong as the greater depth and breadth of stock made available across all product categories has resonated with consumers. The Company continues to grow its scale and customer loyalty and is now a key strategic partner of its three major third-party retailers, M&S, Next & John Lewis, and has also seen strong success with its most recent partner, The Very Group.

In order to meet significant demand across all sales channels and to ensure that it has high levels of stock ready for the Autumn / Winter season, the Company has taken steps to increase levels of inventory which is reflected in its current cash position. Early autumn trading has been very positive with particular success in key growth areas of outerwear, knitwear and partywear.

The period saw the Company navigating numerous macro challenges and successfully mitigating the headwinds faced so far. The current economic backdrop continues to be challenging; however, October trading has started well both on the Company's own site and with its third-party partners. There remains a high degree of external economic uncertainty, but the Company is confident that it can continue to navigate the challenging and volatile conditions and take mitigating actions as appropriate to protect margins and profitability.

In the current environment the Company expects consumers to become more selective about where they spend and also more demanding of those brands with which they spend. However, Sosandar is confident that the Company will continue to benefit from its unique product offering and brand proposition that clearly differentiates it from the rest of the sector. As such, the Company is confident of continuing to make market share gains.

The Company expects to announce its full interim results in early December. 

New Third-Party Partnership, JD Williams

Following its successes with third party partnerships to date, the Company is delighted to announce it has launched a new partnership with N Brown Group Plc's JD Williams on a wholesale agreement basis which commenced in September 2022.

Selling Sosandar products through JD Williams will further increase the brand's reach and deliver profitable growth.

The partnership has got off to a promising start and together with M&S, Next, John Lewis and the Very Group, there are significant opportunities for further growth.

Conference call

Sosandar is hosting a Q&A call for analysts and investors today at 9.00am to discuss the Trading Update. If you would like to register for the call, please follow this link: https://bit.ly/SOS_H122TU

Ali Hall and Julie Lavington, Co-CEOs commented :

"We are extremely pleased to have delivered a strong performance in the first half of the financial year. Our well-planned and agile approach, together with our distinctive product range and effective communication strategy, has enabled us to deliver a significant increase in revenue, as well as a full period of profitability. This momentum has continued into the early weeks of the second half, with strong trading in October to date and tracking in line with our expectations.   

The challenging and volatile macroeconomic conditions currently make the short-term future difficult to predict with any certainty and their true impact on the consumer is not yet known, however, we remain confident in our long-term strategy. We continue to invest and expand our product range, offering our customers an even greater selection of on-trend, affordable, long lasting, lifestyle appropriate clothes. In addition, our performance with our selected third-party partners continues to go from strength to strength - and we are delighted to have signed an agreement with another highly regarded brand such as N Brown.   

We have a clear strategy in place and a proven ability to execute our plan. This gives the Board the confidence that the Group will continue to make progress and deliver profitable growth in line with full year market expectations."  

Note: The Board believes that consensus market expectations for the year ending 31 March 2023 are revenues of £42.8m, EBITDA of £2.2m and PBT of £2.0m.

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 / Kailey Aliyar	[phone]
Alma PR Limited (Financial PR)	[phone]
Sam Modlin/ Lily Soares Smith/ Matthew Young	[e-mail]

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 and N Brown.

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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