Final Results for the Year Ended 31 December 2023

Science in Sport PLC
28 June 2024
 


 

Science in Sport plc

("Science in Sport", "the Company" or the "Group")

 

Audited Final Results for the Year Ended 31 December 2023

Science in Sport plc (AIM: SIS), the premium performance nutrition company serving elite athletes, sports enthusiasts, and the active lifestyle community, announces its audited final results for the year ended 31 December 2023 ("FY23" or the "Period") which show a resilient performance, delivered under challenging circumstances with a new leadership team in place since the final quarter of FY23 driving significant change throughout the business.

The current financial year ending 31 December 2024 ("FY24") is progressing well, with a restructure of the executive and leadership team, a significant operational cost review and rationalisation programme underway to deliver annualised aggregate cost savings in excess of £6m compared to the run rate prior to the leadership changes. Further details of H1 FY24 Trading Performance can be seen in the Group's RNS announcement "Half Year Pre-Close Trading Update and Executive Appointments" released on 28th June 2024.

 

Key Financials

FY23

FY22

Change

Revenue

£62.7m

£63.8m

(1.7%)

Gross Profit

£26.8m

£26.9m

(0.4%)

Gross Margin

42.8%

42.2%

+0.6bps

Trading Contribution

£12.8m

£9.3m

+37.6%

Trading Contribution Margin

20.5%

14.6%

+5.9bps

Underlying EBITDA[1]

£2.0m

£(2.7m)

+4.7m

Underlying EBITDA margin

3.2%

(4.2%)

+7.4bps

Adjusted Net Debt[2]

£12.8m

£10.9m

£(1.9m)

Loss Before Taxation

£(11.3m)

£(10.6m)

(6.6%)

Loss per share

(6.6p)

(7.9p)

+1.3p

FY23 Highlights:

·      Restructure of the executive and leadership team with several senior roles exiting the business.

·      Record revenue trading month in March, with April, May, and June all setting records for the respective months demonstrate a strong underlying demand for our products but routes to market have been reviewed and reset to deliver improved profitability margins.

·      The Group formed an exclusive partnership in the US with thefeed.com, who are the number one endurance sports nutrition direct to consumer business in the US. With this new partnership we have seen a notable improvement in contribution in this jurisdiction throughout FY23.

·      Amazon marketplace sales saw a 13% increase, driven by strong growth from SiS products in the UK and Europe.

·      Alongside the leadership changes in Q4 FY24 the Group significantly reduced A&P spend to ensure the business focused on profitability and cash generation rather than short term unsustainable revenue targets.

·      A significant number of uncommercial marketing contracts have been exited and further savings will be made throughout 2024. Marketing spend will be aligned to identifiable commercial traction.

·      Significant operational cost savings have been extracted under the new leadership in the final quarter of 2023 with an annualised benefit in excess of £6m.

·      The Group continue to successfully integrate the state of the art 160,000 square foot manufacturing and logistics facility in Blackburn, Lancashire to one combined supply chain site following launch in 2022.

·      Successfully developed a relaunch of the Rego recovery range for Q1 FY24.

·      The above actions have largely been implemented from the final quarter of FY23 under the new leadership and have underpinned improvements in profitability in Trading Contribution of £3.5m (+37.6%) and in Underlying EBITDA of +£4.7m year on year. The total operational cost savings are estimated to deliver an annualised benefit in excess of £6m, the majority of which will be delivered from H2 2024 onwards.

 

A separate H1 FY24 performance and future trading outlook RNS "Half Year Pre-Close Trading Update and Executive Appointments" has been released today

 

Dan Wright - Executive Chairman said:

"The Group has made significant strategic progress with a full business review completed in the year. Whilst the strength of our two core brands, SiS and PhD, is unquestionable, the relentless pursuit of top line growth led to some poor historic strategic decisions and an inflated operating structure.

 

Since joining the Board in October 2023 and establishing the new leadership team, the immediate focus has been managing cash outflow and stabilising the relationship with our various stakeholders. The prior strategy of aggressive top line growth across all channels and markets has been reset, with the revised model of controlled growth whilst delivering sustainable cash generative profitability at improved margins from a reduced cost base.

 

To date, a number of significant cost rationalisation actions have been taken, benefitting the final quarter of 2023 and providing a stable platform for 2024 in order for the business to reset. Whilst we anticipate a short term  reduction of year on year revenue in FY24, EBITDA performance has continued to strengthen and remains in line with previous expectations.  

 

Underpinning the Group's new operating approach, and at the core of the business, are two very strong brands operating in an expanding marketplace. With confidence in the revised operating model, the new leadership team is taking the opportunity to re-engage with our core customers, shareholders and financing partners.  We expect to return to sustained revenue growth in 2025 and beyond and whilst cognisant of the challenges ahead are extremely excited about the opportunity to deliver a profitable and cash generative branded consumer goods business and substantial shareholder value associated with it."

 



 

For further information:

Science in Sport plc

T: 020 7400 3700

Dan Wright, Executive Chairman

Daniel Lampard, CFO

 




Liberum (Nominated Adviser and Broker)

T: 020 3100 2000

Richard Lindley

John More

Anake Singh

 


 

Notes to Editors

About Science in Sport plc

Headquartered in London, 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 active lifestyle community. The Company has two highly regarded brands, PhD Nutrition, a premium active-nutrition brand targeting the active lifestyle community, and SiS, a leading endurance nutrition brand among elite athletes and professional sports teams.

The two brands sell through the Company's phd.com and scienceinsport.com digital platforms, third-party online sites, including Amazon and ebay, and extensive retail distribution in the UK and internationally, including major supermarkets, high street chains and specialist sports retailers. This omnichannel footprint enables the Company to address the full breadth of the sports nutrition market.

PhD is one of the UK's leading active nutrition brands with a reputation for high quality and product innovation. The brand has grown rapidly since its launch in 2005. The range now comprises powders, bars, and supplements, including the high protein, low sugar range, PhD Smart.

SiS, a leading endurance nutrition business founded in 1992, has a core range comprising gels, powders and bars focused on energy, hydration, and recovery. SiS is an official endurance nutrition supplier to over 330 professional teams, organisations, and national teams worldwide. SiS supplies more than 150 professional football clubs in the UK, Europe, and the USA. 

SiS is Performance Solutions partner to Ineos Grenadiers cycling team, and Tottenham Hotspur, New York City and CGC Nice football clubs. 

For further information, please visit phd.com and scienceinsport.com

 

 



 

Chairman's Statement

Overview

 

2023 has been a challenging year for the Group with a new leadership team in place since the final quarter of the year to 31 December 2023 driving change throughout the Group.

 

For the year ended 31 December 2023, the Group delivered underlying EBITDA1 of £2.0m in line with market expectations and despite lower revenues of £62.7m. Statutory loss before tax was £11.3m resulting in an improved loss per share of -6.6 pence. Full details of the Group's financial performance are set out in the Business Review .

 

The new executive team brings together vast experience across a range of highly relevant sectors. The Group are focused on delivering long term shareholder value via our new strategy outlined below.

 

Strategy

 

The Group has made significant strategic progress with a full business review completed in the year. Whilst the strength of our two core brands, SiS and PhD, is unquestionable, the relentless pursuit of top line growth led to some poor historic strategic decisions and an inflated operating structure.

 

Since joining the Board in October 2023 and establishing the new leadership team, the immediate focus has been managing cash outflow and stabilising the relationship with our various stakeholders. The prior strategy of aggressive top line growth across all channels and markets has been reset, with the model of controlled growth whilst delivering sustainable cash generative profitability at improved margins from a reduced cost base.

 

To date, a number of significant cost rationalisation actions have been taken, benefitting the final quarter of 2023 and providing a stable platform for 2024 in order for the business to reset.

 

Key actions, both complete and ongoing, include;

 

·      Restructure of the executive and leadership team with several senior roles exiting the business.

·      Marginal revenue channels have been reset and measures implemented to secure and grow the Group's profitable revenue streams. Upon detailed review, a number of overseas distribution agreements were found to be uncommercial and based on prioritisation of revenue growth over profitability. While this will reduce revenues in 2024, we will ensure that our distribution arrangements are a two way partnership whereby the strength of the brand is supported by both parties with measurable deliverables.

·      Supplier and operational reviews are underway in conjunction with product inventory rationalisation.

·      Whilst brand health is robust, and both brands remain leading in their respective categories, a significant number of uncommercial marketing contracts have been exited in 2023 and further savings will be made throughout 2024. Marketing spend will be aligned to identifiable commercial traction.

 

1 Earnings before interest, tax, depreciation, amortisation, loss on disposal of intangible assets, share-based payments, restructuring costs, transition costs, unrealised foreign exchange on intercompany balances and other non-EBITDA one-off costs.

 

·      Significant operational cost savings have been extracted under the new leadership in the final quarter of 2023 and progress in implementing operational efficiencies continues to be made. This is anticipated to generate improved contribution to cashflow and earnings throughout 2024.

·      In aggregate this will deliver annualised savings totalling £6m, the majority of which will be delivered in 2024.

 



 

Environmental, Social and Governance (ESG)

 

We are committed to promoting sustainability and responsible business practices both as a Group and through our individual brands. As an industry leader, we have invested in packaging technology and plant to transition all protein powder products into recyclable pouch packaging, a first for the sports nutrition industry globally. Furthermore, our move to a new combined supply chain site in the prior year has seen significant environmental improvements by reducing transport miles, carbon emissions and creating new opportunities for those living and working in Blackburn.

 

Outlook

 

Moving forward, we are taking a balanced view on prospects for 2024. Key strategic areas of focus include embedding the new operating model post the recent restructuring; controlled growth over the medium term; and continued margin improvements resulting in cash generation and deleveraging. As a result, whilst we anticipate year on year revenues will reduce, we are targeting a significant improvement of underlying EBITDA and reduction of the Group's Adjusted net debt.

 

Underpinning the Group's new operating model, and at the core of the business, are two very strong brands operating in an expanding marketplace. With confidence in the revised operating model, the new leadership team are taking the opportunity to re-engage with our core customers, shareholders and financing partners to build the business from a more stable platform and ultimately deliver substantial shareholder value.

 

 

 

 

Dan Wright                                                                           

Executive Chairman                                                           

 



 

Science in Sport Overview

Key Performance Indicators

FY23

FY22

Change

Revenue

£62.7m

£63.8m

(1.7%)

Gross Margin

42.8%

42.2%

+0.6bps

Contribution Margin

20.5%

14.6%

+5.9bps

Underlying EBITDA

£2.0m

£(2.7)m

+£4.7m

 

Overview

 

Headquartered in London, Science in Sport Plc ('SiS') is a leading sports nutrition business that develops, manufactures, and markets innovative nutrition products for professional athletes, sports and fitness enthusiasts and the active lifestyle community. The Group has two highly regarded brands, PhD Nutrition ('PhD'), a premium active-nutrition brand targeting the active lifestyle community, and SiS, a leading endurance nutrition brand among elite athletes and professional sports teams.

 

The two brands sell through the Group's phd.com and scienceinsport.com digital platforms, third-party online sites, including Amazon and eBay, and extensive retail distribution in the UK and internationally, including major supermarkets, high street chains and specialist sports retailers. This omnichannel footprint enables the Group to address the full breadth of the global sports nutrition market, worth $24.6bn in 2022 and forecast to grow at 5.9% CAGR from 2022 to 2027[3].

 

Launched in 2005, PhD is one of the UK's leading active nutrition brands with a reputation for high quality and product innovation. The range comprises powders, bars, and supplements, including the high protein, low sugar range, PhD Smart. PhD brand ambassadors include leading endurance and strength athlete Ross Edgley.

 

SiS, a leading endurance nutrition business founded in 1992, has a core range comprising gels, powders and bars focused on energy, hydration, and recovery. SiS is an official endurance nutrition supplier to over 330 professional teams, organisations, and national teams worldwide. SiS supplies more than 150 professional football clubs in the UK, Europe, and the USA. Brand ambassadors include the former track cyclist Sir Chris Hoy, an eleven-time world champion and six-time Olympic champion, and Elish McColgan, who won gold in the 2022 Commonwealth Games 10,000 metres.

 

SiS is a Performance Solutions partner to INEOS Grenadiers cycling team, Tottenham Hotspur, New York City and OGC Nice football clubs, as well as Official Sports Nutrition Partner to the Milwaukee Bucks, 2021 National Basketball Association Champions. In 2023, winner of the women's marathon at the 2022 World Athletics Championships, Gotytom Gebreslase, and the Elite Running Team joined other Performance Solutions partners that are benefitting from bespoke support and products developed with world leading science.

 

In 2022, the Group opened a state of the art 160,000 square foot manufacturing and logistics facility in Blackburn, Lancashire.

 

Our Brands

 

The Group's results and operations are underpinned by our two market leading brands;

 

PhD

 

Born from science, with innovation and quality at the core of the brand, PhD is one of the UK's leading active nutrition brands. The PhD brand is established internationally with a strong retail network across the globe which has enabled the Group to grow and develop the brand's exceptional reputation.

 

Our range of PhD products includes:

 

·      Diet - The delicious Diet range combines protein, which is ideal for building and maintaining lean muscle whilst keeping you satiated for longer.

·      Smart - Consisting of great tasting high protein, low sugar foods, bars and snacks. This includes the Smart Bar, an on-the-go protein hit and the multi-use Smart Protein Powder suitable for cooking.

·      Life - A range of premium, expertly formulated health optimisation products. From the high in protein, low sugar, plant-based Complete meal solution, and Reset, a night time formula, to Mind, made to support optimal mental performance, this is a range to optimise performance for life.

·      Performance - expertly formulated to help you perform at your best and optimise your training. From key supplements to aid in strength gains pre and intra workout to replenishment and recovery post workout, to maximise training and hitting goals.

 

Science in Sport:

 

Science in Sport is a leading performance nutrition brand with over 330 elite athletes and teams relying on its products for success. The combination of world-class knowledge and scientific formulations ensure the brand provides optimal performance solutions for athletes across the nutritional need states of energy, hydration and recovery.

 

 

Our range of SiS products includes:

 

·      Energy - Bars, shots, gels and powders to give athletes energy

·      Hydration - Gels, tablets and powders to keep athletes energised and hydrated

·      Recovery - Powder range to aid athletes' recovery post-exercise

·      Athlete health - Vitamins and supplements range designed to support and maintain immune function, digestive health and bone health amongst athletes



 

Our focus in delivering long term value

As part of the comprehensive review of the business in 2023, the leadership team have outlined six key areas of focus, which will enable the Group to reset in 2024 and deliver long-term value going forward;

1.   World-class science

 

As a world leader in nutritional science and product development, investment in science remains at the core of the business. Quality, efficacy of ingredients and proven product benefits are key principles of both brands.

 

2.   Brand exposure

 

Both brands command significant share within their respective markets. Science in Sport holds the number one position in UK retail and marketplace channels, with a leading presence globally. PhD is in the top three within the UK retail and marketplace channels and is strongly positioned in the Asia Pacific region. We will continue to grow brand awareness, leveraging our Elite athlete portfolio and scientific credentials, through targeted investment delivering measurable returns.

 

3.   Sales growth

 

The opportunity for global sales growth is significant, given the strength of the brands and continued positive trajectory of the sports nutrition market. We will deliver this by working with existing and new partners, building profitable long-term relationships in the UK and globally.

 

4.   Financial health

 

The Group had previously pursued an aggressive growth strategy, while this delivered positive revenue growth it was not cash accretive. The revised strategy is on sustainable profitable cash generation, through delivery of enhanced margins on a lower cost base while deleveraging the business.

 

5.   Operational excellence

 

With the transition to the manufacturing facility at Blackburn fully completed, optimising the supply chain and manufacturing processes to deliver enhanced margins is the key focus for 2024.

 

6.   High performing team

 

We are resetting the culture and ways of working; we are creating the conditions where everyone can perform at their best by integrating all aspects of our business and ensuring accountability and product pride across every department.



Our Market and Customers

 

The global sports nutrition market was worth $24.6bn in 2022 and is forecast to grow at 5.9% CAGR from 2022 to 2027. Our 2023 revenue of £62.7m (2022: £63.8m) represents a solid foothold in this market but highlights the scale of the opportunity for both brands for significant growth.

 

Our current revenues are weighted to the UK, representing 56% (2022: 57%) of our total revenue. This is driven through strong distribution through multiple channels of specialist retailers, grocery, Amazon and our own direct channel. The UK is a key market, and we see further opportunities to expand and grow our market share through existing and new customers.

 

Outside of the UK, representing 44% (2022: 43%) of our revenue, we have several key distribution partners covering multiple geographies. We are in the process of resetting a number of these commercial relationships to ensure strategic alignment, with the objective of delivering mutually beneficial profitable growth and improved margins.

 

Turnover by geographic destination of sales are analysed as follows:

 

 

 

Year ended

31 December

2023

£'000

Year ended

31 December

2022

£'000

United Kingdom


35,302

36,574

Rest of Europe


12,047

11,391

USA


3,548

4,670

Rest of the World


11,774

11,138

Total Sales


62,671

63,773

 

Our People and Culture

 

In the current year, and subsequent to the balance sheet date, the business has undergone a significant organisational restructure, with over 20 management roles removed. This has resulted in streamlined reporting lines on a much lower cost base. The new executive and senior management team having the capability and expertise to deliver the new strategy.

 

Our world class team across all parts of the organisation know the performance nutrition market like no one else. With functional experts in all disciplines, including; science, brand, digital marketing, retail, and supply chain, the Group are well placed to deliver on the plan for 2024.

 

Our Future

 

As outlined in the Chairman's Statement, the Group is taking a balanced view on prospects for 2024 with the strategic focus on embedding the new operating model following the recent restructuring; controlled growth over the medium term continued margin improvements resulting in cash generation and deleveraging.


Business Review

The Group delivered £62.7m revenue in the year ended 31 December 2023, down 1.7% on prior year (2022: £63.8m) and underlying EBITDA increased to £2.0m (2022: £2.7m loss) consistent with expectations despite the lower revenue.

 


2023

2022

Increase/


£'000

£'000

(decrease)


 



Revenue

62,671

63,773

(1.7%)

Cost of goods

(35,839)

(36,837)


Gross profit

26,832

26,936

(0.4%)

Selling & general administration costs

(13,985)

(17,611)


Trading contribution

12,847

9,325

37.8%

Underlying operating expenses

(10,854)

(12,014)


Underlying EBITDA

1,993

(2,689)

174.1%


 



Share-based payment charges

-

(262)


Depreciation and amortisation

(6,250)

(4,808)


Restructuring and one-off costs

(1,975)

(888)


Loss on disposal of intangible assets

(879)

-


Transition costs

(2,092)

(1,075)


Unrealised foreign exchange on intercompany balances

(247)

(99)


Other items

(283)

-



 



Loss from operations

(9,733)

(9,821)

0.9%

 

Performance in 2023 was driven from growth in the Retail (UK and International) and USA online channels, offset by lower trading in China and in the Digital channel. Our SiS brand delivered annual revenue growth of 15%, with PhD closing 2023 with an annual revenue reduction of 16% compared to the prior year, predominantly due to the interrupted trade in the Chinese markets.

 

Gross profit for the Group remained consistent with £26.8m recognised in 2023 (2022: £26.9m) with gross margin improving to 43% (2022: 42%). The underlying improvement is better reflected by the significant improvement in trading contribution of 21% (2022: 15%). The trading margin reflects the benefit of the distributor model, particularly in the US, together with the operational efficiencies and cost savings at all levels. The 2023 trading contribution margin percentage achieved the highest levels during Q4 of 2023, giving confidence in further improvements in 2024.

 

Underlying EBITDA of £2.0m (2022: £2.7m loss) improved year on year through improved margins and ongoing cost efficiencies which remain the focus of the Group moving into 2024. Excluded from underlying EBITDA are one-off costs, principally relating to the organisational restructure, transition costs moving to the internally manufactured protein bars and moving the distributor model in the US.

 



 

Revenue

 


 

2023

 


2022



SiS

PhD

Total

SiS

PhD

Total


£'000

£'000

£'000

£'000

£'000

£'000


 

 

 




Digital

4,984

2,325

7,309

8,859

3,618

12,477

Marketplace

6,218

6,835

13,053

6,199

7,851

14,050

China

1,105

2,285

3,390

178

7,031

7,209

USA

3,548

-

3,548

-

-

-

Global online

15,855

11,445

27,300

15,236

18,500

33,736

International retail

8,322

4,257

12,579

6,491

3,904

10,395

UK retail

10,007

12,785

22,792

7,981

11,661

19,642

Retail

18,329

17,042

35,371

14,472

15,565

30,037

Total Sales

34,184

28,487

62,671

29,708

34,065

63,773

 

Global Online

 

Global online sales accounted for 44% of total sales (2022: 53%) and decreased 19% to £27.3m (2022: £33.7m). The reduction in our own channel digital sales was driven by lower traffic and saw digital sales decrease 41% year on year to £7.3m (2022: £12.5m) following the conscious decision by the Group to reduce marketing spend in this area whilst focusing on significantly improving contribution on digital sales in 2024 and beyond.

 

Our Amazon marketplace sales saw a 13% increase, driven by strong growth from SiS products in the UK and Europe. Despite this, weaker US marketplace sales (driven by transition to thefeed.com) saw overall marketplace channel revenues decline to £13.1m (2022: £14.1m).

 

Our US and China business, combined, has been broadly flat delivering £6.9m (2022: £7.2m). In Q1 of 2023, we formed an exclusive partnership in the US with thefeed.com, who are the number one endurance sports nutrition direct to consumer business in the US. With thefeed.com now partnering for operations and fulfilment of our products in the US to both direct to consumer and marketplace channels we have seen a significant improvement in contribution in 2023. In China, whilst annual revenue slowed due to lower demand in H2, the business is now recovering and we anticipate growth in 2024.

 

Retail

 

Retail sales accounted for 56% of total sales (2022: 47%) and delivered another year of annual growth in revenue with total retail sales increasing by 18% to £35.4m (2022: £30.0m) driven from both UK and International sales growth across both brands.

 

UK Retail delivered another year of solid growth, with sales rising by 16% to £22.8m (2022: £19.6m). Strong performances across numerous retailers saw growth in major grocery accounts (6%), independents (10%) and specialist retailers (30%).

 



 

PhD UK retail sales grew again by 10% (2022: 11%). We are the second largest manufacturer on sports nutrition shelves in UK Retail as well as the number #1 manufacturer of lean whey powder and plant-based protein powders.

 

Science in Sport delivered growth of 25% (2022: 6%) in UK Retail, with our high gross margin gels continuing their consistent growth trend. Science in Sport is still the clear number #1 in endurance nutrition in UK Retail.

 

International Retail also continued its strong growth, and sales were £12.6m (2022: £10.4m), 21% up on the prior year. This was acheieved with strong growth across multiple geographies and both brands with SiS and PhD international retail achieving sales growth of 28% and 9% respectively.

 

Profitability

 

The Group generated a gross profit of £26.8m (2022: £26.9m) with a gross margin of 43% compared with 42% in 2022. Gross margin improvements were driven from efficiencies generated from the new Blackburn facility despite increases in raw material prices and other rising prices.

 

Trading contribution was £12.8m (20.5% contribution margin) (2022: £9.3m; 14.6% contribution margin). The Group focused on continued cost mitigations from reduced advertising and promotion spend and the benefit of the distributor model, particularly in the US. As a result, selling and administration costs of £14.0m (2022: £17.6m) decreased by £3.6m year on year as management continued to focus on more efficient use of spend to promote profitable growth.

 

Underlying operating costs decreased by £1.2m year on year. The Group has good levels of visibility on these costs due to them relating to people, premises and related overhead costs with a renewed focus on efficiency of spend. The Group has fixed energy tariffs in place utill 2025 for electricity and 2027 for gas.

 

Underlying EBITDA was a gain of £2.0m, a significant improvement on the loss of £2.7m in 2022. The reported loss before tax is £11.3m, (2022: £10.6m loss). Loss per share improved to -6.6p (2022: -7.9p).

 

The Group has chosen to report underlying EBITDA as an alternative performance measure. This is adjusted for depreciation, amortisation, loss on disposal of intangible assets, non‐cash share-based payments, restructuring costs, transition costs and material one-off costs. The Board believes this provides additional useful information for Shareholders to assess an underlying profit performance more closely aligned to a cash profit value, excluding one-offs. This measure is used by the Board for internal performance analysis. A reconciliation of underlying EBITDA to profit from operations is presented in note 1.3.

 

 

 

 

 

 

 

 

 



 

Working capital

 

As at 31 December 2023, the Group held inventory of £6.8m (31 December 2022: £6.6m). Inventory remained consistent as we continued to manage the supply chain tightly to ensure efficient working capital and ensure optimal cover.

 

The year on year decrease in trade receivables of £3.7m was primarily due to increases in the impairment and credit note provision.

 

Correspondingly, the year on year increase in trade and other payables of £5.3m, was predominantly due to the increase in the year end invoice financing facility position of £6.3m (2022: £4.5m).

 

Cash position

 

The Group ended 2023 with cash of £2.1m (2022: £0.9m) and Adjusted net debt of £12.8m (2022: £10.9m) with headroom in facilities of over £4m. The increase in Adjusted net debt (Adjusted net debt is presented in note 1.3) at the year end was driven by the timing of restructuring payments and working capital outflow associated with the early termination of a marketing partner, both of which will result in significant savings in 2024.

 

A £7.5m flexible invoice credit facility with HSBC, our principal bankers, was drawn to £6.3m. Additional trade finance facilities of £3.5m were drawn at year-end. Total headroom on the combined facilities including cash was over £4m at the year-end. All banking working capital facilities were successfully renewed to April 2025 as part of an annual renewal cycle, with increases in our invoice financing facility to £8m (2023: £7.5m) and trade finance facility to £4m (2023: £3.5m).

 

Intangible Assets

 

Total intangible additions during 2023 were £1.0m (2022: £1.9m), with £0.4m (2022: £1.2m) being on technology spend and £0.6m (2022: £0.7m) on product development. Technology spend relates to continued investment on the warehouse management system and ecommerce platform, and product development spend in relation to a number of elite and commercial products across both brands.

 

Following a review of capitalised product development costs, there were several products where management were no longer able to justify the carrying value of the asset where products are no longer produced, formula has been superseded or commercial viability no longer exists. As a result, the assets have been disposed of leading to a loss on disposal of £0.9m.

 

Fixed Assets

 

Total fixed asset additions during 2023 were £1.1m with a final £1.6m work in progress related to the new bar line delivered in December 2023. This completes the strategic investment cycle of peak cash outflows with the Blackburn investment complete. Capital commitments at the end of 2023 were £nil. Ongoing capital expenditure of fixed assets is anticipated to be in the range of £0.5m to £1m excluding any strategic investment opportunities.

 

Share-based payments

 

The Company operates both a Short-Term Incentive Programme ("STIP") and a Long-Term Incentive Programme ("LTIP"). Together, the Share Option Plan ("SOP") was approved by the Remuneration Committee in June 2014 in line with the proposal contained in the Company's AIM Admission document published in August 2013. A LTIP scheme for financial years 2020‐2022 is in place.

 

£nil charge was recognised for the 2023 LTIP and STIP schemes (2022 schemes: £Nil).

 

Taxation

 

The tax credit in the year is £Nil (2022: £0.3m charge). The Group has cumulative tax losses of £35.3m (2022: £29.1m), a proportion of which the Group will look to use to cover future profits.

 

Current Trading and Outlook

 

Following the strategic, organisational, and operational review in 2023, the Group has begun 2024 with greater clarity and focus in delivering the new operating model. This will be achieved with a lean and flexible cost base which will enable the Group to improve underlying EBITDA and its cash generation in 2024.

 

In the first quarter of 2024, management have been focused on embedding the new operating model and structure, tightly managing the cost base through cutting spend on non value add activities and exiting uneconomic contracts in marketing and technology while resetting commercial arrangements to deliver appropriate margins. While this will result in a top line reduction in the short-term, the margin improvements and cost reductions will be additive to cash and EBITDA generation.

 

The Board expects 2024 to be a year of progress as management continues to execute the strategic plan driving a balanced 2024 with the focus on controlled growth.

 

Dividend Policy

 

Focusing on  de-leveraging of the Group and continual investment in the future growth of the business, the Board is taking a prudent approach to the Group's dividend policy and made the decision not to propose a final dividend for the full year to 31 December 2023 (2022: nil pence per share). It remains the Board's intention to review returns to shareholders when conditions improve and financial performance permits.

 

Post year-end events

 

There are no events subsequent to the reporting date which would have a material impact on the financial statements.

 



 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



 

 



Year ended

Year ended



31 December

31 December



2023

2022


Notes

£'000

£'000



 


Revenue

4

62,671

63,773

Cost of goods


(35,839)

(36,837)

Gross profit


26,832

26,936

 


 

 

Operating expenses

5

(36,565)

(36,757)

Loss from operations

6

(9,733)

(9,821)

Comprising:




Underlying EBITDA

1.3

1,993

(2,689)

Share-based payment expense


-

(262)

Depreciation and amortisation


(6,250)

(4,808)

Non-recurring costs and other items

6

(5,476)

(2,062)

 


 

 

Finance costs

9

(1,558)

(757)

Loss before taxation


(11,291)

(10,578)

 


 

 

Taxation credit / (expense)

10

12

(332)

Loss for the year


(11,279)

(10,910)



 


Other comprehensive income


 


Cash flow hedges


-

2

Exchange differences on translation of foreign operations


54

(21)

Total comprehensive loss for the year


(11,225)

(10,929)

 

 


 


Loss per share to owners of the parent


 


Basic and diluted - pence

11

(6.6p)

(7.9p)



 

 

 

All amounts relate to continuing operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 



As at

As at

Company number: 08535116


31 December

31 December



2023

2022


Notes

£'000

£'000

Non-current assets


 


Intangible assets

12

27,042

30,739

Right-of-use assets

20

10,520

10,536

Property, plant and equipment

13

10,000

10,338

Deferred tax

19

19

-

Total non-current assets

 

47,581

51,613

Current assets


 


Inventories

14

6,764

6,638

Trade and other receivables

15

13,812

16,524

Cash and cash equivalents

16

2,144

930

Total current assets

 

22,720

24,092

 

 

 

 

Total assets

 

70,301

75,705

 


 


Current liabilities


 


Trade and other payables

17

(25,257)

(19,993)

Provision for liabilities

18

(671)

(901)

Lease liabilities

20

(789)

(415)

Asset financing

28

(1,192)

(843)

Hire purchase agreement

27

(82)

(80)

Total current liabilities

 

(27,991)

(22,232)

 


 


Non-current liabilities




Provision for liabilities

18

(1,059)

-

Lease liabilities

20

(9,903)

(10,261)

Asset financing

28

(2,282)

(2,839)

Hire purchase agreement

27

-

(82)

Total non-current liabilities

 

(13,244)

(13,182)

 


 


Total liabilities

 

(41,235)

(35,414)

 

 

 

 

Net assets

 

29,066

40,291

Capital and reserves attributable to owners of the parent company


 


Share capital

21

18,227

17,242

Share premium reserve

23

53,134

53,134

Employee benefit trust reserve

23

(204)

(429)

Other reserve

23

(907)

(907)

Foreign exchange reserve

23

(84)

(138)

Retained deficit

23

(41,100)

(28,611)

Total equity

 

29,066

40,291

 

 

 

 

 

 

 



 

CONSOLIDATED STATEMENT OF CASH FLOWS



 

 



Year ended

Year ended



31 December

31 December



2023

2022


Notes

£'000

£'000

Cash flows from operating activities


 


Loss for the financial year


(11,279)

(10,910)

Adjustments for:

 



Amortisation of intangible assets

12

3,827

2,919

Depreciation of right-of-use assets

20

993

963

Depreciation of property, plant and equipment

13

1,430

926

Loss on disposal of intangible assets

6

879

-

Loss on disposal of property, plant and equipment


11

-

Unrealised foreign exchange on intercompany balances


247

-

Interest expense


1,558

757

Taxation

10

(12)

332

Share based payment charge


-

262

Operating cash outflow before changes in working capital

 

((2,346)

(4,751)



 


Changes in inventories


(126)

1,809

Changes in trade and other receivables


2,712

(3,737)

Changes in trade and other payables


3,009

(1,970)

Total cash inflow / (outflow) from operations

 

3,249

(8,649)



 


Cash flows from investing activities


 


Purchase of property, plant and equipment


(1,103)

(6,013)

Purchase of intangible assets


(1,009)

(1,941)

Net cash outflow from investing activities

 

(2,112)

(7,954)



 


Cash flows from financing activities

29

 


Gross proceeds from issue of share capital


-

5,000

Share issue costs


-

(371)

(Repayments) / proceeds from asset financing


(208)

2,184

Interest paid on asset financing


(253)

(143)

Proceeds from invoice financing


1,818

4,523

Interest paid on invoice financing


(419)

(119)

Proceeds from trade facility


527

2,733

Interest paid on trade facility


(399)

(53)

Principal repayments of lease liabilities


(306)

(629)

Interest paid on lease liabilities


(436)

(442)

Net cash inflow from financing activities

 

324

12,683

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

1,461

(3,920)

Unrealised foreign exchange differences

 

(247)

-

Opening cash and cash equivalents

 

930

4,850

Closing cash and cash equivalents

16

2,144

930

 

 

 

 

 



 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 


Share capital

Share premium

Employee Benefit Trust reserve

Other reserve

Foreign exchange reserve

Cash flow  hedge reserve

Retained deficit

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 31 December 2021

13,510

51,839

(158)

(907)

(117)

(2)

(17,836)

46,329

 









Total comprehensive loss for the year

-

-

-

-

(21)

2

(10,910)

(10,929)

Transactions with owners:

 








Issue of shares

3,732

1,295

(398)

-

-

-

-

4,629

Issue of shares held by EBT to employees

-

-

127

-

-

-

(127)

-

Share based payments

-

-

-

-

-

-

262

262







 



At 31 December 2022

17,242

53,134

(429)

(907)

(138)

-

(28,611)

40,291







 



Total comprehensive loss for the year

-

-

-

-

54

-

(11,279)

(11,225)

Transactions with owners:








 

Issue of shares

985

-

-

-

-

-

(985)

-

Share based payments

-

-

225

-

-

-

(225)

-










At 31 December 2023

18,227

53,134

(204)

(907)

(84)

-

(41,100)

29,066







 



 

 

 

 

 

 

 

 

 

 

 



 

1. Accounting policies

 

1.1  General information

 

Science in Sport plc (the "Company" and together with its subsidiaries "SIS" or the "Group") is a public limited company incorporated and domiciled in England and Wales (registration number 08535116). The address of the registered office is 2nd Floor, 16 - 18 Hatton Garden, Farringdon, London EC1N 8AT. The functional and presentation currency is Pounds Sterling and the financial statements are rounded to the nearest £1,000.

 

The main activities of the Group are those of developing, manufacturing and marketing sports nutrition products for professional athletes and sports enthusiasts.

 

1.2  Basis of preparation

 

Whilst the financial information included in this results announcement has been prepared on the basis of UK-adopted International Accounting Standards, it does not contain sufficient information to comply with UK-adopted International Accounting Standards.. The financial information contained within this results announcement for the year ended 31 December 2023 and the year ended 31 December 2022 is derived from but does not comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022 have been filed with the Registrar of Companies.. The auditors' report on the statutory accounts for the year ended 31 December 2023 and the year ended 31 December 2022 is unqualified, does not draw attention to any matters by way of emphasis, and does not contain any statement under section 498 of the Companies Act 2006.

 

1.3 Use of non-GAAP measures - Underlying EBITDA and Adjusted net debt

 

The Directors believe that the underlying EBITDA as a measure provides additional useful information for Shareholders on underlying trends and performance. This measure is used for internal performance analysis. Underlying operating profit/(loss) is not defined by IFRS and therefore may not be directly comparable with other companies' adjusted profit measures. It is not intended to be a substitute for, or superior to IFRS measurements of profit.

 

A reconciliation of the underlying EBITDA to statutory operating loss is provided below:

 


Year Ended 31 December

2023

(£'000)

Year Ended 31 December

2022

(£'000)

Underlying EBITDA

1,993

(2,689)

Share-based payment expense

-

(262)

Depreciation and amortisation

(6,250)

(4,808)

Restructuring and one-off costs

(1,975)

(888)

Loss on disposal of intangible assets

(879)

-

Transition costs

(2,092)

(1,075)

Unrealised foreign exchange on intercompany balances

(247)

(99)

Other items

(283)

-

Loss from operations

(9,733)

(9,821)

 

The Directors believe that Adjusted net debt as a measure provides additional useful information for Shareholders on underlying trends and performance. This measure is used for internal performance analysis. This measure is not defined by IFRS and therefore may not be directly comparable with other companies' net debt analysis. It is not intended to be a substitute for, or superior to IFRS measurements.

 


Year Ended 31 December

2023

(£'000)

Year Ended 31 December

2022

(£'000)

Adjusted net debt

 


Cash and cash equivalents

2,144

930

Invoice financing

(6,341)

(4,523)

Trade facility

(3,260)

(2,733)

Asset financing obligation

(3,474)

(3,682)

Other payables

(1,903)

(877)

Adjusted net debt

(12,834)

(10,885)

 

 

 

 

 

 

 



 

2. Financial risk management

         

The Group's activities inevitably expose it to a variety of financial risks: market risk (including currency risk, cash flow interest rate risk and fair value interest rate risk), credit risk and liquidity risk.

 

It is Group policy not to enter into speculative positions using complex financial instruments. The Group's primary treasury objective is to minimise exposure to potential capital losses.

 

(a) Market risk

 

Foreign exchange risk

 

The Group operates globally with subsidiaries in the USA, Italy and Australia, and therefore there will be risks around foreign exchange rates. Refer to note 16 for analysis of cash balances by currency.

 

The Group primarily enters into contracts which are to be settled in UK Pounds. However, some contracts involve other major world currencies including the US Dollar, Euro and Australian Dollar.

 

As of 31 December 2023, the Group's net exposure to foreign exchange risk was as follows:   


Trade receivables

Trade

payables

Cash and cash equivalents

Net


£'000

£'000

£'000

£'000

AUD $

11

-

27

38

EUR €

229

(138)

401

492

USD $

1,144

(107)

271

1,308

NZD $

3

-

19

22

JPY ¥

-

(21)

-

(21)

Total

1,387

(266)

718

1,839

 

As of 31 December 2022, the Group's net exposure to foreign exchange risk was as follows:   

 


Trade receivables

Trade

payables

Cash and cash equivalents

Net


£'000

£'000

£'000

£'000

AUD $

5

-

31

36

EUR €

212

(13)

178

377

USD $

125

-

242

367

NZD $

-

-

6

6

JPY ¥

-

(24)

-

(24)

Total

342

(37)

457

762

 

Cash flow and fair value interest rate risk

 

The Group's interest rate risk arises from medium term and short term money market deposits. Deposits which earn variable rates of interest expose the Group to cash flow interest rate risk. Deposits at fixed rates expose the Group to fair value interest rate risk. The Group had no fixed rate deposits during the year. The Group analyses its interest rate exposure on a dynamic basis throughout the year. The Group has no variable borrowings and therefore no interest rate swaps or other forms of interest risk management have been undertaken.

 

(b) Credit risk

 

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well as credit exposure in relation to outstanding receivables. Group policy is to place deposits with institutions with investment grade A2 or better (Moody's credit rating). The Group does not expect any losses from non-performance by these institutions. Management believes that the carrying value of outstanding receivables and deposits with banks represents the Group's maximum exposure to credit risk.

 

The top 10 customers account for 53% (2022: 49%) of the Group's revenue and hence there is some risk from the concentration of customers, the largest single customer is 16% (2022: 13%) of revenue and is a major international online business. Further disclosures regarding trade and other receivables are included in note 15.

 

(c)  Liquidity risk

 

Liquidity risk arises from the Group's management of working capital; it is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and management monitors rolling forecasts of the Group's liquidity on the basis of expected cash flow.

 

The Group had trade and other payables at the reporting date of £25.3m (2022: £20.0m) as disclosed in note 17. The following table sets out the contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities:

 


Up to 3 months

 Between 3 and 12 months

 Between 1 and 2 years

 Between 2 and 5 years

Over 5 years


£'000

£'000

£'000

£'000

£'000

Trade payables

5,114

-

-

-

-

Accruals

8,728

-

-

-

-

Hire purchase

20

62

-

-

-

Asset financing

366

1,098

1,185

1,295

-

Invoice financing

6,341

-

-

-

-

Trade financing

3,260

-

-

-

-

Lease liabilities

315

884

1,051

3,030

8,434

Total financial liabilities

24,144

2,044

2,236

4,325

8,434

 

(d) Capital risk management

 

The Group considers its capital to comprise its ordinary share capital, share premium, other reserve and accumulated retained earnings/deficit as disclosed in the consolidated statement of financial position.

 

The Group remains funded primarily by equity capital together with working capital facilities and asset finance. The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for equity holders of the Group and benefits for other Stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group's debt and cash position is monitored weekly which ensures these objectives are being met along with other internal metrics.

 

3. Segmental reporting

 

Operating segments are identified on the basis of internal reporting and decision making. The Group's Chief Operating Decision Maker ("CODM") is considered to be the Board, with support from the senior management teams, as it is primarily responsible for the allocation of resources to segments and the assessments of performance by segment.

 

The Group's reportable segments have been split into the two brands, Science in Sport (SiS) and PhD Nutrition. Operating segments are reported in a manner consistent with the internal reporting provided to the CODM as described above. The single largest customer makes up 16% of revenue and is not separately identified in segmental reporting.

 

The Board uses revenue, EBITDA, profit before tax and cash, as key measures of the segment's performance. These are reviewed regularly.

 


 

2023



2022

 


SiS

PhD

Total

SiS

PhD

Total


£'000

£'000

£'000

£'000

£'000

£'000


 

 

 




Sales

34,184

28,487

62,671

29,708

34,065

63,773

Gross profit

16,565

10,267

26,832

17,383

9,553

26,936

Advertising and promotions

(5,368)

(3,025)

(8,393)

(6,602)

(2,387)

(8,989)

Carriage

(3,173)

(1,909)

(5,082)

(6,356)

(756)

(7,112)

Online selling costs

(434)

(76)

(510)

(1,424)

(86)

(1,510)

Trading contribution

7,590

5,257

12,847

3,001

6,324

9,325

Other operating expenses

 

 

(22,580)



(19,146)

Loss from operations

 

 

(9,733)



(9,821)

 

4. Revenue from contracts with customers

 

The Group operates the primary sales channels shown below, which form the basis on which management monitor revenue. UK Retail includes domestic grocers and high street retailers, Digital are sales through the phd.com and scienceinsport.com platforms, International Retail relates to retailers and distributors outside of the UK and Marketplace relates to online marketplaces such as Amazon and Tmall.

 


 

2023

 


2022



SiS

PhD

Total

SiS

PhD

Total


£'000

£'000

£'000

£'000

£'000

£'000


 

 

 




Digital

4,984

2,325

7,309

8,859

3,618

12,477

Marketplace

6,218

6,835

13,053

6,199

7,851

14,050

China

1,105

2,285

3,390

178

7,031

7,209

USA

3,548

-

3,548

-

-

-

Global online

15,855

11,445

27,300

15,236

18,500

33,736

International retail

8,322

4,257

12,579

6,491

3,904

10,395

UK retail

10,007

12,785

22,792

7,981

11,661

19,642

Retail

18,329

17,042

35,371

14,472

15,565

30,037

Total Sales

34,184

28,487

62,671

29,708

34,065

63,773

 

Turnover by geographic destination of sales may be analysed as follows:

 

 

Year ended

31 December

2023

£'000

Year ended

31 December

2022

£'000

United Kingdom


35,302

36,574

Rest of Europe


12,047

11,391

USA


3,548

4,670

Rest of the World


11,774

11,138

Total Sales


62,671

63,773

 

 

 



 

5. Operating expenses



 

Year ended

 31 December 2023

 

Year ended

31 December 2022



£'000

£'000



 


Sales and marketing costs


13,985

17,611

Operating costs


16,330

14,076

Depreciation and amortisation


6,250

4,808

Share based payment charge (1)


-

262

Administrative expenses


22,580

19,146



 


Total operating expenses


36,565

36,757

 

(1)       Includes associated social security credits/costs of £nil (2022: credits of £218,000)

 

6. Loss from operations

 

 

Loss from operations is stated after charging/(crediting):

 

 

Year ended

31 December

2023

 

Year ended

31 December

2022


 

£'000

£'000

 

 

 


Amortisation of intangible assets

 

3,827

2,919

Loss on disposal of intangible assets

 

879

-

Depreciation of right-of-use assets

 

993

963

Depreciation of property, plant and equipment

 

1,430

926

Research and development costs

 

464

249

Grant income in respect of research and development tax credits

 

(163)

(140)

A&P/Marketing costs

 

8,393

8,989

Impairment of trade receivables

 

520

489

Non-recurring costs and other items (breakdown detailed below)

 

5,476

2,062

 

Included within the amortisation of intangible assets is £686k (2022: £nil) of accelerated amortisation in relation to the corporate website.

 

Non-recurring costs and other items deducted in arriving at the Groups underlying EBITDA are analysed below:

 

 


Year ended

31 December

2023

£'000

Year ended

31 December

2022

£'000

 




Restructuring and one-off costs


1,975

888

Loss on disposal of intangible assets


879

-

Transition costs


2,092

1,075

Unrealised foreign exchange on intercompany balances


247

99

Other items


283

-

Total non-recurring costs and other items


5,476

2,062

 



 

The total fees for services provided by the Group's Auditor are analysed below:

 


Year ended

31 December

2023

£'000

Year ended

31 December

2022

£'000

Audit services




- Audit fees in respect of the parent company and consolidation


66

57

- Audit fees in respect of the subsidiary accounts


139

121

Non-audit services


 


- Corporation tax compliance


-

18

- Other taxation advisory


-

17

Total fees


205

213

 

7. Wages and salaries

 

The average monthly number of persons, including Directors, employed by the Group was:

 


Year ended

31 December

2023

Number

Year ended

31 December

2022

Number


 


Sales and marketing

57

56

Manufacturing

146

132

Administration

36

36

Directors

6

5

Total employees

245

229

 

Their aggregate emoluments were:

 


Year ended

31 December 2023

£'000

Year ended

31 December

2022

£'000


 


Wages and salaries

11,075

9,267

Directors' fees

24

181

Social security costs

1,155

1,048

Pension and other staff costs

310

294

Total cash settled emoluments

12,564

10,790

Share based payments - equity settled

-

480

Share based payments - social security costs/(credits)

-

(218)

Total emoluments

12,564

11,052

 

 



 

8. Directors' and Key Management Personnel remuneration

 

Amounts paid to the Directors of the parent company are analysed in the following table:

 

 

 

Year ended

31 December 2023

 

Year ended

31 December 2022


£'000

£'000


 


Directors

 


Aggregate emoluments and fees

698

653

Benefits in kind

4

7

Pension contributions

12

12

Total emoluments

714

672

Share based payment remuneration charge: equity settled

-

279

Total Directors' emoluments

714

951

 

Directors' fees of £24,000 (2022: £39,000) for one Director are paid through a limited company.

 

During the year, one Director participated in defined contribution pension schemes (2022: none). The number of Directors serving during the year who participated in the long-term incentive programme was 2 (2022: 2). A total of 9,852,866 share options were exercised by 2 Directors in the current year with a total gain of £1,157,712 (2022: none).

 

The highest paid Director received £278,000 (2022: £554,000) which was made up of salary, share-based payments and benefits in kind.

                                                                                                                                                                               

Directors' emoluments include amounts attributable to benefits in kind comprising private medical insurance on which the Directors are assessed for tax purposes. The amounts attributable to benefits in kind are stated at cost to the Group, which is also the tax value of those benefits.

 

The aggregate remuneration of members of Key Management Personnel (which includes the Board of Directors and other Senior Management Personnel) during the year was as follows:

 

 

 

 

Year ended

31 December

2023

Year ended

31 December

2022


£'000

£'000


 


Remuneration and short-term benefits

1,188

878

National insurance costs

160

99

Pension

12

-

Compensation loss of office

103

-

Post-employment benefits

-

3

Share based payments

-

167

Total amounts paid to Key Management Personnel

1,463

1,147

 

 



 

9. Finance costs

 

 

 

Year ended

31 December 2023

Year ended

31 December

2022


£'000

£'000


 


Interest expense on lease liabilities

436

442

Interest expense on asset financing

253

143

Interest expense on invoice financing

419

119

Interest expense on trade facility

399

53

Unwinding of dilapidation provision

51

-

Total finance costs

1,558

757

 

10. Taxation

 

 

 

Year ended

31 December

Year ended

31 December

 

2023

2022


£'000

£'000

 

 


Current tax

 


Overseas subsidiary taxation

(7)

(332)

Total current tax charge

(7)

(332)

 

Deferred tax

 


Effect of change in tax rates

-

270

Origination and reversal of temporary differences

19

790

Adjustment in respect of prior period

-

(1,060)

Total deferred tax credit

19

-


 


Total tax credit / (charge)

12

(332)

 

The tax assessed for the year is different from the standard rate of corporation tax in the UK. The differences are explained below:


 


Loss before tax

11,291

10,578


 


Loss before tax multiplied by a hybrid rate of corporation tax

in the UK of 23.52% (2022: standard rate of 19%)

2,656

2,010

Effects of:

 


Expenses not deductible for tax purposes

(423)

(366)

Fixed asset differences

6

186

Current year movement in respect of prior periods

22

-

Unrecognised deferred tax asset on losses carried forward

(2,772)

(2,498)

R&D expenditure credit received

38

48

Effect of changes in tax rate

155

357

Excess overseas tax suffered

-

(69)

Other

330

-

Total tax credit / (charge)

12

(332)

 



 

Tax on each component of other comprehensive income is as follows:

 


2023

2022


Before tax

Tax

After tax

Before tax

Tax

After tax


£'000

£'000

£'000

£'000

£'000

£'000








Profit recognised on hedging instrument

-

-

-

2

-

2

Exchange losses on the translation of foreign operations

54

-

54

(21)

-

(21)

Total

54

-

54

(19)

-

(19)

 

At 31 December 2023 UK tax losses of the Company available to be carried forward are estimated to be £38.6m (2022: £30.5m. The rate of UK Corporation tax increased from 19% to 25% on 6 April 2023, for the financial year ended 31 December 2023 a hybrid rate of 23.52% has been used. Existing deferred tax liabilities had been calculated at the rate at which the relevant balances were expected to be recovered or settled. This rate was 25% and therefore existing deferred tax liabilities have not had to be remeasured.

 

There are no future factors at the reporting date that are expected to impact the Group's future tax charge. The Group is not within the scope of the OECD Pillar Two model rules.

 

11. 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. The exercise of share options would have the effect of reducing the loss per share and is therefore anti-dilutive under the terms of IAS 33 'Earnings per share'.


 

 



Year ended

Year ended


31 December

31 December


2023

2022




Loss for the year attributable to owners of the parent - £'000

(11,279)

(10,910)

Weighted average number of shares

170,123,783

138,860,015

Basic loss per share - pence

(6.6p)

(7.9p)

Diluted loss per share - pence

(6.6p)

(7.9p)

 

The number of vested but unexercised share options is 2,896,615 (2022: 16,446,937).

 

 



 

12. Intangible assets

 

 

Goodwill

Brands

 

Customer relationships

Website and software development

Product development

Total


£'000

£'000

£'000

£'000

£'000

£'000

Cost







At 31 December 2021

17,398

8,957

5,638

5,740

2,309

40,042

Additions

-

-

-

1,195

746

1,941

At 31 December 2022

17,398

8,957

5,638

6,935

3,055

41,983

Additions

-

-

-

443

566

1,009

Disposals

-

-

-

(216)

(1,573)

(1,789)

At 31 December 2023

17,398

8,957

5,638

7,162

2,048

41,203








Amortisation







At 31 December 2021

-

2,763

1,738

2,930

894

8,325

Charge for the year

-

894

564

1,105

356

2,919

At 31 December 2022

-

3,657

2,302

4,035

1,250

11,244

Charge for the year

-

896

564

1,691

676

3,827

Disposals

-

-

-

(216)

(694)

(910)

At 31 December 2023

-

4,553

2,866

5,510

1,232

14,161








Net book value

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 December 2023

17,398

4,404

2,772

1,652

816

27,042

At 31 December 2022

17,398

5,300

3,336

2,900

1,805

30,739

 

Following a review of capitalised product development costs, there were several products where management were no longer able to justify the carrying value of the asset where products are no longer produced, formula has been superseded or commercial viability no longer exists. As a result, the assets have been disposed of leading to a loss on disposal of £879,000 which has been recognised in operating expenses.

The brand and customer relationships recognised were purchased as part of the acquisition of PhD Nutrition on 6 December 2018. They are considered to have finite useful lives and are amortised on a straight-line basis over their estimated useful lives of 10 years. The intangibles were valued using an income approach, using the Multi-Period Excess Earnings Method for customer relationships and Relief from Royalty Method for brand valuations.

 

The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.

The Group has estimated the value in use of PhD Nutrition based on a discounted cashflow model which adjusts for risks associated with the assets. The post-tax discount rate used to measure the CGUs value in use was 11.21% (2022: 9.74%).

The recoverable amount of the CGU has been determined from value in use calculations based on cash flow projections covering a period to 31 December 2028. The forecasts are based on a 3-year, board approved, strategic plan, which forecasts revenue growth ahead of the forecast market growth rate. For the period from 2028 revenue growth rates have been reduced to the forecast average growth rate for the sports nutrition market.

The Board approved cash forecast uses a growth rate of 11.1% for 2024 and 20% for 2025 to 2027. A growth rate of 15% for 2028 has been used which is aligned to long term historic PhD growth rates. From 2028 an annual growth rate of 1.5% is applied into perpetuity.

The key assumptions used in the discounted cashflow model were the discount rate, sales growth and gross margin. Gross margin percentages were based on 2023 actuals adjusted for expected improvements to the manufacturing cycle as well as extra costs around headcount and carriage that are appropriate with the future revenue growth rate.

The discount rate used in the discounted cashflow is based on a WACC analysis which takes into account estimates on the:

·      Risk-free rate (rate used is higher than the long-term UK government bond)

·      Equity risk premium (this is higher than the average equity risk premium in the UK)

·      Size premium (the same value as prior year has been used)

 

Sensitivity analysis

With regard to the assessment of value in use, a change in any of the above key assumptions could have a material impact on the carrying value of the cash-generating unit.

If any of the following changes were independently made to the key assumptions the carrying amount and recoverable amount would be equal:

·      5% absolute increase in the discount rate; or

·      70% decrease in EBITDA (years 1-5); or

·      A combination of 1% decrease in gross margin and 5% absolute decrease in the current revenue growth rate (years 1-5)

 



 

13. Property, plant and equipment

 

 

Leasehold improvements

Plant and machinery

Fixture, fittings and computer equipment

Motor vehicles

Capital work in progress

Total


£'000

£'000

£'000

£'000

£'000

£'000

Cost







At 31 December 2021

663

3,143

2,462

16

2,894

9,178

Additions

3,117

2,269

627

-

-

6,013

Transfers

711

632

-

-

(1,343)

-

At 31 December 2022

4,491

6,044

3,089

16

1,551

15,191

Additions

95

859

149

-

-

1,103

Disposals

(538)

(502)

(644)

(16)

-

(1,700)

Transfers

31

1,520

-

-

(1,551)

-

At 31 December 2023

4,079

7,921

2,594

-

-

14,594








Depreciation







At 31 December 2021

572

1,774

1,567

14

-

3,927

Charge for the year

184

347

395

-

-

926

At 31 December 2022

756

2,121

1,962

14

-

4,853

Charge for the year

312

681

437

-

-

1,430

Disposals

(538)

(502)

(635)

(14)

-

(1,689)

At 31 December 2023

530

2,300

1,764

-

-

4,594








Net book value














At 31 December 2023

3,549

5,621

830

-

-

10,000








At 31 December 2022

3,735

3,923

1,127

2

1,551

10,338








 

Capital Commitments

 

At 31 December 2023, the Group had £nil of capital commitments (2022: £nil).

 

 

14. Inventories

 


31 December

2023

31 December

2022


£'000

£'000


 


Raw materials

1,825

2,455

Finished goods

4,939

4,183

Total inventories

6,764

6,638

 

There is a provision of £1,505,000 included within inventories in relation to the impairment of inventories (2022: £452,000). The provision relates to the impairment of residual packaging stock following the change in gel machinery and a reduction in the number of active stock keeping units (SKUs). During the year, inventories of £34,334,000 (2022: £36,042,000) were recognised as an expense within cost of sales.

 



 

15. Trade and other receivables


31 December

2023

31 December

2022


£'000

£'000


 


Trade receivables

12,046

15,274

Less: provision for impairment of trade receivables

(700)

(281)

Trade receivables - net

11,346

14,993

Other receivables

1,408

1,046

Total financial assets other than cash and cash equivalents classified as amortised cost

12,754

16,039

Prepayments and accrued income

1,058

485

Total trade and other receivables

13,812

 16,524

 

Trade receivables represent debts due for the sale of goods to customers.

 

Trade receivables are denominated in local currency of the operating entity and converted to Sterling at the prevailing exchange rate as at 31 December 2023. The Directors consider that the carrying amount of these receivables approximates to their fair value. All amounts shown under receivables fall due for payment within one year. The Group does not hold any collateral as security.

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on similar credit risk and aging.

 

The expected loss rates are based on the Group's historical credit losses. The historical loss rates are then adjusted for current and forward-looking information affecting the Group's customers.

 

At 31 December 2023 the lifetime expected loss provision for trade receivables is as follows:

 

 

More than 60 days past due

Total

 

At 31 December 2023



Expected loss rate (%)

0%


Gross carrying amount (£'000)

1,324

13,519

Loss provision (£'000)

-

-

35

35

 

At 31 December 2022


 

 

 

 

Expected loss rate (%)

0%

0%

5%


Gross carrying amount (£'000)

13,271

776

1,227

15,274

Loss provision (£'000)

-

-

66

66

 

A further provision of £665,000 (2022: £215,000) has been included against specific debts considered impaired.

 

Movement in the provision in the year

 

Total

 



At 31 December 2022


281

Amount utilised in the year


(101)

Additional provision charged in the year




520

At 31 December 2023




700

 



 

16. Cash and cash equivalents


31 December

2023

31 December

2022


£'000

£'000

 

Cash at bank and in hand

 

2,144

 

930

 

Cash at bank and in hand is made up of the following currency balances:

 



 


British Pound

1,428

551

Euro

399

109

US Dollar

271

235

Australian Dollar

27

29

New Zealand Dollar

19

6


2,144

930

 

The Directors consider that the carrying amount of cash approximates to its fair value.

 

17. Trade and other payables


31 December

2023

31 December

2022


£'000

£'000

 

Trade payables

5,114

4,981

Accruals

8,728

7,226

Invoice financing

6,341

4,523

Trade facility

3,260

2,733

Total financial liabilities measured at amortised cost

23,443

19,463

Other taxes and social security

1,814

530

Total trade and other payables

25,257

19,993

 

The Directors consider that the carrying amount of these liabilities approximates to their fair value.

 

All amounts shown fall due within one year.

 

Invoice financing is the amount due to HSBC after drawing down from the £7.5m (2022: £6.0m) flexible invoice credit facility during the year. This facility contains both fixed and floating charges over all the property and undertakings of the parent company. Repayments and draw downs on the facility are a continuous process as and when invoice payments are collected from customers.

 

Additionally, a £3.5m uncommitted trade facility was entered into during the prior year which is secured on stock. The drawdowns on the trade facility during the year were £527,000 (2022: £2,733,000). Drawdowns on the trade facility are repaid over 90 days from the drawdown.

 

All banking working capital facilities were successfully renewed to April 2025 as part of an annual renewal cycle, with increases in the invoice financing facility to £8m (2023: £7.5m) and trade finance facility to £4m (2023: £3.5m).

 



 

18. Provisions for liabilities

 

The Group had the following provisions during the year:


 

VAT provision

 

Dilapidations provision

Total


 

£'000

£'000

£'000






At 1 January 2023


513

388

901

Additions to the income statement


98

731

829

At 31 December 2023

 

611

1,119

1,730






Due within one year

 

611

60

671

Due in over one year

 

-

1,059

1,059

 

Following an HMRC VAT assessment in the prior year, a small number of Bar products in the PhD range that were previously classed as zero-rated have been assessed by HMRC as standard rated for VAT purposes. The total exposure on these products is £0.6m (2022: £0.5m).

 

In determining the appropriate accounting treatment, management has taken into consideration the decision reached by the First-tier Tribunal in a current case an unrelated Group has ongoing for a similar product. In this case, the Tribunal decided in favour of HMRC that the flapjacks were standard rated. Whilst this decision is being appealed and could be reversed by the Upper-tier Tribunal, given the precedent set, management has determined it appropriate to recognise a provision for the full amount. An equal and opposite other receivable has been recognised for this amount as management consider it virtually certain that it will be recovered from customers by the Group.

 

A dilapidations provision has been increased during the year in conjunction with the new Blackburn operating site. The estimated cost is expected to bring the property back, at the end of the lease, into the same condition it was in at the start of the lease. There are 13 years remaining on the initial lease term at the yearend. There is therefore uncertainty over the final amount and timing of the cashflows. Management have utilised their best estimate of the future obligation at the yearend and will be engaging an independent surveyor in the year to continue to monitor the appropriateness of the provision.

 

19. Deferred tax

 

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 25% (2022: 25%). Details of the deferred tax asset and liability, amounts recognised in profit or loss and amounts recognised in other comprehensive income are as follows:

 

Year ended 31 December 2023:

Asset

Liability

Net

(Charged)/ credited to profit or loss

(Charged)/ credited to equity


£'000

£'000

£'000

£'000

£'000







Accelerated capital allowances

19

-

19

19

-

Available losses

1,786

-

1,786

(365)

-

Other temporary differences

-

-

-

-

-

Business combinations

-

(1,786)

(1,786)

365

-

Net tax assets/(liabilities)

1,805

(1,786)

19

19

-

 

 



 

Year ended 31 December 2022:

Asset

Liability

Net

(Charged)/ credited to profit or loss

(Charged)/ credited to equity


£'000

£'000

£'000

£'000

£'000







Accelerated capital allowances

-

-

-

71

-

Available losses

2,151

-

2,151

(428)

-

Business combinations

-

(2,151)

(2,151)

357

-

Net tax assets/(liabilities)

2,151

(2,151)

-

-

-

 

SiS (Science in Sport) Limited has a cumulative assessed tax loss of £38.6m as at 31 December 2023 (2022: £30.5m). The losses are split into pre 1 April 2017 losses of £4.2m (2022: £4.2m) and post 1 April 2017 losses of £34.4m (2022: £26.3m). SiS (Science in Sport) Limited can utilise its assessed tax losses in the coming years against future expected profits. Assessed losses from before 1st April 2017 can only be used against SiS (Science in Sport) Limited profit whereas assessed tax losses from after 1st April 2017 can be used to offset the future profits from SiS (Science in Sport) Limited and PhD Nutrition Ltd profits. Tax losses have not been recognised as a deferred tax asset due to the uncertainty of the timing of recoverability based on recent results; the Group will continue to assess recoverability.

 

20. Leases

 

The Group leases several properties in the jurisdictions from which it operates. In all jurisdictions the rates are fixed over the lease term.

Right of use assets

 

Land and buildings

£000

Vehicles

£000

 

 

Total

£000

Cost




At 31 December 2021

10,902

14

10,916

Additions

1,041

-

1,041

Disposals

(201)

-

(201)

At 31 December 2022

11,742

14

11,756

Additions - leased assets

325

-

325

Additions - dilapidations provision

655

-

655

Disposals

(3)

-

(3)

At 31 December 2023

12,719

14

12,733





Amortisation




At 1 January 2021

257

-

257

Charge for period

949

14

963

At 31 December 2022

1,206

14

1,220

Charge for period

993

-

993

At 31 December 2023

2,199

14

2,213





Net book value




At 31 December 2023

10,520

-

10,520





At 31 December 2022

10,536

-

10,536

 

 



Lease liabilities



Total


£'000


 

At 1 January 2023

10,676

Additions

325

Disposals

(3)

Interest expense

436

Lease payments

(742)

At 31 December 2023

10,692

Current

789

Non current

9,903

 

 

The maturity analysis of the contractual undiscounted lease liabilities is shown in the following table:

 

Up to 3 months

Between 3 and 12 months

between 1 and 2 year

Between 2 and 5 years

Over 5 years

Total

 

£'000

£'000

£'000

£'000

£'000

£'000








At 31 December 2023

315

884

1,051

3,030

8,434

13,714

 

Short term and low value lease expenses in the year were nil. In the previous year short term leases, classified as operating leases, related to rental property in UK and Italy totalling £120,000.

 

 21. Share capital

 

Ordinary

10p shares

Ordinary

10p shares

 

Number

£'000




Authorised share capital

221,000,000

22,100

 

 

Allotted, called up and fully paid

 

Ordinary

10p shares

Ordinary

10p shares


Number

£'000

At 1 January 2022

135,100,931

13,510

Share issue - 5 May 2022

3,985,477

399

Share issue - 21 October 2022

33,333,333

3,333

At 31 December 2022

172,419,741

17,242

Share issue - 29 December 2023

9,852,866

985

At 31 December 2023

182,272,607

18,227

 

The Company has one class of Ordinary shares which carry no rights to fixed income.

 

On 29 December 2023, the Company issued and allotted 9,852,866 new Ordinary shares which were used to satisfy the exercise of share options. At 31 December 2023 the Employee Benefit Trust held in reserve 2,045,230 new Ordinary shares of 10p each to be issued as share options (2022: 4,293,194 new Ordinary shares of 10p each).

 

22. Share options

 

In June 2014 the Company adopted a Share Option Plan ("SOP"). The key terms of the SOP are substantially the same as set out in the AIM Admission Document which is available on the Group's website. Under the SOP, options to purchase Ordinary shares may be granted by the Remuneration Committee to Directors, Senior Executives and potentially other employees at nil-cost.

 

To enable the Company to grant nil-cost options it has established an Employee Benefit Trust to purchase, hold and transfer the Ordinary shares pursuant to the options.

 

The SOP is managed by the Remuneration Committee on behalf of the Company. The Company will grant each participant an option subject to the terms and conditions of each participant's individual option agreement (including performance conditions) and the SOP rules. Each participant may be granted either annual or long term (three- or five-year vesting period) options or both. Annual options may be settled in either cash or shares at the sole discretion of the Remuneration Committee. As at 31 December 2023, 2,045,230 (2022: 4,293,194) shares were held by the Employee Benefit Trust in respect of options awarded to the Directors in respect of previous years. All other annual options have been treated as equity settled options.

 

In the event that the option holder's employment is terminated before vesting, the option may not be exercised unless the Remuneration Committee so permits. Options expire 10 years from date of grant.

 

The Board approved an LTIP element of the SOP on 22 September 2016 which relates to revenue growth achievement. This award replaces the existing five-year LTIP, the three-year revenue growth phase of this scheme vested in March 2016 and was then planned to be a profit plan for two years thereafter. Following the raising of additional capital in October 2015, the strategy has continued to be focussed on revenue growth following the completion of the first three years of the previous LTIP.

 

An additional LTIP scheme for 2019-2021 was approved during the prior year, and a new LTIP scheme for 2022-2024 was approved during the current year. Further information on the schemes can be found in the Remuneration report.

 

There is no charge for the year relating to employee share-based payment plans. In 2022 the charge was £262,000, which mainly relates to 2021 STIP & LTIP and 2019 LTIP equity settled share-based payment transactions, with social security credits of £218,000.

 

Options granted during the period

During the year ended 31 December 2023, no options were granted under the short term and long-term incentive plan with regard to performance in the year ended 31 December 2022 or 31 December 2023.  All options have a nil exercise price and no market-based performance conditions.

 

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

 

Weighted average exercise price

Weighted average share price at date of exercise

 

 

 

Share options


pence

pence

Number



 

 

Options at 1 January 2022

nil

-

10,820,373

Granted during year

nil

58p

4,037,471

Exercised

nil

50p

(1,276,351)

Forfeited during year

nil

-

-

Outstanding at 31 December 2022

nil


13,581,493





Granted during year

nil

-

-

Exercised

nil

12p

(12,100,830)

Forfeited during year

nil

11p

(629,278)

Outstanding at 31 December 2023

nil

 

851,385

 

The exercise price of all options outstanding at the end of the year was nil. The average remaining contractual life for these options as at 31 December 2023 was 0.5 years (2022: 6.4 years). Of the 851,385 outstanding share options at the yearend, 350,835 were exercised following the yearend, 320,751 lapsed following the yearend and 179,799 remained exercisable at the date of signing these financial statements with no further vesting conditions.

 

23. Reserves

 

Share premium

Amount subscribed for share capital in excess of nominal value less costs directly attributable to the issue of shares.

Employee Benefit Trust reserve

Shares in the Company held by the Employee Benefit Trust which will be used to settle options held by employees under the SOP.

Cash flow hedge reserve

Gains/losses arising on the effective portion of hedging instruments carried at fair value in a qualifying cash flow hedge. There were no movements in cash flow hedges in the current or prior year. There remains a historic cash flow hedge reserve on the consolidated statement of financial position as a result of previous cash flow hedge accounting.

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 in August 2013 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 acquiree).

Retained deficit

Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

Foreign exchange reserve

Arises on the translation of foreign subsidiaries into Sterling at the year-end date.

 

24. Pension costs

 

The pension charge represents contributions payable by the Group to independently administered funds which during the year ended 31 December 2023 amounted to £310,000 (2022: £294,000). Pension contributions payable but not yet paid at 31 December 2023 totalled £59,000 (2022: £49,000).



 

25. Related party transactions

 

IAS 24 'Related Party Transactions' requires the disclosure of the details of material transactions between reporting entities and related parties. Transactions and balances with group companies are eliminated on consolidation and therefore do not need to be disclosed.

 

There were no other related party transactions during the financial year, nor any balances outstanding at the end of the financial year.

 

26. Financial instruments

 

Financial instruments at amortised cost

 

 

31 December

2023

31 December

2022


£'000

£'000


 


Financial assets measured at amortised cost

14,898

16,969


 


Financial liabilities measured at amortised cost

37,691

33,983

 

Financial assets comprise cash and cash equivalents trade and other receivables. Financial liabilities comprise trade payables, accruals, hire purchase, invoice financing, trade facility, asset financing and lease liabilities.

 

27. Hire purchase agreement

 


31 December

2023

31 December

2022


£'000

£'000


 

 

Current portion of hire purchase obligation

82

80

Long term portion of hire purchase obligation

-

82

Total hire purchase obligation

82

162

 

28. Asset financing

 

An asset financing agreement was entered into in 2021 with Lombard Equipment Finance to fund capital expenditure for the Blackburn single site operations facility. The full amount funding has now been received and totals £3,553,000. The Group's obligation is to repay the financing over 60 months, the first repayment occurred in July 2022.

 

This agreement with Lombard contains both fixed and floating charges over all the property and undertakings of the parent company.



 

 


31 December

2023

31 December

2022


£'000

£'000


 

 

Current portion of asset financing obligation

1,192

843

Long term portion of asset financing obligation

2,282

2,839

Total asset financing obligation

3,474

3,682

 

The maturity analysis of the undiscounted asset financing obligations is shown in the following table:

 

Up to 3 months

Between 3 and 12 months

between 1 and 2 year

Between 2 and 5 years

Total

 

£'000

£'000

£'000

£'000

£'000







At 31 December 2023

366

1,098

1,185

1,295

3,944

 

29. Notes to the cash flow statement

 

The following table shows a reconciliation of the changes in liabilities arising from financing activities during the year.

 


1 January

2023

Cash flows

Non-cash changes

31 December 2023


£'000

£'000

£'000

£'000





 

Cash and cash equivalents

930

1,461

(247)

2,144

Asset financing

(3,682)

208

-

(3,474)

Invoice financing

(4,523)

(1,818)

-

(6,341)

Trade facility

(2,733)

(527)

-

(3,260)

Lease liabilities

(10,676)

306

(322)

(10,692)

Total

(20,684)

66

(1,005)

(21,623)

 

Non-cash changes in cash are in relation to unrealised foreign exchange differences. Non-cash changes in lease liabilities are in relation to additions and disposals (note 20).

 

30. Contingent liabilities

 

Following an HMRC VAT assessment in the prior year, a small number of Powder products in the PhD range that were previously classed as zero-rated have been assessed by HMRC as standard rated for VAT purposes. VAT at the standard rates on sales of these products in the period December 2018 to 31 December 2021 is £0.7m. Management are challenging HMRC's assessment and have determined the probability of an outflow of resources is low. Accordingly, a contingent liability has been disclosed for this amount.

 

To the extent there is any liability due to HMRC, the Group will seek to recover this from customers.

 

31. Post balance sheet events

 

There are no events subsequent to the reporting date which would have a material impact on the financial statements.

 



 

32. Parent company guarantees

 

As the ultimate parent undertaking, Science in Sport plc is providing SIS (Science in Sport) (included within these Group consolidated financial statements) with guarantees of its debts in the form prescribed by Section 479C of the Companies Act 2006 ("the Act") such that the subsidiary can claim exemption from requiring an audit in accordance with section 479A of the Act. This guarantee covers all of the outstanding actual and contingent liabilities of this company as at 31 December 2023.

 



[1] Earnings before interest, tax, depreciation, amortisation, loss on disposal of intangible assets, share-based payments, restructuring costs, transition costs, unrealised foreign exchange on intercompany balances and other non-EBITDA one-off costs

[2] Adjusted net debt is defined as cash, less banking working capital facilities, asset financing and other payables and excludes property leases

 

[3] Source - Euromonitor October 2022


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