Half Year Results and Trading Update

Strong revenue growth, substantial improvement in EBITDA losses and acceleration of sales into the autumn.

Sosandar PLC (AIM: SOS), the online women’s fashion brand, is pleased to announce its financial results for the six months ended 30 September 2020 and an update on trading to the end of November 2020.

Financial Highlights
· Revenue growth of 52% to £4.28m (H1 2020: £2.81m)
· Gross profit of £2.24m, a 48% increase on the prior year (H1 2020: £1.51m)
· Significant improvement in EBITDA loss, narrowing to £1.02m (H1 2020: £2.71m)
· Maintained strong gross margin of 52.3% (H1 2020: 53.6%), with small reduction driven by actions taken during initial lockdown
· Net cash of £4.30m as at 30 September 2020 demonstrating continued careful cost management

Operational and Strategic Highlights
· High levels of customer engagement with repeat orders during the period, up 88% year on year
· Significant improvement in marketing ROI with a 26% increase in new customers despite a 47% decrease in marketing spend
· Rapid expansion of product range into more casual styles with great successes seen in denim, loungewear and knitwear
· Reduction in returns rate from 49% to 42%
· Successful launch on John Lewis and Next websites with good sales across all product categories

Autumn Trading Highlights
· The re-introduction of carefully controlled customer acquisition from September to November has delivered strong results with a record month of revenue in October
· Monthly sales for September to November increased by 115% compared to the average for the prior five months
· New daily record for revenue achieved in November
· 17% growth in revenue vs the same three-month period last year, delivered with a 49% reduction in marketing spend and a reduction in cost of acquisition of 52%
· 28% increase in new email sign ups in just three months has further strengthened the Company’s database and should underpin sales for future months
· Strong cash position maintained in excess of £4.0m as at 30 November 2020

H1 FY2021 KPIs

Ali Hall and Julie Lavington, Co-CEOs commented:

“We are delighted to be reporting strong revenue growth and a significant improvement in EBITDA despite one of the most challenging periods ever for the retail industry. It is a real achievement and testament to the fantastic team we have built at Sosandar, that we have delivered increased sales, better cost efficiency, better engagement with customers, grown our database and quickly expanded our product range, whilst at the same time significantly reducing marketing spend.

From September onwards, we cautiously increased expenditure on new customer acquisition and trading has quickly gained momentum. We are very pleased to be exceeding the record highs seen last autumn on half the marketing spend.

As one would expect, we are now selling a much wider range of casual and at-home product than before. However, the Sosandar customer has also not lost a taste for glamour, with sales of sequins, leather, fur coats and knee boots remaining strong.

Looking ahead, whilst there remain short term uncertainties due to Covid-19, our long-term focus has not wavered and continues to be on the development of our product, infrastructure and service, alongside most importantly, further building our customer base. The scale of our opportunity is substantial and we are well placed to deliver on our ambition for Sosandar to be a long-term, sustainable success.”