Interim Results and Trading Update

Strong autumn trading, improved margins and tracking in line with full year market expectations

Sosandar PLC (AIM: SOS), one of the fastest growing fashion brands in the UK, creating quality, trendled products for women of all ages, is pleased to announce its financial results for the six months ended 30 September 2023 and a post period trading update covering October and November.

Post-period Trading Highlights (October and November)

Autumn trading has been strong, and the Company is trading in line with full year market expectations. All channels have performed well with strong revenue growth, increased gross margin, positive pre-tax profit in both months and a record month of trading in November, with similar momentum in December to date.

• Revenue for October and November in excess of £10m, a 16% increase on the same period last year and a significant improvement on the 6% growth achieved in H1 FY24
• Gross margin up 430bps versus H1 FY23 from 55.4% to 59.8%, reflecting the planned reduction in price promotional activity
• Strong performance on own site and one of the top selling brands across all third-party partners including Next and M&S
• Substantial progress towards opening our first own stores, with locations identified ahead of planned launch early in FY25
• Sainsbury’s brand-new fashion concept stores went live in early October with a wide range of Sosandar product selling well in all nine stores
• Signed new agreements with two large prestigious international third-party partners: The Iconic in Australia which has recently launched and The Bay in Canada, which is expected to launch during the latter part H2 FY24
• Balance sheet remains robust with cash position increasing to £7.3m at 30 November 2023

Half Year Financial Highlights

• Net revenue growth of 6.0% to £22.2m (HY23: £21.0m)
• Loss before tax of £1.3m (HY23: £0.1m profit)
• Gross margin increased to 55.4% (H1 FY22: 54.4%)
• Net cash of £7.0m as at 30 Sept 2023 (FY23: £10.6m)

Ahead of our considered move towards a multi-channel model aiming to significantly increase our addressable market, in Q2 FY24 we trialled a reduction in price promotional activity across our own site. The performance in the period reflects this trial which, as expected, resulted in a material improvement in average order value and margin with the anticipated reduction in site visits, orders and conversion. The planned roll out of our store estate over the medium term is specifically designed to deliver profitable growth as a result of less discounting and accelerate delivery of our medium-term target of £100m+ revenue and a 10% margin.

Operational and Strategic Highlights

Successful launch with Global-e, a world leading platform, enabling the Company to transact
and fulfil orders worldwide to over 60 countries in a cost-effective manner. Sales data is being
used to inform future international opportunities based on where the Sosandar brand is
performing well

• Product across all categories continued to resonate with customers with particularly strong sales of summer occasion wear and holiday clothing in H1 FY24, with partywear and knitwear being standout categories in autumn to date
• Trading with well-established third-party partners has continued to be strong with the success of the Sosandar product resulting in increased collaboration with our partners, including new partnership with Freemans launched in September
• The mobile app, which went live in July, has performed very well, with c70,000 downloads to date and generating already 10% of own site sales at higher conversion rates than through mobile web browsing

Ali Hall and Julie Lavington, Co-CEOs commented:

“Over the past six months, we have made significant steps on our journey to become a multi-channel retailer whilst also expanding the reach of the Sosandar brand. We are delighted to have launched new partnerships with Sainsbury’s and Freemans, signed our first agreements with two large prestigious international third-party partners and announced that we intend to open our first own stores in Spring 2024.

“Our product remains the key driver of our success and keeps our customers returning to us for their wardrobe needs. Throughout the period, we saw growth across all product ranges with particular success in our summer occasion wear and beach and swim ranges over the summer. In the lead up to Christmas we have seen extremely strong sales across all categories with party wear, dresses, tailoring, knitwear and smart trousers being standout items.

“Trading in the second half of the financial year to date has been encouraging, in line with full year market expectations, with November a record month of trading. This strong performance has been delivered across all our channels.

“Looking ahead, we believe that the future is very bright as we take the Sosandar brand to more customers across the UK and worldwide and move further towards reaching our strategic goal of delivering £100m+ revenues and a pre-tax profit margin of at least 10% in the medium term.”

*Sosandar believes that market expectations for the year ending 31 March 2024 are currently revenue of £46.8
million and PBT of £0.1 million.

Presentations

Sosandar is hosting a webinar for analysts at 08:30 hrs GMT today. If you would like to register, please contact sosandar@almastrategic.com

The Company is also hosting a webinar for retail investors at 12:00 today. If you would like to attend, please register here: https://bit.ly/SOS_H124_webinar