Sosandar : Full Year Results

Date:	11 July 2023
On behalf of:	Sosandar plc ('Sosandar' or 'the Company')
Embargoed until:	0700hrs

Sosandar plc

Full Year Results

A milestone year delivering first full year of profitability and laying the foundations for next stage of growth journey

Sosandar PLC (AIM: SOS), one of the fastest growing fashion brands in the UK creating quality, trend-led products for women of all ages, is pleased to announce its financial results for the year ended 31 March 2023 and an update on trading for Q1 of the current financial year.

FY23 has been a transformational year for Sosandar as the Group delivered a strong financial performance including increases in both revenue and profitability despite the challenging macroeconomic conditions. Sosandar has seen continued progression against its KPIs with growth across all metrics on its own site and sustained momentum with third party partners.

FY2023 Financial Highlights

• Revenue growth of 44% to £42.5m (FY22: £29.5m)
• First full year of profitability, delivering PBT of £1.6m which is a £2.2m positive swing versus the previous year (FY22: £0.6m loss)
• Gross margin maintained at 56.1% (FY22: 56.0%) despite growth in revenue through lower margin wholesale channel
• Net cash of £10.6m as at 31 March 2023 (FY2022: £7.0m) following strong trading and an oversubscribed fund raise in February 2023

FY2023 Operational and Strategic Highlights

• The Company continues to deliver increasing levels of customer engagement on Sosandar.com with all KPIs increasing YoY:
  o Total orders increased 22% to 621k
  o Active customers increased 19% to 265k
  o Conversion Rate of 4.11%, up from 3.87% in FY2022
  o Average order frequency continues to grow, now at 2.34 times per annum
• The fast-tracked development of key product lines has proven successful with all identified lines meeting or exceeding expectations with strong sales of knitwear, formal tailoring, coats and occasion wear
• Trading with our now well-establishedthird-party partners, including Next and Marks and Spencer, has been extremely strong, with a record quarter for the Group delivered through third parties in Q3 FY23 followed by a strong Q4
• Successful initial online launch of partnership with J Sainsbury's is currently performing in line with expectations and the in-store rollout of our curated collection is on track for launch in September 2023
• Accelerated investment in strategic growth initiatives following a successful over-subscribed equity fundraise of £5.5m in January 2023

Post-period Trading Highlights

• Strong start to Q1 FY2024 with revenue of £11.4m, up 10% against a strong prior year comparator, with the impact of strategic initiatives to come through in H2 FY24
• Global-eto go live in July 2023 allowing the Company to transact and fulfil orders worldwide in a cost-effective manner
• Current trading in line with market expectations reflecting strong performance on both own site and through third-party partners
• Product across all categories has continued to resonate with customers with particularly strong sales of summer occasion wear and holiday clothing

• • Mobile app is currently in user testing and is expected to launch in Q2 FY24
  • Partnered with Bloomreach, a market leading customer data platform, to deliver a more bespoke and data driven customer experience with a full launch expected in July 2023
  • Signed a new third-party wholesale partnership with Freemans, part of the Otto Group, to commence in September 2023
  • Cash at 30 June 2023 of £10m, reflecting further investment in inventory and continued strong trading
• Sosandar believes that market expectations for the year ending 31 March 2024 are currently revenue of £57.0 million, and PBT of £2.8 million.

FY2023 KPIs (Own Site)
	Year ended 31 March	Year ended 31 March
	2023	2022	Change
	£'000	£'000
Sessions	15,091,247	13,141,632	15%
Conversion rate	4.11%	3.87%	24bps
Number of orders	620,977	508,473	22%
AOV	£97.27	£90.39	8%
Active customers	264,832	223,253	19%
Average Order Frequency	2.34	2.28	3%

Ali Hall and Julie Lavington, Co-CEOs commented:

"We are delighted to report on what has been a transformational year for Sosandar. Despite the challenging macroeconomic backdrop, we have seen increasing demand for our products across all categories with strong trading across both Sosandar.com and through our third-party partners. The sustained growth in revenue and profitability throughout the period is testament to our ability to deliver a unique quality product offering and highly effective marketing strategy, that resonates with our customer base. Our success to date would not be possible without the commitment and dedication of our team and we would like to take this opportunity to extend our appreciation to all of our staff for their hard work during the year.

As Sosandar continues to grow, we remain committed to investing in our product range to offer our customers an ever-growing variety of on-trend, affordable, long lasting, lifestyle appropriate clothes. We are delighted to report that demand for our fast-tracked product range has continued to increase with knitwear, formal tailoring, coats, partywear, summer occasion wear and swim and beach wear all performing particularly well during the year.

Our third-party partnerships continue to perform extremely well and we were delighted to become an omnichannel retailer through our partnership with Sainsbury's. The partnership will accelerate growth in our market share and the awareness of our brand as we provide our large but underserved demographic with more opportunities to purchase our unique and diverse products. We are also excited that we will imminently be able to transact and fulfil orders worldwide through our agreement with Global-e which is set to go live this month, providing women across the globe with access to our unique and diverse product range.

The momentum built throughout FY23 has continued into FY24 with current trading in line with expectations. We are very excited for the opportunity available to us in FY24 and beyond as we deploy the money raised from our over-subscribed equity fundraise in January 2023 to support our growth both in the UK and internationally."

Presentations

Sosandar is hosting a webinar for analysts at 09:00 hrs BST today. If you would like to register, please contact [e-mail]

The Company is also hosting a webinar for retail investors at 12:30 hrs BST today. If you would like to attend, please register here: https://bit.ly/SOS_FY_results_webinar

Enquiries
Sosandar plc	www.sosandar.com
Julie Lavington / Ali Hall, Joint CEOs	c/o Alma PR
Steve Dilks, CFO
	[phone]
Singer Capital Markets
Peter Steel / Tom Salvesen / Alaina Wong
Alma PR Limited (Financial PR)	[phone]
Sam Modlin / Matthew Young	[e-mail]

This announcement contains inside information for the purposes of the retained UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

About Sosandar plc

Sosandar is one of the fastest growing women's fashion brands in the UK targeting style conscious women who have graduated from price-led alternatives. The Company offers this underserved audience fashion-forward, affordable, quality clothing to make them feel sexy, feminine, and chic. The business sells predominantly own- label exclusive product designed in-house.

Sosandar's product range is diverse, providing its customers with an array of choice for all occasions across all women's fashion categories. The company sells through Sosandar.com and has brand partnerships in place with Next, John Lewis, Marks & Spencer, The Very Group, JD Williams and J Sainsbury.

Sosandar's strategy is to continue growing brand awareness and expand its customer database, whilst also further driving its high levels of customer retention. This is achieved through its exceptional products, seamless customer experience and impactful, lifestyle marketing activities all of which is underpinned by combining innovation with data analysis.

Sosandar was founded in 2016 and listed on AIM in 2017. More information is available at www.sosandar-ir.com

Chairman's Statement

Introduction

I am pleased to be reporting my first set of results as Chairman of Sosandar. I took over as Interim Chairman in incredibly sad circumstances following the sudden death of Bill Murray in February this year. Bill was with Sosandar from the beginning and played an important part in steering the Group to the great success it has achieved. He has left a lasting legacy on the business.

FY23 has been a pivotal year for Sosandar and it is pleasing to report a set of results which demonstrates another period of significant momentum across all aspects of the business. The Group has delivered substantial increases in revenue, gross margin and scale economies, whilst also delivering its first full year of profitability. This performance once again demonstrates the desirability of the Sosandar product range with our customers and its managements' ability to steer the business through the challenging backdrop we have faced.

This outstanding performance has been driven by the continued success across both our own site as well as our third-party partners. Sosandar.com is the heart of the Group's success and is the lifestyle hub where customers access the complete Sosandar experience including the full extent of our diverse range. This site is continually updated with new product and content and we are constantly working and investing to ensure that we maintain

1. seamless customer experience through this channel. Trading with our now well-establishedthird-party partners, John Lewis, Marks and Spencer, NEXT, The Very Group and JD Williams, has been extremely strong, with a record quarter for the Group delivered through third parties in Q3 FY23 followed by a strong Q4. In January, we were delighted to secure a new partnership with another renowned British retailer, J Sainsbury's.
   This partnership has elevated our strategy from pureplay to an omnichannel brand and will enable us to provide our large but underserved demographic with more opportunities to purchase our unique and diverse products.

Executing the next stage of our growth strategy

In February 2023 we successfully completed an over-subscribed equity fundraise of £5.5m of net proceeds, with both existing and new investors showing support for the business and its plans for future growth. These funds will provide the balance sheet flexibility to enable us to execute our omni-channel strategy, starting with increasing stock from Autumn/Winter 2023 for the in-store launch with Sainsbury's, fast-tracking other growth initiatives and accelerating our proven customer acquisition model.

Despite the strength of the sustained performance over the past two years, we continue to see a number of opportunities for further growth both on our own site and through our third-party partners in the coming months and beyond as we to move forward with our objective to make Sosandar one of the largest womenswear brands globally. As a result, as previously announced, in order to prepare for further momentum in FY24, we brought forward investment in some growth initiatives in the latter part of Q4 FY23 that were originally planned for FY24. These investments are centred around operations, technology platforms and international strategy, which will help support and develop the Group's future growth initiatives.

Nurturing and investing in our team

The Sosandar team is the heartbeat of the business. Our 85 employees continuously show dedication, creativity, enthusiasm and passion for the Sosandar brand. The culture that transmits throughout the organisation is testament to the team that has been built and the performance that we have delivered over the past year would not have been possible without their commitment to the Sosandar brand and customers.

As previously announced, in the latter part of Q4 FY23 we further strengthened Sosandar's operational capabilities in order to ready ourselves for the opportunities ahead with the recruitment of an Ecommerce Director, Commercial International Director and Head of Operations. Their significant experience will help us continue to execute against the next stage of our growth strategy.

Maintaining effective governance

The Board of Sosandar remains committed to maintaining and enhancing our corporate governance framework. We have an agile, balanced board, able to make decisions based upon robust assessment and evaluation, but always in a timely fashion.

In September 2022, we were delighted to welcome Lesley Watt to the Group's Board as a Non-Executive Director. Lesley has provided a wealth of knowledge and experience with her appointment to the board. At the same time, we announced that Mark Collingbourne would step down from the Board having supported the Group as Group Finance Director and subsequently as a Non-Executive Director.

Being a responsible business

As a business we are committed to having a positive impact on our society, the environment, and our team. We acknowledge there is increasing interest from a wide range of stakeholders on the various positive impacts that the business has and what we are doing to improve outcomes. As we continue on our growth journey, we will further expand our activity, with an ambition to increase the positive, lasting impact Sosandar has on the fashion industry.

Outlook

The current financial year has started pleasingly, and we are trading in line with our expectations for full year growth. The investments that were made in Q4 FY23 are already bearing fruit across the business, and we are making large strides operationally with the development of our technology platform and finalising our international strategy. The Sosandar product range continues to resonate with our customers and we are committed to ensuring that we offer them a seamless customer experience through all of our sales channels, and continuing to deliver for all our stakeholders.

Nicholas Mustoe

Chairman

CO-CEO'S STATEMENT

A milestone year

FY23 has been a milestone year for Sosandar. Over the last six years, the business has grown from a true startup to what is now a profitable brand delivering multi-million-pound revenue with clothes being sold in the UK's biggest retailers.

Sosandar's sustained progress to date is testament to our ability to deliver a unique quality product offering and highly effective marketing strategy that resonates with our customer base. We have continued to drive momentum within the business and the success of our strategy is reflected by the 44% growth in sales during the period and substantial positive swing of PBT to £1.6m, marking the first year of profitability for Sosandar. This performance is even more notable when considering it has been achieved against the backdrop of some of the most challenging macroeconomic conditions facing the retail sector in decades.

While we have achieved considerable financial and operational success during the year, we have not rested on our laurels and in the latter part of Q4 we took the decision to make investments in order to accelerate our growth strategy to capitalise on the considerable opportunity available to us in the market right now and build the infrastructure to start serving our target customers internationally. These investments have been made possible following our recent over-subscribed equity fundraise in February 2023 which saw Sosandar raise £5.5 million of net proceeds from both existing and new shareholders. We would like to thank all who took part in the raise, and we are excited to utilise this capital to accelerate investments as we begin the next phase of our growth journey.

As ever, the growth achieved during the year is a result of the hard work and dedication of our valued staff and partners. We would like to take this opportunity to extend our sincere gratitude to everyone who has contributed to this transformational year for the Group.

While we are so pleased with progress made throughout FY23, it is tinged with sadness following the sudden passing of our former Chairman, Bill Murray, in February 2023. Bill will be deeply missed by all of the Sosandar team, and he has left a lasting legacy on the business.

Our vision and purpose

Our vision is to become one of the largest womenswear brands globally. Our purpose is to empower women of all ages to feel good in the clothes they wear, catering to the burgeoning 'ageless' generation. Our incredibly strong performance has evidenced the success of our strategy to allow women of all ages to feel sexy and chic through our unique and diverse range of products.

There is an ongoing shift in the consumer mindset towards fashion; women are leaving behind dated ideas of what they must wear at what age, and instead embracing clothes that make them feel good, work in their everyday lives and reflect their individual personalities. Our offering is ideally placed to cater to this trend.