Science In Sport Share Discussion Threads

[glasshalfull] 13/4/2014 12:24

Strong management team that developed Lucozade brand and operating in the growing sports nutrition market, are now ramping up e-commerce offering & International opportunities.

Looks good value down here and undernoted tweet contains link to Edmond Jackson's view.

@Glasshalfull1: SIS @ScienceinSport Sale of endurance nutritional products growing strongly via events like @LondonMarathon #TMFPP

Regards,
GHF

[lafin] 09/4/2014 21:46

SIS products are now being sold on Amazon Germany



and here

as well as many other places too numerous to mention on the internet as well as in supermarkets,cycle shops etc.
It's not just from their own website.
Take a look on Google under science in sports products.


and this in Evening Standard today



" It began distributing in the Asia Pacific region from a wholly-owned company in New Zealand in November and next month begins supplying eight European countries through Japanese sports gear distributor Shimano."


and share sites




and here for sale in portugal

[theuniversal] 09/4/2014 19:29

I thought this link is relevantArticle: EU proposes new shareholder powers over executive payEU proposes new shareholder powers over executive payhttp://www.bbc.com/news/business-26951115

[ygor706] 09/4/2014 15:00

I sold out a few weeks ago when I saw that the company were moving into a new Head Office in Central London. Didn't seem like a cost controlling type of exercise to me. Today's placing just confirms my misgivings; the equity dilution will just be a further drag on eps growth. Takeover looks to be the only way of making a profit for the foreseeable future.

[briangeeee] 09/4/2014 14:40

Things can always change, but I believe £1.5m was sufficient to deal with their requirements through to cash profitability, so they should have a safety cushion.

[simon gordon] 09/4/2014 14:16

I think the My Protein website makes a lot of money, they focus on price and quality, they have a very sharp website and seem to be good at marketing:



I had a look at the SIS website and thought it to be pretty average. Think it will struggle to make a lot of money, you need to be the de facto leader of the niche, like My Protein, are SIS the market leader of their niche?

[yump] 09/4/2014 13:33

There's certainly plenty of margin on all products like this. Quite a few companies part with 8-10% commission for affiliates. Compare that with typically 2-3% for electricals.

Problem is the margin attracts lots of competitors and not much barrier to entry, as the regulations are, well, not really there and they all quote various 'testing' in labs, which of course most people can't differentiate between what is valid and what isn't.

So it all boils down to marketing.

[briangeeee] 09/4/2014 11:22

The primary focus in the near term is strong revenue growth at constant or slightly increasing gross margin. Given their marketing and development spend, IMO 20% pa = poor, 40% pa = good. Let's see how it goes in the current year - they seem to be building a team capable of driving a high rate of growth.

[woodcutter] 09/4/2014 10:38

had a quick look today based on the trading statement but it looks a long way off profitability to me. It was interesting that the statement focused primarily on sales growth.

Some rough numbers:
revenue £6840K
G margin @ 57% £3876K
Sales & marketing £3000K
Admin £2000K

operating loss £(1124K)

The sales, marketing and admin costs are growing at a significantly disproportionate rate to revenue.

Why the head office relocation to london.........so the directors can have a nice office with a fountain. It's a £7m turnover business........ffs, based in Nelson where costs are very inexpensive.

As yump has alluded to in previous posts it's a very competitive market.

On the plus side i can imagine the markup on the products is exceptional hence the 56% GM. And the packaging does look appealing too.

It's a question of scale for me, i figure they need to either reduce overheads and S&M spend or generate revenue to somewhere near £10m just to break even and that's without any further increases in admin and sales and marketing expense. That makes things quite difficult, do you continue the S&M spend in the hope sales grow significantly? It's catch 22!

It's on my watch list but i expect more placings and some hard decision making in the future on overheads and S&M spend.

Woody

[yump] 09/4/2014 09:35

Yep. A lot of companies float to get more funds because they need them, as well as to pay back various previous lenders/shareholders. This is quite a big placing really - dilutes existing shareholders by 20%.

Some have a good organic growth record previous to float and so new investors don't take a hit, some aren't actually getting enough free cash flow to fund expansion, so there's a (hopefully) temporary profit hit, while the expenses all jump.

As you say there is a throwaway line about costs and lots of revenue/expansion talk.

I think the revenue expansion talk works well for very high growth tech. businesses (cloud, mobile etc. etc.), where profits have yet to flow. Not so sure about businesses that are ultra-competitive, with no IP, where the only effective defence is more brand advertising, which keeps on costing more.

I'm not getting any of these at the moment. Possibly looking again in six months or so.

It is quite good growth they are getting, considering the market. What it is actually costing to get that growth is a bit of an unknown. Have to try to see how the growth ties in with previous cost increases - if its going to be an endless cycle or not.

I'll have to get the slide rule out...

Crucial question when the results can be seen, is to what extent the float costs hit profits, or whether costs have jumped as well. ie. is the exceptional a slight red herring ?

[davidlloyd] 09/4/2014 08:26

Pretty spot on there yump. Whilst sales growth is impressive and ahead of expectations the throw away line relating to AIM costs suggests still yet to be profitable. Significantly increasing costs, still awaiting profitability- but the future does begin to look brighter. It would be great if we, the humble pi, got a chance once in a while to participate in AIM share placings instead of limiting it to those in the know (the city spivs....)
DL

[yump] 03/3/2014 10:00

This will be interesting to follow I think - wondering about buying in a bit.

Clearly they are going to talk about overseas expansion a lot and the aim for revenue growth, taking a temporary hit in the timing of profit delivery (although they haven't really done that reliably before float. From what I can see, there is a forecast for pre-tax profit and earnings of 0.5p to March 2014, but I don't think that looks very likely given the interims and the apparent expansion in sales and marketing activity recently.

However if they're off on a series of PR roadshows and there are quite frequent mentions of big names like Shimano in agreements, there's quite likely to be a share price jump.

That's what the market is for - allowing expansion - access to funds etc. The expansion usually comes because you've become profitable in a home market and the business model will scale up, but SIS don't seem to have done that first bit properly yet.

[yump] 03/3/2014 09:48

Why London and not somewhere cheap up north ? Presumably because London makes overseas market contact more accessible ? Bit odd as they just sell 'boxes' online really. Cos nobody with a head office based cheaply up north can possibly sell overseas.

Why do e-commerce or direct selling operations require anything in London ?

Cue investors roadshows, increased coverage and lots more 'targets' I reckon, that will allow a placing or 2, which will pay for the offices, then they can move to Monaco.

Only 1/2 joking.

[lafin] 03/3/2014 09:26

New Office
"Science in Sport plc (AIM: SIS), a leading sports nutrition company, is pleased to announce that it has moved its registered and head office from Windsor, Berkshire, to larger premises in London. This move will accommodate the on-going growth of the business and also locate the Company's management, marketing and sales teams in central London.



SiS's manufacturing and product development facilities will continue to be based in Nelson, near Manchester.



The new head office comprises more than 1,700 square feet. In addition to accommodating the Company's senior management and marketing teams, it will create space for the Company's growing e-commerce and direct selling operations. The central London location will also allow increased convenience for contact with customers and for the Company's investor relations activities."


from today's RNS

[oilforex] 17/2/2014 08:58

You had toast as well? In my day that was a luxury, lol!

I guess my point is that getting reviews such as it did in front of a key audience it is trying to target does it no favors. I must admit I didn't notice if they were also advertising in the publication... to be honest I was more interested in reading an article on winter training!

[yump] 17/2/2014 08:50

Some women appeared on Dragon's Den recently with a 'natural' recovery drink and got a very hard time because although the drinks were based on proper fruit and had no artificial stuff, it wasn't organic. So they concluded that the sort of users who liked natural, would expect organic as well. Whether that's true or not is debateable, but show how tricky and confused the market is - its massively about perception.

Differentiation is absolutely critical, but how you differentiate yourself to a load of different sports, enough to get a defendable market position.. ?

Once the problem with potentially 'funny' ingredients rears its head and where every marketer claims they have the best mix of ingredients for your drink to do whatever you want it to do, which has been tested by some body that you've never heard of, that might be official or might be in-house and there's hardly any proper published research you can go and read...

...and most people are mainly subject to the placebo effect...

The market is open to being fragmented for ever and the winners, if there are any, will be those who consistently spend a lot on marketing. Perhaps there's enough margin to be able to do that.

When I was a lad, we used to go out all day on bikes in the summer heat on 2 slices of toast and not drink anything until we got home. etc. etc ;-)

[oilforex] 17/2/2014 08:27

Funny enough came across a review of I think it was the energy powder product in Triathlon magazine at my doctors surgery of all places! Out of five products tested it was rated 4th.

The review criticized it for containing Aspartame. I only got a quick scan before my appointment but it would seem that competitors didn't

BTW I'm not on a one man crusade against the ingredients or company but it seems a needless Achilles heal. Whatever the reality on it's effects, perception is 9 tenths...

[boonkoh] 12/2/2014 20:38

Just had a quick look. HY results to Sep13 showed that Sales & Marketing costs as well as Admin Costs, most of them probably fixed costs, were £2.6m for the HY.

So it would be similar for Sep13-Mar14 period. Given that H2 is seasonally quieter than H1, there's going to be a bit of cash outflow.

Cash at Sep13 was only £1.4m

Doesn't look good IMO. Fundraising soon?

[oilforex] 05/2/2014 11:03

Hi Lafin, interesting find. Unfortunately most of the populous won't see this and fewer still will be convinced. I still think if competitors don't need to use this stuff then it would surely be better for SIS if they looked at an alternative.

[lafin] 04/2/2014 15:36

EFSA have done yet another report ,study,risk assessment etc on Aspartame DEC 2013 and declare it safe at ADI of 40mg/kg bw/day.



"Experts of ANS Panel have considered all available information and, following a detailed analysis, have concluded that the current Acceptable Daily Intake (ADI) of 40mg/kg bw/day is protective for the general population. However, in patients suffering from the medical condition phenylketonuria (PKU), the ADI is not applicable, as they require strict adherence to a diet low in phenylalanine (an amino acid found in proteins).

Following a thorough review of evidence provided both by animal and human studies, experts have ruled out a potential risk of aspartame causing damage to genes and inducing cancer. EFSA's experts also concluded that aspartame does not harm the brain, the nervous system or affect behaviour or cognitive function in children or adults. With respect to pregnancy, the Panel noted that there was no risk to the developing fetus from exposure to phenylalanine derived from aspartame at the current ADI (with the exception of women suffering from PKU).

The opinion makes clear that the breakdown products of aspartame (phenylalanine, methanol and aspartic acid) are also naturally present in other foods (for instance, methanol is found in fruit and vegetables). The contribution of breakdown products of aspartame to the overall dietary exposure to these substances is low."

[oilforex] 28/1/2014 09:39

From an investing/ cycling point of view I am also interested in these.

For my two penneth worth I would say in terms of 'brand exposure' at events, from my experience they seem quite a long way behind High 5. High 5 nutrition always seems very much in evidence at bike and triathlon events I attended and also in terms of exposure at local bike shops.

However in terms of Supermarket exposure (Tesco/ Waitrose) I would say SIS is much the more dominant brand.

From a personal perspective I have an issue with some of their products. Having ordered a trial bundle of SIS products I was pretty dismayed to find that many are sweetened with Aspartame. For many people who are interested in exercise and take supplements, health and well being is an important issue. I know their is much for and against debate on the use of Aspartame however for me it was an instant 'no no.' I use their bars but as for anything else I use their competitors.

It seems an unnecessary obstacle which could/ should be rectified.

[yump] 18/12/2013 16:28

kinbasket

I probably shouldn't label them as supplement-related - it just struck me there are that many shakes, proteins etc. etc. around that the market seems crowded to me, although in practice like you I'm familiar with the cycling market and not the muscle end of the market. Wiggle is where I got the ZipVit stuff from if I remember rightly - don't use them much now as they seemed to hiccup when they got bought out by the US venture cap. lot. I know they fell foul of a couple of suppliers, but that's another story from the business end that I'm kind of familiar with.

Presumably SIS have other sports markets to go for, possibly dependent on whether another brand has already got itself established in those. eg. Kinetica for Rugby for training and users have bought the SIS type products from the same source.

Think it will take the next results to figure out whether there's going to be an ongoing struggle growing profits or not.

I've seen SIS in cycle mags. quite a bit which is why I popped in to have a look on float. Although I don't do enough to use them, so it must be a pretty strong brand for me to have taken notice. Orange juice with a bit of salt works for me, but I'm not a racer or tackling the Alps every other week !

[kinbasket] 18/12/2013 15:51

Yump.

SIS isn't really in the supplement business. It's a different market sector. Their competitors are powerbar, Cliff bar, Maxim, Isostar etc. It's not the stuff you find at the specialist retailers and gyms for the "lifter" market.

They already distribute in the UK through the major retailers. The two biggest are Wiggle.co.uk and Chainreationcycles.com (the largest online bikeshop in the world)

The marketing is done through the specialist cycle, run, and triathlon press. SIS has a very high profile presence in their target market in the UK. Have a flick through magazines like 220triathlon or Tri uk. I've been using their products myself for about two years which is how I ended up looking at the shares.

I think the brand is very strong and at the right price I'm definitely interested in the stock. The future for them is outside the UK. The UK market is pretty well established.

[yump] 17/12/2013 08:34

Now that's a proper distributor deal.

SIS might get over part of the problem of differentiating their products if they can sign up agreements with a lot of major suppliers of other products in each sport. As they become associated with major sports personalities, the same would go for major sports brands or major sports retailers.

At the moment the supplement market seems to sell through individual supplement websites and sometimes you see products promoted at gyms.

That still leaves the problem of actually getting the products in front of consumers.

I buy bike stuff quite often and for a while a year or so ago I kept getting ZipVit samples in the packages. Those were coming from the retailer who stocked them though. So the stockist came first.

I'd assume that Shimano will start pushing the product out to the major retailers and that their credibility will help to get more stockists involved.

If SIS can route through sports retailers, rather than supplement websites, that would give a deal more credibility.

imo its still a big branding battle though, with all the associated costs and a lower margin when not selling direct.

[lafin] 17/12/2013 07:56

Good RNS
"Science in Sport plc (AIM: SIS), a leading sports nutrition company, announces that it has signed an exclusive agreement with the European arm of Shimano, one of the world's largest cycling distributors and component manufacturers, for the distribution of SiS products in a select group of European countries.



This agreement, which has been signed with Shimano Europe Bike Holdings BV, marks a further step in the delivery of SiS's strategy to develop international sales and takes the SiS brand into Norway, Sweden, Finland and Poland for the first time.



The countries covered by the agreement, which begins on 1 May 2014, are France, Netherlands, Belgium, Luxembourg, Poland, Norway, Sweden and Finland. In these eight countries, Shimano distributes to a mix of independent bicycle dealers, sports retail chains and endurance sports retailers.



Shimano will be managing all sales, marketing, and customer service responsibilities for these regions.



Lennard Vis, Manager Marketing and Sales Support at Shimano Europe Bike Holdings BV, commented: "We are very excited about this partnership, and we are confident this is an important step in realizing our objectives and improving our position in the market. SiS's wide range of science-based nutrition products is a welcome addition to our portfolio, and we are happy to further strengthen our leading role in this way."



Stephen Moon, CEO of Science in Sport plc, commented: "We are delighted to sign this agreement with Shimano, one of the best known names in cycling and a company with unrivalled expertise in European sports retail. The agreement means that the SiS brand will benefit from a single distributor across a substantial part of Europe."