Sosandar (SOS) H1 2025 earnings summary

Executive summary

• Four new UK stores opened, marking a transition to a multi-channel retailer and driving strong in-store and online sales, with a significant halo effect in local areas.

• Strategic focus on improving gross margin and profitability by reducing price promotions and selective marketing.

• Licensing agreement signed with Next to launch a homeware range, expanding into adjacent categories with minimal risk.

• Store rollout is self-funded, supported by a robust cash position.

• Strong trading with third-party partners, including NEXT and Marks & Spencer, and launched in-store with Arnotts in Dublin.

Financial highlights

• H1 FY25 revenue was £16.2m, down 27% year-over-year from £22.2m, reflecting reduced price promotions.

• Gross margin increased by 700bps to 62.2% in H1 FY25, up from 55.4% in H1 FY24.

• Loss before tax halved to £0.7m from £1.3m in H1 FY24, with EBITDA loss narrowing to £0.4m.

• Operating costs, including depreciation, reduced by 21% to £10.7m.

• Net cash position of £7.0m as of 30 September 2024, funding store rollout and CAPEX of £1.0m.

Outlook and guidance

• On track to meet full-year FY25 expectations, with gross margin at 64% in Q3 to date.

• Trading in H2 FY25 is in line with market expectations of £40.5m revenue and £1.0m PBT.

• Medium-term goal to achieve at least 10% PBT on £100m revenue.

• Store rollout pipeline targets up to 10 new stores per year, subject to suitable locations.

• Anticipates H2 to be cash neutral.