Sosandar Plc

Morning, everyone. So firstly, today, we're going to take you through the half year 2023 financials. But we know investors are particularly interested in current trading, especially with the current economic backdrop. So the second half of the presentation is dedicated to this and includes current trading, product expansion, customer acquisition and retention, operations, sales channels, and finally, the outlook for the future.

So before Steve goes through the details, the key highlights of the first six months of the financial year. So we had revenue of 21 million, which is up 72% year on year. We've had our second six months of profitability. And this strong growth has been equally achieved on our own site and through our third party partners. We're successfully continuing to navigate the external challenges. And we further expanded and diversified our product range and had really strong performance across all our KPIs.

So in terms of our financial highlights, starting with revenue, where our revenue for the first half of the financial year was 21 million, a 72% increase on the 12.2 million achieved in the first half of the previous year. This increase includes record trading across all sales channels, enabling us to take market share across all categories. Further investment in stock has enabled us to deliver this growth, which has been delivered equally across both our own sites and through our third party partners. The total growth in revenue was 8.8 million, with growth from our own site being 4.3 million and growth from third parties being 4.5 million. In terms of profit before tax, we have delivered the second six-month period of PBT. Our PBT was 0.1 million, which is a substantial positive swing versus last year, where we made a loss of 1.1 million. This swing is driven by our revenue growth, ongoing operational efficiencies, and further improvement across our customer engagement KPIs, which we will come on to talk about later on. On the right is our gross margin, which was 54.4%, reduced compared to the 56.5% in the previous year. This reduction is all due to a planned end of season sale in late July and August, which we did not do in the previous year. Excluding the impact of the sale, underlying margins have been in line with the prior year, with some inflationary pressures on raw materials being offset by economies of scale and reduced average freight rates. This is a result of using sea freight for a much larger proportion of inbound stock, which is much cheaper and also significantly less impactful on the environment. In terms of our overheads, we have seen a further substantial reduction in our overheads as a percent of net revenue, reducing to 53% compared with 65% in the previous year. The benefit of scale coupled with making sure we spend effectively across all areas of the business has enabled us to bring down this percentage. The chart on the right is a breakdown of our actual overhead spend, which was 11 million for the period, which is a 42% increase on the same period last year. The single largest increase was in commissions retained by our third party partners, which increased to 2.4 million compared with 1.1 million in the previous year. This is a direct cost of the substantial growth in revenue that we have achieved in the period with Next, M&S and John Lewis. Our fulfilment costs, which includes the cost of warehousing and customer postage, increased by 48% to £2.9 million. However, this reduced from 16% to 14% as a percentage of revenue year on year. This reduction reflects a higher proportion of bulk transfers to our third parties and ongoing productivity initiatives being delivered in our operation. Operation costs increased by a million in the period, but again, this reduced as a percentage of revenue from 18% to 15%. Operation costs include the cost of people, systems, and general admin expenditure, which is supporting the growth of our company. there remains further opportunity to reduce our overheads as a percent of revenue in H2 and into the next financial year. I've now got a few slides showing some of our key KPIs. They are all for our own site, susanda.com only. On the left, visits to our website increased in the first six months by 25% to 7.7 million. This included three of the six months in the period being new records, reflecting the increased awareness of our brand and the response to our customer communication strategy. We're delighted with the significant increase in conversion, which is on the right-hand chart, which continues to go from strength to strength. The average for the first half was 4.5% up from 3.9% in the same period the prior year. In addition to our marketing and how we engage with our customers, this step up is a reflection of the amount of product choice that we have available for our customers. The increase in conversion resulted in 347,000 orders being generated on sasanda.com in the first half of the current financial year, which is 43% more than in the same period of the previous year. Again, we have three record months in the period with five of the six months having more than 50,000 orders, which is special given that we only had our first 50,000 order month last October. Our average order value stepped up to £90 in the period, which is four percentage points above the prior year, reflecting the product offering being expanded, which has enabled us to increase the average units per order.