Sosandar Plc

Hello, everyone, and thank you very much for joining us today. We are delighted to be presenting a great set of results and also to talk to you about the exciting year ahead. So just to run through the agenda, first of all, for the presentation, we're going to start off with the full year results to the end of March 23. I'll give a top line overview and Steve will go through the key details of the financials. And then in the second half of the presentation, Ali and I are going to talk through our growth strategy for this year and beyond. So first of all, we'd just like to take a moment to look back on the Susanda growth journey. This graph shows annual revenue over the last six years. We've had consistent growth every single year, going from a million pounds of turnover in 2018 to 42 and a half million turnover last year, all set against the most extraordinary backdrop of multiple external challenges from Brexit, to the pandemic to war in ukraine spiraling inflation and of course the cost of living crisis And as well as sustained growth in revenue since we launched, in the last two years alone, we've increased revenue by 30 million pounds and become profitable. So we've built an entirely new brand, we've disrupted the market, and we've captured the loyalty of an underserved audience, both direct to consumer on our own website and with some of the UK's biggest retailers. Just to go on to last year, last year was a fantastic year. We had our first full year of profitability and we had substantial profit of £1.6 million. Our revenue grew by 13 and a half million to 42 and a half million, which was up 44% year on year. Our business is thriving on every single channel that we sell through. All categories are selling well, including our new fast track categories, such as smart tailoring, swim and beach and occasion wear. and we successfully completed an equity raise of £5.5 million in February. We were delighted by the support from both new and existing investors in what was an oversubscribed process. The additional working capital will support the execution of concurrent new initiatives and in particular the launch in store with Sainsbury's in September. And we've also laid really strong foundations to achieve our ambition, which is to become one of the biggest fashion brands in the world. So I'll now pass over to Steve to go through the financials in more detail.

Thanks, Julie. Good afternoon, everybody. So starting with our net revenue, which, as Julie rightly says, was 42 and a half million, up 44 percent on last year and up 30 million compared to just two years ago. This substantial growth reflects the ever-growing demand for Susanda product with incredibly strong performance from both susanda.com and through third-party web platforms. Revenue each quarter increased during the year with Q1, Q2 and Q3 setting new all-time records, even the traditionally quieter Q4 being strong with the month of March being 32% up on the previous year. The profit before tax number was 1.6 million and FY23 really was a milestone year, being our first full year of profitability with a substantial positive swing of 2.2 million compared to last year. Scale, ongoing margin and overhead efficiencies have all contributed to this performance. Moving on to our gross margin, which improved 15 basis points to 56.2%. The improvement compared with the prior year has been delivered whilst also increasing the proportion of revenue from the lower gross margin wholesale channel and the weakening of sterling against the dollar, which had some impact in the latter part of the year. In terms of the wholesale channel, we now have three partners, which are the very group, M.Brown, and Mulatterley Sainsbury's, which we launched in March 23, initially on their website, ahead of a bricks and mortar launch during FY24. We continue to take many actions to deliver benefit in gross margin, including some targeted price increases, improved supplier cost prices, and further efficiencies in inbound freight costs. There is more potential to further improve the gross margin that we deliver. with our target to deliver 60% on a like-for-like basis, although the actual margin that we report will be dependent on the channel mix, in particular the proportion of the wholesale business. In terms of our overhead, our total admin expense increased by 30% to 22.2 million in the year, and that compares to a 44% increase in revenue. As a result, admin expenses as a percentage of revenue reduced to 52% compared to 58% in the previous year, reflecting the benefit scale whilst continuing to invest in all areas of the business to drive sustained growth in revenue and all KPIs. Our revenue growth, coupled with the slight step up in gross margin and significant drop in overhead percentage, has driven the move to profitability. So looking at our overheads in more detail, on the left-hand chart is the absolute spend that we've incurred on our overheads and broken down by type of spend. And on the right-hand side is the same spend set as a percent of revenue. Our spend on marketing, which is in gray on the charts, continue to follow a similar strategy to the previous year, with focus on TV, social and brochures, with peak months of investment being where the return on investment is at its greatest. Overall, spend increased by 3% year on year, resulting in a significant drop as a percent of revenue, with the cost of customer acquisition remaining below £20, which we are really pleased with. The cost of fulfilment, which is lighter blue on the charts, increased by 26% compared to the previous year. This includes warehousing and customer order delivery costs. From a warehousing perspective, our 3PL partner, GXO, formerly Clipper, have continued to deliver for our multi-channel customers and have adapted the operation to manage bulk order wholesale customers in addition to our traditional B2C demand. In quarter four, we onboarded Every as an additional customer delivery partner in addition to Royal Mail in order to give the customer greater choice. This has also helped reduce our average cost of delivery, which will yield greater benefit in FY24. The largest increase in admin expenses is from third-party commissions, which is dark blue on the charts. This increased by 59%. and reflects the growth in revenue through our concession partners, who are John Lewis, Next, and Marks & Spencer. The commission is retained by the concession partner and is reported within our overheads, covering all costs of the operation, including warehouse and fulfillment, returns handling, marketing, and other operational costs. The revenue and gross profit figures that we report are therefore undiluted when compared to trading through susanda.com. Our other admin expense, which is the gold section on the charts, includes our staff cost, which increased by 52% compared to the previous year. Our headcount increased by 24 during the year to an average of 73, with a closing headcount still of only 85 as of March 23. The investment in people has been across all functions of the business and has included pivotal roles to equip us to deliver the growth plans in FY24. Key roles that we have hired in the year were an e-commerce director, a commercial international director, a head of operations and a head of people. All KPIs on our own website have continued to improve year on year. Visits to our own site increased 15% to 15.1 million, and our conversion continued to rise to an average of 4.1% for the year, up by over 30% compared with FY21. Our average order value for the year was £97, up 8% year on year, and our customers continued to shop more and more frequently, with our average order frequency across all customers increasing to 2.34 times per annum. On our own site, the total number of orders has more than doubled in the last two years with 22% more orders being generated last year compared with FY22. A total of 621,000 orders were taken with both repeat customer and new customers both increasing. Our average units per order has continued to rise with the average for last year being 2.1, up from 1.9 last year, which is a reflection of the product choice for our customer has, and the continued availability of new products, which results in customers coming back to the site frequently throughout the year. The really important metric of marketing cost per order has continued to drop, with last year being just below £6, compared with £9 two years ago. Brand awareness is now much greater and our constant review of everything that we do to optimize the return on our spend. So in summary, our income statement for the last three years is shown here. So revenue of 42 and a half million, which is 44% up year on year and up by 30 million since FY21. This substantial increase in revenue has enabled us to deliver our first full year of profitability with a PBT of 1.6 million. And finally, here's the balance sheet. As at the 31st of March, 23, we had net assets of 18.4 million compared to 10.6 million a year previous and a net current asset position of 17.2 million. During the year, our financial position was further strengthened with an equity raise of 5.5 million net in February, which is enabling us to accelerate concurrent growth initiatives, including our rollout into stores through the wholesale arrangement that we have with Sainsbury's. It will also allow us to take advantage of the many opportunities that we have, which Julie and Ali will talk through in later slides. The strength of our balance sheet includes a cash balance at the year end of 10.6 million, and we have no bank indebtedness. This position is allowing us to invest in inventory to support all sales channels, whilst also investing in people, technology and operations to ensure the trajectory of growth can be delivered. We've continued to invest in stock during the year, with the balance at the year end being 12.4 million. This includes stock in the main warehouse, at our concession partners, as well as stock in transit, which reflects the higher proportion of supply coming to the UK via sea freight. In addition, our stock figure also includes an increase in the right to return asset, which covers post-year end return stock. Trade and other payables increased to 8.4 million compared to 6.8 million in the previous year, which just reflects the increase in business scale. Credit to payment days have continued to move favorably as the group becomes an ever more important and trusted customer for our supply partners. Credit insurance is now being made available as a result of our sustained financial performance over the last 18 months. Included in this increase is the provision for post year end customer refunds for orders fulfilled within the financial year. This increase is 0.6 million and just reflects the year on year increase in revenue. Trade and other receivables increased to 2.7 million from 2.5 million in the previous year. This includes amounts owing from concession and wholesale customers. No change to payment terms have been made during the year and all payments have been received on time and in full. We have delivered sustained growth over many years and have delivered strong financial performance. We are really well placed to continue our growth trajectory in FY24 and beyond. And on that note, I will pass to Ali.

Thanks Steve. Afternoon everyone. So now we want to come on and talk about the key priorities for Susanda going forward for this year and the foundations we're laying for the years beyond. This is a pivotal year for Susanda because we have so many major new initiatives and developments to drive and deliver our next stage of growth. Today we're sharing five of these initiatives. In due course we will share other ones we're working on too. The overriding thing we want to communicate is that we are a brand in demand in both the UK and abroad. The world is our oyster and we fully intend to become one of the world's biggest fashion brands. So we're going to talk about these initiatives in detail, but just let me summarise the five things that we're looking at for long term growth. So product, firstly and most importantly, we continue to constantly innovate our product range as we are nothing without great product. We are also doing a large scale optimization of our direct to consumer business through sasanda.com. We are expanding routes to market online in the UK and also through bricks and mortar initiatives and also international expansion, which is incredibly exciting and continues to move forward. So we are expanding every single area of the business, whether it's our direct to consumer business or a third party business, as well as looking at whole new routes to market. Before we go on to talk about expansion of routes to market, we want to talk about product because none of this means anything without it. It is the constant innovation of product that will make all these routes to market a success. Product and what our customer wants from it is what we do and what we are really good at. So to tell you about the latest innovations we're launching, we have a petite range launching in September. We have our biggest ever occasion wear launch coming in autumn winter 23. We're now going to produce swim and beach all year round as it's been so successful. And our tailoring category that didn't exist a year ago is now one of our biggest categories. This innovation never stops and it is the understanding of our customer and what she wants to buy that fundamentally has made this business a success.