UK – Science in Sport PLC (SiS), a London-based sports nutrition company, has flagged a potential sale of the company or assets under a strategic review that seeks a cash buffer against further operating shocks and weakening consumer demand despite first-half growth.

“The board has decided to conduct a strategic review of the business as a whole in order to maximize value for shareholders.

An outcome of the review may or may not result in a sale of the company or of certain group assets,” SiS said in a filing with the London Stock Exchange.

The UK nutrition company has so far raised GBP5.0 million (US$5.67m) by placing of 33.3 million new shares at a price of 15 pence per share. The new shares represent just under 24% of the company’s issued share capital prior to the placing.

As part of the placing, “substantial shareholder” Lombard Odier also subscribed to 16.2 million shares, worth GBP2.4 million (US$2.72m).

The proceeds will be “used to strengthen the company’s balance sheet with a view to providing sufficient liquidity and flexibility in the event there is any further downturn in the economy impacting sales or any unexpected increases in input material costs or other costs”, SiS said.

“There remain uncertainties and headwinds in the short term due to the macro-economic environment.”

The company is headed by CEO Stephen Moon, who will buy 200,000-plus shares through the placement, the business produces protein powders, bars, snacks and energy gels, and also vitamins and supplements.

 Brands include SiS and PhD Smart, with the range supplied to sports retailers, supermarkets, and online.

During the announcement of interim results, SiS reported a 10% increase in revenue to GBP32.3m(US$36.62m) for the six months to 30 June. However, underlying EBITDA turned to a GBP2.3m(US2.61m) loss, compared to a GBP0.6m(US$0.68m) profit a year earlier.

The business noted it was impacted in the second quarter of 2022 by global events, reduced consumer confidence, and specific one‐off events affecting sales and costs.”

SiS added: “The closure of the company’s Russian business, supply-chain issues in the USA, plus a supply issue for PhD Smart Bars in July and August has reduced revenues by approximately GBP4.3m in the year to date.

“As notified in the July 2022 trading update, unbudgeted sharp raw material price increases, such as whey and soy protein and maltodextrin, fuel and logistics costs, and GBP0.3m (US$0.38m) in restructuring costs, will add GBP2.9m to costs in 2022.”

To reduce the burden, the company said it has ended “several longer‐term projects and tertiary markets” to provide an estimated GBP1.9m in savings this year, which will “annualize” to GBP2.7m in 2023.

SiS, which noted the business has net debt of GBP8.7m and is facing a weakening consumer demand, temporary supply-chain issues, and input-cost increases, clarified it is not currently in talks with any potential buyer “and is not in receipt of any approach with regard to a possible offer”.

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