Science in Sport PLC (AIM:SIS) said the macro-market slowed growth in the first half and announced that it is conducting a strategic review which could see the sale of the business.
Despite revenue growing 10% to £32.3mln in the six months to 30 June 2022, the nutrition company said “global events and specific one-off events” impacted sales and costs.
The gross margin decreased to 43% from 52% due to cost headwinds, brand mix and stock clearance and the company slipped to an underlying EBITDA loss of £2.3mln, compared to a £0.6mln underlying operating profit in the prior year.
After a strong start to the year, weakening consumer demand, temporary supply chain issues and input cost increases have combined to impact our trading,” said chief executive Stephen Moon.
In a separate statement, Science in Sport said the board believes the company is "fundamentally" undervalued, which has sparked a strategic review which could see the sale of the business.
Science in Sport said several actions to lower costs and underpin sales growth have been taken after the closure of its Russian business and supply chain issues cost it £4.3mln in sales.
Price increases were introduced across all its channels and customers which should deliver £1mln in revenue in 2022, it said.
The first half saw it complete a £7.5mln investment in its supply chain site which can supply three times the current sales level and is delivering savings in line with the investment case.
A proposed fundraising to raise £5mln will take place to ensure the balance sheet remains strong in case of a further economic downturn or increase in input costs, it said.
“Positively, our premium brands have enabled us to increase prices across all channels to help offset external factors and we have responded proactively, reducing costs with a focus on cash generation,” said Moon.