Sosandar : Interim Report for the 6 months ended 30th September 2022

Date:	13 December 2022
On behalf of:	Sosandar plc ('Sosandar' or 'the Company')
Embargoed until:	0700hrs

Sosandar plc

Half Year Results

Continued revenue growth of +72%, delivering the Company's second six-month period of positive PBT. Momentum has continued into the second half of the financial year with record sales months in October and November, trading in line with market expectations* for the full financial year.

Sosandar PLC (AIM: SOS), one of the fastest growing fashion brands in the UK, creating quality, trend- led products for women of all ages, is pleased to announce its financial results for the six months ended 30 September 2022 and an update on current trading.

Post-period Trading Highlights

• Strong start to H2 FY23 with record sales months delivered in October and then November
• Black Friday saw record number of visits to Sosandar.com and the strongest sales week on record for our third party partners, with margins increasing on H1 FY23
• Products across all categories selling well, with fast-tracked categories including partywear, knitwear and outerwear particularly strong
• Net cash of £4.2m as at 30 Nov 2022

Half Year Financial Highlights

• Net revenue of £21.0 million, a 72% increase against the same period in the prior year (H1 FY22: £12.2m). This growth was split equitably between own site and third party partners
• PBT of £0.1m for H1 FY23, a substantial positive swing compared to (£1.1m) loss in H1 FY22, being the second six-month period of positive PBT following H2 FY22
• Gross margin at 54.4% (H1 FY22: 56.5%) signifying a more normal post Covid trading period, including a planned end of season sale in August
• Net cash of £4.2m as at 30 Sept 2022 (FY22: £7.0m) reflecting planned earlier delivery of autumn stock than the prior year to facilitate deliveries into third party partners. In addition, the Company is starting to import more via sea freight which changes the working capital cycle, realising significant cost benefit and reducing our environmental impact

Half Year Operational and Strategic Highlights

• Success of unique product offering and increasing brand awareness shown by growth across KPIs compared with the same period the year prior (H1 FY22):
  o Number of orders increased on Sosandar.com by 43% to 347,137, of which 80,935 were from brand new customers and 266,202 were from existing customers
  o Average order frequency up 8% to 2.41 times

1. Website visits up 25% to over 7.7m

1. Conversion rate increased to 4.5% (H1 FY22: 3.9%)

1. Strong Average Order Value up 4% to £90 (H1 FY22: £86)

• 1. Active customers up 33% to 254,601
• Successful fast track development of key products, with all identified lines meeting or exceeding internal expectations

• Strong trading with third parties M&S, Next, John Lewis and The Very Group across all product categories
• Launched a new partnership with N Brown Group Plc's JD Williams on a wholesale agreement in September 2022

H1 FY23 KPIs (Own Site)
		Six months ended	Six months ended
		30 Sept 2022	30 Sept 2021	Change
	Web visits	7,770,346	6,212,484	25%
	Conversion rate	4.5%	3.9%	60bps
	Number of orders	347,137	242,991	43%
	AOV	£89.71	£85.86	4%
	Active customers	254,601	191,424	33%
	Average Order Frequency	2.41	2.21	9%

Ali Hall and Julie Lavington, Co-CEOs commented:

"We are very pleased to be reporting a strong performance for the six months ended 30 September 2022, with trading in line with our expectations for full year growth. Our continued revenue growth has enabled us to reach a significant milestone in delivering another six months of profitability, achieving a substantial swing from a loss of £1.1m in the same period last year to a profit before tax of £0.1m for the current period.

This performance is a testament to the relevance of our strategy, unique and broad product offering and ever-increasing brand awareness, which has enabled us to continue to deliver for our customers, despite the challenging macroeconomic backdrop.

Second half trading to date has built on the momentum we saw in the first half. Pleasingly, throughout October and November we delivered two record months of sales with this culminating in an extremely successful Black Friday period which saw a record number of visits to Sosandar.com and the strongest sales week on record for our third party partners, with margins increasing compared with the first half of the financial year. In addition, whilst discounts were on offer, gross margins remained stable resulting in two further months of profitability.

Looking ahead, whilst the external environment remains challenging, it is important to note that as a business, we have successfully mitigated many of the headwinds we have faced over the past two years. We have a brilliant brand, highly differentiated product that is in demand across all our channels and a great team who constantly execute our strategy well. We continue to trade in line with market expectations for the full year and remain confident in the longer-term outlook for the business."

• Sosandar believes that market expectations for the year ending 31 March 2023 are currently revenue of £42.8 million and PBT of £2.0 million.

Presentations

Sosandar is hosting a webinar for analysts at 09:30 hrs GMT today. If you would like to register, please contact [e-mail]

The Company is also hosting a webinar for retail investors at 11:30 today. If you would like to attend, please register here: https://bit.ly/SOS_H1_23_webinar

Enquiries
Sosandar plc	www.sosandar.com
Julie Lavington / Ali Hall, Joint CEOs	c/o Alma PR
Steve Dilks, CFO
Singer Capital Markets	[phone]
Peter Steel / Tom Salvesen / Kailey Aliyar
Alma PR Limited (Financial PR)	[phone]
Sam Modlin/ Lily Soares Smith/ Matthew Young	[e-mail]

This announcement contains inside information for the purposes of the retained UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

About Sosandar plc

Sosandar is one of the fastest growing women's fashion brands in the UK targeting style conscious women who have graduated from price-led alternatives. The Company offers this underserved audience fashion-forward, affordable, quality clothing to make them feel sexy, feminine, and chic. The business sells predominantly own-label exclusive product designed in-house.

Sosandar's product range is diverse, providing its customers with an array of choice for all occasions across all women's fashion categories. The company sells through Sosandar.com and has brand partnerships in place with Next, John Lewis, Marks & Spencer, The Very Group and N Brown.

Sosandar's strategy is to continue growing brand awareness and expand its customer database, whilst also further driving its high levels of customer retention. This is achieved through its exceptional products, seamless customer experience and impactful, lifestyle marketing activities, all of which is underpinned by combining innovation with data analysis.

Sosandar was founded in 2016 and listed on AIM in 2017. More information is available at www.sosandar-ir.com

Co-CEOs' Statement

We are delighted with the continued momentum and progress that we have delivered in the six- month period to 30 September 2022. To deliver such a strong performance, with both continued revenue growth and our second six-month period of positive PBT, despite the numerous macroeconomic challenges impacting the sector, is testament to our unique product, the hard work of our team, the resilience of our strategy and the agility of our business model. As a result of this, and the strong trading performance we have seen in October, November and early December, we are pleased to be trading in line with market expectations for the full year.

We have seen significant progress across all key pillars of our growth strategy, including significantly broadening our product range, increasing the levels of customer engagement on our own site and further developing our network of third-party partners.

Demand for our unique, sexy and chic product continues to increase with new styles and our highly effective marketing strategy resonating well - driving strong growth with both new and repeat customers on our own site and through our third-party partners. Throughout the period we have invested in our infrastructure to ensure that we satisfy this demand and enable further scalable growth by remaining at the forefront of fashion innovation.

We would like to take this opportunity to extend our thanks to our team, partners and suppliers for their unwavering commitment and support of the business.

Strong trading performance and continued improvement across all KPIs

Despite the challenging macroeconomic environment, our well-planned approach, together with our distinctive product range and effective communication strategy has enabled us to deliver an extremely pleasing performance.

Total net revenue for the period increased 72% year-on-year to £21.0 million, with a substantial positive swing in PBT to £0.1m (H1 FY22: £1.1m loss), being the second six-month period of positive PBT following H2 FY22. This performance was driven by the success of our broadened product range as we identified and fast-tracked the development of key product areas, whilst also monitoring our cost base. The revenue growth delivered over the period was split equitably between our own site and our third party partners.

Pleasingly, as the scale of the business continues to increase, we are increasingly able to exploit a number of opportunities which result in a sustainable benefit to the gross margin. This, coupled with a more normal post Covid trading period, which included a planned end of season sale in August, has resulted in gross margin remaining strong at 54.4% (H1 FY22: 56.5%).

Our net cash position of £4.2m as of 30 September 2022, reflects our decision to order stock in early for the Autumn/Winter season to ensure that we can meet the significant demand across all of our sales channels. A large proportion of this stock was also brought in by sea freight which means that we take receipt of the stock a number of weeks earlier than we would if it came via air and thus requires payment earlier.

The continued improvement we have seen across all our KPIs is testament to the success of our strategy in accelerating sales growth by identifying and fast-tracking the development of key product lines. The number of orders increased by 43% year on year to 347,137, of which 80,935 were new orders and 266,202 were repeat orders. Our conversion rate increased to 4.5% from 3.9%, average

order frequency increased by 8% to 2.41 times per annum, and website visits were up 25% to over 7.7m. Average Order Value for the period has increased 4% to £90 as our product offering expands, representing good growth against H1 FY21 (£86).

It is clear our well-planned approach, together with our distinctive product range and effective communication strategy, has enabled us to continue to deliver for our customers.

Unique product range is the key to our success

Our long term vision is to dress women across the globe to feel sexy and chic. Our huge addressable market is united by a desire for on-trend, affordable, long lasting, lifestyle appropriate clothes. Sosandar's magic is the successful execution of distinctive product and powerful communication. This execution has captured the hearts and minds of our ever-growing customer base.

As a clothing brand our product is the key driver of our success. We create head-to-toe outfits at a mid-level price point that are long lasting, with a wide selection of choice that covers all occasions and unique prints that are designed in-house.

At the time of our Full Year Results in July we stated that we planned to fast-track development in categories where we knew our customers would be likely to spend - specifically in occasion-wear, beach and swim, and tailoring. Pleasingly, this has been extremely successful with all identified lines meeting or exceeding expectations. Across the period, every single product category was in growth, with holiday and beach wear, formal tailoring and partywear performing exceptionally well throughout summer and into September.

This strong momentum has continued into Autumn and Winter as consumers plan for the festive period with fast-tracked development of targeted categories including knitwear, formal tailoring, coats and partywear leading to a record breaking Black Friday for the Group across both Sosandar.com and via our third party partners. The successes so far in H2 FY23 serve to reaffirm confidence in our strategy as our product continues to match our consumers' needs and consistently delivering products they love.

Sustained momentum with our third-party partners

Whilst the growth of our own site is the anchor of our success, trading with our third party partners including M&S, Next, the Very Group and John Lewis has continued to be strong. Our relationships with our partners allow us to increase our reach among our core target demographic and deliver incremental revenue and EBITDA growth.

In line with the Group's strategy to identify and target the development of key product lines, the range and levels of inventory going to our concession partners has continued to increase. The positive result of this strategy can be seen in our sales performance across all our partners which serves to highlight that this is resonating with consumers.

Alongside our existing relationships, we were pleased to announce the new third-party partnership with JD Williams on a wholesale agreement basis in October this year. We are very pleased with the promising start to this partnership.

Looking ahead, we will continue to invest in our own site, the bedrock of the Sosandar lifestyle hub, whilst also exploring additional third-party partnerships in the UK and abroad.