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Started: piworld, 16 Apr 2024 15:36
Last post: piworld, 16 Apr 2024 15:36
Sosandar Joint CEO’s Julie Lavington, Ali Hall and CFO Steve Dilks outline FY24 Highlights, followed by Q&A.
Watch the video here: https://www.piworld.co.uk/company-videos/sosandar-sos-full-year-2024-trading-update-april-2024/
Or listen to the podcast here: https://piworld.podbean.com/e/sosandar-sos-full-year-2024-trading-update-april-2024/
Started: Laughton, 16 Apr 2024 11:55
Last post: TheTrotsky, 16 Apr 2024 14:14
PIs are a fickle bunch. These results were as good as baked in following the strategy pivot. SOS may have fallen short of its revised sales and profit targets but only fairly marginally. To have set a revised sales target of £46.8m and only fallen short by £500k in the current economic environment is actually no mean feat (the small loss, as opposed to the small profit, more or less followed the sales shortfall).
SOS's revised strategy is beginning to pay dividends (the profit before tax in H2 FY24 more or less matched the profit before tax in FY23. Overheads have risen but that was to be expected given SOS's new overseas activities in Australia and Canada from mid-Q3 FY24 onwards (which should now help bolster prospective H1 FY25 sales) and the push into bricks and mortar (costs are being incurred despite no stores having yet been opened). The delay in opening new stores (I think that at least one store was expected in Q4 FY24) might be disappointing but is in keeping with the management's cautious approach (they've proven themselves capable of being reactive to evolving events and I trust them to only move forward when they think the time is right and/or have the cojones to cut their losses if needs must).
They missed their revised sales target by c£500k which, with a c60% gross margin, would potentially have generated an additional profit of c£200k. A miss maybe, but not a disaster.
Overall, not too bad when you consider the current economic backdrop and how their peers are currently performing.
Looking forward, following the strategy "pivot" in mid-Q2 FY24, I'd currently expect SOS to breakeven in H1 FY25 based on H1 FY24 LfL sales and H2 FY25 gross margins and operating expenses. However, SOS is currently targeting a 17% increase in overall FY25 sales (c£54.6m) and, allowing for an increased weighting to H2, then a (say) 10% increase in H1 sales would be the current expectation which should then deliver an H1 FY25 profit of c£1.3m. Whether SOS thinks it can stay on target to deliver a 17% increase in sales in FY25 in the current economic environment remains to be seen.
I think we have to accept that it's currently a very challenging retail environment and if in H1 FY25 SOS can deliver both an increase in sales and profits in excess of (say) £500k then I think that would be a positive outturn. SOS made a handbrake turn in mid-Q2 FY24 and it was always going to take at least 12 months to wash through (including being able to pare back the additional marketing overheads that would have taken on in expectation of a renewed and enlarged marketing drive) and if SOS had continued with it's previous strategy of chasing sales at the expense of gross margins, it's probable that its FY24 loss would have been significantly higher IMHO; when people are tightening their belts it becomes unrealitic to expect an additional (say) 10%+ increase in sales just to offset not only the gross margin that you are foresaking but the increased marketing and other overheads.
"As a result of a substantial positive swing in PBT from H1 (£1.3m loss) to an expected profit of £1.1m in H2, FY24 will be broadly in line with market expectations* with a marginal loss of £0.2m expected to be reported for the year overall"
So that's a miss then.
One day, maybe, they'll deliver what they promise and long suffering holders will be rewarded - but I guess we'll have to wait a bit longer.
Started: Chapel, 29 Mar 2024 20:12
Last post: Chapel, 29 Mar 2024 20:12
This from the NEXT today:-
Wolfson added that Next had been able to sell more of its pricier, better-quality items as “there appears to be something of a shift back to investment dressing with customers buying somewhat fewer, slightly more expensive items.”
Should be good news for SOS shareholders??
Started: hardbingerofboom, 11 Mar 2024 11:40
Last post: K0sh, 11 Mar 2024 19:02
Someone's unloading before the fiscal year end.
Buying opportunity if it goes down another half.
I haf bought at 11.5 and sold at 12.5 and had regrets about selling when it had gone higher.
Thus time I'll hold.
It's been ver quiet on the SOS front.
Don't they release a 3 monthly update soon?
I would like to hear a progress update and if I like it I will buy more.
They will open shop and eventually a bigger fish will make an offer for the larger retail footprint.
Started: Apeirogon, 21 Feb 2024 13:33
Last post: W13Ken, 21 Feb 2024 19:20
No probs Trotsky, I'm as keen as you for one to open.
Apeirogon, I haven't been expecting a store update in the first quarter but the next TU for March FY end is due the week of 7th April. For me it makes sense that they would use that occasion to report on the final quarter and to announce shop opening plans.
I think the CEOs are good at keeping to planned deadlines - they edited magazines so know all about hitting those. They're also very experienced in marketing so I think the shop launches will come with a suitable fanfare.
I had a look again. Google lists it as a clothing shop (open 9:30am to 5:30pm) but it's not open Saturday or Sunday.
I could ignore the Google maps image not showing a shop (because if it had just opened then it would be quite possible that the Google maps image might have pre-dated the shop opening) but I find it hard to believe that a clothes shop wouldn't be open on Saturdays.
Sorry, but I think I might have given you a bum steer (particularly if the head office is located at the same address). Mea culpa
Google maps images shows no store, but does list one with "in-store shopping and delivery".
Makes sense to have a store where the head office is for management to see things first hand.
Is that a store or the head office?
Head Office
40 Water Lane,
Wilmslow,
Cheshire SK9 5AP
I you search Sosandar stores you'll find that they now have a store open on Water Lane, Wilmslow just outside Manchester (it's where a lot of PL footballers live). Not sure when it opened but Wilmslow is a good location for an up-market shop.
Started: newtrader1, 8 Feb 2024 03:50
Last post: newtrader1, 8 Feb 2024 14:28
Thank you for the information. I really appreciate it.
I'm a long-term SOS holder, so I'm fairly biased, but I believe that SOS can achieve bigger and better things if given the time; I keep a watching brief on ASOS, BOO, QUIZ, SDRY etc. and SOS was the only one to deliver growth in sales in the December quarter. The pivot that SOS made in Q2 FY24 to reduce its discounting and maximise gross margins was well considered but there were inevitable short-term costs (it had to gear back its previous promotion-led sales growth plans and the additional marketing costs associated with that) and, together with the high street and overseas expansion plans, it needs a bit more time to show that its sales growth (albeit at a lower rate but higher margin) is back on track. I think the post-Xmas Q4 FY24 trading period is going to be tough (it's difficult to ignore the current wider economic situation) but am hopeful that SOS will still be able to deliver on its revised FY24 targets and beyond.
I think the market over reacted to SOS's Q2 FY24 results (which is still reflected in the current share price) and does not yet appreciate the management team's capability to deliver its long-term aims. The team is laser focused and rarely sits on its laurels. The team showed its mettle during COVID and, whilst other UK online retailers have been just "plugging the leaks" for the last 12 months (their strategies haven't really changed; they've just been downsizing), has taken decisive action to shore up the bottom line and move forward.
Hopefully we should start to see the dividends in the next 6-9 months and the share price start to improve. The analysts haven't been keen on the pivot to the high street but the truth is that if analysts ran businesses they'd probably be bust before they even opened their doors! The SOS management team understands fashion and is not prone to making rash, ill-considered decisions. Hang tough.
Caveat emptor as always
Hi Newtrader, first off, take all share bulletin board comments - including mine - with a pinch of salt as very few commentators are truly objective.
However, as objectively as I can be as a fairly large shareholder, I think Sosandar have built a strong brand but they still have to convince that they can successfully convert increasing sales into increasing profits.
I am keeping the faith but one key change this year is the move into physical shops in the Spring. If they go well then there's a fair chance of a positive rerating. Good luck...
Hi all, I'm new to this board.
I was wondering what ur view is on long term share price?
Downhill? better to sell now & cut losses or some positive news on d horizon & worth holding for a bit longer. I only have 2k worth of Sosandar, down 1k atm. Thanks for any advise u may have.
Started: Apeirogon, 10 Jan 2024 09:01
Last post: TheTrotsky, 11 Jan 2024 15:41
This is a tough market and it doesn't appear to be willing on the face of it to give SOS credit for continuing to increase sales and margins despite the current economic backdrop.
Nor does it seem willing to give SOS credit for changing strategy mid-way through FY24, reducing promotions and focusing on gross margin rather than top line growth at any cost; personally I think the change in strategy will mean the difference between SOS making a seven figure loss and a, albeit small, profit for FY24. In the meantime, SOS continues to pursue new overseas partnerships in Australia and Canada and opening new bricks and mortar outlets in the UK.
I think FY25 will prove to be a pivotal year.
A record quarter with revenue of £14.3m, up 23% year-on-year (Q3 FY23: £11.6m)
Gross margin 58.3% vs 56.8% in the prior year
Like for like gross margin, which excludes the increase of wholesale, was 60.7% vs 57.3% in the prior year
·
Net cash of £7.7m as at 31 December 2023 (£7.3m as at 30 November 2023)
Started: piworld, 13 Dec 2023 10:11
Last post: Apeirogon, 17 Dec 2023 17:08
10mil Profit on 100 mil sales is the medium term target. I am confident the leadership team will achieve that and turn this into a £150m mkt cap company in 3-4yrs.
Sosandar Co-CEO’s, Julie Lavington and Ali Hall, and CFO, Steve Dilks present Half Year results and a Trading Update, followed by Q&A.
Watch the video here: https://www.piworld.co.uk/company-videos/sosandar-sos-half-year-results-presentation-december-23/
Or listen to the podcast here: https://piworld.podbean.com/e/sosandar-sos-half-year-results-presentation-december-23/
Started: TheTrotsky, 12 Dec 2023 13:43
Last post: Chapel, 12 Dec 2023 15:50
Promising as you say. Good to hear SOS is second best women's fashion brand on NEXT.
Als the profitability of their competitors with retail chains was reassuring.
Feels like the summer share price mark down was a significant over reaction
A pretty positive presentation I thought. Given the current UK economic backdrop, the growth in sales and GP margins in October & November was good.
I'm also (generally always) impressed with the executive team. They seem to have their heads screwed on straight. They're not going to expand their planned retail estate unless each site meets their stringent criteria. Also, they're not going to just plunge into the US retail market. Instead, they plan to take on board their learning experiences in Australia and Canada first, and carefully select who they are going to partner with in the US when they do eventually launch.
As ASOS has seen, sales growth in the US can be a two-edged sword; simply rolling out your tried and tested UK operational model can be a recipe for disaster. The US is about 40x the area of the UK and the UK's population density is about 8x the US's; it's a totally different logistical challenge. Discounters aside, the US has far fewer national retailers than people might otherwsie expect, and I seriously doubt that SOS would want to consider partnering with the likes of Amazon, Target, Wal-Mart etc. Personally, I wouldn't be surprised to see SOS eventually partner with retailers, such as Kroger and Macy's, who have a strong presence in certain large US markets e.g. California, Florida, Illinois, Texas and the North Eastern seaboard.
I think it's also quite impressive that SOS is already generating c2% of its turnover from overseas without any advertising or promotion.
It all bodes well for the future IMHO.
Started: W13Ken, 7 Dec 2023 19:29
Last post: W13Ken, 7 Dec 2023 19:29
One position filled today according to Drapers - the leading authority on fashion retailing in the UK since 6 August 1887 - is as follows:
"Sosandar names first creative director.
Womenswear brand Sosandar has appointed former Karen Millen and Coast head of brand Emily Frazer to the role of creative director."
Perhaps up to now the joint-CEOs have covered this so it should be a positive to see a creative manager of proven quality helping set the future direction of SOS.
Started: piworld, 29 Nov 2023 09:29
Last post: piworld, 29 Nov 2023 09:29
Tuesday, 12 December, 12:00pm
Julie Lavington & Ali Hall, Joint CEOs and Steve Dilks, CFO will present results for the six-month period to 30 September 2023, followed by Q&A.
Register here: https://bit.ly/SOS_H124_webinar
Started: Apeirogon, 23 Nov 2023 13:40
Last post: Apeirogon, 23 Nov 2023 13:40
For what it's worth: https://simplywall.st/stocks/gb/consumer-durables/aim-sos/sosandar-shares/news/declining-stock-and-solid-fundamentals-is-the-market-wrong-a-1020
Personally, I think the management team have their heads screwed on and will do a good job of the store roll-out. Time will tell.
Last post: Apeirogon, 6 Nov 2023 07:53
Given that the number of shares outstanding has been rising steadily, I assume that the directors are regularly awarded shares for free. Why would they buy ?
12p and still no sign of director buying..A sure sign this SP is going nowhere in the short and medium term.
Last post: Shornryder, 25 Oct 2023 13:29
If they bought in so soon after the crash in price, they could (rightly) be accused of share price manipulation.
I have dipped my toes in at below 11.5p
Still no director buying even at these low prices..l don't think this company gives an Xmas trading update,so we have a long wait for any news to possibly lift the shares
Started: TheTrotsky, 18 Oct 2023 16:44
Last post: Apeirogon, 23 Oct 2023 12:34
Please explain how you get to 4p valuation.
If they get to £10 net profit and are still growing in 2025 then on 15x multiple the share price could be 59p. Although with continual share awards it might be more like 50p.
Yes but Sos is now not worth more than 4p. There is every chance that the stock will be bust within 2 years. It is in the worst business at the worst time. Things are getting worse and the future is dire. More tax on the way and a lot more conflict.
Not the fault of the company. A terrible time to be in small caps like this. Most will go bankrupt
Your timing seems good..AIM shares are on the floor..Did you know that in 2022,AIM market was the WORLD'S worst performer,so the only way is up (but not in a straight line) Sosandar is a minimum 2 year hold..The problem is most of us have bought shares previously when SP was higher and now face a long wait just to break even
With reference to my point (3) below, I'd accept that by not discounting SOS may have lost out on some customers who are more price driven than product/quality driven but it's difficult to target discounts at just those customers alone (unless they fall into the catch-all of new customers) i.e. you either have to offer discounts to all or accept that you will miss out on some opportunities. This would likely have been factored into SOS's internal assessment of whether or not to continue to try and chase revenues in the current market environment or maintain margins.
Also, today's announcement does not mean that SOS couldn't revert back to the previous strategy in FY26 and beyond if the market environment became more benign. Maintaining margins and cutting their cloth to fit is a reflection of the times and it would appear that SOS expects the current market environment to persist into FY25 at least.
It's a set back but not a knock out.
The overseas expansion plans seem sensible and the costs controllable. Also, it remains to be seen whether there are any benefits to be garnered from the southern hemisphere seasonal cycle being the opposite of the northern hemisphere. SOS could potentially be launching its summer/autumn collections into Australia at the end of FY24. Whether those collections will be based upon its existing 2024 collections, its intended 2025 collections or a mix of both will be interesting. It's rarely cost effective to ship any unsold stock from one country to another and one assumes that stocks supplied to their partners in Australia and Canada will be supplied direct from their suppliers.
One would assume that any roll-out of bricks & mortar outlets will be done slowly and steadily. A half dozen outlets over a couple of years in a selection of handpicked locations should be manageable as a proof of concept.
A lot of rubbish being spouted on bulletin boards today IMHO.
Here are some key take outs:
1) SOS is not immune from the general economic malaise;
2) Shoppers currently have less discretionary spending and arguably, at least in the short-term, most spending on clothing is discretionary to a greater or lesser extent;
3) Discounting to try and increase revenues when people increasingly have a specific need and only a fixed budget to spend can backfire e.g. you're better off selling two garments at £100 than three garments at £100;
4) Discounting to increase revenues does not always boost the bottom line e.g. if you drop prices across the board by, say, 10% then you need a c22% increase in revenues (from your lower base) just to achieve the same level of gross profits, all other costs being equal;
5) SOS hasn't ruled out all discounting;
6) SOS geared up its operations, in accordance with its original budget forecasts, for a substantial increase in FY24 revenues which, as H1 progressed from Q1 to Q2, became increasingly apparent was no longer achievable;
7) Having previously committed to a more rapid expansion of sales and having recruited and trained additional staff to facilitate said expansion, SOS couldn’t just shed those additional costs immediately;
8) SOS moved from one sales strategy in Q1 to another in Q2 and I’d hazard that it probably incurred an additional c£500k-£1m of operating costs in H1 than it might have done had it anticipated that the economic climate would require this strategic change 6-18 months ago;
9) I’d also hazard that if SOS had continued to pursue a strategy of discounting to increase revenues in Q2, rather than maintaining gross margins, its operating loss would have been even higher i.e. the additional revenues would not have been able to make up for the loss in gross margin (I suspect SOS would have modelled this based on H1 trends before making the decision);
10) You have to adapt and change with the times rather than fretting over spilt milk;
11) SOS has never been shy of changing its modus operandi when needs dictate e.g. COVID, regardless of the short-term impact (SOS has always preferred to act rather than wait in hope);
12) It's clear that SOS has taken on additional operating costs to prepare the ground for international expansion and new bricks & mortar outlets (I wouldn't be surprised if these additional costs exceed £1m pa);
13) These additional (discretionary) costs can be shed further down the road if the plans do not progress;
14) The demise of the UK high street is much overstated - even Shein operates bricks & mortar outlets in the UK! (one has to assume that fashion retailers have a far better understanding of their business needs than most armchair analysts); and
15) A high street expansion in the right locations is not necessarily doomed to failure, as some like to suggest, but you have to reckon with a 2-3 year payback period
No bounce back today..This looks like it is heading for a slow descent into single digit SP..No share buying by the directors,even at this price.
I suspect that these ladies know a lot more about women’s fashion than the posters on this board. They seem to have their heads screwed on. Time will tell.
Spot on..It has set back meaningful profitably for at least 2 years..In the end they will justify a capital raise by saying store expansion needed as stores are doing well..In the end l can only see two possible compatible suitors..Next and Zara owners..Let's keep our fingers crossed for any rumours to lift SP
I agree Glowacki.
The board is trying to run too soon. The market sees another capital raise in prospect. Stores will be expensive and no profits for another couple of years.
The one really dumb thing the directors did today was announce an expensive strategy change at same time as company moved from profit over 6 months to a loss...Had they waited until they could show an increasing profit,and then announce the new strategy,the SP would have rocketed upwards..Right now it looks like trading losses with much bigger increase in expenses coming up in 2024... Strategy is excellent,but timing sucks.
Started: davwal, 18 Oct 2023 15:52
Last post: davwal, 18 Oct 2023 15:52
Today’s announcement re opening stores in high-grade retail centres seems to run counter to also taking floor space in a mid-range supermarket alongside its own basic (and in my view horrible) low budget range . Sosandar was launched with a clear strategy of not owning bricks and mortar, but now the thinking seems all over the shop (pardon the pun).
Started: piworld, 18 Oct 2023 14:29
Last post: piworld, 18 Oct 2023 14:29
Sosandar Joint CEOs, Ali Hall and Julie Lavington and CFO, Steve Dilks present a Trading and Strategic Update for the first half of 2024, outlining the company’s performance as well as their omnichannel strategy, launching its first bricks and mortar stores plus international launches in Australia and Canada.
Watch the video here: https://www.piworld.co.uk/company-videos/sosandar-sos-h1-trading-and-strategy-update-october-23/
Or listen to the podcast here: https://piworld.podbean.com/e/sosandar-sos-h1-trading-and-strategy-update-october-23/
Last post: wakeyinvestor, 18 Oct 2023 11:42
A poor decision to open own stores on High Street in affluent towns IMO. Customers can touch and feel the product when in store at Sainsbury for example and they should have waited to see how this actually plays out in terms of sales. A strange time also to make such a decision. Yes, the typical customer if affluent and may not be as impacted by the cost of living crisis or a recession, but they are affluent career women who are time constrained and enjoy the efficiency of the online experience. This company is not ASOS or Boohoo, instead with Sosandar the quality is a given so I’m not sure that the touch and feel aspect is that big a deal. That said, I assume they’ve done the market research, so hey, what do I know?
Yes but you can say the same about Quiz. I think people are fed up with online stuff unless it is really cheap like shein. But the costs of having stores and business rates etc. staff costs are getting higher and higher and Labour are committed to getting rid of zero hour contracts and controls on strikes etc. no wonder mkt hates this statement. 5 pence on the way if they actually start buying stores.
All good points. the only real question is at level to buy the shares, if the hope is for a buyout. certainly, the markets/pi's think bricks and mortar are a pointless expense, even with the high street presence it gives. it might well be a canny move for the economic turn but as we seem to be heading still for more economic uncertainty i canwell imagine the sp wouldn't be where it is now if that wasn't part of the new strategy. maybe further down the line? or maybe they feel the turn is going to be slow but the set up will take a year, at best, to fully operate.
all that can really be said is the price is cheaper but how cheap would you want to throw you lot in with them to insulate your cash from existing headwinds?
Next recently acquired FatFace despite already stocking FatFace clothing (it's also acquired several other brands that it was already stocking). Buying cuts out the middle man and would also give Next direct access to SOS's suppliers and additional scope for economies of scale; not that I'm advocating a buyout by anybody.
"The company is profitable."
I must be reading a different Trading Update.
Started: scoutingforit, 18 Oct 2023 08:46
Last post: TheTrotsky, 18 Oct 2023 10:04
Garbage. Sales haven't actually fallen in Q2 compared to FY22 unlike some of their peers e.g. ASC, BOO, QUIZ, SDRY etc. SOS pivoted (more like a handbrake turn) its strategy between Q1 and Q2. It's highly likely that they would have taken on board certain additional operating costs during Q1 in expectation of scaling up volumes that will now take longer to absorb (there will no doubt be scope to cut some of these costs if necessary). Also, they've taken on a number of additional high level staff with a view to their new bricks & mortar and overseas ventures, plus invested time and costs in progressing these ventures. These are additional costs that can be jettisoned further down the road if plans have to change.
You can't make a pivotal change in strategy (chasing margins rather than volumes) without some short-term disruption. It's way too soon to make any conclusion. They now need to meet, if not exceed, their new FY24 revenue targets and prove the margin improvement. That said, it would now seem difficult to achieve anything better than breakeven for FY24 (which is quite a come down from the prior year and previous forecasts) and I'm not sure how this lines with statements made in the investor presentation to the effect that they remain profitable (allowing for depreciation and other non-cash expenses they might be cash flow positive but that's not the same as profitable).
People have been saying that SOS is going to go bust for years now and each year SOS has proved their doubters wrong. I'm inclined to give the management team the benefit of the doubt but they do need to deliver a sound H2 (one week does not prove anything but at least they've had a good start to H2).
Can see this going bust before being bought out... the share price movement suggests so.
At £30m its pocket money for the likes of ashley
Started: scoutingforit, 18 Oct 2023 08:41
Last post: scoutingforit, 18 Oct 2023 08:45
Limited stock to buy now
Bounce coming
Company adopting the entirely wrong strategy.... this will be bought out.
Set to bounce from here
First batch
Started: W13Ken, 13 Oct 2023 08:04
Last post: Apeirogon, 18 Oct 2023 08:36
The drop in total orders is quite a concern. Hopefully the new initiatives bear fruit.
Brown Group also down massively.
A general malaise in the clothing retail industry.
We know John Lewis has gone but what will be new apart from Sainsbury's?
My guess is we'll hear more about the new partnership with Freemans (30 million unique visitors visit the brand’s direct to consumer website annually). Freemans scrapped their catalogue of 118 years and went all digital last month, they have launched a new "Made You look" TV campaign and there are a growing list of Sosandar items on their website.
If we hear more about the international rollout then a likely candidate could be Freemans owner, Otto GmbH. They are a German mail order company and one of the world's biggest e-commerce companies.
Half Year Trading Update on Wed 18th October.
The SOS shareprice has been massively negatively affected since the release of BOO's interim results on 3rd Oct. BOO's LFL revenue was down 17% and EBITDA was down 12%.
This has led to a shareprice drop since then of 4% for BOO (you could argue it was mostly priced in after an extended fall) but 17.4% for SOS! Now, I can't claim to be impartial here but that does seem to be a huge overreaction, given the different markets that the companies target and their customers' relative spending power.
I expect there to be a good bounceback on decent results (July's FY presentation said there had been a strong start to the financial year), hence I topped up earlier this week. The board have cleverly built a strong brand without throwing caution to the wind and that should continue. Unlike some other AIM companies they didn't duck out of 20 minutes of questions in their last investor presentation.
Full Year presentation video:
hTTps://www.youtube.com/watch?v=1xruP3r1t3M
Stock market disagrees. Going down for a reason.
I expect SOS to do ok without JL
Sosandar no longer on John Lewis website. I wonder what had happened there seemed the perfect partnership. JL struggling may have wanted better terms. Not good for Christmas sales growth