Strong performance from sports supplement firm... but shares still need a boost
COMPETING in the Olympics and Paralympics takes a huge toll on the body and most athletes try to compensate with sophisticated diets.
Science in Sport makes specialist products used by tennis star Andy Murray, Tour de France champion Chris Froome and 40 Premier and Football League clubs. The group also worked closely with cycling, swimming, rowing and athletics teams in Rio, and users of its nutritional products won around 50 medals, including 16 at the Paralympics.
But SiS does not just cater to professionals. Sports enthusiasts across the country down gels, shakes and protein mixes to boost energy, keep hydrated, recover faster and build muscle. The group has also moved into Australia, Italy, Holland, Germany and the US.
Midas tipped SiS in June 2014, when the shares were 67½p. Today, they are just 2p higher, having fallen to 46p in the aftermath of the Brexit vote. This is undeserved.
Chief executive Stephen Moon has virtually doubled sales over the past two years, he has expanded overseas and invested heavily in the group’s online business, which is growing at more than 60 per cent annually.
The global market for products such as energy gels and whey protein shakes is huge, with sales of around £400million each in the UK, Australia and Germany and more than £1billion in the US.
SiS is a small player but it is known for innovation, recently creating the first ready-to-drink whey shake, which is perfect for athletes on the go.
Last week, it unveiled a 24 per cent rise in interim sales to £6.5million alongside an operating loss of £369,000. The loss was expected as Moon is investing heavily in future growth and full-year sales are expected to exceed £12million, rising to almost £15million in 2017.
Midas verdict: Science in Sport operates from a highly efficient, low-cost factory in Lancashire, shipping its products all over the world. The share performance has been disappointing, but the business is going from strength to strength. Shareholders should hang on in there. New investors could also find value.