Energy drink maker is ready for a boost

ANDY MURRAY may not have made it through to the Wimbledon finals, but watching him play with the majestic Serena Williams has been enjoyable and entertaining. For the competitors and their peers, however, matches require not just skill but endurance.

Most, including Murray, glug Science in Sport isotonic energy gels to make it through. Made in Nelson, Lancashire, the gels are used by elite athletes around the world, including Tour de France defending champion Geraint Thomas and the rest of Team Ineos.

Even if athletes swear by Science in Sport, known as SiS, the stock market seems less convinced.

Recommended by Midas at 68p five years ago, the stock is 63p today. The pedestrian performance reflects concerns about the economic environment and frustration that SiS has yet to deliver a profit.

The group also raised money on the stock market late last year, a move that sent the shares down from 75p to little more than 50p at the start of 2019.

Looking ahead, the stock should rebound.

The 2018 fundraising was used to buy PhD, a Leeds-based protein bars business.

While SiS products are primarily sold to endurance athletes, PhD bars are the snack of choice for gym enthusiasts. For SiS, acquiring PhD was a smart move. The companies were roughly equal in size but together, they cover a large chunk of the sports nutrition market, worth around £11 billion a year globally.

In 2014, SiS sales were £8 million.

MIDAS VERDICT: Science in Sport investors have every right to feel aggrieved. But, like endurance athletes, they should not give up now. The company is growing fast, profits are in sight and the shares, at 63p each, are undervalued. Existing shareholders should stick with the stock – and there are opportunities for new investors, too.

This year, the enlarged group should turn over nearer £50 million. Brokers are also expecting the business to break even, before moving into profit next year.

Chief executive Stephen Moon hopes to double sales again in the next few years, boosted by strong growth online and internationally.

The company focused on the UK in 2014, selling to retailers such as Tesco and Sainsbury’s.

Today, a large percentage of sales come from the group’s own website and its products are sold in 100 countries, including America and China.

These trends are likely only to increase in the years ahead. Traded on: AIM Ticker: SIS Contact: sisplc.com or 020 7400 3700