£3.2 million becomes £49.8 million in three weeks
Risk-tolerant traders should open a position in Science in Sport (SIS:AIM), the sports nutrition minnow demerged from biotech Provexis (PXS:AIM) earlier this month (9 Aug). A steady stream of new products, strong sales momentum and international market share gains offer powerful catalysts to drive shares in the company, known as SiS, higher in the months ahead.
The Berkshire-based concern makes and markets sports nutrition products such as isotonic gels, hydration tablets and cereal-based energy bars for sports enthusiasts and professional athletes alike. Its competitive advantages include a commitment to launching new products as well as close ties fostered with elite athletes. Brand ambassadors include Olympians Chris Hoy and triathlete Helen Jenkins. SiS claims 24 medal-winning athletes or teams used its products at London 2012, while Andy Murray’s US Open win was also fuelled by its wares.
Chief executive officer Stephen Moon, a former senior executive in GlaxoSmithKline’s (GSK) nutritional healthcare business, argues the global sports nutrition market is both resilient and fast-growing. The fact that sales of sports foods alone surged 300% higher between 2005 and 2010 supports his claims. SiS eked out underlying profits of £100,000 on like-for-like sales up 11% to £5.5 million in the year to March. Moon says sales momentum picked up strongly in the fourth quarter and has continued into the current year, while operating margins are also building as a result of factory efficiencies and other savings.
Besides selling through specialist cycle, triathlon and running shops, SiS is making inroads into retail multiples including Tesco (TSCO), its biggest customer, Sainsbury (SBRY), Boots and Halfords (HFD). Enticingly, international distribution is building and sales are growing at pace through www.scienceinsport.com. The plan is to roll out the e-commerce platform in the US in January, a move that could add further fuel to the compelling topline story.
Shares says: Sales momentum is building and the US launch could be a game changer.
