Shares in Sosandar (SOS:AIM) bounced 17.7% higher to 28.25p after the online women’s fashion brand said sales and EBITDA, or earnings before interest, tax, depreciation and amortisation, for the year to 31 March 2022 will beat recently upgraded market expectations.
The upgraded followed the digital fashion retailer’s delivery of a second consecutive EBITDA positive quarter in the final quarter of the year, despite January and February being seasonally quieter months, with growth driven by momentum across both its own and third party websites,
TRIPLE DIGIT SALES GROWTH
Sosandar now expects to report sales north of £29 million, up 138% year on year with an EBITDA loss reduced by over 80% from the £2.92 million deficit racked up in full year 2021, having generated six consecutive EBITDA positive months in the second half.
Key performance indicators were up across the piece last year, among them conversion rates, average order value and average order frequency, amid ‘ever increasing engagement’ with its loyal customer base.
In the statement, Sosandar stressed it has used its agility to ‘navigate external headwinds, including global supply chain challenges which, alongside margin gains driven by the growth of the business, have resulted in no material impact to date’, although the board ‘continues to monitor the situation closely’.
THIRD PARTY DEALS PLEASE
Sosandar has become a key strategic partner of all its three major third party retailers, namely Marks & Spencer (MKS), Next (NXT) and John Lewis.
Following success to date, it has extended its relationship with Next to sell on Next’s Platform Plus, which allows Next customers to order items picked from Sosandar’s own warehouse, which are then delivered via Next’s distribution network.
The company also revealed it has been approached by Very and commenced wholesaling a small part of its range last month.
‘Selling Sosandar products through Very.co.uk will further increase the brand’s reach amongst its core target demographic and deliver incremental revenue and EBITDA,’ insisted Sosandar.
Commenting on the upgrade and new third party arrangements, Co-CEOs Ali Hall and Julie Lavington said they are ‘incredibly proud Sosandar is capturing the hearts of fashion-forward women and are delighted to add The Very Group to our family of partners.
‘Despite the continuing uncertainty in the wider environment, our confidence in the outlook for Sosandar is undiminished and, reflecting our trading momentum, we plan to further accelerate our growth in the new financial year and beyond.’
UPGRADES FROM SINGER
Before the positive announcement, the consensus of analysts’ expectations was for year to March 2022 sales of £27.1 million and an EBITDA loss of £900,000.
Singer Capital Markets has subsequently upgraded its sales estimate by £2 million to £29.1 million and halved its forecast EBITDA loss to £450,000 and also upgraded sales by 10% for the years to March 2023 and 2024, driving EBITDA upgrades of £500,000 (26%) and £900,000 (33%) to £2.2 million and £3.5 million respectively.
