This coming Thursday, 26th September, Sosandar (LON:SOS) will be holding its AGM in Wilmslow, Cheshire.
It will sign off on a small loss-making year’s business, just £0.3m down on a £46.3m turnover, but it is not so much about what happened last year, instead confirming that the current year to end-March 2025 will see the business turn back into profits.
The Business
Sosandar, which was founded in 2016 and listed on AIM in 2017, is one of the fastest growing women’s fashion brands in the UK targeting style-conscious women who have graduated from lower quality, price-led alternatives.
Over 1m women now have items of the company’s clothing hanging in their wardrobes, its product range is diverse, providing an array of choice for all occasions across all women’s fashion categories.
The company, which sells predominantly own-label exclusive product designed and tested in-house, states that for its underserved audience it offers fashion-forward, affordable, quality clothing to make them feel sexy, feminine, and chic.
Sosandar’s success has been built on an exceptional product range, seamless customer experience and impactful, lifestyle marketing, all of which is underpinned by combining innovation with data analysis.
The group’s growth strategy has been focused upon continuing to grow brand awareness and expand its addressable market and routes to market, reaching customers wherever they wish to shop.
The company sells through Sosandar.com and has brand partnerships in place with Marks & Spencer, The Very Group, JD Williams, J Sainsbury, The Selfridges Group, and Next.
The Latest Trading Update
On Tuesday 16th July the group, when announcing its 2024 results, issued a Trading Update for the first quarter of the current year.
Co-CEO’s Ali Hall and Julie Lavington stated that:
“Looking ahead, FY25 is focused primarily on delivering sustainable growth in our gross margin, pre-tax profit, cash generation and maintaining a strong balance sheet.
Nonetheless, we do expect revenue growth from on our own site, further third party partnerships, opening shops and the compounding positive effect that the shops will have across all our channels.
We believe that the future is very bright as we take the Sosandar brand to more customers across the UK and worldwide, as we move forward towards reaching our strategic goal in the medium term.”
It gave guidance that market expectations for the year to end-March 2025 are currently revenue of £54.6m and PBT of £1.0m.
In Q1 there was a continued focus on prioritising margin enhancement and profitability, while the balance sheet remained robust with £8.3m in cash allowing the company to self-fund its planned store roll out.
Analyst View
Analyst Matthew McEachran, at Singer Capital Markets, rates the group’s shares as a Buy, looking for 31p in due course.
His estimates for the current year to end-March 2025 are for sales of £45.6m (£46.3m), with adjusted pre-tax profits rebounding from a £0.3m loss last year to a £1.0m profit this year, lifting earnings up to 0.4p a share.
In My View
I like the feel of this little £25m capitalised group.
After last year’s loss it is quickly springing back into profit, while also pushing its online channels and opening its own shops.
That combination could well deliver even further corporate growth in the coming year.
Its shares at just 10p, on the face of it may look too expensive on 25 times current year earnings, but remember it is a recovery situation – one certainly worth paying attention to, especially ahead of its AGM this week and its Interim Results being announced on Thursday 10th October.