This coming Thursday, 26^th 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 16^th 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 10^th October. 

The FTSE 100 was broadly flat on Monday as investors continued to assess the implications of the Federal Reserve beginning to cut interest rates last week.

The Federal Reserve’s decision to cut interest rates by 50bps dominated markets last week, and after a strong rally in US stocks, investors were still adjusting to a new world of lower rates and running scenarios for stocks going into the end of the year.

Investors had an additional monetary policy easing to consider on Monday after China cut its repo rate to help stimulate the economy.

“The 10bps cut is aimed at encouraging banks to lend more freely,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“While it’s not a major move, it came alongside the news that a press conference will be held by the governor of the People’s Bank of China, focusing on financial support for economic development. Expectations are rising that another cut to interest rates could be on the way, to try to help China achieve its growth targets.”

Despite the cut to the Chinese, some China-focused stocks were actually down. Rio Tinto was in the read but Antofagasta managed to carve out gains.

Prudential and HSBC cheered the news are were higher on the session.

Rightmove was among the top risers after REA Group upped its offer for the property portal. Rupert Murdoch’s REA Group had its initial offer rejected but has shown a willingness to get the deal done by coming with a revised bid of 770p comprise of cash and shares.

“Australia’s REA has shown its determination to gain a big foothold into the UK property search market by significantly upping its takeover bid for Rightmove,” Streeter said.

“The group is frustrated by a lack of engagement from Rightmove which has clearly been holding out for a much higher offer after the first highly opportunistic bid. It’s now been increased by 9.2% which represents almost a 40% premium to its share price at the end of August. While this will certainly be very encouraging for some investors, who had seen the value of their holdings plummet from highs reached in January 2022, there is likely to be a push among others to hold out for an even better deal.”

Rightmove shares were 2.9% higher at the time of writing.

Rupert Murdoch’s REA Group has shown how keen it is to acquire Rightmove by coming back with a higher bid after an initial approach was rejected.

REA has made a improved proposal to acquire Rightmove, offering 770p share in a cash and stock deal. This latest offer, made on September 22, 2024, values Rightmove at approximately £6.1 billion and represents a 9.2% increase from REA’s initial proposal on September 5.

The new offer consists of 341p in cash and 0.0422 new REA shares for each Rightmove share.

The revised offer price represents a significant premium to Rightmove’s recent trading prices, including a 39% premium to its undisturbed share price on August 30, 2024. This move follows Rightmove’s rejection of REA’s previous improved offer of 749p per share on September 18, which the Rightmove board deemed as fundamentally undervaluing the company.

We will have to wait and see whether the Rightmove board see any merit in the revised offer, but it isn’t a huge increase on the initial offer.

“We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property,” said Owen Wilson, CEO of REA.

“We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth. We have today increased our proposal to an implied value of 770 pence – it provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise. We are genuinely disappointed at the lack of engagement by Rightmove’s Board and we strongly encourage the Rightmove Board to engage.”

Rightmove is the UK’s leading property portal, and for it to fall into overseas hands at a low valuation will be a blow to London’s markets.

After a bumper session for US stocks overnight, UK investors may be disappointed with the soggy session for the FTSE 100, which was trading down heavily in afternoon trade.

UK-specific macro news was to blame, and concerns about the upcoming budget have started to take hold in the market.

“The FTSE 100 started off on the back foot on Friday despite record highs in the US overnight. The index was dragged lower by a surge in the pound which affects the relative value of constituents’ overseas earnings,” said AJ Bell investment director Russ Mould.

“Chancellor Rachel Reeves’ regular warnings of ‘difficult decisions’ in the Budget will be carrying increasing weight after new figures showed public debt as a share of the economy had reached 100% for the first time since the 1960s.”

UK sentiment was hit by mixed economic data related to the consumer. Retail sales rose 1% in August, but Gfk Consumer Confidence fell on worries about the consequences of taxes and disposable spending.

The FTSE 100 was down 0.8% at the time of writing. Although the S&P 500 surged to record highs overnight, US futures were on the back foot after a warning from FedEx about their outlook.

“Often seen as a good indicator of the health of the wider economy thanks to the breadth of its exposure across areas like transportation, logistics and e-commerce, FedEx’s big warning overnight might have wider resonance. It was severe enough to wipe $8 billion off its market value,” Russ Mould said.

“FedEx’s shares were down by double digits in pre-market trading as the company slashed its guidance after missing first-quarter forecasts by a notable degree. The company’s core Federal Express business is really in the doldrums.”

In London, the top risers and fallers were almost a mirror image of yesterday’s leaderboard. Utilities companies were among the very few gainers on Friday, and cyclical sectors were heavily in the red.

National Grid was the top riser with a 1% gain, and United Utilities wasn’t far behind.

All the optimism evident in retailers yesterday was obliterated after this morning’s economic data. Frasers Group and Kingfisher were heavily hit. Even B&M Value was down more than 2%.

Burberry, set to be ejected from the index on Monday, was the top faller with a 4% loss.