The new team at London based runners’ gels and hydration company Science in Sport today said a review of the business had revealed “the relentless pursuit of top line growth led to some poor strategic decisions and an inflated operating structure.”
In a trading update chairman Dan Wright stepped into an executive role in October after former chief Stephen Moon revealed he had suffered a “life changing accident” that led him to quit the business.
Mr Wright said the immediate challenge after taking over the day to day role was to “stem the cash outflow” and trein in the previous strategy of “aggressive growth across all channels.”
A number of actions are underway including a renegotiation of oversea distribution deals, axeing some marketing contracts and operational savings that together will deliver cost reductions of £2.5 million.
Overall sales at the Hatton Garden headquartered company fell 1.6% last year from £3.8 million to £62.8 million with growth in the UK offset by weaker trading in China.
Adjusted earnings of £2 million compared with a loss of £2.7 million in 2022.
The company, best known for its SiS and PhD brands, has a partnership deal with leading long distance runner Eilish McColgan, who is hoping for a medal in the 10,000 metres at the Paris Olympics this summer.
It said “with the focus on controlled growth and profitability, revenues are expected to be broadly flat” in 2024, “with a doubling of underlying EBITDA and reduction in net debt.”
The AIM traded shares fell 0.75p, or 4.5% to 16p.
