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Sports nutrition specialist is worth a look for profit breakthrough and takeover potential

Improved earnings and increased interest by large companies in the sports nutrition market strengthen our conviction in Science in Sport (SIS:AIM).

A strong pipeline of new products could help the £37m market cap sustain positive earnings momentum in the year ahead.

Full year results (reported on 23 Mar) from the sports nutrition products maker revealed 30% sales growth to £12.2m, driven by international expansion, online sales and new product development.

Science in Sport has a strong brand among fitness enthusiasts and elite athletes across a growing range of endurance sports. Chief executive Stephen Moon expects the core UK and EU business to be profitable in 2017 at the earnings before interest, tax, depreciation and amortisation (EBITDA) level.

More than half of SiS’ revenue is generated online, via its own website and using third party channels. New standalone websites in the US, Italy, Germany and Holland could provide further support to earnings growth this year.

Major e-commerce and grocery suppliers are showing considerable interest in the growth attractions of the sports nutrition market. As broker Cenkos explains: ‘Corporate activity remains vibrant. Grenade recently completed a second private equity deal, valued at £72m (circa eight times sales), whilst reports indicate Associated British Foods (ABF) is actively acquiring in the space.’


We remain bullish on Science in Sport at 85p, buoyed by the expected core business profit breakthrough and growing consumer and corporate interest in its space. (JC)

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