Sosandar Plc
Annual Report
For the year ended
31 March 2024
Company Registration Number: 05379931
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Annual Report 2024
Contents
Page
Group Overview
Chairman’s Statement
2
Strategic Report
4
Corporate Governance
Board of Directors
22
Directors’ Report
32
Consolidated and Company Financial Statements
Independent Auditors’ Report
37
Consolidated Statement of Income and Other Comprehensive Income
44
Consolidated Statement of Financial Position
45
Consolidated Statement of Cash Flows
46
Consolidated Statement of Changes in Equity
47
Company Statement of Financial Position
48
Company Statement of Cash Flows
49
Company Statement of Changes in Equity
50
Notes to the Consolidated and Company Financial Statements
51
Company Information
78
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CHAIRMAN’S STATEMENT
For the year ended 31 March 2024
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Introduction
I’m pleased to be reporting on another strong year of progress for Sosandar, delivering an increase in
revenues and improved gross margins. The results for the year reflect management’s strategic
decision to implement a more targeted approach to price promotion to improve margins and enable
us to be better placed to deliver long-term, sustainable profitable growth as we continue our transition
towards becoming a multi-channel retailer.
Sosandar has rapidly grown from a start-up into one of the fastest growing fashion brands in the UK
and FY24 saw the business continue to evolve as it looks to achieve its goal of becoming one of the
world’s largest womenswear brands globally.
The strength of Sosandar’s brand and unique product range continues to drive its success. Our product
is reaching more women globally, more regularly and through more channels than ever before.
Delivering on our growth strategy
Following the over-subscribed equity fundraise in February 2023, we were able to accelerate the
execution of our multi-channel strategy and other growth initiatives.
We have further invested in the functionality of our own site in order to enable more customers to
buy directly from us, have more ways to shop and provide a more personalised experience. In addition,
we successfully launched our mobile app in July 2023.
Trading with third-party partners, across which we sell at full Recommended Retail Price (RRP), has
continued to be strong and has further increased our brand awareness, with Sosandar consistently
being one of the top selling brands across all third-party partners, including Next and Marks & Spencer.
We expanded our global reach through our first international launches, and have launched with
Global-e, enabling Sosandar to transact and fulfil orders to over 60 countries in a cost-effective manner
and substantially broadening our potential customer reach.
We have now taken the first strides towards becoming a true multi-channel retailer with the planned
opening of our own UK stores, a logical next step as we look to reach more of our customer
demographics by offering more ways to engage and shop with Sosandar.
In addition to the greater reach and scale stores offer, they will also help to further expand Sosandar’s
brand awareness and presence, benefitting all channels.
Our reduced use of price promotion through on-line channels is an important precursor to our store
openings, expected later this year, as it enables price parity between our on and off-line offerings. We
are progressing well with our plans to establish our first stores, with multiple locations in high profile,
affluent areas where Sosandar customers over-index at various stages of the pipeline. Our priority is
situating the stores in the right location and for the right cost.
Our people are out greatest asset
Behind Sosandar’s success is our team of hard working and passionate people. From the initial product
designs through to sourcing, logistics, customer service and all aspects of retailing, it is only possible
because of our excellent team working to create clothing that meets our customers’ wants and needs.
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CHAIRMAN’S STATEMENT
For the year ended 31 March 2024
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Throughout the year, we strengthened our capabilities across the business. In particular, as we gear
up to opening our stores, we have enhanced the extensive experience already within the team by
appointing a Head of Retail, Head of Retail Operations and Visual Merchandiser.
I would like to thank all our team members for their continued dedication and hard work.
Governance and responsibility
Maintaining and enhancing our corporate governance framework remains a priority for the Sosandar
Board. We have processes in place to ensure adherence to our high standards and the effectiveness
of our committees, and our Board is adept at making executive decisions in a considered and timely
manner.
Sosandar is underpinned by responsible and scalable business practices. Throughout our business
operations, company culture, and interactions with our community and customers, we strive to have
a positive impact on society. We uphold responsible fashion practices and will continue to review and
improve our activities to deliver them and to increase Sosandar’s positive impact on the fashion
industry.
Outlook
FY25 is set to be another year of progress for Sosandar. We remain steadfast in our focus on growing
margins and profitability, whilst also increasing Sosandar’s brand awareness and reach both
internationally and in the UK with the opening of our first physical retail stores. We remain highly
committed to offering a seamless customer experience through all our sales channels and to returning
value to all our stakeholders.
Nicholas Mustoe
Chairman
15 July 2024
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STRATEGIC REPORT
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AT A GLANCE
Sosandar provide a one-stop online shop for style conscious women who have graduated from price
led alternatives. We offer this underserved audience fashion forward, affordable, quality clothing to
make them feel sexy, feminine, and chic. The business sells predominantly own label exclusive product
designed in-house.
Investment case
Huge and relatively untapped target market
▪
Sosandar creates fashion-forward products for a generation of women overlooked by existing
fashion brands, offering a significant untapped opportunity – a demographic that spends
£3.7bn per year on fashion and forming part of the overall £60bn womenswear market.
▪
Estimate around 20 million women over the age of 35 and 13 million within our core
demographic of 35-64.
▪
As age no longer determines how women dress, whatever age the Group recruits a customer,
it provides an opportunity to dress them for the rest of their life.
▪
These numbers represent only the UK and, this same societal shift and the opportunity it
represents exists in all developed countries across the world, giving the Group the opportunity
to dress women across the globe.
A unique and broad product range
▪
All products are sold at a mid-price point and are increasingly designed with sustainable
materials - offering customers on-trend, affordable, long lasting, lifestyle appropriate clothes
with high fashion credibility.
▪
A unique aesthetic empowering women of all ages to feel chic, sexy and on-trend.
▪
Offers customers clothing for all occasions with the product range including areas such as
knitwear, formal tailoring, partywear, summer occasion wear and swim wear.
▪
Able to adapt quickly to changes in consumer demand thanks to the broad range of product
categories.
Multi-Channel strategy
▪
Sosandar.com remains the bedrock of the brand, offering the customer the full product range
and exceptional service (TrustPilot score rated as Excellent).
▪
Established partnerships with several of the UK’s largest fashion retailers, being a top selling
brand including through NEXT and Marks and Spencer.
▪
Sosandar stores to open for the first time in FY25, enabling the brand to extend its reach to
customers spending in stores which accounts for 60% of womenswear spend.
▪
Further expansion into International markets following launches with third-party partners in
Australia and Canada and the internationalisation of Sosandar.com during FY24.
▪
Drives further brand awareness across the target market, whilst driving incremental sales and
accelerating improvement in profitability.
Experienced and driven founder-led management team
▪
Highly experienced management team with many years in the fashion and retail industries.
▪
Proven success previously taking a business from concept to market leader.
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Investment case (continued)
Underpinned by responsible and scalable business operations
▪
‘Responsible fashion business’ framework embedded within the business which covers the
following key areas:
o Ethical Operations which covers the commitment to sourcing product from suppliers
who share common values and beliefs
o Environmental sustainability which includes sourcing product from sustainable
sources and packaging which is ‘green’ and recyclable; and
o Fabulous Sosandar reflects the inclusive and uplifting workplace for all employees
▪
Mobile-first website built on leading Magento platform, with the Sosandar App launched to
further enhance the options available to the customer in how they chose to interact with
Sosandar.
▪
Best in class third-parties chosen to deliver logistics services including GXO for warehousing
and Royal Mail / Evri for consumer deliveries.
▪
A new ERP to be implemented in FY25 to ensure Sosandar can scale with robust and efficient
back office systems to support all business functions.
CO-CEO’S STATEMENT
A year of significant progress
FY24 has been a year of continued progress at Sosandar. We have delivered a robust financial
performance, with a profitable second half, accelerating revenue growth whilst at the same time
growing our margin and generating cash.
In addition, we have made significant steps on our journey to become a multi-channel retailer whilst
also expanding the reach of the Sosandar brand. We launched new partnerships with third-party
partners, both in the UK and internationally, and made significant strides towards opening our first
stores.
This has all been achieved against one of the most challenging backdrops our industry has experienced
and is testament to how our customers feel about our on-trend, affordable, long lasting, lifestyle
appropriate clothes.
Robust financial performance
We generated revenue of £46.3m, an increase of 9% versus the prior year (FY23: £42.5m). Our focus
on driving long-term profitable growth has resulted in our gross margin increasing, with gross margin
for the full year being 57.6%, up from 56.2% in FY23. The second half comparisons paint a clearer
picture of the strategic decision to introduce a more targeted approach to price promotional activity
ahead of select store openings, with discounts purposefully offered much less frequently. Gross
margin for the second half was 59.6%, up from 57.8% in the prior year. Post-period end by Q1 FY25
gross margin has continued to improve and has increased to 63.4% (Q1 FY24: 56.7%).
Demonstrating the impact of increased revenue and gross margin, H2 FY24 saw the Group deliver a
substantial uplift in profitability, of £1.0m, following a £1.3m loss in H1 FY24. Combined, this resulted
in a loss before tax of £0.3m for the full year.
Throughout the period we have continued to deploy careful working capital management, resulting
in a cash position at 31 March 2024 of £8.3m (31 March 2023: £10.6m). This further strengthens our
ability to execute the next stage of our growth journey, including, as planned, the roll out of select
physical retail stores during FY25 and beyond funded entirely from existing financial resources.
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CO-CEO’S STATEMENT (continued)
Our vision and purpose
Our vision is to become one of the largest womenswear brands globally. Our purpose is to empower
women of all ages to feel good in the clothes they wear, catering to the burgeoning 'ageless'
generation. Our continued growth is evidence of the success of our strategy to allow women of all
ages to feel sexy and chic through our unique and diverse range of products.
There is an ongoing shift in the consumer mindset towards fashion; women are leaving behind dated
ideas of what they must wear at what age, and instead are embracing clothes that make them feel
good, work in their everyday lives and reflect their individual personalities. Our offering is ideally
placed to cater to this trend.
While our products are trend-led, they are designed to be kept and loved for years. This is why we
invest so highly in quality and fit, which is reflected in our price point.
Our unique brand
As a clothing brand, our product is everything. The strength of our brand and unique product range
are the key drivers of our success and keep our customers returning to us for their wardrobe needs.
Throughout the year, we have seen major successes across key styles with party wear, dresses,
tailoring, knitwear and smart trousers being standout items.
As Sosandar continues to grow, we are committed to developing our product range to offer our
customers an ever-growing variety of on-trend, affordable, long lasting, lifestyle appropriate clothes.
The success of our range has been consistently strong across all our different routes to market.
Through the success of our own website and third-party partnerships with some of the largest retailers
in the UK and now internationally, the Sosandar brand is now widely recognised as on-trend,
affordable and high quality, providing us with opportunities to leverage our strong brand in the future.
Our routes to market
1. Our own site
Sosandar.com and our app is the anchor of our offering. Through this channel, our customers get the
whole Sosandar lifestyle experience and can access the full extent of our diverse product range. The
site is continually updated with new products and content, and we are constantly working and
investing to ensure we maintain a seamless customer experience through this channel.
Since its launch in July 2023, our app has performed well, and is enabling us to provide mobile first
technology to our customers, giving them more avenues to engage with the Sosandar brand.
Within the year we also launched with Global-e, the world's leading platform to enable and accelerate
global, direct-to-consumer, cross-border ecommerce. This enabled us to transact and fulfil orders
worldwide to over 60 countries in a cost-effective manner and allowed us to build our knowledge to
inform our future international strategy. We have seen demand from across the globe, with initial
sales in line with our expectations, with Ireland, Australia and the Middle East in particular getting off
to a good start.
2. Third party partners
Trading with our well-established third-party partners has continued to be strong, with the success of
our product resulting in Sosandar being one of the top selling brands across all third-party partners
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including Next and Marks & Spencer. Alongside our existing relationships, we were pleased to form
new third-party partnerships with J Sainsbury’s and Freemans, part of the Otto Group.
In the period, we launched with The Iconic in Australia and The Bay in Canada. The Iconic has
performed incredibly well and we are extremely excited by the success we have had to date in a
previously untapped market for Sosandar brand. Shortly after launching with The Bay, their
marketplace went down due to technical issues which they have been unable to resolve. We therefore
made the decision to stop working with them and withdraw our stock. Our performance in Australia
validates our belief that the Sosandar product range will resonate with fashion conscious women
across the globe.
Post period-end we were delighted to announce a new partnership with Arnotts, the oldest and largest
department store in Ireland, as we have seen strong demand from customers in Ireland since our
inception. Initially, the Sosandar range will be sold online, followed by an in-store concession.
Third party partnerships, both domestically and internationally, remain a key facet of our higher
margin multi-channel model and we believe this channel will play an important role in growing and
strengthening our loyal customer base.
3. The rollout of our own stores
With over 60% of the +£60bn p.a. clothing market in the UK being transacted in physical stores, we
are confident that the opportunity available to multi-channel retailers far exceeds than if we were to
remain an online pureplay business.
As a reminder, we believe that having our own stores will:
•
Deliver multiple benefits both to our total addressable market, profitability and to the brand
as a whole;
•
Bring increased brand awareness;
•
Drive higher margins, both at the gross and operating level;
•
Result in more efficient marketing; and
•
Deliver overall lower returns rates
We are delighted to confirm that we have signed for, and have commenced the fit out of, our first two
stores located in Marlow and Chelmsford which are expected to open in September. As previously
disclosed, these are the first of several stores that we expect to sign this calendar year, with a number
of others currently in the latter stages of legal process.
Marlow is a vibrant and affluent riverside town, with 32,000 visitors daily. The store is on Marlow High
Street, home to various boutiques and cafés, including The White Company, Sweaty Betty and Toast.
Located in Buckinghamshire, Marlow attracts visitors from London and the Home Counties. Marlow is
distinct in that shoppers can visit major high street retailers, as well as Michelin-star restaurants and
historic monuments, whilst enjoying the charm of a market town.
Chelmsford is located within the London commuter belt and has a population of nearly 200,000
people. The city’s proximity to London, along with the quality of its shops, elegant city centre and
idyllic surrounding countryside, makes Chelmsford a vibrant and affluent city. The store is in the heart
of the city, on Bond Street, which boasts a variety of top high street brands, such as Mint Velvet, The
White Company and Tag Heuer.
Our primary focus is to ensure that Sosandar stores are situated in the right position in affluent,
thriving locations where Sosandar customers over-index. The exact timing of openings will,
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accordingly, be determined by our disciplined approach to ensuring 'right price, right location’ and
that all other aspects are in place to deliver a fantastic in-store customer experience.
As part of our rollout, we have hired a Head of Retail, Head of Retail Operations and Visual
Merchandiser to build on the extensive retail experience within our existing teams. In addition, we
have selected an EPOS system to ensure that the customer journey is seamless and we are now
working on the integration.
Our roadmap
The transition to becoming a true multi-channel retailer, with our product being sold on our own site,
through our own stores and via highly reputable third-party partners, is well underway. Alongside our
strategic goal of delivering a pre-tax profit margin of at least 10% and £100m+ revenues in the medium
term, we have defined the focus that will shape our decision making over the coming years:
•
Drive sustainable profitable growth with a focus on margin;
•
Leverage our growing brand awareness, with a focus on further broadening its reach and
continuing to drive brand equity;
•
Remain agile on marketing spend, predominantly leveraging stores as a marketing channel,
and selectively using marketing campaigns as an additional tool; and
•
Grow the store portfolio and review opportunities to broaden the shop formats and locations
from standalone shops, maintaining a low risk approach
Outlook
Our robust performance in FY24 is a testament to the strength of our brand, the quality of our product
offering and our ability to provide our customers with a diverse range of clothes and accessories for
all their wardrobe needs. We have also made some key advances operationally and strategically, all
of which position us to provide our growing customer base with more opportunities to interact with
the Sosandar brand.
We have set out our roadmap to deliver on our medium-term objectives, designed to drive profitable
growth and generate improved shareholder returns. Our Q1 FY25 results at the gross margin and pre-
tax profit level have been highly encouraging and reflect our prioritisation of margins with reduced
discounting ahead of planned store launches. As such, whilst it is early in the year to predict a full year
outturn, we have taken the decision not to drive revenue growth at the detriment of margins in FY25.
The significant increase in gross margin to 63.4% means pre-tax profit levels are expected to remain
in-line with expectations, despite lower revenues, which are now likely to be in-line with the prior
year.
Looking further ahead, we expect that our enhanced brand presence and sales mix will, once again,
deliver revenue growth in the years ahead, driven by growth through our own website, the rollout of
stores and the compounding positive effect that the shops will have across all of our channels.
We are incredibly excited about the future, as we open our first physical retail stores, continue to take
the Sosandar brand to more customers across the UK and worldwide, and move further towards
reaching our strategic goals of delivering a pre-tax profit margin of at least 10% and £100m+ revenues
in the medium term.
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FINANCIAL REVIEW
KPI’s
Year ended 31
March 2024
£'000
Year ended 31 March
2023
£'000
Change
Revenue
£46,277
£42,451
9%
Gross Profit
£26,650
£23,837
12%
Gross Margin
57.6%
56.2%
140bps
Administrative Expenses
£26,984
£22,200
22%
Profit / (Loss) before tax
(£332)
£1,597
-121%
EBITDA*
(£18)
£1,872
-101%
*EBITDA is calculated as profit before tax less interest, depreciation and amortisation
FINANCIAL REVIEW (continued)
Year ended 31
March 2024
Year ended 31
March 2023
Change
Sessions
15,090,432
15,091,247
0%
Conversion rate
3.43%
4.11%
-68bps
Number of orders
518,108
620,977
-17%
AOV**
£102.25
£97.27
5%
Active customers ***
253,566
264,832
-4%
Average Order Frequency ****
2.08
2.34
-11%
** Average Order Value is calculated on own site sales only, inclusive of shipping charges and VAT
*** Active customers is the number of individual customers who purchased from Sosandar.com in the last 12 months
**** Average Order Frequency is the total number of orders in the last 12 months divided by the number of active customers
The Group has delivered a robust financial performance in the year whilst laying the foundations for
a period of significant strategic growth commencing in FY25. FY25 will include the milestone of
opening the first Sosandar physical retail store, and the performance in FY24 reflects certain actions
that we took to shift our focus from revenue growth to margin enhancement, with a view to the long-
term success of the business. The most significant of these has been the managed reduction in price
promotional activity on our own website in the second half of FY24 in order to move to a full RRP
model which will be aligned across all sales channels. As a result of this, revenue growth in FY24 was
reduced compared with previous years, and pre-tax profit was impacted, however, gross margin was
significantly up against last year due to this managed change.
The non-financial KPIs shown above also reflect this managed change away from revenue growth as
the overriding priority and therefore show a reduction.
The performance in the year was delivered against a backdrop of ongoing challenges presented by the
macro environment which has included wars, supply chain issues and high inflation. The agility and
ongoing approach to managing risk in all aspects of the how the business is led, allowing us to deliver
such a robust performance once more.
The cash balance is particularly strong and we continue to expect to fund the store opening
programme entirely from existing cash resources.
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Revenue up +9% to £46.3m
The growth in revenue reflects the continued demand for Sosandar product across all sales channels
which now includes own website, third-party concessions and third-party wholesale partners.
We had by far our largest quarter of revenue ever in Q3, with revenue up 23% against Q3 FY23, as our
range of occasion and party wear resonated well with consumers. Q4 was also strong, resulting in H2
being well ahead of last year despite the reduction during the period in price promotional activity
which drives incremental revenue.
Gross Margin +140bps to 57.6%
Gross Margin improved when compared with the prior year to 57.6%. This growth is inclusive of the
growth in revenue generated from the wholesale channel which has a lower margin. On a like-for-like
basis excluding the proportional increase in the wholesale channel, the gross margin increased by
250bps to 59.8%.
In the year, there has been significant focus on reducing the levels of price promotional activity on our
own website. This has included reducing the frequency of promotions and the average level of
discount per promotion. This strategic change resulted in the gross margin in H2 being 420 bps higher
than H1 at 59.6%.
Other actions that have been taken to improve gross margins have included improved supplier cost
prices and further efficiencies in inbound freight costs. There have been no increases to RRP’s during
the year, however there is a small amount of positive rollover benefit from price increases
implemented in the previous year.
Further benefits have been delivered with regards to inbound freight costs during the year. A higher
proportion of product has been delivered using sea freight although there remains a balanced
approach using all methods (sea, rail, road, air). Furthermore, we have started to do more full
container loads when using sea freight which is cheaper than partial loads. This increased further as a
result of the red sea issues, enabling us to guarantee space on specific vessels and routes.
Administrative Expenses
Total administrative expenses increased by 22% to £27.0m (FY23 £22.2m) compared to a 9% increase
in revenue.
Administrative expenses as a percentage of revenue increased to 58% (FY23 52%), in part reflecting
the change in our promotional strategy partway through the year as we shifted our primary focus
away from revenue growth towards margin enhancement. The increase also reflects investment in
the business ahead of opening our own physical stores and further international growth.
Spend on marketing increased slightly compared with the previous year. The strategy on marketing
remains broadly similar with investment being focused on TV, social and brochures with peak months
of investment being where the return on investment is greatest. During the year we also invested in
the launch of the Sosandar App which has performed ahead of expectations with strong sign ups,
conversion and retention stats being reported.
The cost of fulfilment which includes warehousing and customer order delivery costs remained flat
compared to the previous year despite revenue growing by 9%. As a result the cost as a percentage of
revenue reduced from 13% to 12%.
From a warehousing perspective, our 3PL partner, GXO (Clipper) has continued to deliver for our multi-
channel customers as have our two delivery partners, Evri and Royal Mail. Onboarding Evri as a second
delivery partner option during FY2022 has been an important step enabling us to offer the consumer
a choice to use their preferred delivery company. The average cost per order has been reduced as a
result of this change.
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FINANCIAL REVIEW (continued)
The largest increase in administrative expenses is from third party commissions (increased by 43% on
the prior year) which reflects the growth in revenue through our concession partners (notably NEXT
& Marks and Spencer). The commission is retained by the concession partner and is reported within
overheads covering all costs of the operation including warehousing and fulfilment, returns handling,
marketing and other operational costs. The revenue and gross profit figures are therefore undiluted
when compared with trading through our own site Sosandar.com.
Other administrative expense which includes staff costs increased by £1.7m (28%) compared to the
previous year. Headcount increased by 19 during the year to an average of 97 with a closing headcount
of 103 as at March 2024. The investment in people has been across all functions of the business and
has including pivotal roles to equip us to deliver the growth plans in FY25 and beyond including for
the retail channel.
Statement of Financial Position
The statement of financial position is robust. As at 31 March 2024, the Group had net assets of £18.2m
(FY23 £18.4m) and a net current asset position of £16.7m (FY23 £17.2m).
The cash balance at 31 March 2024 is £8.3m and there remains no bank indebtedness. The Group was
cash generative in H2 FY24, increasing the available balance by £1.3m (30 Sept 2023 £7.0m) which will
allow for the opening of physical retail stores to be self-funded from existing cash reserves.
Within the year, the cash balance reduced by £2.3m (31 March 2023 £10.6m) which reflects timing of
payments in Q1 FY24, in particular for stock. In addition, investment has been made in capital projects
including for the launch of the Sosandar App and ongoing costs for the new ERP which is anticipated
to go-live in 2025.
Inventory has reduced in the year, from £12.4m in FY23 to £10.9m in FY24. The reported inventory
balances includes stock on hand at both the main warehouse and at third-party concession partners,
stock in transit and the right to return asset which covers post year end returns. The reduction in
inventory has been intentional, as product purchased in the year has been supported by carry over
lines from previous seasons to create the overall product range.
Subsequently, stock cover has reduced with further opportunity to improve in FY25 which will increase
the cash available to deliver the store roll out programme. Within inventory, the right to return stock,
covering the post year end returns, reduced to £0.6m (FY24 £1.1m) which reflects the reduced average
number of days it takes for our customers to return product. As a result, the provision is lower as
actual refunds have been processed quicker than in the previous year.
Trade and other payables reduced to £5.1m (FY23 £8.4m) which reflects a lower trade creditor
balance, particularly for inventory and lower provision for post year end customer refunds.
Trade payables have reduced to £2.1m (FY23 £3.7m) which reflects lower outstanding stock invoices,
partly due to timing but also due to lower quantity of stock being purchased reflecting the carry-over
from the previous year. Having significantly increased creditor payment days over the last two years,
the average agreed terms are now 75 days for stock and 30 days for non-stock. It is not anticipated
that this will improve further in FY25. Contract liabilities reduced to £1.4m (FY23 £2.6m) which reflects
the lower provision required for post year end refunds for orders fulfilled within the year. This reflects
the timing of actual refunds being much closer to the original order date, meaning customers are
returning items more quickly than the previous year. Liability for VAT reduced to £0.5m (FY23 £1.1m)
due to higher on account payments to HMRC each month and therefore reducing the liability to be
paid at the quarter end.
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FINANCIAL REVIEW (continued)
Trade and other receivables increased to £2.8m (FY23 £2.7m) which includes amounts owing from
concession and wholesale customers. No change to payment terms were made during the year and
all payments have been received on time and in full.
Non-current assets increased to £1.9m (FY23 £1.7m). Investment in fixed assets remained relatively
low, with spend primarily on replacement IT equipment which has a useful of life of no more than four
years. In the year, investment was focused on software with two significant projects of note. The
development and launch of the Sosandar App with the highly respected partner Poq has been
successful with sign ups and KPI’s being in line with our expectations. In addition, work is ongoing to
implement an ERP system for the Group.
This project commenced a year ago with the main build taking place during FY25 for go-live anticipated
early in 2025. The chosen system is Microsoft Business Central with implementation partners chosen
who have significant experience executing with fashion and multi-channel retailers. The costs for the
ERP project are held as assets under construction with depreciation commencing when the software
goes live.
Cashflow
The Group had a net cash position as at 31 March 2024 of £8.3m (FY23 £10.3m). As highlighted
already, the Group’s cash position improved in H2 FY24 by £1.3m (H1 FY24 £7.0m).
The movement in the year reflects the reduction in payables and investment in software (ERP and
App) partially offset by the reduction in inventory. The strong cash balance is particularly important
as we invest in opening our first physical retail stores in FY25 which will incur a significant amount of
capital expenditure compared with previous years. This investment will be self-funded from existing
cash resources.
Risk Factors
There are a number of risks and uncertainties associated with the business. The Board believes the
following are the principal risks along with the mitigating actions being applied.
External Risks
Risk Factor
Impact
Mitigating Actions
Economic -
Inflation
•
Inflation and relatively high
interest rates are having a
negative
impact
on
consumers in terms of
reducing
their
disposal
income. As a consequence,
consumer spending could
be lower on clothing which
could lead to a reduction in
revenue.
•
The typical customer of the business tends
to have a higher level of disposable
income and therefore able to withstand
economic turbulence. Therefore, the
business is able to trade well through
periods of high inflation or wider
economic downturn.
•
The product range and price points are
diverse covering all main wardrobe needs
of the target demographic and can be
agile to manage any situation.
Route to
Market
(Channel)
•
Currently, the vast majority
of revenue is generated
online which makes up 40%
of consumer spending on
clothing.
Therefore,
a
•
Whilst the channel mix is currently online
only, there is risk mitigation in so far as
trading through multiple third party
platforms in addition to Sosandar.com.
This includes some of the UK’s largest
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proportion of the spending
in physical retail stores is
not being capitalised on.
•
If consumers increase their
proportional spending in
physical stores, revenue
could reduce as a result.
retailers, such as NEXT and Marks &
Spencer.
•
Opening physical retail stores would
reduce the risk profile of proportional
spending moving between online and
offline
whilst
also
reaching
more
customers
and
increasing
brand
awareness. This is the plan for FY25.
Route to
Market
(Geographical)
•
The
vast
majority
of
revenue is generated in the
UK
therefore
a
deterioration of the UK
economy specifically could
have an adverse impact on
revenue
if
consumer
confidence and spending
reduce.
•
Expansion into new international markets
commenced in FY24 with third party
partnerships in Australia and Canada plus
being able to deliver to 100 countries from
Sosandar.com through the tie-up with
Global-e.
Further
expansion
into
international markets would reduce the
risk of the majority of revenue being
generated in the UK.
Fashion
•
As trends change there is a
risk that design does not
keep up with customer
requirements for the latest
fashion.
•
The business operates a model whereby
product is landing into the warehouse
daily. Working to tight lead times that
allow the design team to track the latest
catwalk and commercial fashion trends.
These are then fed into the product
development
cycle
to
ensure
that
customers have access to the latest trends
at affordable prices.
Competition
•
From
new
or
existing
competitors.
•
Loss of revenue
•
Reduction in margin and
profitability if competitors
increase
discounting
resulting
in
consumers
shopping elsewhere
•
The business is agile and can adjust its
strategy according to all external factors
including those of its competitors.
•
The business has an increasingly loyal and
growing active customer database which
allows the business to engage with them
regularly through e-mail and brochures.
Foreign
exchange
•
The
business
buys
a
relatively small proportion
of
product
in
foreign
currency. Adverse currency
rate
movements
could
impact margins.
•
A detailed forward-looking purchase plan
to
identify
any
potential
currency
exposure.
•
RRP’s can be increased to offset any
significant pressure on cost prices
•
Forward contracts would fix the rate with
key currencies (USD and EUR) allowing for
clarity and to guarantee margins on
current RRP’s. Forward contracts are
planned to be used in FY25.
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Negative
online reviews
•
Negative
comments
on
social
platforms
could
influence
purchasing
decisions for new visitors.
•
A dedicated customer service team, led by
a highly experienced leader are able to
support customers with any questions or
issues that they have. The TrustPilot
score is currently ‘Excellent’ which
provides customers with the confidence
to purchase from Sosandar.
Internal risks
Risk Factor
Impact
Mitigating Actions
Suppliers
•
The business relies on its
outsourced manufacturing
supplier base to provide the
final
product.
Loss
of
suppliers
through
insolvency,
disaster
or
ceasing
of
working
relationship could impact
short term supply.
•
Non-compliance
with
labour or environmental
requirements
could
interrupt supply chain and
cause reputational damage.
•
Product supplied could be
of insufficient quality for
sale.
•
Purchases are spread over a number of
suppliers to avoid over dependency on
any single supplier and as the business is
growing and increasing order quantities
the potential supplier base is widening.
•
All design is done in-house with detailed
specification packs provided for each
product which helps on-board new
suppliers quickly.
•
All suppliers are asked to confirm
adherence with the business code of
conduct.
•
Independent
supplier
audits
are
conducted at least once every two years,
ensuring
compliance
with
working
practices and ethics.
•
Each product goes through an extensive
sampling process and final quality control
process to ensure it is suitable for sale.
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Systems
–
security
and
availability
•
System
outages
would
prevent the business from
operating and therefore
would see a reduction in
revenue during this time.
•
GDPR could impact ability
to work with data providers
who
help
identify
prospective customers for
marketing purposes.
•
Data breaches could impact
reputation and business
continuity.
•
The business has agreements with
external partners to manage and support
its systems and they would ensure that
any outage is minimised.
•
The main website is hosted in the cloud,
allowing for automatic scaling to maintain
speed and robustness in periods of high
demand.
•
Restricted access to sensitive data which
is only held in systems which have MFA
(Multi-Factor Authentication) enabled
with any sharing of such information
being through secure means.
•
Dedicated cyber insurance policies are in
place which include specialist resource
and plans to minimise the impact of any
cyber-attacks.
Key employees
•
The loss of one or more of
our key employees could
have an adverse impact on
the business and inhibit its
ability to grow as planned
•
The remuneration committee ensure that
key employees are rewarded sufficiently
to retain and motivate on an ongoing
basis.
•
There is a Long Term Incentive Plan in
place for the board plus the other
members of the senior leadership team in
the form of share options team to further
ensure that they are rewarded and
incentivised appropriately.
Working
capital
•
As the Group requires
working capital to further
invest to grow the business.
This will include investment
in
inventory,
customer
acquisition,
product
development
and
operations.
•
The business has detailed forecasting
models including sensitivity scenarios so
that robust decisions can be made,
balance growth potential with risk
mitigation.
•
Marketing spend efficiencies have been
made over the past two years. The
relatively low cost of acquisition is
expected to be maintained, which reduces
the risk as the return on investment is
strong when investment is being made.
•
Weekly and monthly cash flow projections
are reviewed by senior management and
actions taken where necessary, with all
key members of staff aware of the cash
flow objective.
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Sosandar: A responsible fashion business
As a responsible business, we are conscious of the impact our operations have on our diverse network
of employees, customers, suppliers, manufacturers, shareholders and the communities in which they
work.
We are committed to having an increasingly positive impact through every aspect of our business as
we progress against our three key areas of focus. These consist of:
•
Ethical Operations
A fair, transparent and collaborative supply chain
•
Environmental Sustainability
Minimising the footprint left on the natural world
•
Fabulous Sosandar
An inclusive and uplifting workplace
Ethical Operations
As we continue to scale as a business, we remain committed to working with suppliers who share our
core values of social responsibility and ethical operations. This remains a central tenet of our strategy
and we are focused on constantly improving how we work to ensure that our levels of corporate
governance consistently improve. In this regard, we routinely review ethical operations within our
supply chain at Board level, overseen by our Head of Sourcing, to ensure that our high standards are
maintained across all levels of our business, our partners and those within our supply chain.
Transparency in our supply chain
As part of our commitment to ethical sourcing within our supply chain, we continue to work in line
with our robust "Code of Conduct" which encompasses essential aspects of ethical and social
compliance. Amongst others, this includes stringent policies on child labour, which all of our 80 global
suppliers are required to adhere to.
This commitment reflects our dedication to ensuring the highest standards of ethics and social
responsibility throughout our supply chain are both maintained and advanced as we grow as a
business.
At Sosandar, we hold social responsibility at the very core of our ethos and, as we challenge ourselves
to be a more conscientious and socially impactful business, accountability around our progress is
important. In order to enhance transparency and ensure better accountability, we continue to utilise
independent audits through organisations including SMETA (Sedex Members Ethical Trade Audit) and
BSCI (Business Social Compliance Initiative), which serve as robust measures to verify and maintain
compliance within our global supply chain. By employing these review processes, we reinforce our
commitment to upholding our own high standards and ensuring the integrity of our operations.
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Third Party Partners
Working with third party partners is an essential element of our sales strategy and as a business, we
implement a high level of criteria to ensure that our own social values are aligned with any potential
partner.
We currently work with multiple third party partners including NEXT and Marks and Spencer. Each of
these partners maintain their own stringent ESG policies and we are proud to continue working with
them as we grow our brand.
GXO
Sosandar continues to outsource its product storage, packing and returns logistics to GXO, a leading
retail logistics specialist. Throughout our growth journey, we have developed a strong collaborative
relationship with GXO and it has always been vital that our values are aligned with regards to being
responsible businesses. GXO has a robust Corporate Social Responsibility programme, which can be
found on its website at https://gxo.com/esg/
Environmental Sustainability
Reducing our environmental impact is a key focus area for Sosandar. We regularly examine the raw
materials and components used in our products, seeking opportunities to source and produce them
in a more sustainable manner. Our ongoing commitment to sustainability drives us to explore ways to
enhance the sourcing and production processes for greater environmental responsibility and we will
continue to do so as we progress on our growth journey.
Minimising the use of air freight in favour of more environmentally friendly methods of transporting
stock remains part of our ongoing agenda.
We are committed to amending our practices to find the right balance of transportation methods
while taking into consideration cost, lead time and environmental impact. Having increased the
amount of our stock that is now being transported via sea freight shipping, we have also increased the
consolidation of inbound shipments which further reduces our impact.
Minimising waste
Since foundation, we have been determined to create clothing that is long-lasting and minimises waste
within the fashion industry. Sosandar products are made to the highest standards, using quality
materials that ensure durability and longevity.
We are proud to continue working with Smart Works, a charity which delivers an invaluable service to
women across Greater Manchester, delivering high quality and sustainable clothing to women in need.
Through this partnership, we seek to combat clothing waste and make a tangible difference within the
fashion industry.
Recycling
As part of our ongoing environmental strategy, we remain committed to minimising waste by utilising
recyclable, carbon neutral and sustainable consumer packaging where possible. In this regard we are
pleased to report that 100% of our inbound polybags have now been migrated to fully recycled
materials and in addition to this, our consumer bags are now being made from sugar cane.
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We continue to use a dedicated packaging supplier for all of our product suppliers to order from,
ensuring full transparency and ensuring that all packaging is made from recycled materials.
Fabulous Sosandar
Our team
At Sosandar, our people are at the centre of everything we do and we would like to take this
opportunity to sincerely thank all of them for their continued diligence and dedication.
We have worked hard to make Sosandar an open and enjoyable workplace for all of our staff and we
are very proud of the inclusive and open culture we have created. It is the commitment and hard work
of our people that has allowed us to become the company we are today and they will continue to be
the backbone of our business as we scale.
We are pleased to be an equal opportunity employer, recruiting from a varied pool of talent and we
are dedicated to ensuring that all applicants and employees are treated with fairness and equality,
without any form of preferential treatment. Promoting this inclusivity is very important to us as a
business and it will continue to be so in the future.
Looking forward
As a business we are committed to having a positive impact on our society, the environment, and our
team. We acknowledge there is increasing interest from a wide range of stakeholders on the various
positive impacts that the business has and what we are doing to improve outcomes. As we continue
on our growth journey, we will further expand our activity, with an ambition to increase the positive,
lasting impact Sosandar has on the fashion industry.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of
stakeholders in their decision making. They must make decision in good faith that they believe will
most likely promote the success of the Group for the benefit of its shareholders. In making these
decisions the Directors must consider, amongst other things:
•
the likely consequences of any decision in the long term;
•
the interests of the Company’s employees;
•
the need to foster the Company’s business relationships with suppliers, customers and
others;
•
the impact of the Company’s operations on the community and the environment;
•
the reputation for a high standard of business conduct; and
•
the need to act fairly between members of the Company.
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Key Stakeholders
How we engage
Employees
The team remains relatively small with 103 employees in total as at March
2024. The culture of the company places a high emphasis on
communication, engagement and collaboration which includes an open-door
policy from the co-CEO’s and wider senior management team. All employees
are in the office at least three days per week with many in four or five days.
We recruit employees who want to be in the office as they share our values
that we are a stronger business for the benefits that collaborative working
brings. On a daily basis there will be multiple meetings, many of which are
cross functional in nature. In addition the leadership team regularly present
to all staff progress and strategic changes being made by the business. Our
Human Resources team play a pivotal role in supporting all members of staff,
including helping with personal and collective development. In addition, an
annual anonymous staff survey is conducted which has a very high response
rate, with themes and actions presented back to staff afterwards. A new
initiative in the year has been the Appreciation Station which allows the
whole business to celebrate successes, teamwork or acts of kindness
periodically throughout the year.
Shareholders
As an AIM listed business, we have a dedicated investor website, which was
relaunched in 2023, and contains all key information and RNS updates. We
also conduct regular presentations with investors, both institutional and
retail around the time of key trading updates. Presentations are made
available online for those who did not have the opportunity to attend in a live
capacity. Throughout the year, the management term attend forums to
interact with shareholders including attendance at Mello and inviting
institutional shareholders to the offices to gain a greater depth of
understanding about the business, including having the opportunity to meet
employees that otherwise they would not meet.
Suppliers
We have a dedicated and recently expanded Sourcing team, whose role it is
to ensure ongoing assessment and onboarding of new suppliers. In addition,
we have personal relationships with suppliers from all levels and across
multiple departments within our business. In terms of stock suppliers,
multiple visits have been made to their premises throughout the year and
key suppliers have also visited our UK head office which further cements the
strong relationships that we have. Regular internal communication takes
place to update key stakeholders of all matters relating to our suppliers.
Customers
Our customers are at the heart of everything we do. We use email and social
platforms to update them about new products and our customer service
team provide feedback on the direct interactions that they have with our
customers. Our TrustPilot score is rated as ‘Excellent’ with frequent 5 star
reviews being posted for the ways in which we service the customer on a
daily basis.
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Significant events/decisions 2024
Event/Decision
Key
Stakeholders
Actions & Impact
Inflation
All stakeholders
•
Inflation has remained high in FY24, with the cost
of everyday items being much higher, coupled
with interest rates reaching 15 year highs which
has affected mortgage rates.
•
Disposable income for consumers has been
reduced, resulting in spending on non-essential
items being reduced
•
Consumers have
continued to be more
discerning in their spending habits, ensuring that
any products being purchased are absolutely the
ones that they want.
•
The Sosandar consumer tends to have a higher
level of disposable income and therefore able to
withstand economic turbulence. Therefore, the
business is able to trade well through periods of
high inflation or wider economic downturn.
•
The average price point of a Sosandar product is
mid-market
and
therefore
items
remain
affordable for the target customer.
•
The product range is diverse in terms of both
category mix and price point which means the
consumer remains well served by Sosandar
Growing revenue
through UK third-
party retailers
All stakeholders
•
Sales have continued to accelerate throughout
the year
•
Partnerships with most of the key retailers in the
UK remain strong, with Sosandar being one of the
top selling brands in each
•
Selling through third parties increase in brand
awareness for Sosandar through association with
such well known UK retailers who each have
multi-million number of e-commerce customers
has further accelerated visits and sales through
Sosandar.com
•
Increase in revenue and profitability as a result of
these agreements with accelerated economies of
scale
Product range
development
All stakeholders
•
The product range continues to evolve with new
styles landing frequently in order to ensure the
customer continues to see fresh and relevant
product.
•
The product mix is highly diverse with an
equitable balance across many categories,
including dresses, denim, knitwear and footwear.
The customer has choice across all main
womenswear categories
•
Key developments during the year have included
the growth in the party and occasionwear range,
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Julie Lavington
Director
15 July 2024
increasing the number of soft separate styles
(trousers and jackets) and the development of a
petite range
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Corporate governance
The Directors recognise the importance of robust corporate governance and, following admission,
have undertaken to take account of the requirements of the Quoted Companies Alliance Corporate
Governance Code (QCA) to the extent that they consider it appropriate, having regard to the Group’s
size, board structure, stage of development and resources.
The QCA Code recommends that the Board of Directors should include a balance of Executive and
Non-Executive Directors, such that no individual or small company of individuals can dominate the
board's decision making.
Board membership
Name
Role
Classification
Membership during
the year to 31 March
2024
Membership as at the
date of the Annual Report
Nicolas
Mustoe
Chairman
Non-
Executive
No Change
No Change
Alison Hall
Co-CEO
Executive
No Change
No Change
Julie
Lavington
Co-CEO
Executive
No Change
No Change
Stephen Dilks CFO
Executive
No Change
No Change
Adam
Reynolds
Non-
Executive
Non-
Executive
No Change
No Change
Andrew
Booth
Non-
Executive
Non-
Executive
No Change
Chair Remuneration
Committee
Jonathan
Wragg
Non-
Executive
Non-
Executive
Resigned 15 December
2023
None
Lesley Watt
Non-
Executive
Non-
Executive
No Change
Chair Audit Committee
The Group has an Audit Committee and a Remuneration Committee. The Group does not have, or
need, a Nomination Committee at this time. As the Group grows, the Board will actively consider
adding additional Directors.
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Directors Responsibilities
Introduction
The Board of Sosandar Plc seeks to follow best practice in corporate governance as appropriate for a
Group of our size, nature and stage of development. As a public company listed on AIM, we are
cognisant of the trust placed in the Board by institutional and retail investors, employees and other
stakeholders. We recognise the importance of an effectively operating corporate governance
framework.
The Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance
Code to support the Group’s governance framework. The Directors acknowledge the importance of
the ten principles set out in the QCA Code and this statement briefly sets out how we currently comply
with the provisions of the QCA Code. The Board considers that it does not depart from any of the
principles of the QCA code.
Principle
How we comply with the QCA Code:
1. Establish a strategy and business model which promotes long-term value for shareholders
Sosandar intends to build long-term shareholder value by targeting an underserved market of women
looking for trend-led, affordable, quality clothing with a premium aesthetic. We design and
manufacture clothing and footwear for all occasions with fashion forward styles designed to flatter.
Our strategy is to build a loyal customer base, focusing on customer growth and retention, by reaching
the customer in whatever way they wish to shop, including both online and in store.
2. Seek to understand and meet shareholder needs and expectations
The Directors recognise the importance of engaging with its shareholders and reports formally to them
when its full-year and half-year results are published. The executive team meet with both institutional
and retail shareholders regularly, and this has included hosting shareholders at meetings at the Head
Office where other members of the leadership team are available to meet. In addition, all
shareholders are welcome at the Annual General Meeting which is held in person.
The Joint CEOs and CFO regularly present at private investment events during the year.
Investors may contact the Group directly through the investor enquiries email address noted on the
Group’s website sosandar@almastrategic.com. Investors may also receive Investor Email Alerts from
the Group by signing up at https://www.sosandar-ir.com/investors/regulatory-news/ .
3. Take into account wider stakeholder and social responsibilities and their implications for long-
term success
The Directors recognise their responsibility not only to shareholders and employees, but to a wider
group of stakeholders (including, inter alia, customers and suppliers) and the communities in which
we operate.
Sosandar Plc is committed to the highest standards of corporate social responsibility in its activities,
as outlined in more detail in the annual report and accounts.
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Suppliers
We outsource manufacturing to more than 50 subcontractors around the world including Turkey,
China, India, Brazil, Romania and Spain. All suppliers are asked to confirm they adhere to the ethical
trade guidelines. The breadth of strong supplier relationships mitigates the risk of over reliance on a
small number of specific contacts. The output from suppliers is regularly reviewed to ensure continued
success.
Customers
We provide frequent new product ranges to ensure constant newness for our customers. Our in-house
designers react quickly to changing customer demand to ensure the Group is on the cutting edge of
fashion, while tailoring garments to fit customers.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has identified what we believe to be a sensible approach to risk management for a group
of our size. We outline the Group’s approach to risk management and the principal risks we face,
along with what we do to mitigate those risks, in detail on pages 11 to 14 of our Annual Report and
Accounts.
This area is subject to regular review as our business and the risks we face evolve.
5. Maintain the board as a well-functioning, balanced team led by the chair
The Board includes a balance of Executive and Non-Executive Directors, with four Non-Executive
Directors, two of whom are judged to be independent, and three Executive Directors.
The Board's activities are supported by both Audit and Remuneration Committees.
All the Directors have appropriate skills and experience for the roles they perform at the Group,
including as members of Board Committees.
Directors are subject to re-election at least every three years in accordance with the Articles of
Association.
The Group is satisfied that the current Board is sufficiently resourced to discharge its governance
obligations on behalf of all stakeholders and will consider the requirement for additional Non-
Executive Directors as the Group fulfils its growth objectives.
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Board members have diverse and relevant skills and experience. This includes the appropriate
balance of sector, financial and public market experience to shape the strategic direction and
corporate governance of the Group.
In addition the Board has access to external advisors where necessary.
The Board and Committees receive training as appropriate. In particular, the members of the Audit
Committee receive technical communications from appropriate bodies to keep them abreast of the
latest accounting, auditing, tax and reporting developments.
The Directors also receive regular briefings and updates from the Group’s NOMAD in respect of
continued compliance with, inter alia, the AIM Rules and the Market Abuse Regulation.
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More details of the skills and experience of the Directors are provided in the Annual Report on page
29 as well as the website.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
Evaluation of the performance of the Group’s Board has historically been implemented in an informal
manner.
The chairman reviews Board and Director performance during the year, which includes but is not
limited to: financial targets; adherence to Group policies, effectiveness of management as well as
attendance and contribution at Group meetings.
On an ongoing basis, Board members maintain a watching brief to identify relevant internal and
external candidates who may be suitable additions to or backup for current Board members.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotion of a corporate culture based on sound ethical values and
behaviours is essential to maximise shareholder value.
The Group carefully assesses each of the companies it works with to ensure the requisite standards
and values are in place. All new suppliers must confirm in writing that they adhere to a specific code
of conduct before commencing to trading with Sosandar.
The Group’s policies set out its zero tolerance approach towards any form of modern slavery,
discrimination or unethical behaviour relating to bribery, corruption or business conduct.
9. Maintain governance structures and processes that are fit for purpose and support good decision-
making by the board
The roles and responsibilities of specific Directors and Board Committees are available on our website.
The Board formally meets multiple times per year including at least four times per year in person.
Each sub-Committee has terms of reference outlining the specific responsibilities delegated to it. The
terms of reference of each Committee can be found on in the corporate governance section of the
Group website.
10. Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders.
The Group communicates progress throughout the year through Regulatory News Service
announcements and in more detail when releasing its interim financial statements and Annual Report
and Accounts. All historical Annual Reports and other governance related material, including notices
of all general meetings, since the Group’s formation, are available on the Group’s website.
Results of shareholder votes are made public on the Group’s website after the meetings concerned.
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Board meeting attendance
The Group holds a combination of in person Board meetings and regular virtual update calls which
works well to ensure there is a frequent flow of communication between the Directors. The Directors
are responsible for formulating, reviewing and approving the Group’s strategy, budget and major
items of capital expenditure.
Board
Audit
Remuneration
Total In Year
24
4
2
Alison Hall
21
-
2
Julie Lavington
19
-
2
Stephen Dilks
22
4
-
Nicolas Mustoe
24
4
-
Adam Reynolds
21
-
-
Andrew Booth
19
-
2
Jonathan Wragg*
17
3
-
Lesley Watt
22
4
2
* Resigned on 15 December 2023
Sub Committees
Audit Committee
The Audit Committee, comprising Lesley Watt (chairwoman) and Nick Mustoe, met four times during
the year. Jonathan Wragg was also a member of the audit committee up until his resignation on 15
December 2023. The committee has met four times during the year.
The committee has the following key responsibilities:
•
Reviewing and monitoring financial reporting;
•
Evaluating the internal control environment
•
Leading the relationship with the external auditors.
During year ended 31 March 2024 and up to the date of the Annual Report, the specific actions taken
by the audit committee have included:
•
Reviewing and approving the 2024 Annual Report and financial statements. As part of this
review, the Audit Committee received a report from the external auditors and had a follow up
meeting where matters relating to the report and statements were discussed.
•
Advised the Board on matters relating to the Annual Report and financial statements and
provided answers to any questions that were asked.
•
Review of the external auditors planning document, with particular focus on the timetable,
audit approach, materiality and assessment of significant risks.
•
Appraising the suitability of the external auditors and subsequently recommending their
appointments and the associated fees. Auditors will be rotated at least every 10 years in line
with current regulations. The current auditors, Saffery LLP, have been in place for 2 financial
years.
•
Assessing recommendations and audit findings from the prior year Audit Committee Report
•
Reviewing and supporting on the review conducted by the FRC relating to the 2023 Annual
Report, which had nil impact on Group financial statements.
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FRC
In February 2024, the Group received a letter from the Corporate Reporting Review Department of
the Financial Reporting Council (FRC) advising that they had selected the FY23 Annual Report and
Accounts for review. The letter had specific questions with regards to the relevant reporting
requirements in relation to the intercompany loan from Sosandar PLC to Thread 35 Ltd and the
company cash flow statement. The audit committee had oversight of the response provided by
management to the FRC enquiries. Management have engaged fully to address the points raised and
have sought advice and
technical input from appropriately qualified third party specialists as part of the process. The
committee thanks the FRC for its co-operation, and its contribution towards to our continual efforts
to improve the quality of our Annual Report and Accounts. More details can be found in note 2 on
page 51.
Remuneration Committee
The Remuneration Committee, which comprises Andrew Booth (chairman) Lesley Watt, Julie
Lavington and Ali Hall. The committee has met twice during the financial year.
During year ended 31 March 2024 and up to the date of the Annual Report, the specific actions taken
by the remuneration committee have included:
•
Reviewing the remuneration of the Executive Directors
•
Making recommendations to the Board on bonus scheme, long term incentive plans, benefits
and employee retention strategies
•
Monitoring and recommending on matters relating to remunerations at all levels of the
organisation
Directors’ remuneration
The Group operates a remuneration policy with the remuneration committee taking responsibility for
all matters relating to Executive, Non-Executive and Senior Management.
Executive Directors
The remuneration policy on executive director remuneration is designed to ensure that there is
alignment between shareholder and executive interests. The desire to sufficiently retain and
motivate the executive is achieved through a combination of a competitive base salary and long term
incentives.
Basic Salary
The remuneration committee review basic salaries annually. In October 2023 the basic salaries for
Julie Lavington and Alison Hall increased by 14% to £250,000 and have remained at this level for the
remainder of the financial year. The basic salary for Stephen Dilks also increased in October 2023, by
14% to £185,000 and has remained at this level for the remainder of the financial year.
Annual Bonus
Currently there are no short term bonus plans in place however this remains under review by the
remuneration committee.
Pension
The Group operates a defined contribution pension scheme which is available to all employees
following successful completion of the probationary period. The assets of the scheme are held
separately from those of the Group in independently administered funds.
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The pension contributions made to Julie Lavington and Alison Hall during the year ending 31 March
2024 were 12% of basic salary.
The pension contributions made to Stephen Dilks during the year ending 31 March 2024 was 8% of
basic salary.
Long Term Incentive Plan
The Group has a share ownership compensation scheme for Directors and senior employees of the
Group to further align their interests with those of the shareholders. There has been no change in the
share option granted to the directors in the year. The share options granted will vest at various future
dates based on agreed commercial criteria and are detailed in the table on page 28 and in note 17.
Non-Executive Directors
The remuneration policy on Non-Executive Director remuneration is determined by the Remuneration
Committee. The remuneration is set according to the level of contribution, relevant experience and
specialist knowledge. For the year ending 31 March 2024, the Non-Executive remuneration was
maintained at £45,000 per annum for the Chairman and £30,000 for all the remaining Non-Executive
Directors.
The Directors of the Group held the following beneficial interests in the shares and share options of
Sosandar Plc at 31 March 2024 and 31 March 2023:
Share Options
Ordinary
Ordinary
Option
Share based
payment P&L
charge
31-Mar-24
shares of
shares of
exercise
0.01p each
0.01p each
Price £
Expiry
Alison Hall
5,309,343
1,655,629
0.151
01/11/2027
0
9,725,971
0.000
18/06/2031
110,105
Julie Lavington
5,309,343
1,655,629
0.151
01/11/2027
0
9,725,971
0.000
18/06/2031
110,105
Nicholas Mustoe
4,905,981
400,000
0.151
01/11/2027
0
Adam Reynolds
2,419,901
800,000
0.151
01/11/2027
0
Andrew Booth
150,000
-
N/A
N/A
-
Lesley Watt
43,184
-
N/A
N/A
-
Steve Dilks
-
720,000
0.000
18/06/2031
19,819
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Share Options
Ordinary
Ordinary
Option
Share based
payment P&L
charge
31-Mar-23
shares of
shares of
exercise
0.01p each
0.01p each
Price £
Expiry
Alison Hall
5,309,343
1,655,629
0.151
03/11/2027
3,894
9,725,971
0.000
18/06/2031
125,667
Julie Lavington
5,309,343
1,655,629
0.151
03/11/2027
3,894
9,725,971
0.000
18/06/2031
125,667
Nicholas Mustoe
4,905,981
400,000
0.151
03/11/2027
941
Adam Reynolds
2,431,390
800,000
0.151
03/11/2027
1,882
Mark Collingbourne
928,919
400,000
0.151
03/11/2027
941
Bill Murray
345,107
400,000
0.151
03/11/2027
941
Andrew Booth
150,000
-
N/A
N/A
-
Jonathan Wragg
126,750
-
N/A
N/A
-
Lesley Watt
43,184
-
N/A
N/A
-
Steve Dilks
-
720,000
0.000
18/06/2031
19,765
Further details with regards to Executive and Non-Executive remuneration is detailed in note 6.
Biographical details of the Directors
Nick Mustoe - Non-Executive Chairman
Nick started his career in 1981 working in advertising for agencies Foote Cone and Belding and Lowe
Howard Spink. In that time Nick worked across many clients including Tesco, Heineken, Whitbread,
Vauxhall, Wickes, Weetabix, Bauer Publishing and Hanson Group Companies.
In 1993 Nick led a breakaway start up agency called Mustoe Merriman Levy which he ran as an
independent agency for 15 years, with a brief period under the ownership of Japanese multi-national
Hakuhodo. During this time the agency managed client accounts including Kia Cars, Danone, Lloyds
Pharmacy, Doctor Marten, Bauer Publishing, Coca Cola and Unilever.
In 2008, Mustoe Merriman Levy merged with a leading PR agency Geronimo to form Kindred Agency
Limited, a PR and social media agency. Nick subsequently led an MBO of Kindred in 2010 and continues
to lead the company as Chairman.
Nick also holds several non-executive positions including Chairman of Sandown Park Racecourse and
Strata Create events agency.
Alison Hall – Co CEO and Founder
Former fashion magazine editor, Alison Hall, is co-founder and joint CEO of Sosandar.
Prior to founding Sosandar in 2015, Alison was editor of Look magazine. After its launch in 2007, Alison
helped it grow to become a leading fashion magazine title. Alison has been a highly influential fashion
editor and has twice been awarded the Editor of the Year (Women's Magazines (weekly or fortnightly))
accolade by the British Society of Magazine Editors. During her tenure at Look, Alison designed
successful clothing ranges for several of the UK's top retailers.
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Biographical details of the Directors (continued)
Alison started out her career as a newspaper journalist, before holding editor positions on magazine
brands such as Slimming, Bliss and More. She successfully implemented major relaunches of various
titles, creating growing businesses, reinvigorating the brands and increasing circulations. Alison has
also been a fashion contributor to both local and national radio and TV shows.
Julie Lavington – Co CEO and Founder
Former fashion magazine publishing director, Julie Lavington, is co-founder and joint CEO of Sosandar.
In 2007, Julie launched Look magazine, a leading UK women's fashion publication. During her tenure,
Julie steered Look to have a multi-platform presence with a wide social media reach. She diversified
into producing successful Look branded clothing ranges with leading UK fashion retailers. Julie was
awarded the prestigious Publisher of the Year Award in 2010 by the Professional Publishers
Association. From August 2014, Julie was also publishing director of UK InStyle magazine, a global
fashion brand published in 17 countries worldwide.
Prior to her role at Look and InStyle, Julie was publishing director of the TV portfolio at H. Bauer from
2001 to 2006, where she took TV Choice from fledgling brand to the biggest selling magazine on UK
newsstands. She has also held publishing roles on numerous women's brands, including Marie Claire,
after starting her career in advertising sales following a modern languages degree at Durham
University.
Stephen Dilks – Chief Financial Officer
Steve joined Sosandar from Regatta, the outdoor apparel business in September 2020 as Finance
Director and was appointed Chief Financial Officer in May 2021. Steve is CIMA qualified and has a
broad skillset gained across a number of roles in highly complex organisations with a blend of financial,
commercial and strategic experience.
During his eleven years at Regatta, the last four as Finance Director, Steve supported the Group’s
consistent double-digit growth across multiple brands, countries and channels including wholesale,
own retail, concessions and online. He was also the finance lead for several key strategic projects
including the Group's Brexit planning and the implementation of group wide new IT systems.
Prior to his tenure at Regatta, Steve held a broad range of financial and commercial roles in retail and
FMCG organisations including Kraft Foods and The Co-Operative Group.
Adam Reynolds – Non-Executive Director
Adam began his career in the City in 1980 with stockbrokers Rowe Rudd. He later joined Public
Relations business Basham & Coyle heading their Investor Relations Division. In 2000, he established
his own PR/IR and Corporate Finance firm, which listed on AIM in November 2000 and was then sold
in 2004.
Adam was approached in 2005 to become Non-Executive Chairman of International Brand Licensing
Plc. In 2009, Adam brought David Evans and Julian Baines - the two leading diabetes specialists in the
UK - into the company and the business changed direction. Today it is known as EKF Diagnostics Plc.
In 2012, Adam was introduced to Autoclenz Plc through an institutional fund manager. In November
2012, Adam launched a successful agreed bid with the management for the business to be taken
private. Adam is a director and shareholder of this business.
Adam is currently Chairman of Belluscura Plc, OTAQ Plc, ProBiotix Plc and MyHealthChecked Plc.
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Biographical details of the Directors (continued)
Andrew Booth - Non-Executive Director
Andrew is a 20 year digital marketing veteran working with hypergrowth companies, starting with
gettyimages in 1999 developing his career throughout the rise from Aim to Nasdeq, to NYSE becoming
Vice President of Marketing. Following the sale of gettyimages in 2008 for $2.4BN to Hellman and
Friedman, Andrew joined Time Out as Group Marketing Director leading the migration of digital with
the customers and growth of the worldwide brand prior to stock market listing. Thereafter he became
Chief Marketing Officer for the Hut Group spanning all brands, all customer facing activity globally.
In 2014 Andrew joined Laterooms.com, part of TUI PLC as Chief Marketing Officer / Chief Revenue
officer, working also as part of the sale team. Andrew remains within the plural environment focused
on brands that are utilising technology to significantly drive change and growth with customers. In
addition to Sosandar Andrew works with Rolls Royce, JCB, Hyundai and a number of North West based
private equity companies on digital / omni channel customer growth.
Lesley Watt - Non-Executive Director
Lesley chairs the Audit Committee of Sosandar and is also a member of the Remuneration
Committee. She holds a number of Non-Executive Director positions including Tatton Asset
Management plc where she is a member of the Audit and Remuneration Committees and chairs the
ESG Committee. She qualified as a Chartered Accountant with PwC and has held numerous Board
and senior finance positions over the last 30 years including Scottish & Newcastle plc and has
significant experience with high growth start-up companies.
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Directors Report
The Directors present their Annual Report and Financial Statements for the year ended 31 March
2024.
Principal activity
The principal activity of the Group is the sale of womenswear fashion, footwear and accessories
through
its
own
website;
Sosandar.com
and
through
selected
third-party
partners.
Business review and future outlook
The performance for the financial year as well the Group’s strategy, business model and future
intentions is covered in the Chairman’s and CEO statements on pages 2 to 8.
Financial results
The Group’s financial performance and position is covered in the financial review on pages 8 to 12 and
in the consolidated financial statements on pages 44 to 47.
Going concern
After making appropriate enquires, the Directors consider that the Group and Company has adequate
resources to continue in operational existence for the foreseeable future. As part of their enquiries
the Directors have reviewed cash forecasts for the Group and Company’s operations for the 12 months
from the date of approval of the financial statements. The Group and Company has adequate cash to
cover its corporate overheads and management costs over this year but management continues to
monitor these costs and manage cashflows. Refer to note 2 for further information.
Dividends
The Board is focused on reinvesting all surplus cash generated in continuing to grow the business in
its stated strategic objectives including the opening of physical retail stores. Therefore, the Directors
do not recommend a dividend payment for the year ended 31 March 2024 (2023: £nil).
Directors
The Directors who served on the Board during the year and to the date of this report are as follows:
Alison Hall
Julie Lavington
Stephen Dilks
Nicolas Mustoe
Adam Reynolds
Andrew Booth
Jonathan Wragg (resigned 15th December 2023)
Lesley Watt
Details of Director shareholders are contained in the corporate governance report.
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Substantial shareholdings
As at 21 June 2024 the following held 3% or more of the share capital of the Company:
No of shares at
% Issued
Rank
Shareholder
21-Jun-24
Capital
1
Octopus Investments
28,530,783
11.37%
2
Schroder Investment Mgt
23,926,013
9.64%
3
Lombard Odier Asset Mgt
21,276,265
8.57%
4
Hargreaves Lansdown Asset Mgt
19,573,017
7.89%
5
Canaccord Genuity Wealth Mgt
15,411,600
6.21%
6
Amati Global Investors
12,480,000
5.03%
7
EdenTree Investment Mgt
11,520,909
4.64%
8
Interactive Investor
9,339,202
3.76%
Based on 248,226,513 ordinary shares on 21 June 2024.
As at 28 March 2024 the following held 3% or more of the share capital of the Company:
No of shares at
% Issued
Rank
Shareholder
28/03/2024 *
Capital
1
Octopus Investments
28,230,783
11.37%
2
Schroder Investment Mgt
23,575,463
9.50%
3
Hargreaves Lansdown Asset Mgt
20,742,627
8.36%
4
Lombard Odier Asset Mgt
20,377,434
8.21%
5
Canaccord Genuity Group Inc
16,626,601
6.70%
6
Amati Global Investors
12,480,000
5.03%
7
EdenTree Investment Mgt
11,520,909
4.64%
8
Interactive Investor
9,683,123
3.90%
9
Mr William Currie
8,724,058
3.51%
10
Raymond James Investment Services
8,543,154
3.44%
Based on 248,226,513 ordinary shares on 28 March 2024.
* 28 March 2024 is the last trading date prior to the year-end date
Events after the reporting period
Further information on events after the reporting period is set out in note 22.
Disclosure in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
company’s strategic report information required by Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors’ report. It has done
so in respect of information on research and development, environmental actions and future
developments.
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Principal risks and uncertainties
The principal and uncertainties of the business are discussed in the Strategic Report and in note 21.
Overseas legal entities
The Group has one overseas subsidiary; Sosandar (Europe) Limited which was incorporated in
February 2024. No activity has taken place in the year ended 31 March 2024.
Auditor
A resolution for the reappointment of Saffery LLP as auditor of the Group is to be proposed at the next
Annual General Meeting.
Streamlined Energy and Carbon Reporting
Sosandar is committed to reducing its energy and greenhouse gas emissions in line with our corporate
targets. The Group is developing a strategy to ensure that energy efficiency is at the heart of each area
of the business. For the financial year ending 31st March 2024, the Group is reporting under the
Streamlined Energy and Carbon Reporting legislation (SECR) for the first time.
Sosandar PLC is submitting this SECR report at a group level for all UK entities.
In the reporting year, the reporting entities consumed 60,469 kWh of energy associated with Scope 1
and 2 greenhouse gas emissions. Electricity consumption accounted for all of the reported energy use,
and this is classified as Scope 2 emissions.
The greenhouse gas emissions associated with the above supplies have been calculated to be 12,522
tonnes of CO2e. Scope 2 emissions were 100% of this and were entirely associated with electricity
purchases. The reporting entities consumed 4,405 kg/CO2e from Scope 3 emissions and were
associated with employee travel in where the Group is responsible for the fuel costs.
SECR regulations require the Group to report an energy intensity metric, and we have chosen to use
annual turnover as the divisor for our intensity metric. Our CO2e per million pounds of gross turnover
were 366 kg per million pounds.
Our energy consumption has been calculated based upon metered kWh consumption states on
invoiced supplies in all instances.
Our reporting incorporates all Scope 1 and 2 supplies, and the Group’s greenhouse gas emissions have
been calculated using the relevant conversion factor published by the UK Government in their GHG
Conversion Factors for Company Reporting and is based on HM Government Environmental Reporting
Guidelines: Including streamlined energy and carbon reporting guidance (March 2019).
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Unit of measurement
FY24
Energy consumption used to calculate
emissions - electricity
kWh
Kg CO2e
Scope 1 - direct emissions from controlled/
own sources (combustion of gas)
-
-
Scope 2 - indirect energy emissions from
purchased electricity, heat, steam and cooling
60,469
12,522
Miles
Kg CO2e
Scope 3 – other indirect emissions from
energy use and related emissions from
business travel in rental cars or employee-
owned vehicles where they are responsible
for purchasing the fuel
16,374
4,405
Total emissions
16,927
Revenue (£'m)
46.277
Intensity ratio (CO2e/£m revenue)
365.776
During FY24 the Group implemented the following key initiatives to reduce energy use and
emissions;
-
Creation of an ESG working group representing all areas of the business, to bring focus to
environmental issues
-
Investigating the use of alternative freight methods, such as rail
-
Continuing to work with suppliers to reduce carbon emissions by reducing consumption and
exploring alternative options
-
Assessing the recycling process for waste at both head office and our warehouse
-
Working with SmartWorks, a local charity, to donate clothing thereby avoiding waste and
associated emissions
Future goals the company have undertaken are:
-
Aiming to streamline all processes, from source to customer to reduce emissions
-
Through continuous development and responsible business practices, we aim to contribute to a
sustainable future for both our stakeholders and the communities where we operate
Directors' responsibilities
The Directors are responsible for preparing the strategic report, directors' report and financial
statements in accordance with applicable law and UK adopted international accounting standards.
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements in accordance with UK adopted
International Financial Reporting Standards (IFRS). Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and Group and the profit or loss of the company for that period.
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In preparing these financial statements the Directors are required to:
•
select suitable accounting policies and apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
state whether the Group and Company financial statements have been prepared in
accordance with UK adopted international accounting standards, subject to any material
departures disclosed and explained in the financial statements; and
•
prepare the financial statements on the going concern basis unless it is inappropriate
to presume that the Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time
the financial position of the Company and Group and to enable them to ensure that the financial
statements comply with the UK-adopted international accounting standards Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website.
Disclosure of information to the auditors
At the date of approving this report, each Director confirms that, so far as that he is aware, there is no
relevant audit information of which the Group and Company’s auditors are unaware and she/he has
taken all the steps that he ought to have taken as a Director in order to make her/himself aware of
any relevant audit information and to establish that the Group and Company’s auditors are aware of
that information.
For and on behalf of the Board:
Julie Lavington
Director
Date: 15 July 2024
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
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Sosandar Plc
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Annual Report 2024
Opinion
We have audited the financial statements of Sosandar Plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 March 2024 which comprise the consolidated statement of
comprehensive income, the consolidated and company statements of financial position, the
consolidated and company statements of cash flows, the consolidated and company statements of
changes in equity as well as the notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards.
In our opinion the financial statements:
•
give a true and fair view of the state of affairs of the group and of the parent company as at
31 March 2024 and of the group’s loss for the year then ended;
•
have been properly prepared in accordance with UK-adopted international accounting
standards; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent
of the group and the parent company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Our approach to the audit
We tailored the scope of the audit work to ensure we obtained sufficient, appropriate evidence to
support our opinion on the financial statements as a whole, taking into account the structure of the
group and the parent company, the accounting processes and controls and the industry in which the
group operates.
The group consists of three legal entities, two incorporated and operating in the UK, and one newly
incorporated in the Republic of Ireland. The results of these components are consolidated in the
group financial statements. Sosandar PLC and Thread 35 Limited have been subject to a full scope
audit by the group audit team, whilst Sosandar (Europe) Limited was deemed a non-significant and
non-material component. The components within the scope of our audit work covered 100% of the
group’s revenue, profit and net assets. We also tested the consolidation process and related
adjustments.
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where the Directors made
subjective judgements, for example in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. We also addressed
risk of management override of internal controls, including evaluating whether there was any
indication of bias or override of controls by the Directors that represented a risk of material
misstatement.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we identified, including those which had
the greatest effect on the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Inventory valuation
At 31 March 2024, the group held inventory of
£10,920k (2023: £12,361k), net of provisions of
totalling £541k (2023: £388k).
The nature of the industry that the group
operates in carries a higher inherent risk of
inventory becoming obsolete due to changing
fashion tastes and trends. There is significant
judgement involved in determining whether a
provision for impairment is required to reflect
the reduced net realisable value of obsolete
inventory.
Due to the significance of inventory to the group
and other users of the financial statements, we
consider this to be a key audit matter.
Our audit procedures included the following:
•
We obtained an understanding of
management’s provisioning policy which
is based on the last goods received note
and the percentages of inventory
purchased that were converted to sales
•
We
assessed
the
obsolescence
percentages applied and determined it
was appropriate with reference to sales
and purchases made during the year,
returned stock salvage rates, and any
indicators of potentially damaged stock
arising from our attendance at a
stocktake.
•
We tested the mathematical integrity of
management’s provision calculation by
recalculation. We validated the inputs
into the model, including verifying the
quantity and values for various elements
making
up
the
overall
inventory
provision and confirmed the accuracy of
the data used with references to
purchase and sales reports
•
We carried out testing on a sample of
inventory lines to ensure that inventory
is held at the lower of cost or selling price
less costs to sell with reference to future
orders
Based on our audit procedures we have not
identified any material misstatements arising
from the valuation of inventory.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
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Sosandar Plc
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Annual Report 2024
Key Audit Matter
How our scope addressed this matter
Carrying value of investment in the subsidiary
At 31 March 2024 the parent company holds
an investment in the subsidiary of £7,692k
(2023: £7,432k).
The directors’ assessment of indicators of
impairment includes significant estimates and
assumptions around identifying future cash
flows and rates of future growth.
Due to the significance of the carrying value of
the investment in the subsidiary to the parent
company, we consider this to be a key audit
matter.
Our audit procedures included the following:
•
We considered management’s annual
review for indicators of impairment,
identifying
the
reduced
PBT
and
impairment of intercompany loans as
further
indicators
of
potential
impairment.
We
evaluated
the
subsequent
impairment
review
by
comparing the calculated net present
value of the investment based on
forecast revenue and EBITDA to the
carrying value recorded within the
financial statements.
•
We challenged the weighted average
cost
of
capital
estimated
by
management,
and
performed
a
recalculation based on industry data. We
confirmed that when the updated WACC
was applied to the sensitivity assessment
the conclusions of the impairment
assessment remained appropriate
•
We
verified
that
management’s
impairment
assessment
has
used
consistent cash flows that adequately
represented
forecast
trading
performance
Based on our audit procedures we have not
identified any material misstatements arising
from the carrying value of investment in the
subsidiary.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of
misstatements and in forming our opinion. Our overall objective as auditor is to obtain reasonable
assurance that the financial statements as a whole are free from material misstatement, whether
due to fraud or error. We consider materiality to be magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of
the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
as set out below. These, together with qualitative considerations, helped us to determine the scope
of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the financial statements as a whole.
We determined group materiality to be £605,000 (2023: £530,000), based on 1.25% of group
revenue. The materiality of the parent company was determined to be £165,000 (2023: £91,000)
based on 1.5% of gross assets of the company.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
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Annual Report 2024
Performance materiality is used to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds over materiality. Performance
materiality was set at 75% of planning materiality for both the group and the individual entity. We
also set a level of triviality based on 5% of planning materiality; any uncorrected audit differences
below these levels were not reported to the Audit Committee, unless warranted under qualitative
grounds.
Materiality was determined at the planning stage based upon unaudited management accounts. This
was reviewed throughout the audit process to ensure it remains appropriate for the financial
statements as a whole. A final review was performed with reference to these financial statements of
the group and individual components; planning materiality was deemed to still be appropriate, thus
no changes were made.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the group and the parent company’s ability to continue to adopt the going
concern basis of accounting included:
•
obtaining, critically appraising and assessing for arithmetical accuracy the directors’ formal
going concern assessment, including the group’s cash flow forecasts for the period to 31
March 2026 and considering the completeness and accuracy of the future cash flows assessed
against historical results and existing contractual arrangements;
•
considering the reasonableness of assumptions used by the directors in the preparation of the
cash flow forecast which included comparing the 2024 actual results to the forecasts made in
the prior year;
•
understanding the assumptions applied in the directors’ sensitivity analysis applied to the
base case scenario to derive their blended downside scenario, including assumptions around
revenue growth, funding options and cost management opportunities, and comparing these
to historical trends and market data, applying further sensitivities where appropriate;
•
reviewing the adequacy of disclosures made within the financial statements on the going
concern basis of preparation; and
•
discussing events after the reporting date with the directors to assess their impact on the
going concern assumption.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group or the
parent company's ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements, or
our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
•
the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in
the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records
and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 30, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
In preparing the financial statements, the directors are responsible for assessing the group and the
parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the group and parent company
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The specific procedures for this engagement and the extent
to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material
misstatement and how fraud might occur, including through discussions with the directors,
discussions within our audit team planning meeting, updating our record of internal controls and
ensuring these controls operated as intended. We evaluated possible incentives and opportunities
for fraudulent manipulation of the financial statements. We identified laws and regulations that are
of significance in the context of the group and parent company by discussions with directors and by
updating our understanding of the sector in which the group and parent company operate.
Laws and regulations of direct significance in the context of the group and parent company include
The Companies Act 2006, the AIM Rules for Companies and UK Tax legislation.
In addition, the group is subject to other laws and regulations that do not have a direct effect on the
financial statements, but compliance with which maybe fundamental to its ability to operate or
avoid a material penalty. These include anti-bribery legislation and employment law.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit
procedures on the related financial statement items including a review of group and parent
company financial statement disclosures. We reviewed the parent company’s records of breaches of
laws and regulations, minutes of meetings and correspondence with relevant authorities to identify
potential material misstatements arising. We discussed the parent company’s policies and
procedures for compliance with laws and regulations with members of management responsible for
compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key
areas which might involve non-compliance with laws and regulations or fraud. We enquired of
management whether they were aware of any instances of non-compliance with laws and
regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud
through management override of controls by testing the appropriateness of journal entries and
identifying any significant transactions that were unusual or outside the normal course of business.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
INDEPENDENT AUDITORS REPORT
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
We assessed whether judgements made in making accounting estimates gave rise to a possible
indication of management bias. At the completion stage of the audit, the engagement partner’s
review included ensuring that the team had approached their work with appropriate professional
scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed
non-compliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the parent company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the parent company and the parent company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
…………………………………..
Diane Petit-Laurent FCA (Senior Statutory Auditor)
for and on behalf of Saffery LLP
Chartered Accountants
Statutory Auditors
Trinity
16 John Dalton Street
Manchester
M2 6HY
15 July 2024
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
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P a g e | 44
Annual Report 2024
Year ended
31 March
Year ended
31 March
2024
2023
Notes
£’000
£’000
Revenue
3
46,277
42,451
Cost of sales
(19,627)
(18,614)
Gross profit
26,650
23,837
Administrative expenses
(26,984)
(22,200)
Operating profit/(loss)
(334)
1,637
Finance income
38
-
Finance costs
5
(36)
(40)
Profit/(loss) before taxation
(332)
1,597
Income tax credit/ (expense)
7
(91)
284
Profit/(loss) for the year
(423)
1,881
Other comprehensive income
-
-
Total comprehensive profit/(loss) for the year
(423)
1,881
Earnings/(loss) per share:
Earnings/(loss) per share – basic, attributable to ordinary
equity holders of the parent (pence)
8
(0.17)
0.84
Earnings/(loss) per share – diluted, attributable to
ordinary equity holders of the parent (pence)
(0.17)
0.74
The notes on pages 51 to 77 form part of these financial statements.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
Sosandar Plc
P a g e | 45
Annual Report 2024
The financial statements were approved and authorised for issue by the Board of Directors on 15 July
2024 and were signed on its behalf by:
Steve Dilks
Director
Company Number: 05379931
The notes on pages 51 to 77 form part of these financial statements.
As at 31
March
As at 31
March
2024
2023
Notes
£’000
£’000
Assets
Non-current assets
Intangible assets
9
391
-
Property, plant and equipment
10
909
991
Deferred income tax asset
1,7
605
696
Total non-current assets
1,905
1,687
Current assets
Inventories
12
10,920
12,361
Trade and other receivables
14
2,768
2,730
Cash and cash equivalents
15
8,313
10,576
Total current assets
22,001
25,667
Total assets
23,906
27,354
Equity and liabilities
Equity
Share capital
16
248
248
Share premium
16
52,619
52,619
Capital Reserves
4,648
4,648
Other reserves
1,485
1,223
Reverse acquisition reserve
(19,596)
(19,596)
Retained earnings
(21,196)
(20,773)
Total equity
18,208
18,369
Current liabilities
Trade and other payables
18
5,076
8,355
Lease liability
19
194
148
Total current liabilities
5,270
8,503
Non current liabilities
Lease liability
19
428
482
Total non current liabilities
428
482
Total liabilities
5,698
8,985
Total equity and liabilities
23,906
27,354
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Year ended
31 March
Year ended
31 March
2024
2023
Notes
£’000
£’000
Cash flows from operating activities
Group profit/(loss) before tax
(332)
1,597
Adjustments for:
Share based payments
17
262
311
Depreciation and amortisation
9, 10
316
235
Finance costs
36
40
Finance income
(38)
-
Disposal of intangibles
80
-
Working capital adjustments:
Change in inventories
1,441
(5,054)
Change in trade and other receivables
(38)
(235)
Change in trade and other payables
(3,279)
1,594
Net cash flow from operating activities
(1,552)
(1,512)
Cash flow from investing activities
Purchase of property, plant and equipment
10
(81)
(400)
Purchase of intangibles
9
(458)
-
Initial direct costs on right of use asset
-
-
Bank interest paid
5
-
-
Net cash flow from investing activities
(539)
(400)
Cash flow from financing activities
Gross proceeds from issue of equity instruments
16
-
5,900
Costs from issue of equity instruments
(343)
Finance income
38
-
Lease payment
19
(210)
(117)
Net cash flow from financing activities
(172)
5,440
Net change in cash and cash equivalents
(2,263)
3,528
Cash and cash equivalents at beginning of year
15
10,576
7,048
Cash and cash equivalents at end of year
15
8,313
10,576
The notes on pages 51 to 77 form part of these financial statements.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Share
capital
Share
premium
Reverse
acquisition
reserve
Capital
redemption
reserve
Retained
earnings
Other
reserves
Total
Notes
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 31 March 2022
221
47,089
(19,596)
4,648
(22,654)
912
10,620
Loss for the year
-
-
-
-
1,881
-
1,881
Share-based payments
17
-
-
-
-
-
311
311
Issue of share capital
16
27
5,873
-
-
-
-
5,900
Costs on issue of share capital
16
-
(343)
-
-
-
-
(343)
Balance at 31 March 2023
248
52,619
(19,596)
4,648
(20,773)
1,223
18,369
Profit for the year
-
-
-
-
(423)
-
(423)
Share-based payments
17
-
-
-
-
-
262
262
Issue of share capital
16
-
-
-
-
-
-
-
Costs on issue of share capital
16
-
-
-
-
-
-
-
Balance at 31 March 2024
248
52,619
(19,596)
4,648
(21,196)
1,485
18,208
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of share issue expenses.
Other reserve relates to the charge for share-based payments in accordance with International Financial Reporting Standard 2.
Retained earnings represent the cumulative loss of the Group attributable to equity shareholders.
Reverse acquisition reserve relates to the effect on equity of the reverse acquisition of Thread 35 Limited.
Capital redemption reserve represents the aggregate nominal value of all the deferred shares repurchased and cancelled by the Company. The reserve is
non-distributable.
The notes on pages 51 to 77 form part of these financial statements.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
In accordance with the provisions of the Companies Act 2006, the Company has not presented a
statement of profit or loss and other comprehensive income. The Company's loss for the year was
£605k (2023: £3,859k loss).
The financial statements were approved and authorised for issue by the Board of Directors on 15 July
2024 and were signed on its behalf by:
Steve Dilks
Director
Company Number: 05379931
The notes on pages 51 to 77 form part of these financial statements.
As at 31
March
As at 31
March
2024
2023
Notes
£’000
£’000
Assets
Non-current assets
Investments
11
7,694
7,432
Loans to subsidiaries
13
-
-
Total non-current assets
7,694
7,432
Current assets
Trade and other receivables
14
8
23
Cash and cash equivalents
15
4,534
5,119
Total current assets
4,542
5,142
Total assets
12,236
12,574
Equity and liabilities
Equity
Share capital
16
248
248
Share premium
16
52,619
52,619
Other reserves
1,485
1,223
Capital redemption reserve
4,648
4,648
Retained earnings
(46,825)
(46,220)
Total equity
12,175
12,518
Current liabilities
Trade and other payables
18
61
56
Total current liabilities
61
56
Total liabilities
61
56
Total equity and liabilities
12,236
12,574
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Restated
Year ended
31 March
Year ended
31 March
2024
2023
Notes
£’000
£’000
Cash flows from operating activities
Profit/(loss) before tax
(605)
(3,859)
Adjustments for:
-
-
Impairment of intercompany loan
201
3,423
Share based payments
17
-
7
Finance income
(12)
-
Working capital adjustments:
Change in trade and other receivables
15
11
Change in trade and other payables
5
4
Net cash flow from operating activities
(396)
(414)
Cash flow from investing activities
Loans to subsidiaries
(201)
(3,423)
Net cash flow from investing activities
(201)
(3,423)
Cash flow from financing activities
Net proceeds from issue of equity instruments
16
-
5,557
Finance income
12
-
Net cash flow from financing activities
12
5,557
Net change in cash and cash equivalents
(585)
1,720
Cash and cash equivalents at beginning of year
15
5,119
3,399
Cash and cash equivalents at end of year
15
4,534
5,119
Following a review by the FRC, the comparative year has been re-presented. Please refer to note 2
on page 51.
The notes on pages 51 to 77 form part of these financial statements.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Share
capital
Share
premium
Other
reserves
Capital
redemption
reserve
Retained
earnings
Total
Notes
£’000
£’000
£’000
£’000
£’000
£’000
Restated Balance at 31 March 2022
221
47,089
912
4,648
(42,361)
10,509
Loss for the year
-
-
-
-
(3,859)
(3,859)
Share-based payments
17
-
-
311
-
-
311
Issue of share capital
16
27
5,873
-
-
-
5,900
Costs on issue of share capital
16
-
(343)
-
-
-
(343)
Balance at 31 March 2023
248
52,619
1,223
4,648
(46,220)
12,518
Loss for the year
-
-
-
-
(605)
(605)
Share-based payments
17
-
-
262
-
-
262
Issue of share capital
16
-
-
-
-
-
-
Costs on issue of share capital
16
-
-
-
-
-
-
Balance at 31 March 2024
248
52,619
1,485
4,648
(46,825)
12,175
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of share issue expenses.
Other reserves relate to the charge for share-based payments in accordance with International Financial Reporting Standard 2. The cumulative share-based
payment expense recognised in the consolidated statement of comprehensive income is £262k. The cumulative share payment expense recognised in the
parent company statement of comprehensive income is nil (2023: £7k).
Retained earnings represent the cumulative loss of the Company attributable to the equity shareholders.
Capital redemption reserve represents the aggregate nominal value of all the deferred shares repurchased and cancelled by the Company. The reserve is non-
distributable.
The notes on pages 51 to 77 form part of these financial statements.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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1 General information
Sosandar Plc (the ‘Company’) is a public company limited by shares incorporated in England and Wales.
Details of the registered office, the officers and advisers to the Company are presented on the
Company Information page at the end of this report. The Company is listed on the AIM market of the
London Stock Exchange (ticker: SOS).
The principal activity of the Group in the year under review was that of a clothing manufacturer and
distributer via internet and mail order.
The principal activity of the company is that of a holding company.
2 Significant accounting policies
Basis of preparation
The consolidated financial statements consolidate those of the Company and its subsidiary (together
the ‘Group’ or ‘Sosandar’). The consolidated financial statements of the Group and the individual
financial statements of the Company are prepared in accordance with applicable UK law and UK
adopted international accounting standards (IFRSs) and as applied in accordance with the provisions
of the Companies Act 2006. The Directors consider that the financial information presented in these
Financial Statements represents fairly the financial position, operations and cash flows for the year,
in conformity with IFRS.
Prior period adjustments and FRC review
In February 2024, the Group received a letter from the Corporate Reporting Review Department of
the Financial Reporting Council (FRC) advising that they had selected the FY23 Annual Report and
Accounts for review. As a result of the review, it came to light that there was a presentational error in
the Statement of Cashflows for the company. Loans made to subsidiaries of £3,423k in 2023 and
£4,681k in 2022 were omitted from the cash flow statement when they should have been included as
an investing cash outflow with a corresponding adjustment to operating cash flows relating to the
subsequent impairment. This has been adjusted in the company cash flow statement. The error had
no impact on the company statement of financial position.
The review conducted by the FRC was a limited scope review performed solely on the Group’s Annual
Report and Accounts for FY23 and does not provide any assurance that the annual report and accounts
are correct in all material respects. The FRC’s role is not to verify the information provided to it but to
consider the compliance with reporting requirements. As such the FRC accepts no liability for reliance
on their review by any stakeholder of the company, including but not limited to investors and
shareholders.
Going concern
The Group’s business activities, together with the factors likely to affect its future development,
performance and position, are set out in Chairman’s Statement on pages 2-3. The financial position of
the Group, its cash flows and liquidity position are described in the financial statements and associated
notes. In addition, note 21 to the financial statements includes the Group’s objectives, policies and
processes for managing its capital; its financial risk management objectives; details of its financial
instruments; and its exposures to credit risk and liquidity risk.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
In order to assess the going concern of the Group, the directors have reviewed the Group’s bank
balances, cash flows, the annual budgets and forecasts, including assumptions concerning revenue
growth, marketing spend, returns and repeat customers and expenditure commitments and their
impact on cash flow. These cash flow and profit and loss forecasts show the Group expect an increase
in revenue based on the assumptions set out in note 11 of the financial statements. This will have
sufficient headroom over available banking facilities. Management continue to monitor costs and
manage cashflows against these forecasts.
At 31 March 2024, the Group had a cash balance of £8.3m and is therefore in a strong position, with
sufficient working capital to take advantage of opportunities in FY25. This substantiates the view that
the Group is a going concern.
The directors continue to monitor the Group’s going concern basis against the backdrop of significant
external events. During the financial year, rising inflation and increased interest rates led to a ‘cost of
living crisis’ in the UK. Whilst at a macro level, these changes are expected to impact consumer
spending, the Group has not experienced a material downturn in activity with gross margin remaining
stable. Therefore, despite these events, the directors confirm that they have a reasonable expectation
that the Group will be able to continue in operation and meet its liabilities as they fall due for the
foreseeable future.
Should the underlying assumptions of the working capital model prove invalid, and the Group be
unable to continue as a going concern it may be required to realise its assets and discharge its liabilities
other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and
classifications of recorded asset amounts or liabilities that may be necessary should the Group and
Company be unable to continue as a going concern.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. Accordingly, they continue
to adopt the going concern basis in preparing the financial statements.
Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiary undertakings; all subsidiaries have a reporting date of 31 March.
Subsidiaries are all entities which fall within the definition of control under IFRS 10; an investor
controls an investee when the investor is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the
investee.
The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Company. They are de-consolidated
from the date that control ceases.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
In November 2017, Sosandar Plc (‘Company’) acquired the entire issued share capital of Thread 35 Ltd
(‘legal subsidiary’) for a consideration of £6,281,618, satisfied by the issue of shares of £1,603,422 and
cash of £4,678,196.
As the legal subsidiary is reversed into the Company (the legal parent), which originally was a publicly
listed cash shell company, this transaction cannot be considered a business combination, as the
Company, the accounting acquiree, does not meet the definition of a business under IFRS 3 ‘Business
Combinations’. However, the accounting for such capital transaction should be treated as a share-
based payment transaction and therefore accounted for under IFRS 2 ‘Share-based payment’.
Any difference in the fair value of the shares deemed to have been issued by the Thread 35 Ltd
(accounting acquirer) and the fair value of Sosandar Plc’s (the accounting acquiree) identifiable net
assets represents a service received by the accounting acquirer.
Although the consolidated financial information has been issued in the name of Sosandar Plc, the legal
parent, it represents in substance continuation of the financial information of the legal subsidiary.
The assets and liabilities of the legal subsidiary are recognised and measured in the Group financial
statements at the pre-combination carrying amounts and not restated at fair value.
The retained earnings and other reserves balances recognised in the Group financial statements
reflect the retained earnings and other reserves balances of the legal subsidiary immediately before
the business combination and the results of the period from 1 April 2017 to the date of the business
combination are those of the legal subsidiary only.
The equity structure (share capital and share premium) appearing in the Group financial statements
reflects the equity structure of Sosandar Plc, the legal parent. This includes the shares issued in order
to affect the business combination.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the
primary economic environment in which the entity operates (the functional currency). The financial
statements are presented in pounds sterling (£), which is the Group’s presentation currency and the
Company’s functional currency.
Foreign currency transactions are translated into the functional currency using exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
The results and financial position of all Group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
monetary assets and liabilities for each statement of financial position presented are
translated at the closing rate at the date of that statement of financial position;
•
income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the
rate on the dates of the transactions); and
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
2 Significant accounting policies (continued)
•
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of borrowings and other currency instruments designated as hedges of such
investments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or
sold, exchange differences that were recorded in equity are recognised in the income statement as
part of the gain or loss on sale.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent throughout the financial period. Standards and
amendments to UK adopted international accounting standards (IFRSs) effective as of 1 April 2023
have been applied by the Group.
Adoption of new and revised standards
During the financial year, the Group has adopted the following new IFRSs (including amendments
thereto) and IFRIC interpretations, that became effective for the first time.
Standard
Effective date, annual
period beginning on or
after
IFRS 17 Insurance Contracts
1 January 2023
IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information
1 January 2024
IFRS S2 Climate-related Disclosures
1 January 2024
Their adoption has not had any material impact on the disclosures or amounts reported in the financial
statements.
Standards issued but not yet effective:
At the date of authorisation of these financial statements, the following standards and interpretations
relevant to the Group and which have not been applied in these financial statements, were in issue
but were not yet effective.
Standard
Effective date, annual
period beginning on or
after
Amendment to IFRS 16 – Leases on sale and leaseback
1 January 2024
Amendment to IAS 1 – Non-current liabilities with covenants
1 January 2024
The Directors have assessed the full impact of these accounting changes on the Company. To the
extent that they may be applicable, the Directors have concluded that none of these pronouncements
will cause material adjustments to the Group’s Financial Statements. They may result in consequential
changes to the accounting policies and other note disclosures. The new standards will not be early
adopted by the Group and will be incorporated in the preparation of the Group Financial Statements
from the effective dates noted above.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
The directors anticipate that the adoption of these standards and interpretations in future periods
will have no material effect on the financial statements of the group.
The Directors have taken advantage of the exemption available under Section 408 of the Companies
Act 2006 and not presented an income statement nor a statement of comprehensive income for the
Company alone.
Calculation of share-based payment charges
The charge related to equity-settled transactions with employees is measured by reference to the fair
value of the equity instruments at the date they are granted, using an appropriate valuation model
selected according to the terms and conditions of the grant. Judgement is applied in determining the
most appropriate valuation model and in determining the inputs to the model. Judgements are also
applied in relation to estimations of the number of options which are expected to vest, by reference
to historic leaver rates and expected outcomes under relevant performance conditions. Please see
note 17.
Depreciation of property, plant and equipment and amortisation of other intangible assets
Depreciation and amortisation are provided to write down assets to their residual values over their
estimated useful lives. The determination of these residual values and estimated lives, and any change
to the residual values or estimated lives, requires the exercise of management judgement. Please see
notes 9 and 10.
Revenue recognition
Revenue is recognised at the point where legal title in the goods passes from the Group to the
customer. This includes the price paid for the goods as well as any delivery charge where applicable.
Typically, legal title is passed when the goods are despatched from the warehouse and as the invoice
is created. It is impractical to recognise on delivery, and the difference due to this timing is immaterial.
The point of recognition and the point of return is the same for both direct and third-party sales.
Revenue is reported after making deduction for actual and anticipated returns, relevant vouchers and
sales taxes.
Revenue is generated both on Sosandar’s own website, and through third party partners.
Intangible assets
Identifiable development expenditure is capitalised to the extent that the technical, commercial and
financial feasibility can be demonstrated. Costs are capitalised where the expenditure will bring future
economic benefit to the company. Intangible assets have finite useful lives.
Amortisation is recognised within administrative expenses in the Statement of Comprehensive
Income so as to write off the cost of assets less their residual values over their useful economic lives.
The following annual rates are used:
Website
20% Straight line
Trademark
20 % Straight line
Software
33% Straight line
Assets Under Construction will be depreciated when the assets are in use.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
Property, plant and equipment
Property, plant and equipment are stated at historical cost less subsequent accumulated depreciation
and accumulated impairment losses, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the company and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to profit or loss during the financial period in which they are incurred.
Depreciation on property, plant and equipment is calculated using the straight-line and reducing
balance methods to write off their cost over their estimated useful lives at the following annual rates:
Plant and Machinery
15% Straight line
Computer Equipment
33.33% Straight line
Fixture and Fittings
15% Reducing balance
Office Equipment
25% Reducing balance
Leasehold Improvements
20% Straight line
Right of Use Asset 20% Straight line
Equity
Equity instruments issued by the Group are recorded at the value of the proceeds received, net of
direct issue costs, allocated between share capital and share premium.
Inventories
Inventories are valued at the lower of cost and net realisable value, on a weighted average cost basis.
Net realisable value is the estimated selling price in the ordinary course of the business less applicable
variable selling expenses. Cost of purchase comprises the purchase price including import duties and
other taxes, transport and handling costs and other attributable costs, less trade discounts.
Taxation
Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax. The tax
currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported
in the same income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The
Group and Company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the statement of financial position date.
Pension costs
The Group contributes to a defined contribution scheme for employees. The costs of these
contributions are charged to the statement of comprehensive income on an accruals basis as they
become payable under the scheme rules.
Investments
Investments in subsidiary companies are stated at cost less any provision for impairment. Investments
are accounted for at cost unless there is evidence of a permanent diminution in value, in which case
they are written down to their estimated realisable value. Any such provision, together with any
realised gains and losses, is included in the statement of comprehensive income.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
Impairment of investments
The impairment of the carrying value of the investment in subsidiaries is calculated using forward-
looking assumptions of profit growth rates, discount rates and timeframe which require management
judgement and estimates that cannot be certain. Note 11 contains the assumptions made by
management.
Provisions
Provisions are recognised when the Group and Company has a present obligation as a result of a past
event, and it is probable that the Group and Company will be required to settle that obligation.
Provisions are measured at the Directors’ best estimate of the expenditure required to settle the
obligation at the statement of financial position date and are discounted to present value where the
effect is material.
Financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at
fair value through profit or loss, any directly attributable transactions costs, except as described
below. Subsequent to initial recognition non-derivative financial instruments are measured as
described below.
A financial instrument is recognised when the Group becomes a party to the contractual provisions of
the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows
from the financial assets expire or if the Group transfers the financial assets to another party without
retaining control or substantially all risks and rewards of the asset. Regular purchases and sales of
financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase
or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the
contract expire or are discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities such as cash and cash equivalents,
receivables and payables of the Group and Company at the statement of financial position date
approximated their fair values, due to the relatively short-term nature of these financial instruments.
Trade payables and other non-derivative financial liabilities
Trade payables and other creditors are non-interest bearing and are measured at amortised cost.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade and other receivables are recognised initially at transaction price and subsequently measured
at their cost when the contractual right to receive cash or other financial assets from another entity
is established.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
Trade receivables are considered past due when they have passed their contracted due date. Trade
receivables are assessed for impairment based upon the expected credit losses model. The Group
applies the IFRS 9 Simplified Approach to measuring expected credit losses using a lifetime expected
credit loss provision for trade receivables. To measure, expected credit losses on a collective basis are
grouped based on similar credit risk and aging.
Financial assets and liabilities
The Group classifies its financial assets at inception as measured at amortised cost. The Group
classifies its financial liabilities, other than financial guarantees and loan commitments, as measured
at amortised cost. Management determines the classification of its investments at initial recognition.
A financial asset or financial liability is measured initially at fair value. At inception transaction costs
that are directly attributable to its acquisition or issue, for an item not at fair value through profit or
loss, are added to the fair value of the financial asset and deducted from the fair value of the financial
liability.
Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount at which the financial asset
or liability is measured at initial recognition, minus principal payments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initial amount
recognised and maturity amount, minus any reduction for impairment.
Fair value measurement
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction on the measurement date. The fair value
of assets and liabilities in active markets are based on current bid and offer prices respectively. If the
market is not active the group establishes fair value by using appropriate valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are
substantially the same for which market observable prices exist, net present value and discounted
cash flow analysis.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where the group has transferred substantially all of the risks and rewards of ownership.
In a transaction in which the group neither retains nor transfers substantially all the risks and rewards
of ownership of a financial asset and it retains control over the asset, the group continues to recognise
the asset to the extent of its continuing involvement, determined by the extent to which it is exposed
to changes in the value of the transferred asset. There have not been any instances where assets have
only been partly derecognised. The group derecognises financial liability when its contractual
obligations are discharged, cancelled or expire.
Impairment losses from contracts with customers
The Group assesses at each financial position date whether there is objective evidence that a financial
asset or group of financial assets is impaired, in line with IFRS 9. All financial instruments are initially
measured at fair value plus or minus, in the case of a financial asset or financial liability not at fair
value through profit or loss, transaction costs. Any measurement of expected credit losses under IFRS
9 reflects an unbiased and probability-weighted amount that is determined by evaluating the range
of possible outcomes as well as incorporating the time value of money.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
2 Significant accounting policies (continued)
Impairment losses from contracts with customers
The Group considers reasonable and supportable information about past events, current conditions
and reasonable and supportable forecasts of future economic conditions when measuring expected
credit losses. The amount of loss is recognised in the Statement of Comprehensive Income.
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability
•
any lease payments made at or before the commencement date less any lease incentives
received
•
any initial direct costs, and
•
restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12
months or less. Low-value assets comprise IT-equipment and small items of office furniture less than
£5k.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRS requires management to make
estimates and judgements that affect the reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the year end and the reported amounts of revenues
and expenses during the reporting period. Estimates and judgements are continually evaluated and
are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The key areas identified by the Group are as
follows:
Contract liabilities - refund accruals
Accruals for sales returns are estimated on the basis of historical returns and are recorded so as to
allocate them to the same period in which the original revenue is recorded. These accruals are
reviewed regularly and updated to reflect management’s latest best estimates, although actual
returns could vary from these estimates. The accrual for refunds totalled £1,365k (2023: £2,617k) and
a right to returned goods asset recognised of £555k (2023: £1,113k). A performance obligation is
deemed for returns and refunds. A 14 day return policy is noted for a full refund through
Sosandar.com and up to 30 days on third party retailer websites.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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2 Significant accounting policies (continued)
Critical accounting judgements and key sources of estimation uncertainty
Contract liabilities - refund accruals
Whilst not a key source of estimation uncertainty, the directors believe it is relevant to disclose the
impact of changes to the estimate. A difference of 1%pt in the sales returns rate have an impact of
+/- £124k (2023: +/- £134k) on the refund provision, and +/- £53k (2023: +/- £60k) on the right to
returned goods asset.
A provision is made to write down any slow-moving or obsolete inventory to net realisable value. The
provision is £541k at 31 March 2024 (2023: £384k). Whilst not a key source of estimation uncertainty,
the directors believe it is relevant to disclose the impact of changes to the estimate. A difference of
1%pt in the provision as a percentage of gross inventory would give rise to a difference of +/- £109k
in gross profit (2021: +/- £124k).
Investments
In order to assess the impairment of the investment in the subsidiary, the Directors use a value in use
calculation.
The key assumptions used for the value in use calculation for the year ended 31 March 2024 were as
follows:
2024
2023
%
%
Discount rate
6.4
11
Compound annual revenue growth rate
10
20
The Directors assessment of the estimates on future revenues and EBITDA growth in future years is a
key source of estimation uncertainty. The estimations are based on the budgeted investment and
expansion of our clothing and footwear ranges, increased stocking levels and continued investment in
marketing channels to acquire new customers.
The Directors have performed a sensitivity analysis to assess the impact of downside risk of the key
assumptions underpinning the projected results of the Group. The projections and associated
headroom used for the Group is sensitive to the EBITDA growth assumptions that have been applied.
Impairment of non-financial assets
At each statement of financial position date, the Group reviews the carrying amounts of its
investments to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
Critical accounting judgements and key sources of estimation uncertainty (continued)
Impairment of non-financial assets
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than it’s carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.
Share-based compensation
The Group has issued equity-settled share-based payments to employees. The fair value of the
employee and suppliers’ services received in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed over the vesting year is determined by reference to the
fair value of the options granted, excluding the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each statement of financial
position date, the entity revises its estimates of the number of options that are expected to
vest. It recognises the impact of the revision to original estimates, if any, in the income statement,
with a corresponding adjustment to other reserves within equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital
(nominal value) and share premium when the options are exercised.
The fair value of share-based payments recognised in the income statement taking into account
conditions attached to the vesting and exercise of the equity instruments.
The expected life used in the model is adjusted; based on management’s best estimate, for the effects
of non-transferability, exercise restrictions and behavioural considerations. The share price volatility
percentage factor used in the calculation is based on management’s best estimate of future share
price behaviour and is selected based on past experience, future expectations and benchmarked
against peer companies in the industry.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is
accounted for using the statement of financial position liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
P a g e | 62
Annual Report 2024
Critical accounting judgements and key sources of estimation uncertainty (continued)
Deferred tax (continued)
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial position date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled, or the asset realised. Deferred tax is charged or credited to the income statement, except
when it relates to items charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable
right to set off current tax assets against current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group and Company intends to settle its current tax
assets and liabilities on a net basis.
3 Revenue
The directors have considered the requirement of IFRS 15 with regards to disaggregation of revenue
and do not consider this to be required as the group only has one operating segment which is retail
sales.
The income recognition for delivery receipts, commissions on partner-fulfilled sales and wholesale
revenue are in line with that of retail sales and linked to dispatch/delivery to customers.
Due to the nature of its activities, the group is not reliant on any individual major customers.
During the year, the Group expanded into international markets. The major geographical market
remains the UK.
Year ended
Year ended
31-Mar
31-Mar
2024
2023
£'000
£'000
UK
46,177
42,451
Rest of World
100
-
Total
46,277
42,451
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
4 Operating loss
31 March
2024
31 March
2023
£'000
£'000
Operating loss is stated after charging/(crediting):
Operating lease rentals
121
86
Auditors’ remuneration:
Audit fee – group and company
64
54
Legal and other fees
242
155
Foreign currency loss
13
190
Share based payment
262
311
5 Finance cost
31 March
2024
31 March
2023
£'000
£'000
Interest on the lease
36
40
Total
36
40
6 Employees
31 March
31 March
2024
2023
£'000
£'000
Aggregate Directors’ emoluments including consulting fees
819
752
Wages and salaries
3,621
2,571
Social security costs
433
353
Pension costs
221
148
Share-based payments
262
311
Total
5,356
4,135
31 March
31 March
2024
2023
£'000
£'000
Directors
8
8
Staff
89
70
Total
97
78
Directors’ remuneration
Details of emoluments received by Directors of the Group for the year ended 31 March 2024 are
shown in the table below.
Details of the share options held by each Director can be found in the Group Directors’ Report on page
28. The key management personnel are deemed to be the directors.
The share-based payment charge related to directors was £240k (2023: £279k).
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
P a g e | 64
Annual Report 2024
2024
2024
2024
2024
2023
Base Salary
Pension
Other
Benefits
Total
Total
£
£
£
£
£
Alison Hall
235,000 28,200 9,361 272,561
222,567
Julie Lavington
235,000 28,200 7,902 271,102
222,921
Steve Dilks
171,000 13,680 7,651 192,331
151,778
Bill Murray *
- - -
-
38,019
Nicholas Mustoe **
45,000
- - 45,000
30,692
Adam Reynolds
30,000
- - 30,000
30,000
Mark Collingbourne ***
- - -
-
25,000
Andrew Booth
30,000
- - 30,000
30,000
Jonathan Wragg ****
28,654
- - 28,654
29,230
Lesley Watt *****
30,000
- - 30,000
17,500
Total
804,654 70,080 24,914 899,648
797,707
* Passed away 4 February 2023
** Became Interim Chair 15 March 2023
*** Resigned 1 September 2022
**** Appointed 14 April 2022/ Resigned 15 December 2023
***** Appointed 1 September 2022
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
7 Income tax
a) Analysis of charge in the period
31 March
31 March
2024
2023
£'000
£'000
Deferred tax
Origination and reversal of timing differences
91
(284)
Total deferred tax charge/(credit)
91
(284)
b) Factors affecting the tax charge for the period
31 March
31 March
2024
2023
£'000
£'000
Loss on ordinary activities before taxation
(332)
1,597
Tax at the UK corporation tax rate of 25% (2023: 19%)
(83)
303
Expenses not deductible for tax purposes
66
60
Fixed asset differences
(13)
(15)
Remeasurement of deferred tax for changes in tax rates
(4)
(63)
Movement in deferred tax not recognised
125
(569)
Tax on loss on ordinary activities
91
(284)
On 1 April 2023 the rate of corporation tax increased to 25%. The deferred tax asset recognised in the
accounts has been calculated using the current year tax rate of 25% (2023: 19%). The unrecognised
deferred tax asset amounts to £3,425,906 (2023: £3,444,393) and has been recognised at the tax rate
of 25%.
The deferred tax asset has been recognised due to the expectation that it will be reversed in future
years.
8 Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the loss attributable to equity shareholders by
the weighted average number of ordinary shares in issue during the year:
31 March
31 March
2024
2023
Profit / (Loss) after tax attributable to equity
holders of the parent (£’000)
(423)
1,881
Weighted average number of ordinary shares
in issue
248,226,513
224,738,344
Fully diluted average number of ordinary
shares in issue
248,226,513
252,499,241
Basic earnings/(loss) per share (pence)
(0.17)
0.84
Diluted earnings/(loss) per share (pence)
(0.17)
0.74
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
8 Earnings/(loss) per share (continued)
Where a loss is incurred the effect of outstanding share options and warrants is considered anti-
dilutive and is ignored for the purpose of the loss per share calculation. The prior year calculations of
basic earnings per share is based on the weighted average number of ordinary shares and the diluted
earnings per share calculation includes the effect of outstanding share options.
9 Intangible Assets
Website
Trademark
Software
Assets under
Construction
Total
£’000
£’000
£’000
£’000
£’000
Cost
At 1 April 2022
228
2
-
-
230
Additions
-
-
-
-
-
At 31 March 2023
228
2
-
-
230
Amortisation
At 1 April 2022
228
1
-
-
229
Charge for the year
-
1
-
-
1
At 31 March 2023
228
2
-
-
230
Carrying value 31 March
2023
-
-
-
-
-
Cost
At 1 April 2023
228
2
-
-
230
Additions
-
8
191
259
458
Transfers
-
52
52
Disposals
-
-
(50)
(30)
(80)
At 31 March 2024
228
10
141
281
660
Amortisation
At 1 April 2023
228
2
-
-
230
Charge for the year
-
-
39
-
39
Disposals
-
-
-
-
-
At 31 March 2024
228
2
39
-
269
Carrying value 31 March
2024
-
8
102
281
391
Assets under construction are costs relating to the ERP implementation project and thus were
transferred into intangible assets from property, plant and equipment. Refer to note 10.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
10 Property, plant and equipment – Group
Computer
Equipment
Fixtures
and
fittings
equipment
Right of
use
asset
Assets
under
Construction
Total
£’000
£’000
£’000
£’000
£’000
Cost
At 1 April 2022
123
312
556
-
991
Additions
68
280
380
52
780
At 31 March 2023
191
592
936
52
1,771
Accumulated depreciation
At 1 April 2022
85
256
204
-
545
Charge for year
34
53
148
-
235
At 31 March 2023
119
309
352
-
780
Carrying value 31 March 2023
72
283
584
52
991
Cost
At 1 April 2023
191
592
936
52
1,771
Additions
50
31
166
-
247
Transfers
-
-
-
(52)
(52)
At 31 March 2024
241
623
1,102
-
1,966
Accumulated depreciation
At 1 April 2023
119
309
352
-
780
Charge for year
45
61
171
-
277
At 31 March 2024
164
370
523
-
1,057
Carrying value 31 March 2024
77
253
579
-
909
Assets under construction are costs relating to the ERP implementation project and thus were
transferred into intangible assets from property, plant and equipment. Refer to note 9.
11 Non-current assets
Investments in subsidiaries:
Company
2024
2023
£’000
£’000
Cost at 1 April
7,432
7,127
Additions during the year
262
305
Cost at 31 March
7,694
7,432
Impairment at 1 April
-
-
Disposals during the year
-
-
Impairment at 31 March
-
-
Carrying value as at 31 March
7,694
7,432
The additions during the year are in respect of the share-based payment expense which was issued in
the Parent Company on behalf of its subsidiary, Thread 35 Limited and therefore represents a capital
contribution during the year. More information can be found in note 17.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
11 Non-current assets (continued)
Investments are tested for impairment at the balance sheet date, where indicators of impairment
exist. Indicators were identified including the reduction in profit in the subsidiary and the write off of
the intercompany loan balance with the subsidiary. The recoverable amount of the investment in
Thread 35 Ltd as at 31 March 2024 was assessed on the basis of value in use. As this exceeded carrying
value no impairment loss was recognised.
The key assumptions in the calculation to access value in use are the future revenues and the ability
to generate future cash flows. The most recent financial results and forecast approved by
management were for the next 5 years and included terminal value. The projected results were
discounted at a rate which is a prudent evaluation of the pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the cash-generating unit.
The key assumptions used for the value in use calculation for the year ended 31 March 2024 are
disclosed in note 2, Critical accounting judgements and key sources of estimation uncertainty on page
59.
The subsidiaries of Sosandar Plc are as follows:
Subsidiary companies
Incorporation
Holding
Type of share held
%
Holding
2024
%
Holding
2023
UK
Thread 35 Ltd
Direct
Ordinary shares
100
100
Sosandar (Europe) Limited
Ireland
Direct
Ordinary shares
100
-
The registered office of Thread 35 Limited is 40 Water Lane, Wilmslow, SK9 5AP and the registered
office of Sosandar (Europe) Limited is 5th Floor, 40 Mespil Road, Budlin 4, Ireland, D04 C2N4.
There were no other investments held by the Group.
12 Inventories – Group
31 March
31 March
2024
2023
£'000
£'000
Stock – finished goods
10,365
11,251
Right to returned stock
555
1,110
Total
10,920
12,361
The cost of inventories charged in the year as an expense equated to £19,627k (2023: £18,416k). Right
to returned stock relates to the cost of products sold in the financial year but expected to be returned
after the financial period.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
13 Loans to subsidiaries
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Loan to subsidiary
-
-
-
-
The loan made to Thread 35 Ltd by Sosandar Plc of £26,671k (2023: £26,470k) was fully impaired at
the year end. The loan was not formalised during FY24. It does not bear interest and is repayable on
demand. Post year end, the loan agreements between Sosandar PLC and Thread 35 Ltd and Sosandar
(Europe) Limited were formalised.
14 Trade and other receivables
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Trade receivables
2,160
1,973
-
-
VAT recoverable
8
23
8
23
Other receivables
100
86
-
-
Prepayments
500
648
-
-
Trade and other receivables
2,768
2,730
8
23
The Directors consider that the carrying amount of trade and other receivables approximates their fair
value.
Trade receivables are considered past due when they have passed their contracted due date. Trade
receivables are assessed for impairment based upon the expected credit losses model. The Group
applies the IFRS 9 Simplified Approach to measuring expected credit losses using a lifetime expected
credit loss provision for trade receivables. To measure, expected credit losses on a collective basis are
grouped based on similar credit risk and aging. The Group does not have any non-current receivables.
At 31 March 2024 there were 3 customers who owed in excess of 80% of the total trade debtor
balance. These customers were operating within their credit terms and the directors do not foresee
an increased credit risk associated with these customers. None of the trade receivables have been
subject to a significant increase in credit risks since initial recognition and as such no impairment
provision has been recognised on trade receivables.
Expected credit losses have been recognised in the parent company on the loan to the subsidiary.
31/03/2024 Note
External
credit
rating
Internal
credit
rating
12 month or
lifetime ECL
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
£'000
£'000
£'000
Loans to
subsidiaries
13
N/A
Doubtful
Lifetime
26,671
(26,671)
-
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
15 Cash and cash equivalents
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Cash at bank
8,313
10,576
4,534
5,119
16 Share capital and reserves
Details of ordinary shares issued are in the table below:
Ordinary Shares (£0.01)
Number of
shares issued
and fully paid
Issue Price
£
Total Share
Capital
£’000
Total Share
Premium
£’000
At 31 Mar 2023
248,226,513
0.001
248
52,619
At 31 Mar 2024
248,226,513
0.001
248
52,619
17 Share based payments
Share option plans
The Group has a share ownership compensation scheme for Directors and senior employees of the
Group. On 2nd November 2017 share options over ordinary shares of 15.1p were issued with a further
issue over ordinary shares of 29.1p issued on 25th February 2019. On 21 June 2021 the Group
announced the establishment of a new Long Term Incentive Plan in which it granted new nil cost
options totalling 21,431,942 ordinary shares of 0.1 pence each to its executive directors and members
of the senior management team. Some of the existing options granted, totalling 13,888,742 ordinary
shares, were modified as part of these arrangements. There was no incremental fair value because of
this modification.
The options are settled in equity once exercised. If the options remain unexercised for a period after
ten years from the date of grant, the options expire.
Details of the number of share options and the weighted average exercise price (“WAEP”)
outstanding during the period are as follows:
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Annual Report 2024
17 Share based payments (continued)
31 March 2024
31 March 2023
Number
(‘000)
WAEP £
Number (‘000)
WAEP £
Outstanding at 31 March 2023
27,761
0.035
27,761
0.035
Modifications in the year
0
0.000
-
-
0
0.000
-
-
Issuances in the year
135
0.000
-
-
Cancellations in the year
(135)
0.000
0
0
Outstanding at 31 March 2024
27,761
0.035
27,761
0.035
Exercisable at 31 March 2024
18,118
0.054
18,118
0.054
The options outstanding at 31 March 2024 had a weighted average exercise price of £0.035 and a
weighted average remaining contractual life of 6.59 years.
The fair values of options granted prior to 2021 were calculated using the Black Scholes pricing model.
The fair values of the options granted in June 2021 and May 2023 were calculated using the Monte
Carlo model. The Group used historical data to estimate expected period to exercise, within the
valuation model. Expected volatilities of options outstanding granted prior to the Company’s
admission to AIM were based on implied volatilities of a sample of listed companies based in similar
sectors. The risk-free rate for the expected period to exercise of the option was based on the UK gilt
yield curve at the time of the grant.
The Group recognised a charge of £262k (2023: £311k) related to equity-settled share-based payment
transactions during the year. Of this, the charge recognised in the subsidiary, Thread 35 Ltd, was £262k
(2023: £305k).
The assumptions used in the valuation of the options at the grant date are as follows. There were no
new share issues in the year.
Share options
FY24
Share options
FY22
Share options
FY19
Share options
FY18
Exercise price
0.0p
0.0p
29.2p
15.1p
Share price at date of grant
27.00p
23.75p
29.2p
15.1p
Risk-free rate
0.25%
0.25%
0.25%
0.25%
Volatility
70%
42%
25%
25%
Expected Life
3 years
5 years
10 years
10 years
Fair Value
0.20
0.13
0.07
0.05
For options exercisable at year end, the exercise price ranged from 0.0p to 29.2p.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Sosandar Plc
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Annual Report 2024
18 Trade and other payables
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Trade payables
2,111
3,694
-
20
Accruals
692
549
61
36
Other payables
323
384
-
-
VAT payable
535
1,077
-
-
Contract liabilities
1,365
2,617
-
-
Deferred income
50
34
Trade and other payables
5,076
8,355
61
56
19 Leases
The Group have property lease contracts which are used in its day-to-day operations.
31 March
31 March
2024
2023
£’000
£’000
Lease liability brought forward
630
327
Additions
166
380
Finance cost
36
40
Lease payments
(210)
(117)
Lease liability recognised in statement of financial position
622
630
31 March 31 March
2024
2023
£’000
£’000
Of which
Current lease liabilities
194
148
Non-current lease liabilities
428
482
Lease liability recognised in statement of financial position
622
630
On 1 April 2022, the Group entered into a second property lease in Wilmslow, England in order to
expand its office space. Both property leases have a term of five years with a break clause after three
years.
20 Related party transactions
The intercompany loan balance between the Company and its subsidiary, Thread 35 Ltd, increased by
£201k during the year (2023: £3,423k).
21 Financial instruments – risk management
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. The Group’s activities expose it to a range of financial risks: market risk (including foreign
currency risk and interest rate risk), credit risk and liquidity risk. This note describes the Group’s
objectives, policies and processes for managing those risks and the methods used to measure them.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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21 Financial instruments – risk management (continued)
These methods include sensitivity analysis in the case of foreign exchange and other price risks, and
ageing analysis for credit risk. Further quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies and, whilst retaining responsibility for them it has delegated the authority for designing
and operating processes that ensure the effective implementation of the objectives and policies to
the Group’s finance function. The Board receives regular updates from the management team
through which it reviews the effectiveness of the processes put in place and the appropriateness of
the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility. The Group’s operations expose it to some
financial risks arising from its use of financial instruments, the most significant ones being cash flow
interest rate risk, foreign exchange risk, liquidity risk and capital risk. Further details regarding these
policies are set out below:
Credit risk
The Group faces low credit risk as own site customers pay for their orders in full on order of the goods.
There are credit terms with third party concession and wholesale customers.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost,
less provision for impairment. A provision for impairment of trade receivables is recognised on trade
receivables if the Group deem there to be expected credit losses. The amount of expected credit losses
is calculated using the simplified approach under IFRS 9 and is updated at each reporting date to
reflect changes in credit risk since initial recognition of the financial asset.
Losses arising from impairment are recognised in the statement of comprehensive income in
administrative expenses. The Group will write off, either partially or in full, the gross carrying amount
of a financial asset when there is no realistic prospect of recovery. This is usually the case when it is
determined that the debtor does not have the assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write off. However, the Group may still
choose to pursue enforcement in order to recover the amounts due.
The types of customers that the Group trades with have strong credit ratings and a robust payment
history with the Group with no aged balances and as such the Group have not identified any expected
credit losses from trade receivables during the period. The Group does not deem credit risk a material
risk to the business.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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21 Financial instruments – risk management (continued)
Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from its deposits of cash and cash equivalents with
banks. The cash balances maintained by the Group are proactively managed in order to ensure that
attractive rates of interest are received for the available funds but without affecting the working
capital flexibility the Group requires.
The Group is not at present exposed to cash flow interest rate risk on borrowings as it has no debt.
No subsidiary company of the Group is permitted to enter into any borrowing facility or lease
agreement without the prior consent of the Company.
Foreign exchange risk
Foreign exchange risk may arise because the Group purchases stock in currencies other than the
functional currency.
The Group monitors whether there is a requirement for foreign currency on a monthly basis. The
Group considers this policy minimises any unnecessary foreign exchange exposure.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital; it is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due. The principal obligations of the
Group arise in respect of committed expenditure in respect of its stock purchases and design. The
Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its obligations
when they become due.
To achieve this aim, it seeks to maintain readily available cash balances (or agreed facilities) to meet
expected requirements and to raise new equity finance if required for future development or
expansion.
The Board receives cash flow projections on a monthly basis as well as information on cash balances.
The Board will not commit to material expenditure in respect of its ongoing commitments prior to
being satisfied that sufficient funding is available to the Group to finance the planned programmes.
For cash and cash equivalents, the Group only uses recognised banks with medium to high credit
ratings.
The maturity of borrowings and other financial liabilities (representing undiscounted contractual cash-
flows) is as follows:
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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21 Financial instruments – risk management (continued)
Group
Company
Within 1 year
1-2 years
Within 1 year
1-2 years
As at 31 March 2024
£’000
£’000
£’000
£’000
Trade and other payables
18 5,076
-
61 -
Lease liabilities
19 194
428
- -
Total
5,270
428
61 -
Group
Company
Within 1 year
1-2 years
Within 1 year
1-2 years
As at 31 March 2023
£’000
£’000
£’000
£’000
Trade and other payables
18 8,073
-
56 -
Lease liabilities
19 148 485
- -
Total
8,221 485
56 -
21 Financial instruments – risk management (continued)
Financial assets
At the reporting date, the Group held the following financial assets, all of which were classified as
financial assets at amortised cost:
Amortised cost
Amortised cost
Group
Company
31 March
31 March
31 March
31 March
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Cash and cash equivalents
8,313
10,576
4,534
5,122
Trade & other receivables*
2,270
2,081
8
23
Total
10,583
12,657
4,542
5,145
*excluding prepayments
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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21 Financial instruments – risk management (continued)
Financial liabilities
At the reporting dates, the Group held the following financial liabilities, all of which were classified
as other financial liabilities at amortised cost:
Amortised cost
Amortised cost
Group
Company
31 March
31
March
31 March
31 March
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Trade payables
2,111
3,694
-
20
Accruals
692
549
61 36
Other payables*
323
384
- -
Contract liabilities
1,365
2,617
- -
Lease liabilities
622
633
- -
Trade and other payables
5,113
7,877
61
56
*excluding VAT
Capital risk
The Group’s objectives when managing capital are to safeguard the ability to continue as a going
concern in order to provide returns for shareholders and benefits to other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
22 Net cash
The below table shows the Group’s cash position less lease liabilities.
At 1
April
2023
Cash
flow Additions
Accrued
interest
charges
At 31 March
2024
£'000
£'000
£'000
£'000
£'000
Cash and cash equivalents
10,576
(2,263)
-
-
8,313
Lease liabilities
(630)
210
(166)
(36)
(622)
Net cash (excluding lease
liabilities)
9,946
(2,053)
(166)
(36)
7,691
23 Post balance sheet events
Post year end, the loan agreements between the parent, Sosandar PLC, and the subsidiaries, Thread
35 Ltd and Sosandar (Europe) Limited were formalised. The loans bear interest of 6% and are
repayable on demand. Management considers this a non-adjusting event.
24 Contingent liabilities
The Company and Group has no contingent liabilities.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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25 Ultimate controlling party
There is no ultimate controlling party of the Company.
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C
COMPANY INFORMATION
Sosandar Plc
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Annual Report 2024
Registered office
40 Water Lane
Wilmslow
Cheshire
SK9 5AP
Registered number
05379931, England and Wales
Directors
Nicholas Mustoe – Non-Executive Chairman
Alison Hall – Joint CEO
Julie Lavington – Joint CEO
Stephen Dilks - CFO
Adam Reynolds – Non-Executive Director
Andrew Booth – Non-Executive Director
Lesley Watt – Non-Executive Director
Secretary
Stephen Dilks
Auditors
Saffery LLP
Trinity
16 John Dalton Street
Manchester
M2 6HY
Nominated advisor
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Broker
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Registrars
Share Registrars Limited
3 The Millenium Centre
Crosby Way
Farnham
GU9 7XX
Solicitors
Irwin Mitchell LLP
One St Peter’s Square
St Peter’s Square
Manchester
M2 3AF
Public Relations
Alma Strategic Communications
71-73 Carter Lane
London
EC4V 5EQ
Docusign Envelope ID: 61BB4ABB-706D-4A92-A6D1-FB0E0891649C