Good morning, everyone, and welcome to the call. We'll first provide a short summary of the update, and then we'll hand over to you for questions. To begin with, this has been a year of very important strategic progress for Sosandar. We've delivered what we set out to achieve: growth in margin and profit before tax, along with becoming a multi-channel business through the opening of our own stores. Throughout FY 2025, we've remained steadfast in our approach in building the foundations for sustainable, profitable, and cash-generative growth. We can see the results of this disciplined approach in our margin and PBT performance, but we are now seeing the results also come through in top-line revenue. March sales were in line with the prior year, and this momentum has continued into April, with both our own site sales and sales as a whole up against the prior year.
Everything we've been doing this year has been geared towards reaching this inflection point where we return to top-line growth, but crucially, this growth being at a substantially higher margin. We're confident that we've reached that point.
Now moving on to the financials. As Julie said earlier, our focus has been on the prioritization of margin enhancement and profitability, and the numbers reflect that for FY 2025. We have delivered revenue of GBP 37.2 million, which reflects our continued transition away from price promotional activity on our own website outside of the major scheduled sale events. Looking at quarter four, January was broadly in line with expectations, with a strong end of season sale. February was very much the outlier, with trading softer than we anticipated as we pulled away from the seasonal sale earlier to focus on full-price sales. March performed well, with total revenue being in line with the prior year, which is an important milestone in the context of our strategy. Through quarter four, we could have chased for more revenue. However, we have maintained the disciplined approach and focused on full-price sales.
This approach is benefiting us in April, where we are ahead of the previous year. Crucially, this includes being up on our own website, with both traffic and conversion being strong and up year on year. Importantly, we believe we have now reached the inflection point and will return to revenue growth in the period ahead, including on our own website. Our focus on gross margin is delivering, with the full year being 62.5%, up from 57.6% in the prior year. This material improvement in gross margin is now being delivered on a sustained basis and provides the foundation from which to deliver sustainable growth in profit from FY 2026 and beyond. This improvement in gross margin helped us to deliver a profitable FY 2025, and we estimate that our PBT will be no less than GBP 0.5 million for the year.
Although softer than we had hoped, we have delivered a substantial positive swing of GBP 0.8 million compared with FY 2024 in a year of transition and substantial change. We have a robust net cash position of GBP 7.1 million, albeit reduced from the GBP 8.3 million at the end of March 2024. This does include the initial CapEx outlays to open our physical retail stores, which totaled GBP 1.2 million in the year. As a reminder, the physical store rollout is being delivered entirely from our existing financial resources. On that note, I'll pass to Ali for an overview of our operational progress.
Our key achievements this year have been a positive swing in margin and PBT and the opening of our first stores. We now have six stores, including our latest two, which recently opened in Bath and Harrogate. We are also really pleased that our own website has returned to growth as we expected it to, and we see clear indications of how the website and stores are working together to recruit and retain customers. Our own website has very clearly reached an inflection point, but in areas where the stores are located, it is performing even better than the national average. We have seen an uplift in traffic and conversion on our website in those areas where our stores catered. In addition, 60% of purchases in store are being made by new customers to the brand, proving they are a fantastic marketing tool.
The strength of the Sosandar brand continues to gather momentum. This is also evident from the success we are seeing through our third-party partners, where we continue to be one of the top-selling brands across them all, including Next and M&S. Additionally, our ability to leverage the Sosandar brand's equity led us to signing our first licensing agreement with Next for a Sosandar footwear range. This remains on track and is expected to launch in autumn 2025. On that note, I'll pass back to Julie for a quick overview of our current outlook.
Thank you, Ali. To summarize, FY 2025 has been a year of significant strategic process. We've been building the foundations to return to sustainable, profitable, and cash-generative growth over the medium term. We are now consistently delivering a higher margin. Our customers are accustomed to paying full price. We've expanded our routes to market through the opening of our own stores, and our performance with third-party partners continues to go from strength to strength. We are confident that FY 2026 will be a year of both profit and sales growth, and we're hugely excited for what lies ahead for Sosandar. Now, over to you for questions.
Thank you very much. As Julie says, this now brings us to the Q&A section of the webinar. I'd like to remind any attendees who wish to ask questions, please use the Q&A function. The first question we have is, are there any trends that you're seeing across the stores?
Ali, do you want to take that?
Yeah, we've had a lot of learnings since we were beginning the store rollout last August. The positive expectation that you can open a store in a prime location and people walk in has proven out. We've got footfall in our stores that's really high without having to use expensive marketing. We found that conversion improves over time in the same way as you start any business. It takes time to build momentum. We have also learned a lot about what sells in store as opposed to online because there are definitely differences. We have been able then to build stock packages to reflect that. Our two new stores have started off even stronger than the first two when they first opened, as all the learnings that we've gained over the last six months, we've been able to apply to them on their opening.
Thank you. Do you intend to increase marketing spend as you return to revenue growth?
I'll take that. Yes, we are planning to increase marketing spend in FY 2026. One of the other things that we've really been able to work on over the last year is getting to a place where our marketing spend is really paying back very, very quickly. We're seeing very good results on marketing spend beginning to pay back on first order, which is kind of the holy grail, really. We intend to start dialing up the marketing a little bit. We're not going to be spending heftily on marketing, but we will be spending more than we did in FY 2025.
Great. Thank you. The next question is, what did you do differently in March compared to February?
Shall I take that? We did not do anything really differently. It was just about the macro environment. February is always a bit of a tricky month because it falls between sale and it is the beginning of full-price sales. Obviously, the weather is pretty miserable in February. A lot of economic bad news in February. Generally, the macro environment just was not great for clothing sales in February. What we saw in March was a really quick early uptake of spring-summer product. We brought our spring-summer products in pretty early because we wanted to get all the product into stores. We saw immediately in early March people buying really quite high summer product. It was just natural sales were stronger in March than they were in February.
Great. Thank you. Could you provide some commentary on conversion rates given the full-price strategy?
Steve, do you want to take that?
It undoubtedly isn't as high as it was when we were still price-promoting quite so regularly in the past. Our expectation is slightly more regulated, I suppose, compared to where it has been as a historical norm. However, I think if we look at what's happened over the last 12 months in particular, there was a drop in conversion significantly when we pulled away, but that was a change for the customer. As the customers started to become slightly more accustomed to the new norm of full-price sales in this kind of outside of those sale events, we started to see a steady rise in conversion. If we look at what our expectation is and where we are now, we're broadly where we would expect it to be, although we didn't necessarily know definitively where it should land on a full-price model.
We're really pleased with where it is. I think going back to the question about February and March, and I'll extend it to April, actually, about how conversion and traffic to the website has improved from February into March and again into April. That's nothing other than product landing, customers wanting to buy that product. They're coming to the website ever more frequently, and conversion is continuing to grow. I think also what's really important in the metric sense is that we're recruiting ever more customers, new customers to the brand. I think there's an overlap here strategically on opening stores. Although we've only got six, there is clear evidence that customers are coming to the website from the locality of where the stores have opened more so than the rest of the U.K. average.
That tells us that when we open a store, it's got a halo effect coming to the website, which is bearing out not only in traffic, but also in those customers buying as well. I think April is better than March, which is why we're now up year on year on our own website in April. We weren't in March, although overall revenue was on par year on year. Our own website was still slightly down, but that's flipped into April with being up. That's a combination of both traffic and conversion being stronger.
Thanks, Steve. The next question is, how many stores do you expect to roll out for the rest of the calendar year 2025?
Ali, do you want to take that?
How many stores we open really depends on availability. We have said in the past, and we stick to the fact that we will not compromise on making sure that we have prime locations. We won't open a store unless it's in a prime location. We won't be opening any more stores in this season. We've learned the best window for opening a store is the beginning of the season. The next window for us would be the start of autumn, winter, and then the start of spring-summer.
Thank you. Next question is, growth expectations for this year are at 20%. Is April already on that level, or what has to happen to get to 20% growth?
Steve, do you want to take that?
We're not quite at that level yet. However, if we look at what we've seen across April already, we are in double-digit growth as we sit here today in April. I think it's too soon to say how that becomes the new norm going forward, particularly given what Julie said about marketing investment on our own site, which we didn't do to the same extent last year. We would expect that the growth rate would build through the year as we start to get the exponential effect of any investment in marketing that we make. Not because whilst it comes back on first order, the other key expectation or aspiration would be that those customers are going to buy second and more times as you go through time.
The other benefit that we've got as we go through the year is the ongoing benefit of how sales through our own stores rise as well. I think what we're seeing in April is really positive. When we go forward, we would expect that growth rate to continue to grow beyond where we are now. I think that question was revenue-driven, but I think what's key here is driving profitable growth as well. In terms of where are we from a profitability axis perspective, our margin continues to strengthen, although we won't see year-on-year gains in the way that we did in FY 2025. We are still seeing gains in the early part of FY 2026 over and above last year. We're still growing there.
I think profitability, therefore, is particularly strong as a result of even if we're not doing 20%+ growth on revenue, our PBT is still the target for FY 2026 we're particularly comfortable with. All round, I think there's lots of reasons to be particularly optimistic, not only about FY 2026, but beyond as well as a result of the changes that we've made in the last 12 months.
Thank you. Please give your comments on the current competitive environment and the level of promotional activity from peers.
I'll start with that. Ali or Steve, you could chip in if there's anything else you want to add. I think there's generally quite a lot of promotional activity out there, but there always is, to be honest, in the fashion retail landscape or in the retail landscape generally. That is not causing us to veer off course in any way, shape, or form. There's been a lot of promotional activity really throughout March and into April, but we've very much stuck to our guns, and we intend to continue that way. It is certainly paying dividends for us because we've got a customer base who are now very happy to be paying. They're not waiting for the discounts to come. I guess what we've always seen, we've talked about in the past, is we have very good price points on our products.
The quality and the price points are very well matched. We have always sold at full price on our third-party partners, Next and M&S, and sell very happily at full price. As a pure-play business, we did use price promotional a lot as a way of encouraging repeat customers. Obviously, we have been through that transitional process over the last year to 18 months, and we are now very confident we have come out the other side. We absolutely are sticking to our guns.
Thank you. When you do a 20% off everything online, as you did last week, is that replicated in the stores?
What you saw last week, that was a lapsed and prospects campaign, which is quite normal. Lots of retailers do it. Next do it. M&S do it. What you see, that's not going to all our top customers. No, that wasn't replicated in store.
Thank you. How have the newly opened stores in Bath and Harrogate performed in their initial weeks compared to the other store openings, particularly against the backdrop of the soft February trading?
Ali, do you want to start that one?
Basically, what we found with Bath and Harrogate, they're trading really well because of the fact that we've been able to open them and take all the learnings we've had from the other four stores. They've actually started off better than the other stores started at their beginning because of those learnings. In terms of our stores, what we're seeing is the stores that we've opened first that have had longer to trade are doing the best. That would be Marlow and Marlow and Chelmsford in terms of performance. I think for us, this is pleasing as it basically shows that sales continue to grow the longer the store is open, and the customers get to know you are there, and you get to know and trust the brand.
We are finding the ones that have opened first are doing the best because they've had longer to trade, but the ones that were opening subsequently to that are doing better in terms of how they first start to trade because of the learnings that we've had from the others.
Do you experience strong sensitivity to the weather?
I'll comment on that. I'm hesitating because, I mean, there's always a degree of having some sensitivity to the weather. If the weather's sunnier, then naturally consumers have more inclination to buy summer products, for example. That can be evident. They actually can be boosted if the weather's bad because people then stay at home, and they're on their phones or on their computers. Actually, you can kind of benefit from it being rainy and horrible. I think it's just a natural backdrop, isn't it? The weather really. We just go with it. What we are able to do is we adapt our marketing on a daily basis to make sure it's talking to customers, reflecting what the weather is doing.
For example, the day this week when I can't remember which day it was now when it was raining. It was yesterday, wasn't it? It was really rainy after a summery day. The products that we're promoting at lunchtime on those days are more commensurate with something that you might wear on rainy days, for example. I think being a very agile business, as we've always been, we are able to, I guess, make the weather our friend rather than your enemy.
Thank you. Was the H3 margin equal to H1?
Steve, do you want to take that?
If I look at two component parts of margin, really. If we look at the full price margin, when we're making full price sales and strip out the revenue that's derived from end-of-season sales, the margin grew in H2. There is a slightly stronger sale period post-Christmas, which brings the average margin slightly down in H2. Overall, if I look at the like-for-like margins on four, it grew as we went through the financial year. It could rise in ranges again. We have got marginal growth that I would expect to see in H1 as well. That is the key. I think if we broaden that question to margin and what the future looks like on margin, we have delivered the vast majority of what I would call sales margin growth because we have reduced that price promotional average discount now to a level that will not continue to see significant reduction.
The future gain on margin comes from scale. As we build greater scale, it means we can buy deeper into a style when we buy from factories, which unlocks efficiencies for both us and the factory to deliver a better price. As we move forward over the next couple of years, I would expect further growth, not to the significance of levels that we've seen, but certainly I would expect further growth on a like-for-like basis. More as our scale grows, it unlocks greater benefit. I think getting something beyond the mid-60s is a good expectation. Is that easy? No. Is that a good expectation for what we could see in the coming years? Definitely.
Thank you. How do you see your purchasing and potentially sales affected by tariffs?
Dilks, do you want to take that?
It's difficult to say, isn't it? As we sit here at the moment, no. It's probably worth recognizing currently we don't sell anything materially into the U.S., particularly. Our sourcing is from Asia, although it's quite difficult to work out from a macro level exactly what will happen. Of course, it's not a Sosandar question, is it? It's everything. Does that mean that there's going to be inflationary aspects on purchases as a general point? That's what we need to understand. How do we pass that on if that happens? It's probably too premature to understand, but we're not exposed to the U.S. Does it drive anything that we might do in the U.S. in a particular way? I don't know. We're not there at the moment in a big way.
We do deliver to the U.S. through our global e-relationship, through our own website, but the materiality of that revenue is relatively small. Therefore, it's not something that we're hung on right now. We've just got a watching brief, I guess, as to how all of this will play out in the coming weeks and months.
Brilliant. Thank you very much, everyone. As there are no further questions, I would like to hand back to Julie for any closing remarks.
I'll just finish off by saying thanks very much, everyone, for joining us today. We very much look forward to updating you again in due course.
Thank you very much, everyone. That now brings this morning's webinar to an end.