Applied Nutrition hit by Middle East caution despite fitness fanatic sales boom
Applied Nutrition said its sales were boosted by Ozempic users and fitness fanatics ditching the pub, but shares sank on investor jitters over the impact of the war in Iran.The protein powder and supplement firm said sales rose by 56.5 per cent to £74.5 million for the six months to 31 January, compared with a year earlier.But shares fell by as much as 15 per cent on Monday morning after it said sales volumes in the Middle East would be affected by the conflict.Thomas Ryder, the boss of the FTSE 250 group, said sales are booming as health-conscious customers switch their plans from the pub to the gym. Applied Nutrition has partnered with event firms such as ‘Coffee and Vibes’ who organise fitness classes, followed by healthy food and DJs.'These social gatherings are becoming way more popular than pub gatherings, or club gatherings,’ said Ryder, a Liverpudlian former scaffolder who set up the business in 2014. Coleen Rooney, who is also an investor in the company, is the face of a marine collagen rangeHe added that the increasing uptake of fat jabs, such as Ozempic, has been another opportunity to reach new customers.Weight-loss drugs, medically known as GLP-1s, can cause a loss of muscle mass alongside fat, so doctors advise that users take up strength training and eat enough protein to combat the unhelpful side effects.Ryder said: ‘There's definitely an uptick in consumers wanting these products to support their weight loss journey.’He said that a range of 53 protein-focused meals and snacks with supermarket Morrisons, which targets consumers who are on the jabs, has been selling ‘really, really well.’And a range of Marine Collagen supplements, fronted by Coleen Rooney, who is also an investor in the group, have also been selling well, he said.But news that pre-tax profits leapt by 77.1 per cent to £20.9million for the half-year was not enough to reassure investors after it said it expects ‘some reduction’ in sales volumes in the Middle East.It said: ‘The group is cognisant of the current disruption to shipping routes and purchasing activities within the Middle East. Although we expect some reduction in volumes into the region during the second half, at this stage there is no change to FY26 guidance of full year revenue of approximately £140 million.’There have also been concerns over pressure on households in Britain, as energy prices are now predicted to spike later this year.But Ryder said he was confident that wellness was one of the top priorities for his customers and said: ‘You know, every year there's always something going on. We always navigate our way through and we're just very confident for the second half.’And the group said it still expects to meet annual sales targets of around £140million.Adam Vettese, market analyst for eToro, said: ‘Applied Nutrition’s shares have fallen sharply this morning despite delivering a solid set of interim results that confirmed the upbeat trading update issued in February.‘The sell-off looks like classic “sell the news” – much of today’s performance was already in the price, and investors are focusing on working-capital drag hitting free cash flow conversion, tougher H2 comparatives and potential Middle East shipping headwinds. At current levels the valuation is undeniably demanding.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Applied Nutrition hit by Middle East caution despite fitness fanatic sales boom
