Applied Nutrition’s FY25: ahead of IPO guidance with 24.2% revenue growth
Applied Nutrition has delivered a strong first full year as a listed company. Revenue rose 24.2% to £107.1m and adjusted EBITDA climbed 18.8% to £30.9m, both ahead of IPO guidance and in line with recently upgraded expectations. Free cash flow conversion more than doubled to 72.4%, and the Group ended the year with £18.5m net cash.
Momentum picked up sharply in the final quarter and, according to management, has continued into Q1 FY26. The Board is keeping FY26 expectations unchanged for now, which feels prudent given we are early in the year.
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | £107.1m | £86.2m | +24.2% |
| Gross profit | £49.3m | £41.3m | +19.4% |
| Gross margin | 46.0% | 47.9% | -190 bps |
| Adjusted EBITDA | £30.9m | £26.0m | +18.8% |
| Adjusted PBT | £30.2m | £25.7m | +17.5% |
| Operating profit (statutory) | £28.1m | £23.7m | +18.6% |
| EPS (basic & diluted) | 8.4p | 7.5p | +12.0% |
| Adjusted EPS | 9.1p | 8.0p | +13.8% |
| Free cash flow | £16.5m | £7.1m | +132.4% |
| Free cash flow conversion | 72.4% | 35.3% | +105.1% |
| Net cash (period end) | £18.5m | £18.7m | — |
Where growth came from: UK and Europe surge, International steadies
This was broadly based growth with an especially strong UK and European performance. UK revenue jumped 44.0% to £48.4m, helped by deeper relationships with major retailers and increased shelf space via a joint business plan with a national grocer. Europe rose 45.8% to £15.6m, driven by expanded listings in discount retail and specialist channels across France, Spain, the Netherlands and Germany.
International sales were up 2.9% to £43.1m, masking distributor changes in the Middle East. Excluding the exited distributor, international sales grew 13% between FY24 and FY25, with H2 international revenue 19% higher than H1. The US remains early stage but saw new listings with GNC Corporate, Hy‑Vee and H‑E‑B, plus the AN Performance range at The Vitamin Shoppe.
H2 FY25 delivered about £60m of revenue (vs £40.8m in H2 FY24), reflecting the timing of customer orders and the acceleration seen late in the year.
Margins and cash: useful context behind the numbers
Gross margin dipped to 46.0% (‑190 bps). Management flags a non‑structural mix effect and elevated whey prices as the main reasons. Whey-based products are 19% of revenue and the average whey cost was about 30% higher than FY24. Importantly, direct staff costs as a percentage of revenue fell 70 bps thanks to factory efficiency gains, helping cushion the impact.
Adjusted EBITDA margin was 29% (FY24: 30%), consistent with IPO guidance given the extra costs of being listed. Administrative expenses (adjusted) fell to 18.2% of revenue (FY24: 18.8%), showing scale benefits despite public company costs.
Cash generation stood out. Free cash flow rose to £16.5m with conversion up to 72.4%, supported by careful working capital management. Net cash at the period end was £18.5m and the Group retains a £10.0m undrawn revolving credit facility with RBS.
Innovation and capacity: scaling from £200m capacity today towards £300m
Product development is busy and on-trend. New launches included Sparkling Collagen Protein Water, Vimto‑flavoured gels and hydration products within Endurance, creatine gummies, and collagen stick‑packs. The BodyFuel range added protein and wellbeing products.
Operationally, the factory extension completed in August 2024 and subsequent efficiency gains have lifted revenue capacity to around £200m. Over the next 18‑24 months, Applied plans to invest approximately £2.0m‑£2.5m in automation and specialist production, including additional automated packaging lines and a new gel machine. The Company is also considering a further c.£2.5m investment to bring one of its fastest‑growing products in‑house, with an estimated four‑year payback based on current volumes.
New global distribution facility and HQ (related‑party lease)
The Group intends to enter a lease on a purpose‑built warehouse adjacent to its current site, expected to increase storage capacity by about 180%, remove external warehousing costs and bring all non‑manufacturing teams onto a single site. Fit‑out and equipment are estimated at £3.5m‑£4.0m. Subject to planning and construction, the move is targeted for early FY27.
Governance on the lease
The landlord will be a corporate entity controlled by the CEO and COO, making this a related‑party transaction under the Listing Rules. To manage conflicts, the Board has appointed independent legal and surveying advisers; the CEO and COO will not vote on the lease approval; and the CFO will sign on behalf of the Company with full Board approval. The Board approved the transaction in principle in October 2025, subject to final documentation.
Product and channel highlights worth noting
- UK shelf space and distribution expanded materially, with total product placements across grocery and high street up over 95% in 2025 vs 2024 (source: Circana).
- Endurance is flying: the Vimto collaboration helped make it the fastest‑growing Energy and Hydration brand in UK grocery and high street over the latest 12 weeks (Circana, >£1m 52‑week sales).
- D2C is building steadily, supported by a new app and subscription options. It remains smaller than B2B but plays a complementary role for brand building and repeat purchase.
- Category mix: health and wellness nearly doubled to £18.2m; grab‑and‑go reached £18.7m; pre‑workout was £18.6m (slightly down year on year).
Capital allocation and dividends
Management is prioritising reinvestment to support growth and margin improvement, including automation and bringing currently outsourced production in‑house. Capex in FY25 was £1.0m, with a planned £2.0m‑£2.5m over the next 18‑24 months and the potential additional c.£2.5m machine under consideration.
A pre‑IPO dividend of £14.7m was declared in October 2024. The Company does not anticipate declaring a further dividend before FY27, preferring to retain cash for capacity, efficiency and potential M&A opportunities.
Outlook for FY26: momentum continues, guidance unchanged
The strong finish to FY25 has carried into Q1 FY26. The Group sees positive market share trends, more shelf space, and a larger product range both in the UK and internationally. Given the early stage of the financial year, the Board is sensibly keeping current market expectations unchanged.
Key tailwinds include the broader consumer shift towards health and wellness and the Company’s pipeline of innovation. Watch for traction in new geographies, the US rollout, and any normalisation in whey prices that could support gross margins.
My take: what this means and why it matters
- Clear beat vs IPO guidance – credibility boost. Delivering 24.2% revenue growth and 18.8% adjusted EBITDA growth while absorbing listing costs is a solid first year on market.
- Cash flow quality improved. Free cash flow conversion at 72.4% is a standout and underpins the net cash position and future capex plans.
- Capacity headroom. With revenue capacity lifted to c.£200m and targeted to c.£300m through modest capex, the operating base looks ready for the next phase of growth.
- Commercial flywheel spinning. More listings, more SKUs, and faster innovation cycles are widening distribution and deepening retailer relationships.
- Risks to watch. Gross margin is sensitive to whey prices and mix; international execution needs to re‑accelerate post distributor changes; and the related‑party warehouse lease needs crisp governance through to completion.
Jargon buster
- Adjusted EBITDA: operating profit before interest, tax, depreciation and amortisation, excluding exceptional and non‑underlying items (like IPO costs and share‑based payments). It’s a proxy for underlying operating cash generation.
- Free cash flow conversion: free cash flow as a percentage of adjusted profit after tax. It shows how well profits turn into cash.
- Net cash: cash and cash equivalents less borrowings; excludes IFRS 16 lease liabilities in this RNS.
- Joint business plan (JBP): a structured growth plan agreed with a retailer that can unlock shelf space, listings and earlier access to new products.
Bottom line: Applied Nutrition is executing on its multi‑pillar, global growth strategy, building brand, distribution and capacity in tandem. If the strong start to FY26 holds and the investment programme lands as planned, there is a clear runway to grow from today’s £107.1m of revenue towards the capacity envelope now being built.
