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ScS interim revenue, earnings rise but recent trading hit by bad weather
Furniture and flooring retailer ScS reported a jump in interim revenue and earnings on Wednesday but warned that recent trading has been hit by adverse weather.
In the 26 weeks to 27 January, earnings before interest, tax, depreciation and amortisation rose to £2.9m from £0.1m in the same period a year ago, on revenue of £160.7m, up 1.8%. Gross sales were up 1.5% to £168.4m and like-for-like order intake increased 2.2%.
Earnings per share came in at 0.1p compared to a 5.6p loss the year before and the company upped its interim dividend by 8.2% to 5.30p per share.
ScS opened a new store in Chelmsford on Boxing Day and now trades from 101 stores, with 27 House of Fraser concessions.
Chief executive officer David Knight said: "Our focus on providing excellent choice, value and quality for our customers has proven successful. The board is confident that its strategy is proving successful, and the business continues to strengthen, enabling it to maximise opportunities as they arise and continue to grow market share."
However, the company struck a more cautious note on current trading, with like-for-like order intake in the last seven weeks down 5.3%, mostly due to the bad weather experienced in the week beginning 25 February.
"We expect that the retail market will continue to remain challenging in the short to medium term, and we are conscious that the Group still faces the key Easter and May bank holiday trading periods. Despite the challenging trading conditions, the group continues to deliver profitable growth and the board is pleased with the group's year to date trading, which is in line with its expectations," Knight said.
Shore Capital analyst Phil Carroll said the results are "resilient and robust".
"ScS's value focused retail proposition has resulted in a performance that we believe is ahead of the UK furniture and flooring market and its flexible and agile cost base has enabled this top-line growth to translate into solid profit growth and cash generation. Looking ahead, the second half has seen adverse weather conditions impacting footfall across the retail industry and generally softer trading conditions.
"However, management states that it is pleased with the group's year to date trading, which is in line with its expectations. This gives us confidence for the full year and so, we leave our forecasts unchanged. In the current market conditions, we believe this is likely to be a differentiating factor."
At 1020 GMT, the shares were down 2.6% to 199.59p