ScS revenue tops £331m, but demand softens

Sunderland-based furniture and floorings retailer ScS Group announced its revenue rose 8.6% to £331.6 million in the year to July 30, 2022, and underlying profit before tax excluding business rates relief rose 68% to £13.8 million.

ScS said its total dividend will rise 35% to 13.5p.

However, ScS warned that trading since the start of the new financial year has been subdued, with softening demand as consumers defer spending on big ticket purchases.

The company said order intake for the first 10 weeks of the new financial year were down 7.8% on a like-for-like basis when compared to the first 10 weeks to October 6, 2018, in the firm’s last full year not impacted by the pandemic.

It said one year like-for-like order intake is down 14.4% on the prior year.

ScS CEO Steve Carson said: “We are pleased to be announcing results that are ahead of market expectations.

“The year saw the group deliver record sales, maintain its strong gross margin and manage costs effectively, resulting in a 68% increase in underlying profit before tax, excluding business rates relief.

“We also saw excellent progress in year one of our refreshed strategy, including strengthening our teams as we look to drive the business forward in the coming years.

“Trading since the start of the new financial year has been subdued, with the challenges of high inflation impacting consumers’ disposable income.

“As previously reported, the sector is seeing softening demand as consumers defer spend on big ticket discretionary purchases.

“We are pleased with the strategic progress we have made which, coupled with the strength of the group’s balance sheet, places the business in a strong position to deal with current headwinds.

“Whilst we expect the coming months to be challenging, we are confident in the longer term growth prospects of the business.”