Furniture retail ScS grows sales 14.5% following listing on the London Stock Exchange

Sunderland company's chief executive David Knight says business is 'strong and resilient' with a bright future

ScS
ScS

Sunderland-based ScS, one of the UK’s largest retailers of upholstered furniture and floorings, is anticipating continued growth after the release of its first set of interim results since listing on the London Stock Exchange.

In the 26 weeks ended January 24, 2015, the group saw gross profit rise 13.2% to £132m, compared to £115.3m in the same period the previous year, while total sales increased 14.5%.

The group saw its EBITDA loss grow from £1.3m to £3m, while operating loss, excluding exceptional items, widened from £3.4m to £5.2m.

But chief executive David Knight said this was in line with expectations and reflected a number of factors.

In July 2014, ScS launched 30 House of Fraser concession stores, involving high operating costs with little immediate revenue gains.

The company also invests heavily in the January sales, the expense of which is reflected in the first-half results, while the revenue benefits will not be revealed until the second half.

The results are the first to be published since the IPO of ScS in January, which raised £35.7m.

Mr Knight said the move had proved “extremely positive”, helping with recruitment, consumer confidence and securing prime locations on retail parks.

“We are delighted to be reporting our maiden set of results since listing on the London Stock Exchange,” he said. “These results demonstrate the progress that has been made to develop ScS into a strong and resilient business.

“Our sales order intake is our best ever at this time of year and this momentum gives us good visibility for the second half. We are, therefore, confident of meeting market expectations for the full year.”

The performance is indicative of continued growth trends at ScS, which sprang up from modest roots when its first store - then Sunderland Suite Centre - was established in 1975.

Rebranding in 1987, the group set up its first retail park store at Gateshead’s Metrocentre - the “jelly mould”, as Mr Knight described it, for an ongoing national roll-out.

During the six months to January 24, ScS opened three stores - in Glasgow, Croydon and Slough - and oversaw the launch of both a new e-commerce platform for its trading website and a House of Fraser ‘For Living’ site.

Online sales rose 27.6% to £3.7m, total sales order intake increased 7.8% on a like-for-like basis and flooring sales order intake was up 13%.

The group’s balance sheet likewise remained strong, with net cash of £26.6m.

“Looking ahead, we are excited about our future growth prospects, including our new concession agreement with House of Fraser, our flooring offering and online proposition,” Mr Knight said.

“The Group’s cash flow dynamics and new committed bank facilities underpin the strong financial position which will support our ambitions for future growth and deliver value for our new shareholders.

“To reflect this confidence, the board is today proposing a maiden interim dividend of 2.8p per share.”

ScS chairman Alan Smith said: “The group remains in a strong position to build on the progress we have made in the first half.

“The successful IPO in January 2015 marks a significant point in the company’s development, demonstrates the strength and renewed focus that ScS now has and provides a strong platform for further growth.”

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