ScS has published its preliminary annual results for the year ended 27th July 2019. It confirms that gross sales improved £5.8m to £333.3m, with LFL order growth of +4.2%. Revenue improved £4.6m to £317.4m.
Continued investment in the retailer's ecommerce offering helped drive an online sales increase of +21.7% to £16.8m, bolstered by the roll-out of a new in-store sales app by the end of July. A new store opened (in Kirkcaldy, Scotland) last month.
The group has had a more challenging start to the new financial year, with LFL order intake falling -7.6% for the period from 28th July to 29th September 2019. On a two year basis, LFL order intake was down -3.0%, impacted by the record temperatures seen over the August bank holiday weekend and increased political and economic uncertainty.
CEO David Knight comments: “I am delighted to report another year of good progress and growth for ScS in our continued effort to ensure we remain Britain’s best value sofa and carpet retailer.
"The group saw a £5.8m (+1.8%) increase in gross sales in the year to £333.3m. The increase was impacted by a lower opening order book at the start of the year, due to the warm weather and the football World Cup at the end of the previous financial year. Sales were also impacted by the closure of two stores, which did not meet the required level of return for the capital employed.
"Gross profit increased to £149.9m (2018 – £147.2m), with the gross margin percentage being maintained at 45.0%. Underlying EBITDA increased +3.0% to £19.7m and underlying profit before tax rose +7.1% to £14.6m.
"We remain conscious of the impending Brexit deadline, and the impact this may have on the market, consumer confidence and the wider economy. However, the group’s financial health has never been as strong and with our resilient, debt-free balance sheet, we are in a good position to manage the ongoing uncertainty, and furthermore seek opportunities which will add value in the longer term."
Steve Miley, a senior market analyst at www.asktraders.com, speculates: "The online part of the business has grown by +21.7% to £16.8m, compensating the more modest evolution of the furniture and flooring divisions. This will be the first yearly report without House of Fraser concessions that ceased trading in January 2019, which removed 25 stores form the company’s estate."