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Pent-up demand sees profits surge at ScS
16th Mar 2021 08:59
(Sharecast News) - ScS Group reported a surge in profits on Tuesday after pent-up demand post-lockdown boosted demand for home furnishings.
The upholstered furniture and floorings retailer said gross sales in the 26 weeks to 23 January increased 14% to £182.3m, while revenue rose 14% to £173.9m. Operating profits jumped from £1.2m a year previously to £19.8m, while pre-tax profits swung back into the black, coming in at £17.7m compared to 2020's £600,000 loss.
ScS said the "record" performance had been driven by the delivery of a large opening order book from pent-up demand in June and July, alongside strong order growth in the first quarter.
David Knight, outgoing chief executive, said: "With consumer confidence and the economic environment remaining uncertain, it is difficult to provide clarity on the group's outlook for the weeks and months ahead.
"However, we remain cautiously optimistic, as recent government announcements have provided further clarity on the anticipated reopening of our stores. The business continues to adapt and respond to trading conditions, with increased focus on the development of our digital channels."
All of ScS's stores are closed but are expected to reopen on 12 April. Updating on current trading, ScS said the overall order intake had decreased 87% in the first seven weeks of the second half because of the temporary closures. Online sales growth hit 158% over the same period, however.
ScS said it planned to repay the £1.3m it had received through the Coronavirus Job Retention Scheme before the end of the financial year, assuming the re-opening of its stores was in line with expectations.
As at 1445 GMT, shares in ScS were ahead 5% at 243.18p.
Knight is retiring after 32 years with the retailer and will be replaced by Steve Carson, who joined ScS in January.
The upholstered furniture and floorings retailer said gross sales in the 26 weeks to 23 January increased 14% to £182.3m, while revenue rose 14% to £173.9m. Operating profits jumped from £1.2m a year previously to £19.8m, while pre-tax profits swung back into the black, coming in at £17.7m compared to 2020's £600,000 loss.
ScS said the "record" performance had been driven by the delivery of a large opening order book from pent-up demand in June and July, alongside strong order growth in the first quarter.
David Knight, outgoing chief executive, said: "With consumer confidence and the economic environment remaining uncertain, it is difficult to provide clarity on the group's outlook for the weeks and months ahead.
"However, we remain cautiously optimistic, as recent government announcements have provided further clarity on the anticipated reopening of our stores. The business continues to adapt and respond to trading conditions, with increased focus on the development of our digital channels."
All of ScS's stores are closed but are expected to reopen on 12 April. Updating on current trading, ScS said the overall order intake had decreased 87% in the first seven weeks of the second half because of the temporary closures. Online sales growth hit 158% over the same period, however.
ScS said it planned to repay the £1.3m it had received through the Coronavirus Job Retention Scheme before the end of the financial year, assuming the re-opening of its stores was in line with expectations.
As at 1445 GMT, shares in ScS were ahead 5% at 243.18p.
Knight is retiring after 32 years with the retailer and will be replaced by Steve Carson, who joined ScS in January.