Furniture and floorings retailer ScS bucked the retail industry’s downward trend by boosting revenue with an online sales push and a move towards lower-priced furniture in its half-year results today.
Revenue rose 1.1 per cent year on year to £151.4m in the six months to the end of January.
Gross sales increased 1.2 percent to £159.2m rising from £149.9m in the same six months last year.
Profit after tax hit £200,000, while profit before tax from continuing operations rose 25 per cent year on year to £500,000.
Free cash flow increased to £18.8m, up from £16.7m in the same period the previous year.
Why it’s interesting
Shares rose almost three per cent as investors welcomed the results, with in-store sales making up over 95 per cent of all sales as flooring sales rose 1.4 per cent to £21.6m, offsetting a slight decline in furniture sales of £130m.
However, the group’s online business posted fast growth with online orders increasing 30 per cent to £7.8m.
The company attributed the growth to a revamp of its product line in order to incorporate more lower priced furniture.
Despite the success of the first half of the year, ScS warns that the rising cost of interest-free finance could impact orders delivered and gross margins for the rest of the year.
Results are expected to remain similar to the first half of 2018, with ScS having achieved like-for-like order growth of 2.9 per cent in the 33 weeks to March, even as it warned on Brexit.
“The retail market continues to suffer in the midst of the uncertain economic and political environment,” it said.
“We therefore expect the trading environment to continue to remain challenging in the short to medium term, although the board is confident that the group is well positioned to maximise opportunities as they arise.”
What ScS said
Chief executive David Knight said: “Our focus on providing excellent choice, value and quality for our customers, coupled with our commitment to delivering against our strategic priorities, continues to prove successful.”
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