In the wake of the news that it would be sold to a subsidiary of Italian upholstery retailer Poltronesofà (see related), ScS has published its delayed preliminary results for the 52 weeks ended 29th July 2023, which it describes as "resilient".
Delivered sales were down -0.4% YoY, and gross margin stood at 44.4% (down -1.0%% YoY, with increased costs for providing credit to customers partially offset by price increases).
ScS reports an underlying profit before tax of £7.2m, including a £1.9m loss before tax from the newly acquired Snug business.
The period saw it complete a share buyback programme, returning £7.0m to shareholders, and end on a strong balance sheet, with cash of £69.5m (£70.8m in FY22).
ScS saw strong LFL order growth in H2 of +5.9%, with order intake for the full year in line with FY22.
The business continued to gain market share, cementing its position as the UK's second-largest upholstered furniture retailer. This was bolstered by the acquisition of Snug in January, and ScS subsequently opened one new standalone Snug store (in Bristol) and nine Snug concessions in ScS stores – plus two new ScS stores, in York and Swindon. The new-format store design was rolled out into eight further locations.
ScS also achieved Kitemark certification for domestic furniture from the British Standards Institute, and exceeded 440,000 reviews on Trustpilot, maintaining its 5-star 'Excellent' rating.
Thr retailer says that trading has toughened over the first quarter, with ScS lLFL order intake growing +2.7% in August, +0.3% in September, and declining -4.4% in October. Order intake was in line with the prior year for the 12 weeks to 21st October 2023. The group opened a new standalone Snug store in Westfield London, and seven further concessions in ScS stores, and plans to invest in a further 12 ScS stores to adopt the new-format design.
It boasts a "resilient" balance sheet, with forecasted cash of £57m as of 31st October 2023.
CEO Steve Carson comments: "We are pleased to announce a resilient set of results and to continue to take market share in what is a challenging environment. We were also delighted to see continued progress in year two of our strategy, including modernising our product offering, investing in our store estate, refreshing and relaunching our brand and advertising and to announce the acquisition of Snug.
"We remain cognisant of the challenging economic environment facing our customers which is expected to continue throughout FY24. We therefore believe that continuing to focus on our value-driven proposition is extremely important so that everyone is able to create the home they love.
"The board is confident that the group's strategy and strong balance sheet will enable ongoing trading resilience and we continue to expect to grow market share while investing in stores, in our digital proposition, and other strategic growth opportunities."
