30 Jul 2020 07:00
For Immediate Release | 30 July 2020 |
ScS Group plc
("ScS", or the "Group")
TRADING UPDATE
ScS, one of the UK's largest retailers of upholstered furniture and floorings, today issues the following trading update for the 52 weeks ended 25 July 2020, ahead of announcing its preliminary results on 29 September 2020.
Order intake across the year has been as follows:
Period | Weeks | Date | Order intake vs prior year |
Pre-lockdown | 1 to 34 | 28 July 2019 to 21 March 2020 | (4.2%) |
Lockdown | 35 to 43 | 22 March to 23 May 2020 | (92.5%) |
Post-lockdown | 44 to 52 | 24 May to 25 July 2020 | 92.2% |
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Full year | 1 to 52 | 28 July 2019 to 25 July 2020 | (5.9%) |
As previously reported, following a challenging autumn period, trading improved over the winter sales period with momentum increasing prior to lockdown. Order intake growth was strong in the first seven weeks (late January to mid-March) of the second half of the financial year. However, as the table illustrates, this was impacted by the mandatory closure of all our stores on 23 March 2020. Whilst we saw a significant increase in online orders during the lockdown period, the Group as a whole experienced a decrease in bookings year on year.
Encouragingly, post-lockdown trading has been very strong both in-store and online, with Group order intake increasing 92.2% when compared to the same period in the prior year. This reflects pent up demand, which has been supported by our well executed re-opening plans, our continued focus on value and customer service, and our increased investment in targeted marketing over the last two months.
Delivered sales for the 52 weeks ended 25 July 2020 were £268m, which compares to £333m in the prior year. The reduction was driven by the temporary closure from late March to late May of our distribution network and our manufacturing partners' facilities.
As our furniture products are made to order, and normally have lead times ranging from 5 to 13 weeks, the recent strong order intake performance means the Group's opening order book for the new financial year is significantly higher than in the previous year. The majority of these orders will be delivered in the first quarter of the next financial year.
Financial position
On 17 March 2020, the Group drew down £12m from its revolving credit facility ('RCF'). As noted in our trading update on 26 May 2020, including the £12m RCF, the Group held £48.3m in cash.
Since the end of May, the £12m borrowed under the RCF has been repaid and cash on the balance sheet has grown to £82.3m. This compares to £57.7m of cash at the end of July 2019. The increase has been driven by the Group's negative working capital model, benefiting from the order intake over the past few weeks, coupled with effective cash management actions that the Group has undertaken in response to the COVID-19 outbreak.
Looking forward
Whilst it is too early to provide clarity on the outlook for the weeks and months ahead, the Group is encouraged with its trading performance since re-opening on 23 May 2020.
The Board would again like to thank our colleagues for their ongoing dedication and professionalism during this time, as well as our customers, shareholders, and wider stakeholders for their continued support.
ScS is a resilient business, with a strong balance sheet, coupled with a flexible cost base, and is well positioned to navigate these difficult circumstances and maximise opportunities as and when they arise.
Next scheduled update
The Group will announce its preliminary results for the 52 weeks ended 25 July 2020 on Tuesday 29 September 2020.
An analyst briefing will be held at 9.30am on the morning of the results, details of which will be provided in due course.
Enquiries:
ScS Group PLC David Knight, Chief Executive Officer Chris Muir, Chief Financial Officer | c/o Buchanan +44 (0)20 7466 5000 |
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Buchanan Richard Oldworth Tilly Abraham Charlotte Slater | Tel: +44 (0)20 7466 5000 scs@buchanan.uk.com |
Notes to editors
ScS is one of the UK's largest retailers of upholstered furniture and floorings, promoting itself as the "Sofa Carpet Specialist", seeking to offer value and choice through a wide range of upholstered furniture and flooring products. The Group's product range is designed to appeal to a broad customer base with a mid-market priced offering and is currently traded from 100 stores.
The Group's upholstered furniture business specialises primarily in fabric and leather sofas and chairs. ScS sells a range of branded products which are not sold under registered trademarks and a range of branded products which are sold under registered trademarks owned by ScS (such as Endurance, Inspire and SiSi Italia). The Group also offers a range of third party brands (which include La-Z-Boy and G Plan). The Company's flooring business includes carpets, as well as laminate and vinyl flooring.