Upholstered furniture and floorings retailer ScS has reported a growth in sales as revenues reached record levels.
According to its preliminary results for the 52 weeks ended 30 July 2022, total sales rose 8% to £344.7m from £319.2m in 2021.
Gross profit increased 6.3% from £147m to £156.3m, while underlying pre-tax profit resulted at £13.8m, up £5.6m from £8.2m year-on-year.
As for current trading, inflation and reduced consumer confidence has seen initial trading in the year tougher than it saw in the second half of FY22, with order intake for the first ten weeks of the new financial year down 7.8% on a like-for-like basis when compared to the first ten weeks to 6 October 2018 in FY19 (with FY19 being the last full year not impacted by the pandemic).
One year like-for-like order intake is down 14.4% on the prior year, with FY22 having benefitted from pent up demand as the UK recovered from the impact of the COVID-19 pandemic.
During the year, ScS launched a new ‘track your order’ tool on its website, supported members of its customer experience team to undertake City & Guilds accredited training, and invested in new technology for its contact centre which it will implement next year.
The retailer also saw the launch of 70 new furniture models and 88 new flooring options during the period, which included new range collaborations with Laurence Llewelyn-Bowen, the ‘LLB at Home’ collection, its new ‘Botanicals’ sofa range, and more recently with Ideal Home.
Furthermore, as part of finding the right partners to drive growth, ScS reviewed its furniture supplier base and on-boarded a number of new suppliers across the UK and Europe, reducing its reliance on the Far East as it aims to ‘improve product quality, reduce the environmental impact, and reduce lead times’.
“We also launched our new ‘quick delivery sofas’, with lead times of just two weeks, and worked with a number of suppliers to enable direct home delivery of product direct from supplier to customer. We are continuing to build and evolve this service to transform the speed that we can deliver to our customers,” ScS said.
During the year, ScS also introduced an area within a select number of stores called ‘The Dining Room @ ScS’. It brings its dining range together in a dedicated area of the store and has proven ‘successful’. The retailer has reviewed its product offering, ensuring a good mix of shape and range of materials, which is ‘proving popular’ with customers as dining sales increased by 28.5% on the prior year.
As for stores, ScS continues to trial its new concept design and will plan to rollout across more locations in the future following its three already relaunched. Meanwhile, one store in Southampton and one in Greenock were closed due to leases expiring and performances not meeting the levels required, while it relocated stores in Rotherham and Doncaster to more modern units in improved locations.
Steve Carson, Chief Executive Officer of ScS, commented: “We are pleased to be announcing results that are ahead of market expectations. The year saw the Group deliver record sales, maintain its strong gross margin and manage costs effectively, resulting in a 68% increase in underlying profit before tax, excluding business rates relief. We also saw excellent progress in year one of our refreshed strategy, including strengthening our teams as we look to drive the business forward in the coming years.
“Trading since the start of the new financial year has been subdued, with the challenges of high inflation impacting consumers’ disposable income. As previously reported, the sector is seeing softening demand as consumers defer spend on big ticket discretionary purchases.
“We are pleased with the strategic progress we have made which, coupled with the strength of the Group’s balance sheet, places the business in a strong position to deal with current headwinds. Whilst we expect the coming months to be challenging, we are confident in the longer term growth prospects of the business.”