ScS profits dipped for the year after the furniture retailer was hit by weak trading in the spring and losses from introducing House of Fraser concessions.
- Adjusted EBITDA fell 17.5% during the year
- ScS blames profit hit on weak spring trading and House of Fraser concessions
- In recent trading, sales order intake up 13.3% on like-for-like basis
Operating profit before exceptional items relating to the furniture retailer’s IPO fell 3% to £6.4m for the year ended July 25, while adjusted EBITDA dropped 17.5% to £11.3m.
During the period revenues increased 13.4% to £276.7m and like-for-like order intake rose 5%.
Chief executive David Knight said: “Our results for the financial year were adversely affected by a short, sharp dip in trading momentum in April and early May, which is seasonally a very important period for the business.
“This downturn in trading was caused primarily by a particularly warm early spring and the timing of the general election campaign.”
The tough trading period forced ScS to issue a profit warning in May, which the retailer blamed on the uncertainty caused by the general election campaign.
ScS revealed the introduction of concessions in House of Fraser was loss making, despite the 30 shop-in-shops generating £21.2m of sales during the financial year.
However, despite the retailer admitting the concessions have “proved challenging”, it believes they will make a positive contribution to profits as they mature.
During the period ScS also opened three new stores, bringing its total estate up to 96. Meanwhile, online gross sales were up 25.4% during the year to £8.4m.
The retailer also revealed it is issuing a dividend to shareholders following its return to the stock market in January.
The ScS board is recommending an aggregate dividend payout of £5.5m, which represents a dividend per share of 14p.
The board said that is a reflection of its confidence in the company’s future and is in line with its commitment at the time of the IPO.
ScS revealed that in recent trading sales order intake was up 13.3% on a like-for-like basis for the 9 weeks to 19 September 2015.
Knight said: “We are encouraged by our trading performance since the start of the current financial year and we are in line with our expectations. However, we remain mindful that we continue to face strong comparatives during the remainder of the first half of the year and that a number of key trading periods are ahead of us.
“With a strong brand, broad product range with good consumer appeal, an excellent network of well-invested stores, with an opportunity to expand from our existing geographic footprint, and growth from the continued development of the House of Fraser concession, the group has a clear growth strategy.”