North East furniture retailer ScS has hiked up profit expectations after a strong year of trading - but warned that the cost-of-living crisis is now affecting the business.
The Sunderland firm, which specialises in soft furnishings and flooring, currently trades from 98 stores as well as its growing online channels. The firm announced positive trading, a strong cash position and effective cost management in a full-year trading update.
It said the group now expects to report full-year profit for the 52 weeks ended July 30 to come in ahead of market expectations. At the year end it also said the group’s order book was £71.7m – £28.8m higher than at the same point in 2019 but £31.8m lower than the same time last year.
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Over the course of the year it saw like-for-like orders growth of 3.9% compared to 2021 but said the previous year had been impacted by the effects of the pandemic. There was a 3.9% reduction in orders when compared to FY19, the last period not impacted by the pandemic.
However, the firm said the cost-of-living was starting to affect footfall and orders, and said it was braced for the low customer confidence to affect group performance in the current financial year.
In the shareholder update, the company said: “In recent months we have seen reduced in-store and online visitors resulting in a reduction in order levels, driven by the widely reported falling consumer confidence as a result of the cost of living pressures and economic uncertainty.
“We expect the low consumer confidence will continue to adversely impact the group in FY23. However, the group is in a strong position as we enter the new financial year, and strategic progress over the last 12 months means we are well positioned to take market share and maximise opportunities in a difficult environment.”
The group added that its financial position remains robust, with cash at July 30 of £70.8m and no debt, and that it remains committed to the share buyback programme announced in March 2022 to repurchase and cancel up to £7m of its share capital. So farm it has repurchased and cancelled 1.24m shares.
Preliminary results will be published in October.
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