ScS Group PLC (AIM:SCS), the upholstered furniture and flooring retailer, reported pre-tax profit for the full year of £16.4 million, which, although down from £22.7million from last year, was a “good effort in a difficult year”. , according to broker Peel Hunt.
The company said group sales were £344.7 million, up 8%, while gross margins proved resilient, falling to 45.3% from 46.1%, this which the broker said was above expectations and a surprise.
ScS warned that initial trading in the new fiscal year was tougher than in the second half of 2022, with order intake for the first 10 weeks down 7.8% on a comparable year-over-year basis. on the other.
He said inflationary pressures and loss of consumer confidence continue to impact the number of visitors (both physical and digital) to businesses that sell big-ticket discretionary items.
Steve Carson, Managing Director of ScS, said: “We are delighted to report results ahead of market expectations.
“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 a slowdown in demand as consumers postpone spending in large discretionary purchases.
“While we expect the coming months to be challenging, we are confident in the company’s long-term growth prospects.”
Peel Hunt reiterated its ‘buy’ rating and a 200p price target, adding that “stocks are undoubtedly cheap with so much cash on the balance sheet.”
As of 9:36 a.m., ScS shares were up 0.59% at 122.2 pence.