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ScS Group remains cautiously optimistic after posting 14% jump in half-year sales

The retailer is allowed to trade through its distribution centres

ScS Group PLC - ScS Group remains cautiously optimistic after posting 14% surge in half-year sales

ScS Group PLC (LON:SCS) has said it remains “cautiously optimistic” after posting a 14% jump in half-year sales despite the current coronavirus lockdown restrictions.

The retailer of upholstered furniture and floorings said it has benefitted from increased demand for home products during the pandemic and pent-up demand once stores reopened, since many customers chose to wait to try items in person before making their purchasing decision.

In the 26 weeks to January 23, 2021, ScS said gross sales rose 14% to £182mln due to the significant order intake growth seen over the summer as well as strong trading in the first quarter, while online sales rocketed by 98%.

The firm’s distribution centres were not allowed to open during the first lockdown last spring but have always been trading thereafter in line with government guidelines.

As of January 23, the group's order book stood at £90mln, £16mln more than at the same point in the prior year.

Like-for-like order intake dropped 9% over the period - having grown by 12% in the 21 weeks to December 19, 2020, it plummeted 65% in the weeks between December 20 and January 23, 20321.

Cash at the end of the period was £91mln with no debt, and ScS has £20mln available under a revolving credit facility granted in August.

"The first half was, as expected, strong up until the third lockdown, after which sales naturally collapsed, but there was enough in the tank for a strong profit performance, enhanced further by the short-term positive of turning the advertising off in January," analysts at house broker Peel Hunt said.

"The first half's underlying earnings (EBITDA) may well match full-year estimates and more, but with the stores now closed, the second half will look grim by comparison."

Shares were flat at 211p early on Wednesday.

--Adds analyst comment, shares--

Quick facts: ScS Group PLC

Price: 211 GBX

Market: AIM
Market Cap: £77.93 m

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