ScS tumbles to half-year loss amid supply chain woes
The sofa retailer fell to a £3.6 million pre-tax loss for the six months to January 29, against profits of £17.7 million a year earlier.
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Your support makes all the difference.Sofa and flooring chain ScS has swung to a half-year loss as it blamed supply chain disruption and lengthy delays for knocking sales.
The retailer fell to a £3.6 million pre-tax loss for the six months to January 29, against profits of £17.7 million a year earlier.
It said despite solid customer demand and orders, gross sales fell 5.3% on a two-year comparison to £8.5 million due largely to the supply chain woes.
Sofa and furniture sales fell 6.7%, with a 17.9% tumble for flooring as it said the disruption to shipping and freight left it facing long delivery delays.
We are mindful of the ongoing impact of inflationary pressure on the group, its customers and suppliers
It comes after rival DFS recently revealed a hit of about £21 million from the supply chain challenges, with costs sent soaring amid delays to shipments and deliveries as containers were held at ports, as well as staff and lorry driver shortages.
This left DFS nursing a 70% plunge in half-year profits to £21.6 million.
But despite the supply chain headaches, ScS said it was still on track for full-year profits, in line with market expectations, thanks to a strong order book that has been built up over the past half year.
It notched up a 16.6% surge in orders, on a like-for-like basis, against a year earlier, which was impacted by lockdowns.
Orders were flat on a two-year comparison with pre-pandemic trading, but its order book has doubled since January 25 2020, to £148 million.
ScS added that the second half has seen orders remain buoyant, up 37.7% year-on-year in the 33 weeks so far and remaining flat on a two year comparison.
Steve Carson, chief executive of ScS, said: “Like many retailers, supply chain disruption has impacted the group’s first half results.
“Whilst this has been frustrating it has enabled the business to accumulate a strong order book and we are focused on delivering it through the second half of the year.”
He added: “We are mindful of the ongoing impact of inflationary pressure on the group, its customers and suppliers.”
Shares in the firm lifted 3% as it unveiled returns to investors thanks to the robust order outlook, hiking its interim dividend by 50% to 4.5p a share and announcing the start of a £7 million share buyback programme.