North East furniture retailer ScS is considering opening new stores after hailing a strong year of recovery with revenues rocketing 21.6% to top £310m.
The Sunderland soft furnishings and flooring specialist is now pushing for further growth, after publishing results for the 53 weeks ended July 31 2021, with operating profit soaring from £700,000 to £26.8m, and pre-tax profit rising from a loss of £3.1m to profit of £22.7m, on revenues of £310.6m.
Trading from 100 stores, the group’s like-for-like order intake was down only 1.5% on last year and 6.5% down on 2019, despite being closed for 17 weeks this year, compared with nine weeks last 2020.
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Meanwhile, online sales jumped 146% to £46.9m, following continued investment in its online business and an increase in online shopping during the periods of store closures.
Its closing order book was £103.5m – £1.2m lower than 2020 but £60.6m higher than at the same point in 2019.
One year like-for-like orders fell 21% but they came up against strong comparatives, as a result of the significant bounce following last year’s lockdown.
Its strong position led to the repayment of the £3 furlough grants claimed under the Coronavirus Job Retention Scheme during the year, following the successful reopening of the group’s stores.
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Looking ahead, the firm said it is positive about prospects for the full year, but that it remains mindful of the ongoing supply chain disruption and cost inflation.
As the firm unveiled full year results, CEO Steve Carson, who took on the job this summer, revealed a three-year growth strategy which he said all employees have been involved in creating.
The strategy will involve everything from investment in its showrooms and digital offering to strengthening its teams, focusing on its customers plus expanding its ranges and bringing new brands on board, such as last week’s launch of the new LLB range in collaboration with interior designer Laurence Llewelyn-Bowen.
New stores could be on the horizon, and the company is also considering relocating some stores which are in less profitable locations.
Mr Carson said: “What a year to join a business. We were closed for a third of the year and it’s been a real team effort. Our colleagues have been wonderful as have our suppliers, the landlords and third parties. We’re really pleased with such a strong set of results.
“Our stores are the backbone of the business. We’ve got 100 stores up and down the country and we’re going to be looking at what is the right number of stores and should we add some more stores. There are a number of populations of more 100,000 where we don’t have a store, so we’re going to step into that carefully and thoughtfully and see if there’s an opportunity to add to the estate.
“Knowing you want to be in a location and getting the right store, store size, on the right retail park, at the right rent with the right team to deliver an appropriate ROI, there’s a lot to get right on that journey. Right now this is just something we’re going to properly look at but I know there’s opportunities still in our heartland and we’re under penetrated in the South of England and we have no stores in Northern Ireland.
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I don’t know what the number will be, but I suspect the next time we speak we’ll have a better understanding of what that number will look like.”
Mr Carson said the new financial year has started well, with two year like-for-like order intake growth of 11.9% for the first nine weeks of the year.
Supply chain issues mean lead times for orders are a little behind, with customers potentially having to wait a few extra weeks as their goods are made-to-order, but he said customers have been patient and prepared to wait.
He added: “We are delighted with the strong orders performance since the start of the new financial year.
“However, we are cognisant of the ongoing challenges we, and many other businesses, are facing with regards to the supply chain, including driver shortages, raw material increases and shipping costs and delays.
“We have demonstrated throughout the pandemic that we have a flexible and resilient business model which is able to adapt to changes in the macro-environment whilst still delivering for our customers.
“We look forward to embedding the new purpose and mission statement into our operations and delivering on our refreshed strategy for future growth which we are setting out today.”
Chairman Alan Smith thanked former CEO David Knight, who left the business after 33 years in July, and added: “It has been more important than ever to support our local communities and I am delighted that we have continued to support them, providing 10,000 free school meals to underprivileged families in our founding city of Sunderland, supporting the ITV Bowel Cancer Awareness campaign, and continuing our support of the Foundation of Light and its programmes to tackle loneliness and social isolation.”
The board has proposed a final dividend of 7p which, if approved, would give a full-year dividend of 10p.