SCS report revenues up 15%, EBITDA up 42%, and EPS of 21.8p
Companies: ScS Group plc
ScS Group, one of the UK's largest furniture retailers, announced strong preliminary results this morning, reporting revenues up 14.7% to £317m, gross profit up 17% to £149m, EBITDA up 42% to £16m, and EPS of 21.8p (a pre-results yield of 11.8%) for the 53 weeks to 30 July 2016.
The company has a strong balance sheet with £22.4m in cash and no debt, and has confirmed will pay a full year dividend of 14.5p per share (7.88% pre-results dividend yield).
finnCap have published a note on SCS this morning, saying FY16 numbers came in ahead of its expectations:
"While current trading has unsurprisingly moderated, the Group is still trading positively and the higher base set in FY16 leads us to increase our adjusted EPS forecasts for FY17E and FY18E by 12% and 10% respectively. We retain our 230p price target given consumer confidence has become more volatile post the referendum."
During the year, ScS opened two new stores in Bromborough and Aberdeen, and the company hopes to add three further stores in Edinburgh, Thanet, and Plymouth by the end of the year. Particularly positive for the group was the performance in its House of Fraser concession stores, where gross sales increased 19.7% to £25.3m contributing positively to EBITDA.
David Knight, Chief Executive Officer of ScS said he was delighted to report growth across all areas of the company for 2016 financial year:
"Our sales order intake is the highest ever and is up 14.8% on a like-for-like basis. These results demonstrate that the Group has made significant progress in developing ScS into a strong national brand with three very clear retail offers - upholstered furniture, flooring and our House of Fraser concessions, all supported by an online platform that has seen continued investment."
He continued that company management were encouraged by trading performance since the start of the current financial year, which has been in-line with expectation, but said the board were mindful that the Group continues to face very strong comparatives during the rest of the year:
"Looking further ahead, we are excited about our prospects, including the continued growth from our existing ScS network, the concession agreement with House of Fraser, our flooring offering and our online proposition. We continue to identify new store opportunities within our target areas. The Group's cash flow dynamics underpin the strong financial position which will support our ambitions for future growth and continue to deliver value for our shareholders."
SCS's share price opened up around 8% this morning as investors welcome today's RNS:
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