ScS Upholstery PLC - Interim Results
May 16 2000 - 3:00AM
UK Regulatory
RNS Number:6279K
ScS Upholstery PLC
16 May 2000
ScS Upholstery plc
Record Interim Results for the Six Months Ended 31 March 2000
ScS Upholstery plc, the fully listed furniture retailer of fabric and
leather upholstered furniture, is pleased to announce record interim
results for the six months ended 31 March 2000.
KEY POINTS
-Profit before tax up to #2.62m, an increase of 8.2% over the
comparable period in 1999
-Turnover increased 28.9% to #21.5m (1999: #16.7m)
-Total sales order intake for the six months ended 31 March 2000 up
32% on same period last year, with like for like sales order intake
up 7%
-Gross margin maintained at 47.9%, equivalent to the same period last
year
-Earnings per share increased 9% to 5.68p (1999: 5.21p)
-Increased interim dividend up 15.7% to 1.40p per share (1999: 1.21p
per share)
-Net cash position remains strong at #3.8m despite last year's
special dividend payment and accelerated expansion programme
-Expansion programme ahead of schedule with an anticipated 30 stores
open by the end of September 2000:
-Two new stores opened at Chester and Warrington ahead of Christmas
-Four new stores opened in West Thurrock, Romford, Stevenage and
Manchester in April 2000, prior to important Easter Bank Holiday
trading period
-Four additional new stores scheduled to be opened prior to this
financial year end
-Selling space has already increased by 34% since the beginning of
this financial year and is scheduled to increase by over 50% by the
end of September 2000.
-Total sales order intake up 38% for first 31 weeks of this financial
year with underlying like for like sales order intake up 9% for the
same period
Tony McCann, Chairman, commenting, said:
I am again delighted to announce record interim results achieved in
spite of costs incurred by our accelerated store opening programme.
30 stores by 30 September 2000 will create a solid foundation from
which we can continue to roll out new stores to build our national
presence, whilst maintaining profitability and cash generation.
===============================
For further information please contact:
Mike Browne 020 7466 5000 (Tuesday and
Wednesday)
Chief Executive, ScS Upholstery plc 0191 514 6055 thereafter
Tom Gadsby 020 7466 5000
Buchanan Communications
CHAIRMAN'S STATEMENT
Results
I am pleased to announce that the Group achieved a profit before tax
of #2.62 million for the six months ended 31 March 2000, an increase
of 8.2% over the comparable period in 1999. This was achieved after
incurring costs of opening two new stores ahead of Christmas. Whilst
these opening costs were written off in the first half, we expect
these stores to make a small contribution to the full year results.
Our healthy gross margin remained at 47.9%, the same as the
comparable period last year. The operating margin of 11.5% (1999:
13.5%) reflects increased costs associated with an accelerated and
aggressive expansion programme into two new regions, the North West
and Home Counties. These are principally advertising, distribution
and staff costs, which at this stage do not fully benefit from
critical mass in these new areas.
Both gross and operating margins remain well ahead of the industry
average.
Turnover increased by 28.9% to #21.5 million (1999: #16.7 million).
Total sales order intake for the six months ended 31 March 2000 was
32% ahead of the same period last year, with underlying like for like
sales order intake up 7%.
Earnings per share increased by 9% to 5.68 pence (1999: 5.21 pence).
The Group balance sheet remains very strong with net cash of #3.8
million, having paid the special dividend of #1.59 million approved
at the AGM in January 2000 and having incurred capital expenditure in
excess of #1 million over the comparable period last year in support
of our continued expansion programme.
Dividends
It is the objective of the Board, subject to satisfactory trading and
financial performance of the Group, to pursue a progressive dividend
policy. Accordingly the Board has declared a 15.7% increase in the
interim dividend to 1.40 pence per share (1999: 1.21 pence per
share) payable on 28 July 2000 to those shareholders on the register
of members at 30 June 2000.
New Store Openings
So far this year I am delighted to report we have opened six new
stores of which three were ahead of schedule. I am also pleased to
announce that four more new stores will be opened before the end of
this financial year. This will bring our total number of stores to
30, an increase of over 50% in selling space over 1999, clearly
demonstrating our commitment to an aggressive expansion programme.
We are continuing negotiations to acquire further prime locations for
openings in the next financial year.
Outlook
Total sales order intake for the first 31 weeks of the current
financial year is 38% ahead of the same period last year with like
for like sales order intake 9% up. The increase in the number of
stores from 20 at the start of the financial year to 30 at the close,
together with an upward trend in like for like sales, gives your
Board confidence to anticipate another year of record results.
AJ McCann
Chairman
ScS Upholstery plc
Summarised Group Profit and Loss Account
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2000 1999 1999
Notes #'000 #'000 #'000
Turnover 21,545 16,714 31,44
5
Operating Profit 2,479 2,252 4,227
Net interest receivable 142 171 299
Profit on ordinary activities before 2,621 2,423 4,526
taxation
Tax on profit on ordinary activities 2 (814) 766) (1,431)
Profit on ordinary activities after 1,807 1,657 3,095
taxation
Equity dividends 3 (445) (385) (2,864)
Retained profit for the period 1,362 1,272 231
Earnings per share - (pence) 4 5.68 5.21 9.73
Dividends per ordinary share - (pence) 1.40 1.21 4.00
Special dividend per ordinary share - - - 5.00
(pence)
ScS Upholstery plc
Summarised Group Balance Sheet
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Fixed assets Notes
Tangible assets 7,153 5,259 6,367
Current assets
Stocks 3,232 2,507 2,665
Debtors: amounts falling due within one 2,418 1,908 1,863
year
Cash at bank and in hand 3,798 5,272 4,956
9,448 9,687 9,484
Creditors: amount falling due within 6 (9,725) (8,461)(10,359)
one year
Net current (liabilities)/assets (277) 1,226 (875)
Total assets less current
liabilities 6,876 6,485 5,492
Creditors: amount falling due after (266) (230) (244)
more than one year
Provisions for liabilities and charges (105) (71) (105)
Net assets 6,505 6,184 5,143
Capital and reserves
Called up share capital 318 318 318
Capital redemption reserve 195 195 195
Profit and loss account 5,992 5,671 4,630
Total shareholders' funds 6,505 6,184 5,143
ScS Upholstery plc
Summarised Group Statement of Cash
Flows
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Net cash inflow from operating
activities 3,200 770 3,483
Returns on investment and
servicing of finance 147 176 306
Taxation (356) (89) (1,812)
Capital expenditure (1,719) (567) (1,514)
Equity dividends paid (2,479 (764) (1,149)
Management of liquid resources 911 423 986
Net cash flow before financing (296) (51) 300
Financing - (281) (281)
Increase/(decrease) in cash in
the period (296) (332) 19
ScS Upholstery plc
Reconciliation of Net Cash Flow to
Movement in Net Debt
Unaudited Unaudited Audited
Six months Six Year
ended ended ended
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Increase/(decrease) in cash (296) (332) 19
Increase/(decrease) in bank deposits (911) (423) (986)
Repayment of loans - 281 281
Movement in net debt (1,207) (474) (686)
Net debt at 1 October 4,956 5,642 5,642
Net debt at 31 March / 30 September 3,749 5,168 4,956
Analysis of Changes in Net Funds
30 Cash Flow 31 March
Sept
1999 2000
#'000 #'000 #'000
Bank deposits 4,707 (911) 3,796
Cash at bank and in hand 249 (247) 2
Bank overdraft - (49) (49)
4,956 (1,207) 3,749
Reconciliation of Operating Profit
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Operating profit 2,479 2,252 4,227
Depreciation and amortisation 487 325 701
Changes in working capital and
other non-cash items 234 (1,807) (1,445)
3,200 770 3,483
Notes:
1. The financial information for the six months to 31 March 2000 and
the comparative figures for the six months to 31 March 1999 are
unaudited and have been prepared on the basis of the accounting
policies set out in the Group's statutory accounts for the year ended
30 September 1999.
2. The taxation charge is calculated by applying the Directors' best
estimate of the annual tax rate to the profit for the period.
Unaudited Unaudited Audited
Six Six Year
months months
ended ended ended
31 31 30
March March September
2000 1999 1999
#'000 #'000 #'000
#'000 #'000 #'000
3. Dividends
445 385 385
Equity dividends on ordinary shares:
interim - - 888
Equity dividends on ordinary shares: final
- - 1,591
Equity dividends on ordinary shares:
special 445 385 2,864
4. The calculation of earnings per share is based on the profit for
the financial period and a weighted average of 31,818,200 shares in
issue during the period (1999: 31,818,200).
5. The financial information contained in this interim statement does
not constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The financial information for the full preceding
year is based on the statutory accounts for the financial year ended
30 September 1999. Those accounts, upon which the auditors issued an
unqualified opinion, have been delivered to the Registrar of
Companies.
6. Included within accruals is #Nil (31 March 1999: #878,000 and year
ended 30 September 1999: #Nil) received from HM Customs and Excise
arising out of the Court of Appeal ruling in Primback Ltd versus
Commissioners of Customs and Excise. This relates to VAT previously
paid on interest-free credits which the Primback case determined
should not have been paid. However, there is an appeal against this
ruling from the Customs and Excise. In October 1998, following a
significant increase in the Custom and Excise default rate of
interest, the Group repaid the full amount of the reclaimed VAT, and
deferred payment of its outstanding claims pending the result of the
outstanding appeal to the European Court of Justice. The decision to
repay was made only after receiving appropriate advice and on the
basis that Group's overall claim would not be compromised. No credit
has been taken in the profit and loss account for any possible
benefit arising from this case, pending final resolution of the
appeal.
END
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