RNS Number:5923D
ScS Upholstery PLC
15 May 2001
15 May 2001
ScS Upholstery plc
Record Interim Results for the Six Months Ended 31 March 2001
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 2001.
KEY POINTS
- Profit before tax #3.8m Up 47%
- Turnover #37.3m Up 73%
- Earnings per share 8.41p Up 48%
- Interim dividend per share 2p Up 43%
- 12 new stores since last interim results, selling space Up 60%
- Like for like sales order intake maintained after 31 weeks Up 4%
- Net cash strengthens to #4.9m Up 31%
Tony McCann, Chairman, commenting, said:
"These results are testament to the continuing success of our business
strategy. ScS represents an exciting opportunity as it continues its
expansion programme in what remains a highly fragmented marketplace. We
believe the ScS formula will enable the Company to maintain its strong track
record and realise its excellent growth potential, expanding to over 70 stores
within the next five years."
For further information please contact:
ScS Upholstery plc
Mike Browne, Chief Executive 020 7466 5000 (Tuesday and Wednesday)
0191 514 6055 thereafter
Buchanan Communications
Richard Oldworth / Isabel Petre 020 7466 5000
Chairman's Statement
I am delighted to report that the Group has achieved very strong results for
the six months ended 31 March 2001. Profit before tax rose by 47% to #3.8
million (2000: #2.6 million) during a period of both economic and political
uncertainty reflecting the success of the strategy on which our business has
been built. During the last six months we have continued in our objective to
build a nationwide group which will enable us to grow shareholder value
further.
Results
Turnover increased 73% over the previous year to #37.3 million (2000: #21.5
million), whilst total sales order intake for the first 26 weeks increased by
82%, with underlying like for like sales order intake increased by 4%. This
sales performance has been achieved through the accelerated expansion
programme that we embarked upon last year including the three new stores
opened in this interim period.
Operating profit increased by over 50% to #3.7m (2000: #2.5m) with gross
margin improved at 48.2% from 47.9%. Our operating margin of 10% (2000:
11.5%) reflects the impact of new store openings both during this period and
in the second half of the last financial year together with revenue investment
for future expansion.
Earnings per share increased 48% to 8.41 pence (2000: 5.68 pence).
Interim Dividend
Reflecting on these excellent results, our strong cash position and our
commitment to pursuing a progressive dividend policy, the Board is
recommending an interim dividend of 2 pence per ordinary share, an increase of
43%, payable on 27 July 2001 to those shareholders on the register of members
at 29 June 2001.
Expansion Programme
We opened nine new stores between April and September 2000, the majority of
which, as expected, did not contribute to profits in the six months ending 31
March 2001. In addition, we opened a further three new stores in this first
half. These new stores continue our strategy of opening on prime retail parks
with a high quality fit out and our unique mezzanine floor design. The
Beckton store, opened in October 2000, strengthens the existing cluster east
of London with Romford and West Thurrock and our new Leeds store (October
2000) and Guildford store (Boxing Day 2000) start new clusters in Yorkshire
and the south. These three, of course, have not yet contributed to profits but
I am pleased to report that overall our twelve new stores are trading to
expectation.
Total selling space at 31 March 2001 was 428,000 square feet (2000: 268,000
square feet), an increase of 60%.
Investment
Notwithstanding the fact that we have spent #2.5 million on capital
expenditure over the period, mainly to support new stores, the Group continues
to be cash generative and ended the period with #4.9 million in cash. (30
September 2000: #4.0 million).
Outlook
These results are testament to the continuing success of our business
strategy. ScS represents an exciting opportunity as it continues its
expansion programme in what remains a highly fragmented marketplace. We
believe the ScS formula will enable the Company to maintain its strong track
record and realise its excellent growth potential. We have remained focused
on building a national presence and intend to expand to have at least 70
stores within the next five years, which would still leave significant
opportunity for further expansion in the UK. We currently have 34 stores and
expect to open at least a further three stores over the remainder of this
financial year in Wakefield, Cheltenham and Blackburn. Recent store openings
are beginning to make a contribution to profits and current like for like
sales order intake, after 31 weeks, continues to be 4% ahead of last year. I
therefore expect to report another record set of results for the full year.
A J McCann
Chairman
15 May 2001
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
2001 2000 2000
Notes #'000 #'000 #'000
Turnover 37,293 21,545 46,420
Operating Profit 3,740 2,479 5,166
Net interest receivable 107 142 235
Profit on ordinary activities before 3,847 2,621 5,401
taxation
Tax on profit on ordinary activities 2 (1,173) (814) (1,664)
Profit on ordinary activities after 2,674 1,807 3,737
taxation
Equity dividends 3 (636) (445) (1,718)
Retained profit for the period 2,038 1,362 2,019
Earnings per share - Basic - (pence) 4 8.41 5.68 11.74
Earnings per share - Diluted - (pence) 4 8.27 5.68 11.60
Dividends per ordinary share - (pence) 2.00 1.40 5.40
ScS Upholstery plc
Summarised Group Balance Sheet
Unaudited Unaudited Audited
As at As at As at
31 March 31 March 30 Sept
2001 2000 2000
#'000 #'000 #'000
Fixed assets
Tangible assets 11,190 7,153 10,030
Investment in own shares 97 - -
11,287 7,153 10,030
Current assets
Stocks 4,225 3,232 4,076
Debtors: amounts falling due within one year 6,059 2,418 3,675
Cash at bank and in hand 4,917 3,798 5,112
15,201 9,448 12,863
Creditors: amounts falling due within one (16,414) (9,725) (14,920)
year
Net current liabilities (1,213) (277) (2,057)
Total assets less current
liabilities 10,074 6,876 7,973
Creditors: amounts falling due after more
than one year (716) (266) (660)
Provisions for liabilities and charges (151) (105) (151)
Net assets 9,207 6,505 7,162
Capital and reserves
Called up share capital 318 318 318
Share premium 7 - -
Capital redemption reserve 195 195 195
Profit and loss account 8,687 5,992 6,649
Total shareholders' funds 9,207 6,505 7,162
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
2001 2000 2000
#'000 #'000 #'000
Net cash inflow from operating activities 5,167 3,200 7,814
Returns on investment and
servicing of finance 109 147 244
Taxation (584) (356) (1,419)
Capital expenditure (2,511) (1,719) (4,669)
Equity dividends paid (1,273) (2,479) (2,924)
Management of liquid resources 434 911 (402)
Net cash inflow/(outflow) before financing 1,342 (296) (1,356)
Financing 7 - -
Increase/(decrease) in cash in
the period 1,349 (296) (1,356)
ScS Upholstery plc
Reconciliation of Operating Profit to Net Cash
Inflow from Operating Activities
Unaudited Unaudited Audited
Six Six
months months Year
ended ended ended
31 March 31 March 30 Sept
2001 2000 2000
#'000 #'000 #'000
Operating profit 3,740 2,479 5,166
Depreciation and amortisation 718 487 1,059
Changes in working capital and
other non-cash items 709 234 1,589
Net cash inflow from operating activities 5,167 3,200 7,814
Reconciliation of Net Cash Flow to Movement in Net Funds
Increase/(decrease) in cash 1,349 (296) (1,356)
(Decrease)/increase in bank deposits (434) (911) 402
Movement in net funds 915 (1,207) (954)
Net funds at 1 October 4,002 4,956 4,956
Net funds at 31 March / 30 September 4,917 3,749 4,002
Analysis of Changes in Net Funds
30 Sept Cash Flow 31 March
2000 2001
#'000 #'000 #'000
Cash at bank and in hand 3 239 242
Bank deposits 5,109 (434) 4,675
5,112 (195) 4,917
Bank overdraft (1,110) 1,110 -
4,002 915 4,917
ScS Upholstery plc
Notes to the Interim Report
1. The financial information for the six months to 31 March 2001 and the
comparative figures for the six months to 31 March 2000 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 2000.
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 months Six months Year
ended ended ended
31 March 31 March 30 Sept
2001 2000 2000
#'000 #'000 #'000
3. Dividends #'000 #'000 #'000
Equity dividends on ordinary shares: 636 445 445
interim
Equity dividends on ordinary shares: final - - 1,273
636 445 1,718
4. The calculation of basic earnings per share is based on the profit for
the financial period and a weighted average of 31,806,679 shares in issue
during the period (2000: 31,818,200). The diluted earnings per share is based
on the profit for the financial period and a weighted average of 32,317,365
shares in issue during the period (2000: 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 2000. Those
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
Independent Review Report to ScS Upholstery plc
Introduction
We have been instructed by the Company to review the financial information set
out on pages 3 to 6 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally of
making enquiries of management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on
the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2001.
Ernst & Young
Registered Auditor
Newcastle upon Tyne
15 May 2001
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