ScS Upholstery PLC - Interim Results
May 18 1999 - 3:33AM
UK Regulatory
RNS No 3543k
SCS UPHOLSTERY PLC
18 May 1999
ScS Upholstery plc
Record Interim Results for the Six Months Ended 31 March 1999
ScS Upholstery plc, the specialist retailer of fabric and leather
upholstered furniture, is pleased to announce record interim
results for the six months ended 31 March 1999.
key points
* Profit before tax increased 6% to #2.42m over the comparable
period in 1998 (excluding exceptional flotation costs)
* Turnover increased 16% to #16.7m (1998: #14.4m)
* Gross margin improved by 0.7 percentage points to 47.9%
* Earnings per share increased 6% to 5.2p (1998: 4.9p after
adjusting for exceptional flotation costs)
* Increased interim dividend up 10% to 1.21p per share (1998:
1.1p per share)
* Net cash position remains strong at over #5 million
* Further two new stores to be opened in the remainder of the
calendar year with six openings identified for next financial
year
* Underlying like for like sales order intake down 14% for the
first 31 weeks of the financial year
Tony McCann, Chairman, commenting, said:
"Despite trading conditions remaining tough I am pleased to
announce increased profits for the first half...... Whilst we await
signs of sustained recovery in our sector the Board remains
confident of making progress........"
=====================================================
For further information please contact:
Mike Browne 0171 466 5000 (Tuesday & Wednesday)
Chief Executive,
ScS Upholstery plc 0191 514 6055 Thereafter
Andy Yeo/Tom Gadsby 0171 466 5000
Buchanan Communications
Chairmans Statement
Results
Despite trading conditions remaining tough I am pleased to
announce that the Group achieved a profit before tax of #2.42
million for the six months ended 31 March 1999, an increase of 6%
over the comparable period in 1998 excluding exceptional flotation
costs. Equally pleasing was the improvement of gross margin by 0.7
of a percentage point achieved through effective buying and
continuing our value for money pricing.
Turnover increased by 16% over the same period last year to #16.7
million. Operating margin was a healthy 13.5% which was due not
least to the Groups policy of attracting customers with effective
store location and quality merchandising rather than by excessive
expenditure on advertising.
Total sales order intake for the six months ended 31 March 1999
was 17% ahead of the same period last year, with underlying like
for like sales order intake down 13% when compared with an
excellent period last year.
Earnings per share increased to 5.2 pence (1998: 4.9 pence before
exceptional flotation costs).
The Group balance sheet remains very strong with over #5 million
in net cash even after the planned repayments of #1.24 million,
referred to in the Directors Report in our last Annual Report.
Dividends
It is the objective of the Directors, subject to satisfactory
trading and financial performance of the Group, to pursue a
progressive dividend policy and that interim dividends are
expected to represent approximately one-third of the total annual
dividend. The Board has declared an increased interim dividend of
1.21 pence per share (1998: 1.1 pence per share) payable on 5
August 1999 to those shareholders on the register of members at 9
July 1999.
New Store Opening
The Group opened its 17th store in Nottingham in December 1998. We
now intend to open two further stores this calendar year and an
additional six stores in the next financial year, from 15
potential sites already identified.
Board
The Board was pleased to announce in March 1999 the appointment of
Sacha Beere as Finance Director Designate who will replace Irvin
Bamford as Financial Director following Irvins previously
announced decision to leave the Group at the end of the year.
Sacha has been with the Group since 1996 and worked closely with
Irvin during the period leading up to the flotation in December
1997.
Outlook
Total sales order intake for the first 31 weeks of the financial
year was 10% ahead of the same period last year, with like for
like sales order intake 19% down. However, three new stores were
opened at Easter 1998 each of which benefited from very successful
store opening promotions. Adjusting for these exceptional events,
shows underlying like for like sales order intake 14% down on last
year.
Whilst we await the signs of sustained recovery in our sector your
Board remains confident of making progress through the
continuation of our policy to "Manage for Profit".
AJ McCann
Chairman
ScS Upholstery plc
Summarised Group Profit and Loss Account
Unaudited Unaudited Audited
Six Six Year
months months
ended ended ended
31.3.1999 31.3.1998 30.9.198
Notes #'000 #'000 #'000
Turnover 16,714 14,384 29,255
______ ______ ______
Profit on ordinary
activities before
exceptional item 2,252 2,166 3,830
______ ______ ______
Profit on ordinary
activities after
exceptional item 2 2,252 1,417 3,080
______ ______ ______
Net interest receivable 171 133 283
______ ______ ______
Profit on ordinary
activities before
taxation 2,423 1,550 3,363
Tax on profit on
ordinary activities 3 766 735 1,280
______ ______ ______
Profit on ordinary
activities after
taxation 1,657 815 2,083
______ ______ ______
Equity dividends 4 385 568 1,331
______ ______ ______
Retained profit
for the period 1,272 247 752
====== ====== ======
Earning per share-(pence) 5 5.21 2.56 6.55
Earnings per share
before exceptional
item - (pence) 5 5.21 4.91 8.91
Dividends per ordinary
share - pre flotation
- (pence) 0.00 0.69 0.69
- post flotation (pence) 1.21 1.10 3.50
Notes
1. The financial information for the six months ended 31 March
1999 and the comparative figures for the six months ended 31 March
1998 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 1998.
2. The prior years exceptional item relates to costs incurred in
respect of the full listing of the Group on the London Stock
Exchange in December 1997.
3. The taxation charge is calculated by applying the Directors'
best estimate of the annual tax rate to the profit for the period.
4.
Dividends #'000 #'000 #'000
Pre flotation dividend on 0 75 75
ordinary shares
Stock dividend 0 143 143
Equity dividends on ordinary 385 350 350
shares: interim
Equity dividends on ordinary 0 0 763
shares: final ___ ___ ____
385 568 1331
=== === ====
5. 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 (1998: 31,818,200).
6. 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 1998. Those accounts,
upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
ScS Upholstery plc
Summarised Group Balance Sheet
Unaudited Unaudited Audited
Six Six Year
months months
ended ended ended
31.3.1999 31.3.1998 30.9.1998
99 98 98
#'000 #'000 #'000
Notes
Fixed assets
Tangible assets 5,259 4,780 5,001
______ ______ ______
Current assets
Stocks 2,507 2,015 2,196
Debtors: amounts falling due 1,908 1,539 2,124
within one year
Cash at bank and in hand 5,272 5,159 5,923
______ ______ ______
9,687 8,713 10,243
Creditors: amounts falling due 7 8,461 7,790 9,829
within one year
______ ______ ______
Net current assets 1,226 923 414
______ ______ ______
Total assets less current 6,485 5,703 5,415
liabilities
______ ______ ______
Creditors: amounts falling due 230 1,173 432
after more than one year
Provisions for liabilities and 71 122 71
charges
______ ______ ______
Net assets 6,184 4,408 4,912
====== ====== ======
Capital and reserves
Called up share capital 318 318 318
Capital redemption reserve 195 195 195
Profit and loss account 5,671 3,895 4,399
______ ______ ______
Total shareholders' funds 6,184 4,408 4,912
====== ====== ======
Notes
7. Included within accruals at 31 March 1998 is #878,000 (Year
ended 30 September 1998: #964,000) 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 customer loan finance charges
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.
Scs Upholstery plc
Summarised Group Statement of Cash Flows
Unaudited Unaudited Audit
Six Six Year
months months
Ended ended ended
31.3.1999 31.3.1998 30.9.1998
#'000 #'000 #'000
Net cash inflow from operating 770 865 4,144
activities
Returns on investment and servicing 176 160 313
of finance
Taxation (89) (19) (797)
Capital expenditure (567) (607) (1,737)
Equity dividends paid (764) (75) (425)
Management of liquid resources 423 12 (783)
______ ______ ______
Net cash flow before financing (51) 336 715
Financing (281) (138) (200)
______ ______ ______
Increase/(decrease) in cash in the (332) 198 515
period ====== ====== ======
ScS Upholstery plc
Reconciliation of Net Cash Flow to Movement in Net Debt
Unaudited Unaudited Audited
Six Six Year
months months
ended ended ended
31.3.1999 31.3.1998 30.9.1998
#'000 #'000 #'000
Increase/(decrease) in cash (332) 198 515
Increase/(decrease) in bank deposits (423) (12) 783
Repayment of loans 281 62 125
______ ______ ______
Movement in net debt (474) 248 1,423
Net debt at 1 October 5,642 4,219 4,219
______ ______ ______
Net debt at 31 March/30 September 5,168 4,467 5,642
====== ====== ======
Analysis of Changes in Net Funds
30.9.98 Cash Flow 31.3.99
#'000 #'000 #'000
Bank deposits 5,693 (423) 5,270
Cash at bank and in hand 230 (228) 2
Bank overdraft 0 (104) (104)
______ ______ ______
230 (332) (102)
Loans due before one year (125) 125 0
Loans due after one year (156) 156 0
______ ______ ______
(281) 281 0
______ ______ ______
5,642 (474) 5,168
====== ====== ======
Reconciliation of Operating Profit to
Net Cash Flow from Operating Activities
Unaudited Unaudited Audited
Six Six Year
months months
ended ended ended
31.3.1999 31.3.1998 30.9.1998
#'000 #'000 #'000
Operating profit 2,252 1,417 3,080
Depreciation and amortisation 325 197 652
Changes in working capital and other (1,807) (749) 412
non-cash items ______ ______ ______
770 865 4,144
====== ====== ======
END
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