ScS delays results after government’s coronavirus policy shift

The furniture retailer said it was “currently reviewing” the changes unveiled by Prime Minister Boris Johnson yesterday, which included urging people to avoid pubs, clubs, restaurants, theatres and other social environments.

Johnson also warned that Brits should “avoid all unnecessary social contact”, “stop all unnecessary travel” and work from home if possible, under the government’s plans to slow the spread of the virus.

Scs said its results would be “subject to a short delay” while it reviews them with its auditors.

The retailer did reveal a trading update for the first 26 weeks of its 2019/20 fiscal year, during which it swung to a statutory pre-tax loss of £1.3m on an IFRS16 adjusted basis. Pre-IFRS16, pre-tax profit increased 40% to £700,000.

Underlying EBITDA hit £12.8m on an IFRS16 adjusted basis and was up 11.8% to £3.8m pre-IFRS16.

The group’s gross sales edged up 0.5% to £160.1m during the six-month period, but like-for-like order numbers dropped 4.4%. Margins remained flat at 44.8%.

In the seven weeks since the end of its half-year, ScS said order intake was up 3.3% on a like-for-like basis and that trading for the year to-date was “in line with the board’s expectations”.

However, it cautioned that it was “mindful of the developing situation with the coronavirus” and the pandemic’s “potential impact on deliveries and demand”.

ScS admitted it “cannot predict the impact that COVID-19 might have” on its business, but insisted it had “considered severe but plausible downside sensitivity scenarios”.

However, it said those scenarios “do not include the most severe of possibilities”, such as its stores being forced to close for a prolonged period.

The retailer said further details about the potential impact of coronavirus would be addressed in its delayed interim results announcement.

Boss David Knight said: “Whilst consumer confidence remains low, the group has been successful in sustaining profitable growth and increasing its resilience. Trading in the early part of the year was particularly challenging. However, the improvement and return to growth seen over the key winter sales period and for the first six weeks of the second half was encouraging.

“In the past week we have seen reduced footfall and we are mindful of the developing situation with COVID-19 and the potential impact on deliveries and demand. However, we believe the group is as well positioned as it can be.”