Order backlog still boosting profits
August 4, 2022
Historic high levels of demand in the flooring and furniture sector are still working through order books to boost profits for retailers, even as the economy tightens.
SCS, one of the U.K.'s largest flooring store chains, has reported profits ahead of market expectations and said orders had grown by 3.9% compared to 2021.
And at 30 July 2022, the Group's order book was still at £71.7m – £28.8m higher than at the same point in pre-pandemic 2019.
In its full-year trading update to shareholders, SCS said: "After a challenging 12 months, the Board is pleased to be announcing profit ahead of market expectations for the year ended July 2022. The Group's financial position remains robust, with cash at 30 July 2022 of £70.8m and no debt."
However, the group is pragmatic about the future. When compared to 2019, there is a 3.9% reduction in orders overall and the company said in its statement: "In recent months we have seen reduced in-store and online visitors resulting in a reduction in order levels, driven by the widely reported falling consumer confidence as a result of the cost of living pressures and economic uncertainty.
"We expect the low consumer confidence will continue to adversely impact the Group in FY23. However, the Group is in a strong position as we enter the new financial year, and strategic progress over the last 12 months means we are well positioned to take market share and maximise opportunities in a difficult environment," it said.
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