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ScS Group PLC on Wednesday revealed that profit more than halved in its recent financial year, a day after it accepted a takeover offer worth nearly £100 million. The Sunderland, England-based sofa seller said pretax profit fell to £6.0 million in the 52 weeks that ended July 20 from £16.4 million the year before. The result for the recent year included a £2.8 million loss recorded by Snug, a furniture retailer that ScS bought out of administration back in January. Revenue declined by 1.7% to £325.9 million from £331.6 million. Snug contributed £4.2 million of the recent year’s revenue. ScS also said gross margin narrowed to 44.4% in financial 2023 from 45.3% in financial 2022, due to increased costs of providing credit to customers, partially offset by price increases. ScS declared a final dividend of 10.0p per share, giving a full-year payout of 14.5p, up 7.4% from 13.5p the year before. The company also recently completed a £7.0 million share buyback. The company already had announced the 10.0p final dividend on Tuesday, saying it would be included in the takeover offer that the ScS board has accepted from Italian peer Poltronesofa Spa. ScS shareholders also will receive 270p in cash for 280p per share in total. The offer values ScS equity at £99.4 million. ScS shares jumped by 64% on Tuesday in response to the takeover announcement. The price was down 0.4% to 270.00p on Wednesday morning. Reggio Emilia-based Poltronesofa is a sofa retailer with 167 stores in Italy, 106 in France and another 27 across the rest of Europe. ScS itself has 100 stores in the UK. Poltronesofa wants to enter the UK market as part of its plan for pan-European expansion, ScS had explained on Tuesday. On Wednesday, ScS said it expects the takeover offer to complete in the first quarter of 2024. Turning to recent trading, ScS said like-for-like order growth was 5.9% in the second half of the year. However, this slowed to 2.7% in August and 0.3% in September and turned negative by 4.4% in October. Overall, order intake in the 12 weeks to October 21 was in line with a year before, it said. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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