ScS Group Plc Interim Results For The 26 Weeks Ended 24 January 2015 March 2015

Transcription

1 ScS Group Plc Interim Results For The 26 Weeks Ended 24 January 2015 March 2015 October 2014

2 H Highlights Financial Highlights: Like for like sales order intake up 7.8% Flooring up 13.0% Total sales up 14.5% to 132.0m (2014: 115.3m) Gross profit up 13.2% to 57.4m (2014: 50.7m) Operating loss (excluding exceptional costs re IPO) 5.2m (2014 loss: 3.4m) Reflects seasonality of business higher revenue, lower media costs and higher profits occur in H2 Impact of launch of House of Fraser concession Results in line with expectations Interim Dividend of 2.8p Cash 26.6m and no debt 12.0m revolving credit facility 2

3 H Highlights Operational Highlights: 3 new stores opened in Glasgow, Croydon and Slough Launch of concession in 30 House of Fraser stores For Living Bespoke website developed and launched New e-commerce platform for ScS website Online sales up 27.6% to 3.7m (2014: 2.9m) Tenth DC opened in West Thurrock (August 2014) Strategic position to support growth in House of Fraser, predominantly Southern based, and ScS store expansion 3

4 Summary Income Statement Income Statement Revenue up 16.7m (14.5%) due to: Sofa sales up 5.0m, 5.1% Flooring up 1.6m, 12.7% New stores of 2.0m House of Fraser up from 1.5m to 8.8m Online up 0.8m, 27.6% Focus on sales saw margin % reduced by 50bps to 43.5% but gross profit increased by 6.7m (13.2%) Operating costs increased to support future growth Distribution costs 5.4% of sales (2014: 5.1%) West Thurrock opened Admin expenses 42.0% of sales (2014: 41.8%) House of Fraser Operating loss* and Adjusted EBITDA,** in line with expectations H1 FY15 H1 FY14 FY2014 m m m Revenue Gross profit Distribution costs (7.1) (5.9) (12.3) Administration expenses* (55.5) (48.2) (94.1) Total operating expenses* (62.6) (54.1) (106.4) Operating (loss)/profit* (5.2) (3.4) 6.6 Net finance (costs)/income (3.9) Exceptional items (4.0) - - (Loss)/profit before tax (13.1) (2.5) 7.1 Tax (1.2) (Loss)/profit after tax (11.7) (1.7) 5.9 Interim dividend per share (pence) 2.80p - - Adjusted EBITDA** (2.7) (0.7) 13.7 * Excludes exceptional items * *Adjusted to exclude management fees payable to Sun European Partners and other non-recurring costs 4

5 Cash flow Operating Cash Flow statement Negative working capital model generates strong cash flow Cash/card sales, deposits received at point of order, balance settled before delivery Credit sales, loan provider pays ScS approx days after delivery Majority of suppliers paid at end of month following delivery into DCs Working capital reflects seasonality Capex includes 2.4m for 3 new stores, low underlying capex ongoing H1 FY15 H1 FY14 m m Operating loss before exceptional items (5.2) (3.4) Depreciation and amortisation Working capital Capital expenditure (3.4) (1.1) Loan payments / dividends (0.7) (13.1) Other - (0.2) Net increase / (decrease) in cash 7.8 (0.9) 5

6 Balance sheet Consolidated Balance Sheet Strong cash position and debt free (2014: net debt) Group re-organisation pre IPO capitalised debt due to principal shareholder Customer deposits 19.0m (2014: 16.8m) Company distributable reserves 66.0m 12.0m committed revolving credit facility from Lloyds Bank plc H1 FY15 H1 FY14 m m Intangible assets Fixed assets Lease incentives (5.6) (5.5) Deferred tax (1.0) (1.6) Total non-current assets Cash Debt 0 (22.3) Working capital (29.7) (21.3) Total current liabilities (3.1) (23.3) Net assets (18.3) (3.4) 6

7 Strategy and growth opportunities Growth opportunities: Increasing sales per square foot in existing stores: Upholstered furniture c.7.9% share in a 3.1bn market (2014)* Flooring c.2.1% share in a 1.7bn market (2014)* following launch in 2012 Aim to double market share over the next five years Concessions House of Fraser More diverse customer base and broader geographic reach Exciting medium term growth Additional opportunity through new House of Fraser website New Stores Currently under-represented in SE England 30 potential new store locations currently identified Targeting to open 2-3 new stores per year Online New online platform launched in 2014 Dedicated online sales team *Source: Verdict 7

8 Current Trading and Outlook ScS The Sofa Carpet Specialist A transformational six months for ScS Strong cash flow and new committed facilities support growth and yield Growing markets and confidence in consumer environment Sales order intake is up 7.5% on a likefor-like basis for the first 33 weeks of FY 2015 Confident of meeting full year market expectations Maiden Interim dividend of 2.80p per share 8

9 Appendices Introduction to ScS 9

10 The evolution of ScS Prolonged economic downturn -Business exposed to credit insurance risk -ScS placed into administration and sold to Sun Capital KPI growth: -Transactional online website launched -ScS 5.0% of total upholstered furniture market* - La-Z-Boy, the first third party brand is added to the product range - Occasional tables, lamps and dining furniture added -G Plan, the second third party brand is added - SiSi Italia, the first own brand is added to the range - Interest free credit offered on all products in every store - Flooring added to range - Re-brand as the Sofa Carpet Specialist -Endurance, the second own brand is added to the range -3 store House of Fraser pilot - ScS 7.9% of total upholstered furniture market* - Parker Knoll, the third, third party brand is added to the range - 6.7m of online sales - 75m in branded sales - 30m of flooring sales -New website launched -30 House of Fraser concession stores launched under the House of Fraser For Living brand +9.8% +55.0% +2.9% +11.3% +33.5% 2 Year Gross Profit CAGR Gain in Sales per square foot since 2009 Gain in upholstered furniture Market share since Year Sales CAGR 2 Year Adjusted EBITDA CAGR *Source: Verdict 10

11 Sales channels: Stores Well maintained estate 97 stores, 94 on out-of-town retail parks, 3 opened in 2014, average store retail space of 14,700 square foot ScS Distribution Centres High quality fit-outs majority of stores refurbished in past 5 years Stores in regional clusters supported by 10 distribution centres Average remaining leasehold term of 10 years Payback target on all new stores 2 years Aim to provide high quality customer experience Skilled sales staff incentivised remuneration packages End to end customer service In-house distribution, service and upholstery teams 11

12 Sales channels: House of Fraser 30 stores rolled out by August 2014 plus one trial store opened in December 2014 Strong long term sales opportunity All products under the House of Fraser For Living Brand Plus 5 Lifestyle stores Dedicated management infrastructure Low capital investment Sales based commission model Target mid and premium market segments New House of Fraser website additional sales opportunity ScS House of Fraser Distribution Centres 12

13 Sale channels: Online Online Sales: 2009 = c. 0.5m 2014 = c. 6.7m 2015 H1 = 3.7m (up 27.6%) 0.6m investment in 2014 developed new website designed to: Increase store sales and drive store footfall Create a good buying experience for online shoppers Web exclusives include fabric ranges and offers faster delivery times 13