SCS Group PLC (LON: SCS) shares fell 7.68% despite its profits during the 2021 fiscal year ended 31 July 2021, rising 22.9% to £147.0 million compared to last year’s £119.6 million.
The furniture retailer’s revenues surged 21.6% to £310.6 million versus the £255.5 million generated in the 2020 financial year.
SCS booked an operating profit of £26.8 million compared to the £0.7 million secured in 2020.
Some of the annual report’s highlights included the slight drop of 1.5% in like-for-like orders in 2021 compared to 2020 despite the retailer’s shops being closed for 17 weeks in fiscal 2021 versus nine weeks in fiscal 2020.
The CEO’s comments triggered the adverse reaction to ScS Group’s report after confirming that the one-year like-for-like sales were down 21% during the nine weeks to October 2, 2021. Investors interpreted the comment negatively because it effectively says that the company is seeing lower sales of its furniture products than last year.
Steve Carson, the CEO, clarified that the lower sales were due to the bounce seen last year after the easing of coronavirus lockdown measures that saw buyers flock to its stores due to pent up demand.
It is not yet clear if the slump will persist for the rest of the year. Still, the CEO was on record saying that SCS Group recognises the changes faced by many businesses regarding their supply chains, driver shortages, raw material price increases, rising shipping costs and delays.
Steve Carson, ScS Group’s CEO, commented: “Trading since the start of the new financial year has remained strong, with two-year like-for-like order intake growth of 11.9% for the nine weeks to 2 October 2021. One year like-for-like* orders have fallen 21.0% as a result of the significant bounce following the lockdown in the prior year.”
SCS Group share price.
SCS Group shares fell 7.68% to trade at 252.5p, dropping from Monday’s closing price of 273.5p.
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