UPDATE ON IMPACT OF COVID-19
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For immediate release |
24 March 2020 |
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ScS Group plc
("ScS" or the "Group")
UPDATE ON IMPACT OF COVID-19
ScS prides itself on employing great people and providing an excellent service to our valued customers. The Group employs 1,700 people and has focused on becoming Britain's best value sofa and carpet retailer. In response to the UK Government's announcement on 23 March 2020, we have now temporarily closed our store and distribution network in order to protect our people and our customers.
Protecting our people and customers
To date, ScS has acted quickly to follow Government guidelines. As a result of this last night's recommendations it is now clear that to protect our people and customers we need to go further and temporarily close our stores. With support from the Government's Coronavirus Job Retention Scheme, we intend to continue to support all of our colleagues at this difficult time.
Whilst our stores will be closed for a period, ScS will continue to provide support to our customers and employees through dedicated teams, who we have enabled to work remotely.
Financial position & liquidity
ScS has been building a strong balance sheet. As previously announced, the Group drew down £12m from its revolving credit facility (RCF) on 17 March 2020. The RCF is subject to certain covenants in respect of fixed charge cover, leverage and capital spending. Including the £12m inflow from the RCF, as at 23 March 2020, the Group held £74.8m in cash.
In order to protect our financial position, we are reducing cash expenditure to protect our liquidity in the short term. The Group has and will continue to evaluate existing capital expenditure plans. The Group also welcomes the Government's swift action in suspending business rates for a year and the support for continued employment through the job retention scheme. The Group has also moved to paying rent one month in advance rather than quarterly in advance.
Potential impact
Whilst we cannot predict the impact that COVID-19 might have on the Group's business, management has considered a severe but plausible downside sensitivity scenario. Further details in relation to the impact COVID-19 may have on the Group have been set out in the interim financial statements, which were announced on 20 March 2020.
Looking forward
It is impossible to provide clarity on the outlook for the weeks and months ahead, including the potential impact on deliveries and demand. However, the Board believes the Group is as well positioned as it can be. As and when we are able to provide further information we will do so.
Whilst the outlook during this crisis remains uncertain, ScS is a resilient business, with a strong balance sheet, coupled with a flexible cost base, and is well positioned to navigate this event and return to growth when the economy recovers.
David Knight
Chief Executive Officer
Enquiries:
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ScS Group PLC David Knight, Chief Executive Officer Chris Muir, Chief Financial Officer |
c/o Buchanan +44 (0)20 7466 5000 |
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Buchanan Richard Oldworth Tilly Abraham Charlotte Slater |
Tel: +44 (0)20 7466 5000 |
Notes to editors
ScS is one of the UK's largest retailers of upholstered furniture and floorings, promoting itself as the "Sofa Carpet Specialist", seeking to offer value and choice through a wide range of upholstered furniture and flooring products. The Group's product range is designed to appeal to a broad customer base with a mid-market priced offering and is currently traded from 100 stores.
The Group's upholstered furniture business specialises primarily in fabric and leather sofas and chairs. ScS sells a range of branded products which are not sold under registered trade marks and a range of branded products which are sold under registered trade marks owned by ScS (such as Endurance, Inspire and SiSi Italia). The Group also offers a range of third party brands (which include La-Z-Boy, G Plan and Celebrity). The Company's flooring business includes carpets, as well as laminate and vinyl flooring.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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