Shares in sofa and carpet retailer ScS lost a quarter of their value as the group blamed a sharp fall in sales over the past month on consumer jitters over the general election outcome, and the warmer weather.
In an unscheduled trading update, the newly floated company said like-for-like sales in the four weeks to 2 May were 15.9% lower than a year earlier. Its shares, floated at 175p in January, tumbled 25% to 163.75p.
ScS said consumer confidence was hit over the period by political uncertainty, leaving people unwilling to splash out on major purchases and pushing prices in the industry lower.
The company said: “Trading over the Easter bank holiday weekend and the first May bank holiday has been impacted by a period of warmer weather which coincided with peak sales periods, resulting in lower footfall in stores which, together with uncertainty over the outcome of the general election, has significantly lowered customers’ confidence in committing to big-ticket purchases and resulted in higher levels of market discounting.”
The company said it expected trading to revert to “more normal levels” but earnings before interest, taxes, depreciation, and amortisation would be between £11m and £12m in the year to 25 July, down from £12.9m a year earlier.
Analysts were previously expecting a higher figure of £14.5m for the current year.
ScS said weaker trading would not affect the dividend payout.
“The board remains confident of the future growth prospects for ScS and, supported by strong cash flow dynamics and a robust financial position, is committed to paying the planned £5.6m dividend to shareholders for the year ending 25 July 2015.”
