MARKET MINNOWS

ScS TIDDLERS WHO WANT TO BE WHALES

BACKING anything in the retail space feels like a dangerous game right now but one stock worth a look is sofa and flooring seller ScS.

The firm flogs mid-range sofas for about £400 and sales figures are strong. Last year total sales rose £2.8 million to £352.3 million, while revenue rose £4.3 million to £337.3 million. It also expanded its online sales by 22.6% to £13.8 million, with 80% of customers conducting website research before visiting ScS stores.

“It’s our biggest showcase, our biggest shop window,” said chief executive David Knight.

Analysts said these figures shouldn’t be taken for granted in the current environment, with rivals like DFS warning that trading could get tough if a hard Brexit takes place. But Jonathan Pritchard at Peel Hunt said: “ScS has a strong balance sheet and a clear value image with customers that works. As a solid business generating cash it looks likely to continue to please shareholders.” Its market capitalisation is £86 million and shares trade at 216p.

Nevertheless it has had some nervy moments over the past year, mostly about its concessions inside Mike Ashley-owned House of Fraser. The concessions represent 7.1% of gross sales, but three of 27 stores where it has a presence closed. It remains in discussion over new terms of trade at the remaining stores.

But without doubt the sexiest bit of ScS is its dividend. Despite being a tiddler, the firm coughs up a healthy divi, increasing it last year by 10.2% to 16.2p.

For those still unsure the share register should calm nerves. US investment giant Sun Capital has a majority stake. Artemis, Miton and Columbia Threadneedle are also involved.