Specialist sofa seller ScS, which now sports a rather shrivelled market value, has warned that full-year profits will disappoint, as the credit crunch continues to put pressure on the disposable income of its customers.

In another gloomy update, the company said that since issuing poor interim results to 26 January in March, trading has remained challenging, with like-for-like sales falling by 14% for the eight weeks up to and including 10 May and the recent Bank Holiday weekend proving particularly disappointing.

For the first 41 weeks of the financial year, like-for-like sales are down by 15%, with total sales down by 11%. Second-half profits are sure to be reduced and the full-year results won’t meet market forecasts.

At the interim stage, ScS reported a 13% drop in sales to £92m and a reversal from profits of £3.3m to losses of £8.8m – earnings of 8.2p gave way to a loss per share of 12p. Given torrid trading, the company has put its expansion plans on hold and shelved dividend payments in order to conserve its £4.8m or so of cash.

While the company is managing its way through the most challenging of times, with economic conditions unlikely to improve for the foreseeable future, the shares are best avoided for now.

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