CAUTIOUS consumer sentiment and a relatively weak housing market are impacting on sales at Sterling Furniture, which nevertheless posted a 19 per cent rise in pre-tax profits in the last financial year.
Company secretary Gordon Mearns said that the rise in pre-tax profits from £2.1 million to £2.5m was “considered to be a good result in a difficult market”. The figure was achieved on the back of six per cent rise in turnover from £50.1m to £53.2m.
However, the figures relate to the year to the end of February and Mr Mearns said that the fallout from the June vote to leave the European Union is having an impact on sales in the current financial year.
“A particular area causing uncertainty at present is that brought about by the EU referendum decision,” he said. “The uncertainty created by this vote has had a negative impact on consumer sentiment and confidence.
“A mixture of cautious consumer sentiment and still relatively low levels of housing activity have an impact on retail sales. Factors that affect these create risk and uncertainty for the furniture retail sector.”
Last November Sterling joined major retailers in writing a letter to The Herald warning that stores may have to shed jobs in Scotland unless business rates were overhauled.
Despite this, the firm’s headcount rose in the 2015/16 financial year, with the average monthly number of managers and administrative staff going from 161 to 190 while the average number of sales staff went from 248 to 284.
In August, Sterling took over rival Forrest Furnishings in a deal that was expected to deliver turnover for the current financial year in the region of £60m.
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