Shares digital

ScS Upholstery (SUY) – Interims PTP: -£8.4m (PTP £4m) Divi: n/a (7p)

The results demonstrated why the shares have underperformed the market so badly over the past year (88% relative weakness). The group has been one of the main victims of the decline in consumer confidence. It has reacted to this downturn by aborting its expansion plans, engaging in strong cost control and passing the dividend.

Although the company believes that the market will remain ‘challenging’ for some time,it believes it should be profitable in the second half, helped by its cost reduction programme. However, Dresdner Kleinwort believes that for the year as a whole it will lose £1.7 million. Recovery will be painfully slow. Next year ScS is expected to break even. Dresdner believes no dividend is likely until 2011.

Shares says: Not for the faint hearted. AVOID

by: John Marshall