Sofa shop starts to bounce back

May 16 2008 by Peter McCusker, The Journal

ON concerns sparked by gloomy economic forecasts from the governor of the Bank of England Mervyn King, the FTSE 100 index opened in negative territory before gaining lost ground to close 35 points up at 6251.

In the regional portfolio, ScS Upholstery’s shares were in recovery mode after Wednesday’s tumble on the back of a negative interim management statement. The specialist sofa retailer said that since the announcement of interim results last March, trading has remained challenging.

In numbers, like for like sales for the eight weeks up to and including May 10 are down 14% with the bank holiday being a particular disappointment. In light of the poor bank holiday performance and continuing tough trading conditions, the board has indicated second-half profit will be reduced, which in turn will mean annual figures are lower than expected.

ScS’s commitment to opening one new store was fulfilled at Llanelli on May 1. Shares fell 18% on Wednesday, but recovered 9.5% to 51.5p by the close of play yesterday.

Elsewhere in the regional list, drug group GlaxoSmithKline said it had entered into an agreement with Japanese company Daiichi Sankyo to sell its hypertension drug Olmesartan Medoxomil in India.

The news comes a week after GSK’s Indian subsidiary signed a licensing agreement with Japanese company Astellas for exclusive rights to anti-fungal agent Micafungin in India. Glaxo shares ended the day 5p higher at 1124p.

The strongest performance of the day came from Dermasalve Sciences with a shares rise of 43% to 4.25p.

Fiona Erdozain, FionaE@brewin.co.uk