Retailer's Sterling recovery

Sterling, one of Scotland's biggest and best-known furniture retailers, has brushed aside a tough consumer backdrop and high shipping costs to report a 30 per cent hike in profits.

The privately-owned group warned of testing conditions for the "foreseable future" as it reported a pre-tax profit of 1.5 million for the 12 months to 28 February, up from 1.15m a year earlier.

Sales across the firm, which is based in Tillicoultry, where it runs the biggest of its eight stores, slipped to 48.3m from 49.2m - a performance described by management as "strong" in the current market.

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The annual accounts, obtained from Companies House, also reveal a rising headcount, up by 17 to 500. Total staff costs, though, fell to just below 9.6m from almost 9.8m in 2008-9.

The profit recovery, which followed a 60 per cent slide the year before, would appear to have triggered a sharp rise in boardroom pay.

Total directors' remuneration jumped to about 923,700 from 692,600 the year before. The highest-paid director out of the five listed in the annual report saw their pay more than double to 443,000.

Sterling was set up 35 years ago by George Knowles, who converted a disused mill in Tillicoultry into the largest furniture showroom in Scotland.

Writing in the latest annual report, the group's directors said: "Despite considerable pressure, gross margin improved slightly during the year. This is as a result of improved control over supply chain, costs and pricing."

Sterling said no dividend would be paid for the year under review.