17 January
2025
Immediate
release
DFS Furniture plc ("DFS" and the
"Group")
Trading Update
Improved performance driven by market share
gains, lower operating costs and gross margin
improvement
DFS Furniture plc, the market leading retailer of
living room and upholstered furniture in the United Kingdom, today
announces a trading update for the twenty six week financial
reporting period to 29 December 2024, together with an update on
recent trading.
Summary:
●
H1 Group PBT(A)1 expected to be
c£16-17m, up c+£7-8m year on year
●
Group order intake up +10.1%
YoY2 notwithstanding a weak market backdrop, supported
by successful implementation of growth initiatives and higher than
expected market share gains for both brands, with Sofology's
improved order intake growth trajectory continuing +19.1%
YoY2
●
Gross delivered sales expected to be up
+1.4% YoY, with order bank closing higher YoY, driven by continued
Red Sea shipping delays and order intake strengthening through the
period
●
Profit increase driven by the higher sales, operating cost
savings and gross margin improvement more than offsetting current
inflationary increases
● Net bank debt at the end of the period down
to £117m with leverage3 improving to 1.7x compared to
2.5x at previous financial year end
● The important Winter Sale trading period
has started in line with our expectations
Outlook:
● The
Group continues to expect full year growth in profits and cash flow
with FY25 PBT expected to be in-line with current consensus
● Profit
delivery now expected to be weighted to the first half driven
by:
○ A
cautious view on market demand in H2 based on UK economic
performance post budget
○ Gains
from competitor disruption in H1 expected to partially reverse in
H2
○ An
increase in operational costs in H2 due to the rises in national
insurance contributions, the national living wage and higher than
anticipated interest rates alongside our investment to drive future
growth
The Group will announce its interim results for the
period ending 29 December 2024 on 13 March 2025.
Comment from Tim
Stacey, Group Chief Executive
"While the market remains relatively subdued, we are
continuing to deliver on our self help initiatives having
strengthened our position as the clear market leader, improved our
gross margin and reduced our operating costs, all of which have
helped us to deliver year on year profit growth.
We remain focused on executing our plan, and are
cautiously optimistic despite the increased inflationary pressures
and less positive market outlook for 2025. Looking forward, we are
confident that the Group is well positioned to drive attractive
returns for shareholders as the market recovers and we remain
focused on delivering our 8% PBT medium-term target."
1 PBT(A):
Underlying profit before tax and brand amortisation. Reported PBT
(stated after deducting non underlying charges and brand
amortisation) is expected to be in the range of £15-16m
2 Order
intake growth measured using the most comparable 25 weeks of each
trading period (FY25 H1: 25 weeks ending 22 Dec, FY24 H1: 25 weeks
ending 24 Dec) to avoid the distorting impact caused by a different
number of winter sale trading days in each trading period. All
other YoY growth figures are calculated using the full 26 weeks in
the current and prior year periods
3 Banking
covenant IAS17 definition
4 Company
compiled market consensus PBT(A) of £22.7m
Enquiries:
DFS (enquiries via
Teneo)
Tim Stacey (Group CEO)
Marie Wall (Interim CFO)
Phil Hutchinson (Investor Relations)
investor.relations@dfs.co.uk
Teneo
James Macey-White
Victoria Boxall
Ayo Sangobowale
+44 (0)20 7353 4200
85fs.dfs@teneo.com
About DFS Furniture
plc
The Group is the clear market-leading retailer of
living room furniture in the United Kingdom. Our Group purpose is
to bring great design and comfort into every home, in an
affordable, responsible and sustainable manner. We operate an
integrated physical and digital retail network of living room
furniture showrooms and web sites in the United Kingdom and
Republic of Ireland, trading through our leading brands, DFS and
Sofology. We attract customers through our targeted and national
marketing activities and our reputation for high quality products
and service, breadth of product offer and favourable consumer
financing options. We fulfil orders for our exclusive product
ranges through our own UK finished goods factories, and through
manufacturing partners located in the UK, Europe and Far East, and
delivered with care through our expert final-mile delivery service
"The Sofa Delivery Company Limited".