REG - DFS Furniture PLC - Interim Results
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RNS Number : 2303X DFS Furniture PLC 19 March 2026
19 March 2026
Immediate release
DFS Furniture plc
Interim Results Announcement
Strategic execution driving robust earnings growth and cash generation
DFS Furniture plc (the "Group"), the market leading retailer of living room
and upholstered furniture in the United Kingdom, today announces its interim
results for the 26 weeks ended 28 December 2025 (H1 FY26). The prior year
comparative period is the 26 weeks ended 29 December 2024 (H1 FY25).
H1 FY26 H1 FY25 Change
Order intake growth YoY +2.3% +10.1%(1) n/a
Gross sales(2) £734.5m £675.6m +8.7%
Revenue £547.7m £504.5m +8.6%
Gross margin 57.8% 56.7% +1.1%pts
Underlying PBT(A)(2) £30.9m £17.0m +£13.9m
Reported profit/(loss) before tax £30.3m £15.8m +£14.5m
Underlying basic EPS 9.8p 5.3p +4.5p
Reported basic EPS 9.8p 5.1p +4.7p
Net bank debt(2) £60.6m £116.7m £56.1m
Bank leverage(2, 3) 0.8x 1.6x 0.8x
Strategic and operational highlights
● Leveraging our scale and vertical integration: High profile
exclusive brand partnerships reached record sales levels and are now being
utilised in our growing Home (non-upholstery) proposition, cost of goods
optimisation is driving gross margins up and our logistics platform is now
being leveraged to deliver for third parties
● Utilising data and technology: Technology based product innovation
is driving up average order values and we are utilising AI to optimise the
online customer journey and our operational efficiency
● Harnessing our unique culture: Our dedicated colleagues are critical
to our success; a continued focus on our diversity and inclusion agenda is
driving engagement scores with our seventh employee network now launched and a
new enhanced employee value proposition developed for roll out in H2
Financial overview
● 2.3% YoY order intake growth achieved in a subdued market and
against a strong comparator of +10.1%(1)
● Revenue growth of 8.6% reflecting the growth in order intake and the
benefit of a stronger opening order bank
● Gross margin increased 110bps to 57.8%, approaching our 58% target.
This is the fourth consecutive year of margin expansion reflecting ongoing
product margin improvement and normalisation of input costs, particularly
freight rates and the USD/GBP exchange rate
● Underlying profit performance, PBTu(A)(2) up significantly
(+£13.9m) YoY to £30.9m reflecting the impact of operational leverage(2,3)
● Strong free cash flow generation and cash discipline reducing net
bank debt to £60.6m, down over £100m over the last eighteen months with
leverage(2,3) of 0.8x (1.0x adjusting for working capital phasing) now within
our 0.5x-1.0x target range
● Recognising the Group's improved financial position an interim
dividend of 1.0 pence / share has been declared
Current trading and outlook
● Since the half year we have seen some softening in footfall linked
to adverse weather conditions over the period and consumer confidence remains
delicately balanced. We remain focused on executing our strategy and in
combination with our disciplined approach to gross margin and cost management
we are comfortable reiterating our guidance of full year PBTu(A) in the range
of £43-50m. This assumes no material supply chain disruption resulting from
current geo-political events impacting the timing of delivery of customer
orders.
● The Board remains confident in achieving our £1.4bn full year
revenue and 8% PBT medium term targets
Tim Stacey, Group Chief Executive Officer said:
"In summary, the first half performance was reflective of our strengthening
business and the dedication of our colleagues across the Group. We delivered
robust financial results in a subdued market environment and improved our
financial position. As we look to the second half of the year and beyond, we
remain focused on executing our strategy, driving profitable growth,
strengthening our balance sheet and delivering long term value for our
shareholders, customers and colleagues"
(1) To avoid the distorting impact caused by a different number of winter sale
trading days in each trading period H1 FY25 YoY order intake growth (+10.1%)
is measured using weeks 1-25 of each trading period.
(2) Definitions and reconciliations of KPIs including Alternative Performance
Measures ("APMs") are provided at the end of this statement in note 12 to the
condensed consolidated interim financial statements
(3) Banking covenant leverage calculated using IAS17 calculated EBITDA
(4) Proprietary Lloyds banking data covering 14 specialist upholstery
retailers
(5) Company compiled market consensus profit before tax and brand
amortisation: £47.3m
FY26 Interim Results Presentation
A webcast for analysts and investors will be held at 9.00am (GMT) today to
announce the H1 FY26 results. Virtual presentation link:
https://brrmedia.news/DFS_HY26 (https://brrmedia.news/DFS_HY26)
A copy of the presentation will be made available at:
https://www.dfscorporate.co.uk/ (https://www.dfscorporate.co.uk/)
Enquiries:
DFS (enquiries via Teneo)
Tim Stacey (Group CEO)
Marie Wall (Interim Group CFO)
Phil Hutchinson (Investor Relations)
investor.relations@dfs.co.uk
Teneo
James Macey-White
Jessica Reid
+44 (0)20 7353 4200
85fs.dfs@teneo.com
About DFS Furniture plc
The Group is the clear market-leading retailer of upholstered 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 websites 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
innovative products and services, 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".
CEO Statement
The Group delivered a strong operational and financial performance in H1 FY26,
reflecting the continued execution of our strategic priorities and the
inherent strength of our vertically integrated business model. In a broadly
flat market, we delivered order intake growth of +2.3% year on year, with
solid contributions from both retail brands and double digit growth in our
non-upholstery Home category.
The upholstery market remained subdued over the first half, with consumer
confidence and discretionary spending influenced by broader macroeconomic
uncertainty. Despite this backdrop, financial performance in the period was
robust, with underlying profit before tax and brand amortisation of £30.9m,
representing a significant £13.9m improvement on the prior year. Cash
generation was also strong, delivering on a key focus area of reducing debt,
and bringing leverage back within our target range (0.5x-1.0x). In addition,
our operational performance goes from strength to strength with record net
promoter scores (NPS) achieved in the period.
The transition to more integrated group functions over recent years has
enhanced our operational advantages, enabling us to better leverage our scale,
data and skills across the Group and operate more efficiently. While we have
made significant progress on this journey, there remains further opportunity
ahead.
Our improved financial performance and stronger balance sheet enables us to
better leverage our retail brand pillars and our operating platforms to
maximise our growth opportunities, giving us confidence in meeting our medium
term targets of £1.4bn revenue and 8% PBT margin.
Strategic progress
Our strong performance in the first half reflects the good progress we have
made against our strategy. This has been supported by our three key enablers:
Leveraging our scale and vertical integration:
Our scale and vertical integration drive efficiency and value across the Group
enabling us to have exclusive brand collaborations, the best sourcing rates
and optimised supply chain operations.
In dfs our exclusive brands sit at the heart of our proposition, allowing us
to create distinctive ranges that reflect the latest customer tastes and
emerging home trends. Working closely with trusted partners and supported by
our in-house design expertise, we are able to move quickly from concept to
showroom, being the first to market with new and innovative products. Over
recent years, we have collaborated with well-known brands such as French
Connection, Joules, Ted Baker and Country Living, with participation across
these ranges now at record levels. More recently, we have introduced more
technology into our products to further differentiate our customer
proposition, accelerating the success of our exclusive brand ranges. Our
Cinesound and Soundwave by Shaquille O'Neal Home are particularly popular,
bringing bluetooth connectivity, wireless charging, 4D vibration and immersive
sound to our customers' homes. We are also excited to announce our most recent
collaboration with Amanda Holden which brings statement sofas and Amanda's
style and vivacious personality to our customers' homes.
In Sofology we launched its new 'So Fussy' marketing campaign, this includes a
collaboration with Craig Revel Horwood which has landed exceptionally well
with customers. In addition, we launched two new La-Z-Boy ranges in February
2026; the Atlanta which focuses on technology, and the Colorado which features
a comfortable sofa bed. These new ranges were selected for their appeal to the
Sofology customer and to complement the existing product range. We also
launched our first ever Sofology sale post-Christmas which has proven to be
successful in driving order intake and incremental profit.
We continue to expand our successful exclusive brand partnerships into Home.
In the first half of the financial year, we launched a number of beds and
dining ranges with brands such as House Beautiful and Ted Baker, alongside our
own in-house Platinum and Cinesound brands. In tandem with the launch of the
enhanced Home product proposition, we have increased investment in marketing
to raise awareness of our non-upholstery range, as well as an additional
mezzanine within our dfs Stockton showroom to provide a dedicated environment
to showcase our products, building on the successful introduction of
mezzanines in five other showrooms. We are pleased with the progress made to
date, with order intake in our Home offer growing +14% year on year and we are
confident this momentum will continue to strengthen our overall customer
proposition.
The Sofa Delivery Company, our logistics operation, is the largest two person
sofa delivery company in the UK. It supports both of our retail brands through
a shared infrastructure and provides a seven day a week installation and
delivery service with a strong focus on customer experience, including the
removal and recycling of all packaging waste. Our consistently high
post-delivery NPS scores have earned us a reputation for delivering a market
leading service, and I am pleased to announce that we have signed our first
contracts with two third party retailers. These opportunities will generate
additional revenue by utilising spare capacity within our existing
infrastructure, supporting our broader growth strategy of leveraging our
platforms to create new profit streams for the Group.
We are continually working to optimise our operating structures in order to
leverage the skills of our dedicated and talented colleagues whilst ensuring
we retain distinct brand identities. Recent examples include our customer
service function where we have consolidated elements of our customer service
teams to better utilise specialist skill sets and we have also brought more
creative work in-house, enabling the delivery of marketing assets more
efficiently and at greater speed to market.
Utilising data and technology:
Through the strategic use of data and technology, we drive insight, innovation
and more informed decision making. Our platforms and technology investments
aim to personalise the customer journey, improve operational efficiency and
create a more engaging customer experience at every touchpoint.
In the first half of the financial year, we continued to invest in our dfs and
Sofology websites to deliver more brand-enhancing omnichannel experiences for
our customers. In FY25 we began to utilise AI to create a more personalised
customer experience on our retail websites, and we continue to utilise data to
further optimise our dfs website, recognising that new and returning users
have different needs. New users are guided with more inspirational content to
support their research journey, while returning users can pick up where they
left off, with previously viewed products surfaced on a personalised homepage.
Over the last six months, we have further strengthened the capabilities of the
Sofology website to enhance the customer experience. We have introduced new
tools, including a range locator that helps customers find products in their
nearest showroom for the all-important 'sit test', which alongside the
'Complete at Home' option has driven higher utilisation with 9% of Sofology
transactions started in the showroom now completed at home. In Sofology, we
are also using data to drive more targeted marketing and unlock further
personalisation.
Our aim is to deliver a truly channel-agnostic experience, enabling our
customers to shop through the channel that suits them best. These innovations
have driven our ecommerce NPS score to the highest levels ever.
Interest-free credit ("IFC") continues to be a key feature of the UK
upholstery market, and our scale makes us a major customer of IFC lending
partners, enabling us to offer a market-leading proposition. As part of our
ongoing investment in enhancing our digital platforms, we have recently
introduced a credit checker that allows customers to assess their eligibility
from the comfort of their own home using only a soft credit check. This
provides reassurance and confidence when visiting our stores or shopping
online, supporting customers to take the next step in their buying journey,
whilst supporting operational efficiencies for our sales colleagues.
We have also strengthened our customer service operations by embedding AI into
a number of areas. Having previously introduced AI to enhance colleagues'
written emails, AI now supports faster, more accurate routing of customer
calls, intelligently handling high volume, low complexity enquiries and
ensuring customers are seamlessly directed to the right colleague. It also
enhances how we develop our teams, with AI-assisted call analysis providing
targeted feedback and training support. Together, these improvements are
driving quicker resolutions, higher service quality and greater colleague
productivity.
Harnessing our unique culture to drive performance:
Our unique culture is the foundation of our performance. By fostering an open,
inclusive and customer centric culture we unlock the full potential of our
colleagues, enabling them to deliver exceptional experiences for our customers
and strong results for our business.
Over the past few years, we have been working hard to consolidate the
operations of our business, and I am so proud of this year's Leadership
Development Programme cohort, who have collaborated to develop our new
enhanced Group Employee Value Proposition, launching in the second half of the
financial year. The next cohort has now started and we are excited to see the
contribution they will make to the Group.
To support our colleagues in building long and fulfilling careers with us,
we're committed to creating an environment where everyone feels welcome. A
diverse workforce strengthens our Group, bringing broader perspectives,
fuelling innovation and helping us better serve our customers. Our colleague
networks, each with senior leadership sponsorship, are central to delivering
our inclusion agenda by connecting people, amplifying voices and driving
meaningful change across the Group. With the recent launch of the Mankind
Network, we now have seven networks in total. The Mankind Network brings men
from across the organisation together to support one another in navigating the
modern workplace and to champion positive mental health, further strengthening
our commitment to inclusion and wellbeing for all.
Sustainability is also embedded in our culture. Our property decarbonisation
agenda is underway to deliver our SBTi target of a 54.6% reduction in Scope 1
and 2 emissions by 2032.
Our continued strategic execution has driven strong performance across three
key financial areas:
Growth
We delivered order intake growth across both retail brands, demonstrating the
strength of our proposition and disciplined execution in a subdued market. In
dfs, performance was driven by strong demand for exclusive brand ranges and
differentiated, technology-led products, supporting both volume growth and
higher average order values. Our non-upholstery Home offer was a particular
standout as increased marketing investment and an expanded range supported
double digit growth in the period. Overall, dfs achieved order intake growth
of 2.0%.
Sofology delivered 3.4% year-on-year order intake growth, against a strong
comparator of +19.1% in the prior year. This reflects the sustained benefits
of range and pricing changes made in the prior year along with more recent
changes alongside continued improvements to the customer journey. Growth in
the period was supported by the opening of one new showroom in Carlisle and
the refurbishment of our Bolton showroom which has seen a significant uplift
in performance.
Overall, I'm really pleased with the performance of both our retail brands
which is supported by the tireless efforts of our colleagues and the desire
for continuous improvement which is embedded in the culture of the Group.
Gross margin
During the first half, we made further progress increasing our gross margins.
In the first half, margins were up 110bps year on year to 57.8%, approaching
our 58% target. This is the fourth consecutive year of margin progression,
with underlying product margins continuing to improve as we see the benefits
of combining the commercial buying teams as well as from freight rates
reducing towards long term average levels and an improvement in the USD/GBP
exchange rate.
Costs
We continue to manage our costs with discipline while investing strategically
to support growth, building on the successful completion of our £50m Cost to
Operate programme last year, which delivered savings ahead of plan, ongoing
initiatives including smarter technology and AI based ways of operating are
continuing to help mitigate inflationary pressures.
Future growth
In our FY25 results, I outlined several growth opportunities, in part enabled
by the evolution of our operating model over the past five years. As our
financial position improved we invested in some additional growth
opportunities including mezzanine investments in dfs to support our
non-upholstery Home offer, a new Sofology showroom and various showroom
refurbishments and we're pleased with the initial results. We remain confident
in the Group's ability to drive growth from the following initiatives:
● Innovation: Supported by innovative new product development, we
leverage our scale to offer great value for money, deliver leading customer
service through our experienced colleagues, and create a seamless
technology-enabled customer journey. We see continued innovation as a means to
extend our market leadership in our core upholstery business.
● Growth of share in the £5bn non-upholstery Home market (beds and
mattresses, dining and other living room furniture): Having established the
foundations to enable future growth in the non-upholstery Home market
including the roll out of a warehouse management system, the expansion of some
of our exclusive upholstery brand partnerships to bed frames and the
consolidation of supply to improve gross margins we have invested in marketing
to drive awareness. Having achieved 14% year on year growth in order intake in
the first half we remain confident in delivering our medium term target of
£100m of incremental revenue.
● Sofology footprint expansion: Having grown Sofology from 38
showrooms when we acquired the business in 2017 to 57 at the end of H1 FY26 we
see an opportunity to increase the estate to between 65 and 70 showrooms over
the medium term. We know the target locations and there is relatively low
cannibalisation when opening near dfs showrooms.
● Core sofa market recovery: Market volumes remain c.20% below
pre-pandemic levels. Market recovery is linked to consumer confidence and the
housing market and when the recovery comes, the operational leverage in the
business is expected to result in high profit growth with revenue to profit
drop through at around 40%.
● Business development opportunities: The Sofa Delivery Company has
recently contracted with two third party retailers to deliver their products
using our existing infrastructure. We believe that there will be additional
opportunities to provide great customer service and further maximise
utilisation of our assets, generating incremental profit for the Group.
Outlook
Since the half year we have seen some softening in footfall linked to adverse
weather conditions over the period and consumer confidence remains delicately
balanced.
We remain focused on executing our strategy and in combination with our
disciplined approach to gross margin and cost management we are comfortable
reiterating our guidance of full year PBTu(A) in the range of £43-50m. This
assumes no material supply chain disruption resulting from current
geo-political events impacting the timing of delivery of customer orders.
As we move forward, we are well positioned for further growth. While the
market remains subdued we will balance investment in growth with continued
deleveraging over time, strengthening both our resilience and our capacity to
capitalise on future opportunities. As noted above, a number of sustainable
growth initiatives remain firmly within our control to enhance profitability,
and we remain committed to our £1.4bn revenue and 8% PBT margin targets when
the market recovers.
Directorate changes
I would like to take this opportunity to thank Marie Wall for her contribution
as Interim Chief Financial Officer during this period. Marie has provided
strong leadership and continuity, supporting the business through an important
phase of delivery and momentum. We look forward to working with Dominique
Highfield, our new Chief Financial Officer who will join in May.
Conclusion
In summary, the first half performance was reflective of our strengthening
business and the dedication of our colleagues across the Group. We delivered
robust financial results in a subdued market environment and improved our
financial position. As we look to the second half of the year and beyond, we
remain focused on executing our strategy, driving profitable growth,
strengthening our balance sheet and delivering long term value for our
shareholders, customers and colleagues.
TIM STACEY
Chief Executive Officer
19 March 2026
FINANCIAL REVIEW
The Group's performance in the first half of FY26 built on the momentum
achieved in FY25, marking another period of strong profit growth, free cash
flow generation and debt reduction.
In a subdued market, the Group delivered 2.3% year on year order intake growth
against a strong comparative period of 10.1%. Gross sales increased 8.7%
reflecting growth in order intake and the benefit of a stronger opening order
bank. Gross margins increased 110 basis points and costs remained under strong
control building on the successful completion of our £50m Cost to Operate
programme last year. The cumulative impact of these factors resulted in
underlying profit before tax and brand amortisation(2) increasing by £13.9m
to £30.9m.
Reported profit before tax increased to a greater extent than the underlying
result, up by £14.5m to £30.3m reflecting non-underlying restructuring
charges in the prior year.
We continued to reduce our absolute debt levels to build balance sheet
resilience and ended the period with net bank debt of £60.6m, down £56.1m
year on year. Adjusting for working capital phasing benefits we are pleased
that we have now reduced our bank leverage(3) to the top end of our target
range of 0.5x-1.0x.
The Group's financial position has improved significantly over the last
eighteen months resulting from its improved profit performance, cost
programme and disciplined approach to cash management. Looking ahead the Group
is well positioned to continue to execute on growth and efficiency
initiatives, continuing to deleverage and deliver long term value for our
shareholders.
Order intake
Following a slower than envisaged start to the period, due to exceptional hot
weather in July and August, order intake performance strengthened and for the
period as a whole the Group achieved 2.3% year on year order intake growth, in
a market that was broadly flat year on year(4).
Order intake growth:
Order intake YoY
dfs 2.0%
Sofology 3.4%
Group 2.3%
Both our retail brands grew their order intake in the period.
dfs's exclusive brands continue to perform strongly reaching record levels,
with French Connection, La-Z-Boy, Grand Designs and Joules brands performing
particularly well. In addition, sofas with a high number of technology
components such as wireless chargers, vibrating seats, wine fridges, our
patented heated seats and sound systems helped contribute to both increased
volumes and higher average order values. Finally, our Home (non-upholstery)
category performed strongly in the period, up 14% year on year, benefitting
from recent marketing investment to grow awareness and the roll out of some of
our exclusive upholstery brand partnerships to our Home product ranges.
Overall dfs achieved order intake growth of 2.0%.
The range and price changes made by Sofology in the prior year and our
continued focus on range optimization has meant that the proposition continues
to resonate well with the consumer. This has led to higher conversion driving
the brand's 3.4% year on year growth. In addition, we have evolved the selling
journey leading to an increasing number of customers completing their
transactions in their homes, utilising Sofology's 'Complete at Home'
functionality.
Gross sales and revenue
Gross sales(2), which are reported on delivery of customer orders, increased
8.7% year on year which is higher than the order intake growth of 2.3%. This
is a result of a higher opening order bank relative to the prior year which
supported higher levels of deliveries in the first quarter.
Gross sales(2) and revenue growth:
H1 FY26 H1 FY25 YoY
dfs 573.1 523.1 9.6%
Sofology 161.2 152.5 5.7%
Other 0.2 - n/a
Gross sales 734.5 675.6 8.7%
Revenue 547.7 504.5 8.6%
Other represents gross sales generated from delivering goods for third parties
Revenue, which is stated after deducting VAT, the cost of providing warranty
products and interest free credit subsidy costs from Gross sales grew at a
similar rate to Gross sales.
Gross margin
Following three consecutive years of gross margin rate progression, the Group
delivered a further 110 basis points of margin expansion in the half. We are
making strong progress toward our 58% target, supported by improved product
margins, stronger USD/GBP exchange rate and a return towards historic average
levels on freight rates and SONIA rates.
Gross profit and margin H1 FY25 to H1 FY26:
£m % of revenue
H1 FY25 gross profit and margin 286.3 56.7%
Volume 24.0 0.0%
Product margin 1.4 0.3%
FX 1.9 0.3%
Freight 2.7 0.5%
H1 FY26 gross profit and margin 316.3 57.8%
The increase in gross sales resulted in an incremental £24.0m of gross margin
year on year.
Product margins increased 30 basis points or £1.4m through a number of
initiatives initially started under our cost to operate program. These include
redistribution of products across our supplier base to optimise cost of goods
& quality, product reengineering and reviewing opportunities to better
leverage the Group's scale with the latter enabled by bringing together the
commercial buying teams of each brand under one leader. Cost benefits from
SONIA rate reductions have been reinvested into strengthening the commercial
proposition.
We hedge 90% of our expected USD currency requirements 9 months ahead and 50%
of our expected requirement for the following 6 months. We benefitted from
improved FX rates as anticipated; the average rate paid through the period was
3 cents favourable year on year resulting in a £1.9m / 30 basis point rate
benefit.
Freight rates gradually reduced through the first half returning back towards
longer term historic levels by the end of the period. This drove a £2.7m or
50 basis point year on year rate improvement.
The 110 basis points of overall gross margin rate progression in the period
sits predominantly within the dfs brand with Sofology's margin rate broadly
flat reflecting range and price changes to optimise volumes and cash profit.
Operating costs
Underlying operating costs which include selling and distribution,
administration, depreciation, amortisation and impairment costs totalled
£269.4m, an increase of £19.7m year on year. This represents a percentage
cost of revenue of 49.1%, an improvement on H1 FY25 (49.5%).
Underlying operating cost breakdown H1 FY26 vs H1 FY25:
£m H1 FY26 H1 FY25 YoY
Selling, distribution and admin costs (225.9) (205.4) (20.5)
Depreciation, amortisation and impairment (43.5) (44.3) 0.8
Underlying operating costs (269.4) (249.7) (19.7)
Selling, distribution and administration costs increased by £20.5m due to
three reasons:
● Volume related costs increased as a result of the higher gross sales
achieved in the period.
● We invested in marketing to drive awareness of dfs's Home
(non-upholstery) proposition as well as returning Sofology to TV advertising
with the launch of its new 'So Fussy' campaign which is resonating well with
consumers.
● Wage and NIC related inflation and a higher weighting of the
corporate bonus accrual to H1 relative to the prior year
At our FY25 results we announced the delivery of our £50m Cost to Operate
saving target one year ahead of plan. Initiatives launched last year have
continued to provide savings in the current year helping to partially mitigate
cost inflation, for example in our customer service operations we are
transitioning to service both retail brands through one Group function
leveraging standardised processes and utilising new technology to drive
efficiency and improve the customer experience.
The Group has taken a very disciplined approach to capital investment over the
last three years with absolute levels of investment being lower than
historical levels. This is the driver of the lower depreciation, amortisation
and impairment charges which fell by £0.8m year on year to £43.5m
Looking forward to the second half, we do not expect the year on year
operating cost increases to be as significant as in the first half as we cycle
the inflationary headwinds experienced in Q4 last year and annualise the
marketing investment increases.
We are mindful of the potential impact of the war in the Middle East, and
expect our exposure to higher levels of inflation to be limited in FY26 due to
our contracted positions across energy costs and our shipping agreements. This
is something that we are keeping a close eye on and will seek to minimise any
potential longer term impacts.
Finance costs
Finance costs of £16.7m were £3.6m lower year on year.
Debt interest charges were the main driver of the reduction, principally
resulting from the high levels of free cash generation over the last year to
reduce absolute debt levels. In addition our average funding cost reduced from
over 8.0% in the prior year to 7.5% due to both lower SONIA rates and a lower
premium arising from our improved leverage position.
Lease interest reduced £1.1m due to a reduction in the lease liability
position associated with a year on year reduction in the average remaining
lease term.
£m H1 FY26 H1 FY25 YoY
Lease interest (11.4) (12.5) 1.1
Debt and other interest (5.3) (7.8) 2.5
Underlying finance costs (16.7) (20.3) 3.6
Profits, tax and earnings per share
Sales growth, gross margin expansion and good cost control have resulted in
underlying profit before tax and brand amortisation(2) for the period
increasing by £13.9m year on year to £30.9m. Reported profit before tax
increased by a greater extent, by £14.5m to £30.3m due to the non recurrence
of restructuring charges associated with the Cost to Operate program in H1
FY25.
£m H1 FY26 H1 FY25 YoY
Underlying profit before tax and brand amortisation 30.9 17.0 13.9
Brand amortisation (0.7) (0.7) -
Non-underlying credits/(charges) 0.1 (0.5) 0.6
Reported profit before tax 30.3 15.8 14.5
Tax
The tax charge recognised in the financial statements is £7.6m (H1 FY25
£4.0m) and the effective tax rate is 25.1% (H1 FY25 25.3%).
The Group updates its Tax Strategy Statement each year, which is published on
the Group's website, in compliance with its duty under the Finance Act 2016,
which sets out details of the Group's attitude to tax planning and tax risk.
EPS
Basic earnings per share was 9.8 pence (H1 FY25: 5.1 pence) with the year on
year increase reflecting higher levels of profit after tax. There was a very
small (0.3m / 0.2%) increase in the weighted average number of shares due to
the issue of shares from the Employee Benefit Trust in settlement of the
Group's share scheme obligations.
Cash flow, debt facilities and return on capital
Building on a strong cash performance in FY25, the Group again generated a
high level of free cash flow in H1 FY26. Over the last eighteen months we have
focussed on building a stronger, more resilient balance sheet and have reduced
absolute debt levels by £104.2m versus peak debt of £164.8m at FY24. This
cash flow generation has been supported by improved profit performance,
working capital inflows linked to improved trading and a disciplined approach
to capital investment whilst pausing on returns to shareholders.
£m H1 FY26 H1 FY25 YoY
Underlying EBITDA* 90.4 80.9 9.5
Capex (13.1) (10.4) (2.7)
Interest (5.2) (7.5) 2.3
Tax (4.3) 1.9 (6.2)
Principal & interest paid on lease liabilities (39.3) (46.6) 7.3
Working capital 17.7 28.9 (11.2)
Other** 0.2 1.0 (0.8)
Underlying free cash flow 46.4 48.2 (1.8)
Non underlying items - (0.1) 0.1
Free cash flow / total cash flow 46.4 48.1 (1.7)
Closing net bank debt (60.6) (116.7) 56.1
*Underlying operating profit before interest, tax, depreciation, amortisation
and impairment
**Other of £0.2m (H1 FY25: £1.0m) includes losses/gains on disposal of
assets, FX revaluations, share based payment expense, purchase of shares by
EBT and adjustment for non-underlying P&L charge/credit
£46.4m of free cash was generated in the period, a similar amount to H1 FY25
with the stronger profit performance and a timing benefit on lease payments
offset by a lower working capital inflow and higher tax payments as detailed
below.
We have maintained capital expenditure at relatively low levels compared to
long term average levels for the Group as we prioritised debt reduction,
limiting growth investment to capital light, short payback growth projects. As
our financial position improved, in H1 FY26 we invested in some additional
growth opportunities including a new Sofology showroom in Carlisle and a
mezzanine investment in DFS's Stockton showroom to expand the upholstery
ranges on display and create dedicated space for our expanding 'Home' offer.
We have continued to invest in data and technology to both enhance the
customer experience across the buying journey and to improve the quality and
efficiency of our supporting operations. We expect capital investment for the
full year to be in a range of £24-28m.
Lower interest costs were incurred due to the lower average net bank debt
levels through the period and to a lesser extent by a lower average cost of
financing.
Corporation tax payments are higher year on year due to the benefit in H1 FY25
of recovering historical overpayments, and lease payments were £7.3m lower
year on year reflecting a timing difference on the final rent payments in the
period which will reverse in the second half.
Working capital inflows in the period totalled £17.7m. This inflow is driven
by seasonal flows associated with the large volume of 'guaranteed for
Christmas' orders. Following typical seasonal trends this inflow is expected
to unwind by the year end. Working capital inflows were £11.2m higher in H1
FY25; this is primarily due to a large increase in the level of customer
deposits held following the significant improvement in trading performance
across that period.
Debt and debt facilities
The Group ended the period with £60.6m of net bank debt and bank leverage of
0.8x, this represents a significant improvement on H1 FY25 (where net bank
debt was £116.7m and leverage of 1.6x). After adjusting for the phasing of
working capital leverage is 1.0x, representing the top end of our target
leverage range of 0.5x-1.0x.
At the half year reporting date of 28 December 2025 the period under which we
temporarily operated with widened covenants concluded. Following the
significant debt reduction over the last two years the Group's financial
position has strengthened significantly. The banking covenants, which are
tested half yearly revert to 3.0x maximum leverage(3) (net debt/EBITDA) and
1.5x minimum fixed charge cover(3) (both measured on an IAS 17 basis). Through
the period we operated with significant headroom against each of these.
The Group has debt facilities available to provide sufficient liquidity and a
solid foundation for the future. At the end of the period the Group had in
place £250m of debt facilities comprising a £200m unsecured revolving credit
facility ('RCF') and £50m of US private placement notes. These facilities
have a staggered maturity profile as follows: £250m is available until
September 2027 reducing to £225m until September 2028, £200m until January
2029 and £25m until September 2030.
Return on capital employed
The Group's return on capital employed of 21.6% at the end of H1 FY26 has
increased from 13.8% at the end of H1 FY25 and 16.3% at the end of FY25. This
increase was driven by the Group's strengthened profit performance and reduced
capital employed resulting from a lower tangible asset base reflecting lower
levels of capital expenditure; and a lower right of use asset base linked to
lower average remaining lease terms. We expect returns to continue growing
over the medium term supported by our expectation of improved profitability.
Capital allocation and dividends
The Group's capital allocation priorities are for the Group to operate with
net debt levels (excluding capitalised lease obligations) of between 0.5x-1.0x
of trailing 12 month EBITDA; to invest to maintain the Group's asset base and
support future growth and to provide sustainable shareholder returns.
The Group's financial position has significantly strengthened over the last
eighteen months with debt reducing by £104.2m at FY24 to £60.6m at H1 FY26
and our leverage improving from 2.5x at FY24 to 1.0x (adjusting for working
capital phasing) at H1 FY26, bringing leverage to the top end of our target
range.
In light of this improved position and reiterated guidance for the full year,
the Board has approved the payment of an interim dividend of 1.0 pence per
share (total cost £2.3m). This dividend will be paid on 29 May 2026 to
shareholders on the register on 17 April 2026.
In determining the appropriate size of the dividend, the Board took into
account that demand drivers remain delicately balanced and that the Group is
not immune to geo-political events and their potential impact on the macro
environment. The Board believes that returning to the dividend register in a
measured way is the right course of action to balance investment in growth,
continue deleveraging towards the lower end of our target range and support
sustainable shareholder returns.
MARIE WALL
Interim Chief Financial Officer
19 March 2026
(1) Prior year 10.1% growth reflects the first 25 weeks trading of the FY25
and FY24 periods in order to remove the distorting impact of a differing
number of key winter sale trading days in week 26.
(2) Definitions and reconciliations of KPIs including Alternative Performance
Measures ("APMs") are provided at the end of this statement in note 12 to the
condensed consolidated interim financial statements.
(3) Bank leverage calculated as net debt divided by last 12 months IAS 17
EBITDA. Net debt is net bank debt plus a proportion of finance leased assets.
Fixed charge cover is calculated as last 12 months EBITDARent divided by rent
+ interest.
(4) Proprietary banking data covering 14 specialist upholstery retailers
The Board continually reviews and monitors the risks and uncertainties which
could have a material effect on the Group's results. The Group's risks, and
the factors which mitigate them, are set out in more detail in the Principal
risks and uncertainties section of the FY25 Annual Report and Accounts and
remain relevant, but have evolved, in the current period.
Risk Impact
Financial liquidity Adequate access to liquidity is key to delivering the Group's strategy. The
Group is reliant on the availability of adequate financing from banks and
capital markets to meet its liquidity needs
Regulatory and compliance We operate in an increasingly complex legal and regulatory environment and are
governed by a wide range of laws, regulations, standards and guidance. A
failure to consistently deliver against our legal and regulatory obligations
or broader corporate responsibility commitment would undermine our reputation
as a responsible retailer. This may result in sanctions and financial loss,
and could negatively impact our ability to operate and remain trusted by our
customers, colleagues, investors and other stakeholders. It is essential that
as a Group we are aware and can fulfil all our obligations in the regions in
which we operate.
Cyber security, IT infrastructure and Data Our data and IT systems and infrastructure enable us to fulfil our obligations
to customers and manage our operations. Ensuring we both protect our data, and
utilise it effectively is necessary to deliver our strategy. If a critical
system, our IT infrastructure or our business data was not available,
regardless of the cause, it could impact our operations, result in a loss of
sales as well as incur regulatory penalties and reputational damage.
Supplier and Manufacturing resilience We are reliant on external suppliers, both in the UK and worldwide, to provide
our finished products to customers or supply raw materials for our UK
manufacturing sites. If that supply chain is affected by availability, labour
shortages, transport details or failure of a key supplier, this could increase
the costs to the business or impact our ability to fulfil customer orders.
As we continue to develop and broaden our product range, failure to maintain
adequate procedures and complete the appropriate due diligence and
consistently deliver against our regulatory obligations would undermine our
reputation as a responsible retailer.
Macro economic uncertainty Volatility in global economic conditions, inflationary pressures, changes in
interest rates, currency fluctuations, and ongoing geopolitical tensions may
adversely impact market confidence, supply chains, customer demand, and
overall business performance. Unpredictable policy responses, trade
restrictions, or regional instability could further disrupt operations,
increase costs, and affect strategic decision-making.
Environmental and sustainability Failure to anticipate and respond to the environmental, regulatory, and
climate impacts of our operations could fall short of stakeholder
expectations, causing reputational and financial damage. Poor management of
sustainability and climate risks may disrupt supply chains, limit access to
key materials, and reduce revenue through production delays or rising costs.
Over time, a lack of innovation and slow transition to circular business
models could weaken competitiveness and long-term resilience.
People and culture We aim to create an inclusive workplace with a positive contribution to the
communities we serve as well as all our stakeholders, including our customers,
colleagues, communities and suppliers, creating a 'great place to work'. We
need to ensure we have the right skills for today and the future.
Brand, proposition and reputation The reputation of, and value associated with, the Group's brands and product
offering is central to the success of the business. Failure to maintain a
well-designed, high quality product range that is priced attractively could
compromise the success of the Group. Over time, a failure to meet the product
design, the quality and a customer experience expected by our customers will
have an adverse effect on the reputation of the Group.
Business transformation The Group undertakes a number of significant investment or business change
projects that are key to successfully executing its strategy. As the Group
looks to make changes to the data, processes and IT systems, it is
imperative that any risk of business interruption is managed. Failure to
successfully implement these changes could mean the business fails to deliver
its strategy.
Inbound and Outbound logistics Our distribution operations are key to the running of our business and any
factors that impact the ability to operate has a direct impact on our supply
chain and our customers. This could be as a result of challenges to both
inbound logistics from suppliers to our distribution centres as well as
disruption to outbound deliveries to our customers.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
● the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK;
● the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board
Tim Stacey Marie
Wall
Chief Executive Officer Interim Chief Financial
Officer
19 March 2026
Independent Review Report to DFS Furniture plc
Conclusion
We have been engaged by DFS Furniture plc ("the Company") to review the
condensed set of financial statements in the half-yearly financial report for
the 26 weeks ended 28 December 2025 which comprises the Condensed Consolidated
Income Statement, Condensed Consolidated Statement of Comprehensive Income,
Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of
Changes in Equity, Condensed Consolidated Cash Flow Statement and the related
explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the 26 weeks ended 28 December 2025 is not prepared, in
all material respects, in accordance with IAS 34 Interim Financial Reporting
as adopted for use in the UK and the Disclosure Guidance and Transparency
Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the UK.
A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other information
contained in the half-yearly financial report and consider whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Matthew Radwell
for and on behalf of KPMG LLP
Chartered Accountants
20 Station Road
Cambridge
CB1 2JD
United Kingdom
19 March 2026
Unaudited condensed consolidated income statement
26 weeks to 28 December 2025 26 weeks to 29 December 2024 52 weeks to 29 June 2025
Underlying Non- underlying Underlying Non- underlying Non- underlying
Total
Total
Underlying
Total
Note £m £m £m £m £m £m £m £m £m
Gross sales(1) 3 734.5 - 734.5 675.6 - 675.6 1,388.3 - 1,388.3
Revenue 3 547.7 - 547.7 504.5 - 504.5 1,030.3 - 1,030.3
Cost of sales (231.4) - (231.4) (218.2) - (218.2) (448.6) - (448.6)
Gross profit 316.3 - 316.3 286.3 - 286.3 581.7 - 581.7
Selling and distribution costs (186.7) - (186.7) (170.8) - (170.8) (353.2) - (353.2)
Administrative expenses (39.2) 0.1 (39.1) (34.6) (0.5) (35.1) (71.3) (0.6) (71.9)
Operating profit before depreciation, amortisation and impairment 90.4 0.1 90.5 80.9 (0.5) 80.4 157.2 (0.6) 156.6
Depreciation (36.9) - (36.9) (37.9) - (37.9) (75.9) 4.7 (71.2)
Amortisation (6.6) - (6.6) (6.4) - (6.4) (13.0) - (13.0)
Impairment - - - - - - (1.3) - (1.3)
Operating profit/(loss) 4 46.9 0.1 47.0 36.6 (0.5) 36.1 67.0 4.1 71.1
Finance income 0.2 - 0.2 0.3 - 0.3 0.4 - 0.4
Finance expenses 5 (16.9) - (16.9) (20.6) - (20.6) (38.6) - (38.6)
Profit/(loss) before tax 30.2 0.1 30.3 16.3 (0.5) 15.8 28.8 4.1 32.9
Taxation 6 (7.6) - (7.6) (4.1) 0.1 (4.0) (7.7) (1.0) (8.7)
Profit/(loss) for the period 22.6 0.1 22.7 12.2 (0.4) 11.8 21.1 3.1 24.2
Earnings per share
Basic 7 9.8p - 9.8p 5.3p (0.2)p 5.1p 9.2p 1.3p 10.5p
Diluted 7 9.6p - 9.6p 5.3p (0.2)p 5.1p 9.0p 1.3p 10.3p
1. Refer to note 12 for APM definitions.
Unaudited condensed consolidated statement of comprehensive income
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Profit for the period 22.7 11.8 24.2
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges 2.4 1.0 (10.7)
Net change in fair value of cash flow hedges reclassified to profit or loss
recognised in cost of sales 2.6 2.3 4.6
Income tax on items that are or may be reclassified subsequently to profit or (1.4) (0.9) 1.8
loss
Other comprehensive income/(expense) for the period, net of income tax 3.6 2.4 (4.3)
Total comprehensive income for the period 26.3 14.2 19.9
Unaudited condensed consolidated balance sheet
28 December 29 December 29 June
2025
2024
2025
Note £m £m £m
Non-current assets
Property, plant and equipment 9 73.4 79.7 75.2
Right of use assets 9 265.0 296.3 276.9
Intangible assets 9 529.6 531.5 531.2
Other financial assets - 0.2 -
Deferred tax assets 9.5 10.0 11.6
877.5 917.7 894.9
Current assets
Inventories 55.2 59.1 56.6
Other financial assets 0.3 2.2 -
Trade and other receivables 13.3 12.3 15.8
Current tax assets - 0.1 2.4
Cash and cash equivalents (excluding bank overdrafts) 20.5 22.4 13.9
89.3 96.1 88.7
Total assets 966.8 1,013.8 983.6
Current liabilities
Bank overdraft (6.1) (12.1) (13.9)
Trade payables and other liabilities (245.8) (239.4) (231.8)
Lease liabilities (66.9) (86.2) (64.2)
Provisions 10 (10.7) (11.7) (13.0)
Current tax liabilities (0.1) - -
Other financial liabilities (2.6) (0.2) (8.1)
(332.2) (349.6) (331.0)
Non-current liabilities
Interest bearing loans and borrowings (73.6) (125.7) (105.3)
Lease liabilities (274.0) (291.2) (288.7)
Provisions 10 (8.1) (2.8) (6.1)
Other financial liabilities (0.3) - (0.3)
(356.0) (419.7) (400.4)
Total liabilities (688.2) (769.3) (731.4)
Net assets 278.6 244.5 252.2
Equity attributable to owners of the Company
Share capital 23.6 23.6 23.6
Share premium 40.4 40.4 40.4
Merger reserve 18.6 18.6 18.6
Capital redemption reserve 360.1 360.1 360.1
Treasury shares - (2.9) (2.9)
Employee Benefit Trust shares (8.0) (5.3) (5.2)
Cash flow hedging reserve (2.2) 2.2 (7.2)
Retained earnings (153.9) (192.2) (175.2)
Total equity 278.6 244.5 252.2
Unaudited condensed consolidated statement of changes in
equity
Share Share Merger reserve Capital redemption reserve Employee Benefit Trust shares Cash flow hedging Retained Total
reserve
capital premium Treasury earnings equity
shares
£m £m £m £m £m £m £m £m £m
Balance at 30 June 2024 23.6 40.4 18.6 360.1 (2.9) (5.9) (1.1) (203.8) 229.0
Profit for the period - - - - - - - 11.8 11.8
Other comprehensive income/(expense) - - - - - - 3.3 (0.9) 2.4
Total comprehensive income for the period - - - - - - 3.3 10.9 14.2
Employee benefit trust shares issued - - - - - 0.6 - (0.6) -
Share based payments - - - - - - - 1.3 1.3
Balance at 29 December 2024 23.6 40.4 18.6 360.1 (2.9) (5.3) 2.2 (192.2) 244.5
Balance at 29 June 2025 23.6 40.4 18.6 360.1 (2.9) (5.2) (7.2) (175.2) 252.2
Profit for the period - - - - - - - 22.7 22.7
Other comprehensive income/(expense) - - - - - - 5.0 (1.4) 3.6
Total comprehensive income for the period - - - - - - 5.0 21.3 26.3
Purchase of shares by Employee Benefit Trust - - - - - (0.4) - - (0.4)
Employee Benefit Trust shares issued - - - - - 0.5 - (0.5) -
Transfer of treasury shares to Employee Benefit Trust - - - - 2.9 (2.9) - - -
Settlement of share based payments - - - - - - - (1.0) (1.0)
Share based payments - - - - - - - 1.5 1.5
Balance at 28 December 2025 23.6 40.4 18.6 360.1 - (8.0) (2.2) (153.9) 278.6
Unaudited condensed consolidated cash flow statement
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Profit for the period 22.7 11.8 24.2
Adjustments for:
Income tax expense 7.6 4.0 8.7
Finance income (0.2) (0.3) (0.4)
Finance expenses 16.9 20.6 38.6
Depreciation of property, plant and equipment 8.2 9.3 17.2
Depreciation of right of use assets 28.7 28.6 54.0
Amortisation of intangible assets 6.6 6.4 13.0
Impairment of assets - - 1.3
Loss/(gain) on sale of property, plant and equipment 0.2 (0.3) 0.3
Loss/(gain) on disposal of right of use assets - 0.1 (0.8)
Settlement of share based payments (1.0) - -
Share based payment expense 1.5 1.3 2.8
Foreign exchange impact on cash flow hedges (0.8) (0.1) 1.1
Decrease/(increase) in trade and other receivables 2.5 (0.3) (3.8)
Decrease/(increase) in inventories 1.4 (0.1) 2.4
Increase in trade and other payables 14.1 30.1 22.5
(Decrease)/increase in provisions (0.3) (0.8) 3.8
Net cash from operating activities before tax 108.1 110.3 184.9
Tax (paid)/received (4.3) 1.9 (3.7)
Net cash from operating activities 103.8 112.2 181.2
Investing activities
Proceeds from sale of property, plant and equipment 0.6 0.4 0.2
Interest received 0.2 0.3 0.4
Acquisition of property, plant and equipment (7.3) (5.4) (9.0)
Acquisition of property, plant and equipment - right of use assets (0.8) - (0.6)
Acquisition of other intangible assets (5.0) (5.0) (11.3)
Net cash used in investing activities (12.3) (9.7) (20.3)
Financing activities
Interest paid (5.4) (7.8) (14.4)
Interest paid on lease liabilities (11.4) (12.5) (24.2)
Payment of lease liabilities (27.9) (34.1) (64.5)
Purchase of shares by Employee Benefit Trust (0.4) - -
Net repayment of senior revolving credit facility (32.0) (62.0) (82.0)
Net cash used in financing activities (77.1) (116.4) (185.1)
Net increase/(decrease) in cash and cash equivalents 14.4 (13.9) (24.2)
Cash and cash equivalents at beginning of period - 24.2 24.2
Cash and cash equivalents (including bank overdraft) at end of period 14.4 10.3 -
1. Basis of preparation
These unaudited condensed consolidated interim financial statements for DFS
Furniture plc ("the Company") and its subsidiaries (together, "the Group")
were approved for release on 19 March 2026.
The condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK, and comprise the results for the 26 weeks ended 28 December 2025, the 26
weeks ended 29 December 2024, and the 52 weeks ended 29 June 2025.
The condensed consolidated interim financial statements do not constitute
statutory accounts within the meaning of Section 435 of the Companies Act
2006. As required by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the condensed consolidated interim financial
statements have been prepared applying the accounting policies and
presentation that were applied in the preparation of the Company's published
consolidated financial statements for the 52 weeks ended 29 June 2025 which
were prepared in accordance with UK-adopted international accounting standards
('UK-adopted IFRS').
The statutory accounts for the 52 weeks ended 29 June 2025 have been reported
on by the Company's auditor and delivered to the Registrar of Companies. The
auditor's report for those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain a statement under
Section 498(2) or (3) of the Companies Act 2006. The auditor's review report
for the 26 weeks ended 28 December 2025 is attached.
Going concern
The condensed consolidated interim financial statements are prepared on a
going concern basis, which the Directors believe to be appropriate for the
following reasons.
The Group's existing debt facilities are available as follows: £250m to
September 2027, £225m to September 2028, £200m to January 2029 and £25m to
September 2030.
Covenants applicable to both the revolving credit facility and the private
placement debt are: 3.0x net debt/EBITDA and 1.5x fixed charge cover, and are
assessed on a six monthly basis at June and December.
At 17 March 2026, the last practicable date prior to approval of the interim
financial statements, £166.0m of the revolving credit facility remained
undrawn, in addition to cash in hand, at bank of £3.9m.
The Directors have prepared cash flow forecasts and performed a going concern
assessment for the Group covering a period of at least twelve months from the
date of approval of these condensed consolidated interim financial statements
(the 'going concern assessment period'), which indicate that the Group will be
in compliance with these covenants. These forecasts include a number of
assumptions in relation to: market size and the Group's order intake volumes;
inflationary impacts on gross margin and other costs; sector-wide
manufacturing and supply chain capacities; and achievement of cost savings in
line with the Group's strategic plans.
The Directors have also prepared severe but plausible downside sensitivity
scenarios which cover the same going concern assessment period as the base
case. These scenarios include significantly reduced customer spending, impacts
on gross margin and other costs from inflationary cost pressures, and a
combination of these scenarios. The Directors have also performed reverse
stress-testing analysis to confirm that circumstances resulting in a covenant
breach were beyond those considered plausible.
As part of this analysis, the Directors have considered mitigating actions
within the Group's control which could reduce the impact of these severe but
plausible downside scenarios. These mitigating actions include reducing
discretionary operating expenditure, a pause on expansionary capital
investment, and other measures to protect cash balances. These forecast cash
flows, considering the ability and intention of the Directors to implement
mitigating actions should they need to, indicate that there remains sufficient
headroom in the forecast period for the Group to operate within the committed
facilities and to comply with all relevant banking covenants during the going
concern assessment period.
1. Basis of preparation (continued)
The Directors have considered all of the factors noted above, including the
inherent uncertainty in forecasting the impact of the current economic and
political environment, and are confident that the Group has adequate resources
to continue to meet all liabilities as and when they fall due for at least
twelve months from the date of approval of these condensed consolidated
interim financial statements. Accordingly, the condensed consolidated interim
financial statements are prepared on a going concern basis.
2. Principal accounting policies
As required by the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority, the accounting policies adopted in preparing the condensed
consolidated interim financial statements are consistent with the policies in
the Group's financial statements for the 52 weeks ended 29 June 2025. These
are consistent with UK-adopted international accounting standards. There are
no new standards, amendments to existing standards or interpretations that are
effective for the first time in the period ended 28 December 2025 that have a
material impact on the Group's results.
3. Segmental Analysis
The Group's operating segments under IFRS 8 have been determined based on
management accounts reports reviewed by the Group Leadership Team. Segment
performance is assessed based upon brand contribution. Brand contribution is
defined as underlying EBITDA (being earnings before interest, tax,
depreciation, amortisation and non-underlying items) excluding property costs
and central administration costs.
The Group reviews and manages the performance of its operations on a retail
brand basis, and the identified reportable segments and the nature of their
business activities are as follows:
DFS: the retailing of
upholstered furniture and related products through DFS branded stores and
websites.
Sofology: the retailing of upholstered
furniture and related products through Sofology branded stores and website.
Other: the manufacture of
upholstered furniture and the supply of contract logistics.
3. Segmental analysis (continued)
Segment revenue
External gross sales Internal sales Total gross sales
26 weeks to 26 weeks to 52 weeks to 26 weeks to 26 weeks to 52 weeks to 26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June 28 December 29 December 29 June 28 December 29 December 29 June
2025 2024 2025 2025 2024 2025 2025 2024 2025
£m £m £m £m £m £m £m £m £m
DFS 573.1 523.1 1,091.3 - - - 573.1 523.1 1,091.3
Sofology 161.2 152.5 297.0 - - - 161.2 152.5 297.0
Other segments 0.2 - - 98.6 98.2 195.5 98.8 98.2 195.5
Eliminations - - - (98.6) (98.2) (195.5) (98.6) (98.2) (195.5)
Gross sales 734.5 675.6 1,388.3 - - - 734.5 675.6 1,388.3
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Total segments gross sales 734.5 675.6 1,388.3
Value added and other sales taxes (120.0) (106.8) (222.5)
Interest free credit subsidy (52.6) (51.9) (108.8)
Cost of aftercare products (14.2) (12.4) (26.7)
Revenue 547.7 504.5 1,030.3
Of which:
Furniture sales 521.6 477.8 977.5
Commission on sales of aftercare products 26.1 26.7 52.8
Revenue 547.7 504.5 1,030.3
Segment profit
26 weeks to 28 December 2025 DFS Sofology Other Eliminations Total
£m £m £m £m £m
Revenue 424.5 123.0 98.8 (98.6) 547.7
Cost of sales (195.2) (53.2) (25.7) 42.7 (231.4)
Gross profit 229.3 69.8 73.1 (55.9) 316.3
Selling and distribution costs (excluding property costs) (118.3) (36.3) (58.8) 41.7 (171.7)
Brand contribution (segment profit) 111.0 33.5 14.3 (14.2) 144.6
Property costs (15.0)
Underlying administrative expenses (39.2)
Underlying EBITDA 90.4
( )
26 weeks to 29 December 2024 DFS Sofology Other Eliminations Total
£m £m £m £m £m
Revenue 389.8 114.7 98.2 (98.2) 504.5
Cost of sales (184.4) (49.5) (25.9) 41.6 (218.2)
Gross profit 205.4 65.2 72.3 (56.6) 286.3
Selling and distribution costs (excluding property costs) (113.9) (29.1) (54.5) 41.9 (155.6)
Brand contribution (segment profit) 91.5 36.1 17.8 (14.7) 130.7
Property costs (15.2)
Underlying administrative expenses (34.6)
Underlying EBITDA 80.9
3. Segmental analysis (continued)
52 weeks to 29 June 2025 DFS Sofology Other Eliminations Total
£m £m £m £m £m
Revenue 804.6 225.7 195.5 (195.5) 1,030.3
Cost of sales (383.1) (98.1) (48.5) 81.1 (448.6)
Gross profit 421.5 127.6 147.0 (114.4) 581.7
Selling and distribution costs (excluding property costs) (234.8) (62.0) (109.8) 84.6 (322.0)
Brand contribution (segment profit) 186.7 65.6 37.2 (29.8) 259.7
Property costs (31.2)
Underlying administrative expenses (71.3)
Underlying EBITDA 157.2
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Underlying EBITDA 90.4 80.9 157.2
Non-underlying administrative expenses 0.1 (0.5) (0.6)
Depreciation, amortisation & impairment (43.5) (44.3) (85.5)
Operating profit 47.0 36.1 71.1
Net finance expense (16.7) (20.3) (38.2)
Profit before tax 30.3 15.8 32.9
4. Operating profit
Group operating profit is stated after charging/(crediting):
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Net foreign exchange losses/(gains) 1.1 0.2 (1.6)
Depreciation on tangible assets (including depreciation on right of use 36.9 37.9 71.2
assets)
Amortisation of intangible assets 6.6 6.4 13.0
Impairments - - 1.3
Net loss/(gain) on disposal of property, plant and equipment 0.2 (0.3) 0.3
Net loss/(gain) on disposal of right of use assets - 0.1 (0.8)
Cost of inventories recognised as an expense 235.2 219.9 456.4
Release of provisions (note 10) (0.5) - (0.5)
Non-underlying items:
Restructuring costs - 0.7 0.7
Land slippage costs - - 0.5
Release of lease guarantee provision (note 10) (0.1) (0.2) (0.6)
Fair value lease adjustment - - (4.7)
(0.1) 0.5 (4.1)
The release of the lease guarantee provision relates to potential obligations
under lease guarantees offered to former subsidiary companies, the majority of
which expire in FY26.
Restructuring costs included redundancy costs associated with further
integrating Sofology into the Group. Land slippage costs related to costs of
remediation works required at one of our manufacturing sites. The fair value
lease adjustment arose from the release of acquisition-related fair value
lease adjustments relating to properties where the rent had since been
renegotiated and therefore represented a market rate. It related to
negotiations that had taken place in previous periods, and should have been
recorded at the time of the negotiation, but as it was not material to
individual previously reported periods it was corrected in the year ended 29
June 2025.
5. Finance expense
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Interest payable on senior revolving credit facility 2.6 5.4 8.7
Interest payable on private placement debt 2.1 2.1 4.3
Bank fees 0.8 0.6 1.4
Interest on lease liabilities 11.4 12.5 24.2
Total finance expense 16.9 20.6 38.6
6. Taxation
The tax charge recognised in the interim financial statements has been
calculated on the basis of the expected effective tax rate for the 52 weeks to
28 June 2026 of 25.0% (52 weeks to 29 June 2025: 25.0%).
7. Earnings per share
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
pence pence pence
Basic earnings per share 9.8 5.1 10.5
Diluted earnings per share 9.6 5.1 10.3
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Profit attributable to equity holders of the parent company 22.7 11.8 24.2
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
No. No. No.
Weighted average number of shares for basic earnings per share 231,187,820 230,840,654 230,954,285
Dilutive effect of employee share based payment awards 4,864,776 1,124,397 4,018,845
Weighted average number of shares for diluted earnings per share 236,052,596 231,965,051 234,973,130
7. Earnings per share (continued)
Underlying earnings per share
Underlying basic earnings per share and underlying diluted earnings per share
are calculated by dividing the profit for the period attributable to ordinary
equity holders of the parent company, as adjusted to exclude the effect of
non-underlying items, by the same weighted average numbers of ordinary shares
above used for basic and diluted earnings per share respectively.
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
£m £m £m
Profit attributable to equity holders of the parent company 22.7 11.8 24.2
Non-underlying items after tax (0.1) 0.4 (3.1)
Underlying profit attributable to equity holders of the parent company 22.6 12.2 21.1
26 weeks to 26 weeks to 52 weeks to
28 December 29 December 29 June
2025 2024 2025
pence pence pence
Underlying basic earnings per share 9.8 5.3 9.2
Underlying diluted earnings per share 9.6 5.3 9.0
8. Dividends
No dividends were recognised or paid during the current period or during the
previous reporting periods.
The directors have declared an interim dividend for the period ending 28
December 2025 of 1.0p per ordinary share to be paid on 29 May 2026. DFS
Furniture plc shares will trade ex-dividend from 16 April 2026 and the record
date will be 17 April 2026.
9. Capital asset movements
Property, plant Right of use Intangible
and equipment asset assets
£m £m £m
Net book value as at 29 June 2025 75.2 276.9 531.2
Additions 7.3 6.3 5.0
Remeasurements - 10.9 -
Disposals (0.9) (0.4) -
Depreciation, amortisation and impairment (8.2) (28.7) (6.6)
Net book value as at 28 December 2025 73.4 265.0 529.6
Property, plant Right of use Intangible
and equipment asset assets
£m £m £m
Net book value as at 30 June 2024 83.8 315.0 532.9
Additions 5.4 4.1 5.0
Remeasurements - 5.9 -
Disposals (0.2) (0.1) -
Depreciation, amortisation and impairment (9.3) (28.6) (6.4)
Net book value as at 29 December 2024 79.7 296.3 531.5
In accordance with IAS 36, the Directors have considered both internal and
external factors for indicators of impairment at 28 December 2025. No such
indicators were identified.
10. Provisions
Guarantee Property Other Total
provision
provisions
provisions
£m £m £m £m
Balance at 29 June 2025 8.3 8.5 2.3 19.1
Provisions made during the period 2.0 1.5 0.8 4.3
Provisions used during the period (2.0) (1.0) (1.0) (4.0)
Released during the period - (0.6) - (0.6)
Balance at 28 December 2025 8.3 8.4 2.1 18.8
Current 7.0 1.8 1.9 10.7
Non-current 1.3 6.6 0.2 8.1
8.3 8.4 2.1 18.8
Guarantee Property Other Total
provision
provisions
provisions
£m £m £m £m
Balance at 30 June 2024 6.9 7.5 0.9 15.3
Provisions made during the period 1.2 0.6 0.1 1.9
Provisions used during the period (1.7) (0.7) (0.1) (2.5)
Released during the period - (0.2) - (0.2)
Balance at 29 December 2024 6.4 7.2 0.9 14.5
Current 5.4 5.7 0.6 11.7
Non-current 1.0 1.5 0.3 2.8
6.4 7.2 0.9 14.5
The Group offers a long-term guarantee on its upholstery products and in
accordance with accounting standards a provision is maintained for the
expected future cost of fulfilling these guarantees on products which have
been delivered before the reporting date. An expectation of future claims
under the warranty is made, based on past experience of the proportion of
items where a claim has been made, and the expected average cost per claim. In
calculating this provision the key areas of estimation are the number of
future claims, average cost per claim and the expected period over which
claims will arise (nearly all claims arise within two years of delivery). The
Group has considered the sensitivity of the calculation to these key areas of
estimation, and determined that a 10% change in either the average cost per
claim or the number of expected future calls would change the value of the
calculated provision by £0.6m. The Directors have therefore concluded that
reasonably possible variations in estimate would not result in a material
difference.
Property provisions relate to potential obligations under lease guarantees
offered to former subsidiary companies, the majority of which expire in FY26,
wear and tear costs for Group properties based on anticipated lease expiries
and renewals and experience of costs incurred in relation to similar
properties, which will predominantly be utilised more than five years from the
reporting date, and a provision for the best estimate of the costs of
rectification of an area of land slippage at one of the Group's manufacturing
facilities. Uncertainties exist in relation to the timing and value of the
rectification costs for the land slippage. In calculating the provision
management has assumed that the costs will be as per the best estimate
available from external sources.
Other provisions relate to payment of future refunds to customers, other
regulatory costs and insurance provisions.
11. Net debt
29 June 2025 Cash flow Other non-cash 28 December 2025
changes
£m £m £m £m
Cash in hand, at bank 13.9 6.6 - 20.5
Bank overdraft (13.9) 7.8 - (6.1)
Cash and cash equivalents (including bank overdraft) - 14.4 - 14.4
Senior revolving credit facility (55.3) 32.0 (0.3) (23.6)
Private placement debt (50.0) - - (50.0)
Lease liabilities (352.9) 39.3 (27.3) (340.9)
Total net debt (458.2) 85.7 (27.6) (400.1)
30 June 2024 Cash flow Other non-cash 29 December 2024
changes
£m £m £m £m
Cash in hand, at bank 26.8 (4.4) - 22.4
Bank overdraft (2.6) (9.5) - (12.1)
Cash and cash equivalents (including bank overdraft) 24.2 (13.9) - 10.3
Senior revolving credit facility (137.4) 62.0 (0.3) (75.7)
Private placement debt (50.0) - - (50.0)
Lease liabilities (401.7) 46.6 (22.3) (377.4)
Total net debt (564.9) 94.7 (22.6) (492.8)
12. Alternative performance measures
In reporting the Group's financial performance, the Directors make use of a
number of alternative performance measures ("APMs") in addition to those
defined or specified under UK-adopted international accounting standards
("UK-adopted IFRS").
The Directors consider that these APMs provide useful additional information
to support understanding of underlying trends and business performance. In
particular, APMs enhance the comparability of information between reporting
periods by adjusting for non-underlying items. APMs are therefore used by the
Group's Directors and management for internal performance analysis, planning
and incentive setting purposes in addition to external communication of the
Group's financial results.
In order to facilitate understanding of the APMs used by the Group, and their
relationship to reported IFRS measures, definitions and numerical
reconciliations are set out below.
Definitions of APMs may vary from business to business and accordingly the
Group's APMs may not be directly comparable to similar APMs reported by other
entities.
APM glossary and definitions
APM Definition Rationale
Gross sales Amounts payable by external customers for goods and services supplied by the Key measure of overall sales performance which unlike IFRS revenue is not
Group, inclusive of VAT and other sales taxes and prior to any adjustments for affected by the extent to which customers take up the Group's interest free
interest free credit fees or aftercare product costs. See note 2 for a credit offering.
reconciliation from gross sales to revenue.
Brand contribution Gross profit less selling and distribution costs, excluding property and Measure of brand-controllable profit as it excludes shared Group costs.
administration costs.
Adjusted EBITDA Earnings before interest, taxation, depreciation and amortisation adjusted to A commonly used profit measure.
exclude impairments.
Non-underlying items Items that are material in size, unusual or non-recurring in nature which the Clear and separate identification of such items facilitates understanding of
Directors believe are not indicative of the Group's underlying performance. underlying trading performance.
Underlying EBITDA Earnings before interest, taxation, depreciation and amortisation, adjusted to Profit measure reflecting underlying trading performance.
exclude impairments and non-underlying items.
12. Alternative performance measures (continued)
Underlying profit before tax and brand amortisation uPBT(A) Profit before tax adjusted for non-underlying items and amortisation Profit measure widely used by investors and analysts.
associated with the acquired brands of Sofology and Dwell.
Underlying earnings per share Post-tax earnings per share as adjusted for non-underlying items. Exclusion of non-underlying items facilitates year on year comparisons of the
key investor measure of earnings per share.
Net bank debt Balance drawn down on interest-bearing loans, with unamortised issue costs Measure of the Group's cash indebtedness which supports assessment of
added back, less cash and cash equivalents (including bank overdrafts). available liquidity and cash flow generation in the reporting period.
Cash EBITDA Net cash from operating activities before tax, less movements on working Measure of the non-underlying operating cash generation of the business,
capital and provisions balances and payments made under lease obligations, normalised to reflect timing differences in working capital movements.
adding back non-underlying items before tax.
Free cash flow The movement in cash and cash equivalents (including bank overdrafts), Measure of the cash return generated in the period and a key financial target
excluding the impact of drawdowns/repayments of financing arrangements and for Executive Director remuneration.
dividends paid.
Leverage (gearing) The ratio of period end net bank debt to cash EBITDA for the previous twelve Key measure which indicates the relative level of borrowing to operating cash
months. generation, widely used by investors and analysts.
Underlying return on capital employed (underlying ROCE) Underlying post-tax operating profit, expressed as a percentage of the sum of: Represents the post-tax return the Group achieves on the investment it has
property, plant & equipment, computer software, right of use assets and made in its business.
working capital.
LTM Dec-24 Last twelve months/53 weeks ended 29 December 2024 (unaudited, pro forma Certain KPIs (e.g. Leverage) are only meaningful when assessed on a full year
period). basis.
LTM Dec-25 Last twelve months/52 weeks ended 28 December 2025 (unaudited, pro forma Certain KPIs (e.g. Leverage) are only meaningful when assessed on a full year
period). basis.
12. Alternative performance measures (continued)
Reconciliations to IFRS measures
Adjusted EBITDA H1 FY26 H1 FY25 FY25
£m £m £m
Operating profit 47.0 36.1 71.1
Depreciation 36.9 37.9 71.2
Amortisation 6.6 6.4 13.0
Impairments - - 1.3
Adjusted EBITDA 90.5 80.4 156.6
Underlying EBITDA H1 FY26 H1 FY25 FY25
£m £m £m
Adjusted EBITDA 90.5 80.4 156.6
Non-underlying operating items (0.1) 0.5 0.6
Underlying EBITDA 90.4 80.9 157.2
Underlying profit before tax and brand amortisation - uPBT(A) H1 FY26 H1 FY25 FY25
£m £m £m
Profit before tax 30.3 15.8 32.9
Non-underlying items (0.1) 0.5 (4.1)
Amortisation of brand names 0.7 0.7 1.4
Underlying profit before tax and brand amortisation 30.9 17.0 30.2
Net bank debt H1 FY26 H1 FY25 FY25
£m £m £m
Interest bearing loans and borrowings 73.6 125.7 105.3
Unamortised issue costs 1.4 1.3 1.7
Cash and cash equivalents (including bank overdraft) (14.4) (10.3) -
Net bank debt 60.6 116.7 107.0
Movement in net bank debt H1 FY26 H1 FY25 FY25
£m £m £m
Closing net bank debt (60.6) (116.7) (107.0)
Less: Opening net bank debt 107.0 164.8 164.8
Movement in net bank debt 46.4 48.1 57.8
Free cash flow H1 FY26 H1 FY25 FY25
£m £m £m
Net increase/(decrease) in cash and cash equivalents 14.4 (13.9) (24.2)
Net repayment of senior revolving credit facility 32.0 62.0 82.0
Free cash flow 46.4 48.1 57.8
12. Alternative performance measures (continued)
Leverage LTM Dec-25 LTM Dec-24 FY25
£m £m £m
Net bank debt (A) 60.6 116.7 107.0
Net cash from operating activities before tax 182.7 156.1 184.9
Add back:
Pre-tax non-underlying items (4.7) 4.2 (4.1)
Less:
Movement in trade and other receivables 1.0 1.8 3.8
Movement in inventories (3.9) 7.0 (2.4)
Movement in trade and other payables (6.5) (14.0) (22.5)
Movement in provisions (4.3) (1.2) (3.8)
Payment of lease liabilities (58.3) (70.6) (64.5)
Payment of interest on leases (23.1) (24.9) (24.2)
Cash EBITDA (B) 82.9 58.4 67.2
Leverage (A/B) 0.7x 2.0x 1.6x
IAS 17 bank covenant difference 0.1x (0.4x) (0.2x)
Bank leverage 0.8x 1.6x 1.4x
LTM Dec-24 cash EBITDA is materially different from bank covenant IAS
17-based EBITDA due to timing of rent payments included within payment of
lease liabilities and interest on leases.
Underlying return on capital employed LTM Dec-25 LTM Dec-24 FY25
£m £m £m
Operating profit 82.0 54.6 71.1
Non-underlying operating items (4.7) 4.2 (4.1)
Pre-tax return 77.3 58.8 67.0
Effective tax rate 26.2% 28.0% 26.7%
Tax adjusted return (A) 57.0 42.3 49.1
Property, plant and equipment 73.4 79.7 75.2
ROU assets 265.0 296.3 276.9
Computer software 18.4 18.9 19.3
356.8 394.9 371.4
Inventories 55.2 59.1 56.6
Trade receivables 7.6 7.0 10.5
Prepayments 4.1 4.6 4.7
Accrued income 0.1 0.2 0.2
Other receivables 1.5 0.5 0.4
Payments received on account (48.1) (48.6) (50.4)
Trade payables (113.0) (110.8) (91.6)
Working capital (92.6) (88.0) (69.6)
Total capital employed (B) 264.2 306.9 301.8
Underlying ROCE (A/B) 21.6% 13.8% 16.3%
This interim report, the full text of the Stock Exchange announcement and the
results presentation can be found on the Company's website at
www.dfscorporate.co.uk (http://www.dfscorporate.co.uk)
This interim report contains statements that constitute forward-looking
statements relating to the business, financial performance and results of the
Company and the industry in which the Company operates. These statements may
be identified by words such as "may", "will", "shall", "anticipate",
"believe", "intend", "project", "goal", "expectation", "belief", "estimate",
"plan", "target", or "forecast" and similar expressions for the negative
thereof; or by forward-looking nature of discussions of strategy, plans or
intentions; or by their context. No representation is made that any of these
statements or forecasts will come to pass or that any forecast results will be
achieved. All statements regarding the future are subject to inherent risks
and uncertainties and various factors that would cause actual future results,
performance or events to differ materially from those described or implied in
these statements. Such forward-looking statements are based on numerous
assumptions regarding the Company's present and future business strategies and
the environment in which the Company will operate in the future. Further,
certain forward-looking statements are based upon assumptions of future events
which may not prove to be accurate and neither the Company nor any other
person accepts any responsibility for the accuracy of the opinions expressed
in this interim report or the underlying assumptions. Past performance is
not an indication of future results and past performance should not be taken
as a representation that trends or activities underlying past performance will
continue in the future. The forward-looking statements in this interim report
speak only as at the date of this interim report and the Company expressly
disclaims any obligation or undertaking to release any updates or revisions to
these forward-looking statements to reflect any change in the Company's
expectations in regard thereto or any change in events, conditions or
circumstances on which any statement is based after the date of this interim
report or to update or to keep current any other information contained in this
interim report or to provide any additional information in relation to such
forward-looking statements. Undue reliance should not therefore be placed on
such forward-looking statements.
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