REG - DFS Furniture PLC - Trading Statement

DFS FurnitureAnnouncement

17/01/2025 07:00

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RNS Number : 6623T  DFS Furniture PLC  17 January 2025

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% YoY(2) 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% YoY(2)

●    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
leverage(3) 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".

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