REG - DFS Furniture PLC - Trading Statement

DFS FurnitureAnnouncement

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RNS Number : 3752R  DFS Furniture PLC  17 July 2025

17 July 2025

 

Immediate release

 

DFS Furniture plc ("DFS" and the "Group")

 

2025 FULL YEAR TRADING UPDATE

 

Strong trading and good cost control resulting in PBT(A) slightly above the
top end of guidance

 

DFS Furniture plc, the market leading retailer of upholstered furniture in the
United Kingdom, today issues the following trading update for the 52 week year
ending 29 June 2025 ("FY25").

 

Summary:

●    Full year PBT(A)(1) is expected to be slightly above the top end of
guidance (£25-29m) and up around £20m year on year

●    Profit performance driven by strong trading, gross margin rate
progression and continued cost discipline

●    Strong H1 trading performance continued in the second half. H2 Group
order intake +10% year on year(2) (in line with the growth achieved in H1),
demonstrating significant outperformance of the market that remains subdued

●    Financial position has further strengthened. Net bank debt reduced
to around £107m (FY24 year end £165m) and leverage(3) further reduced to
around 1.4x (FY24 year end 2.5x)

 

Trading overview:

The Group traded consistently through the period, with order intake up +10%
year on year(2) in both H1 and H2, supported by volume and average order value
growth. Both of our retail brands performed well, with DFS up +8.7% and
Sofology up +16.2% year on year(2) due to successful implementation of our
growth initiatives. Our proprietary data shows the Group has grown market
share in the specialist upholstery sector(4) in a period where the market
remained subdued.

 

Gross sales, which are recognised on delivery of orders to customers, were up
+5.8% year on year. This is lower than the level of order intake growth (which
is measured on a 52 week vs 52 week basis) due to a shift in customer orders
to ranges with longer lead times and the impact of the prior year being a 53
week financial reporting period. Consequently, the Group enters FY26 with a
resilient order bank.

 

We have maintained our focus on disciplined cost management and continued to
improve our gross margins. This approach, in combination with the increase in
gross sales, has resulted in expected year on year PBT(A)(1) growth slightly
above the top end of our guidance (£25m-£29m), up from £10.5m (FY24).

 

The Group's financial position has improved with net bank debt (excluding
capitalised leases) reducing in the period to around £107m (FY24 year end
£165m) and leverage(3) reducing to around 1.4x (FY24 year end 2.5x) as we
target a return to our 0.5x-1.0x target range.

 

The Group will announce its full year results for the period ending 29 June
2025 on 25 September 2025.

 

Comment from Tim Stacey, Group Chief Executive

"We are pleased to report that we expect profit for the full year to be
slightly above the top end of our guidance. Our excellent first half
performance set the foundation for our success, with strong trading through
the rest of the year with both our DFS and Sofology brands outperforming the
market. We have continued to maintain a strong focus on disciplined cost
management and improved our gross margins, leading to significant year on year
profit growth. In addition, cash flow was healthy and our balance sheet is
strengthening as we progress towards our target leverage range.

 

Whilst the macro environment remains challenging our business is in great
shape and I would like to thank our amazing colleagues for their support and
commitment as we relentlessly focus on delivering against our strategy
together. 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 medium term ambition of £1.4bn revenue and
8% PBT margins."

 

(1) PBT(A): Underlying profit before tax and brand amortisation

(2) Full year order intake growth measured on a 52 week vs 52 week basis was
10.2%.

To avoid the distorting impact caused by a different number of winter sale
trading days in each trading period H1 YoY order intake growth (+10.1%) has
been measured using weeks 1-25 of each trading period. H2 YoY (+10.3%) has
been measured using the most comparable 27 weeks.

FY24 was a 53 week reporting period, order intake growth measured on a 52 vs
53 week basis is 8.7% year on year.

(3) Banking covenant IAS17 definition

(4) Proprietary banking data covering 13 specialist upholstery retailers

 

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

Ayo Sangobowale

+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 living room, 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 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".

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