Major boost for Doncaster based firm DFS

DFS
DFS

Doncaster-based sofa chain DFS Furniture has hailed a record set of results as Britain’s buoyant housing market and growing consumer confidence boosted sales.

In its first set of annual results since returning to the stock market in March, DFS posted an 8.4% hike in underlying earnings to £89.2 million for the year to August 1 after total sales lifted 7%.

The Carcroft-based business - which has more than 100 stores in the UK, Ireland and the Netherlands - said sales growth slowed slightly in the final six months as it came up against strong comparatives from a year earlier.

But it said there was strong demand for “big ticket” items, spurred on by increasing numbers of house moves and as consumers have been boosted by cheap credit and low inflation.

Sales have also been helped by new store openings as DFS added another six in the UK and Ireland, while also growing its Dwell and Sofa Workshop brands.

On a bottom line basis, pre-tax profits nearly trebled to £10.7 million from £3.6 million a year earlier.

Chairman Richard Baker said there were “still substantial further potential opportunities” as it looks to expand further in the UK and the Netherlands, while also rolling out smaller stores.

The group added there was strong potential to keep growing as the furniture market remains around 20% below its peak before the financial crisis.

DFS, which has more than 3,500 staff, was valued at over £540 million when it floated in the spring and shares have since risen by more than a fifth.

Shares were up another 3% after the annual figures.

Analysts at Jefferies said the results “reassure DFS can deliver growth on several fronts”.

DFS said orders of its exclusive branded ranges leapt by 75% as its new luxury leather ranges under the Iconica brand have proved popular.

Online sales rose 17% over the year, it added.

DFS was founded by Lord Kirkham from a single store in Doncaster in 1969.

The group was listed on the London market between 1993 and 2004 before Lord Kirkham took it back into private hands.

It was then sold to private equity business Advent International for £500 million in 2010.

The firm sold a 38% chunk of the business to new investors in March, raising £98 million, which it says it will use to pay off debt and secure cheaper financing.

The majority of the retailer is still owned by Advent International, while its directors hold a 3.2% stake.