DFS sitting pretty as it looks to consolidate retail portfolio
Furniture retailer DFS has seen comfortable growth in its half years, as it looks to consolidate its retail portfolio.
DFS saw group revenue rise 6.8% to £379.9m, with profit before tax up 3.1% to £16.7m for the 26 weeks to 28 January 2017. Annual gross sales passed the £1bn mark for the first time.
The Doncaster-based business said that it had proven the value of converting store warehousing space for retail use, and continued to accelerate its conversion program, which means consolidating warehouse operations into larger off site facilities.
As part of these plans, DFS opened 15 ‘co-located’ Dwell stores in former DFS warehouse space during the first half,.
Two new 10-15,000 sq ft DFS stores opened in the UK in the half year period, with one further opening planned for early April.
DFS was not immune to the effects of Brexit however, and admitted seeing “some” impact on its margins due to adverse currency movements between the pound and US dollar.
It said that it is “taking actions to mitigate these pressures” through range management and supplier negotiations.
The company also announced that it would be awarding a special dividend of 9.5p per share.
DFS chief executive officer Ian Filby said: “I am pleased to report continued good sales growth and strong cash generation reflecting the successful implementation of our proven growth strategy. This strong performance underpins our announcement today of our first special dividend for shareholders.
“The scale of our business, which is larger than our next four UK competitors combined, gives us significant advantages that allow us consistently to offer outstanding value to our customers.
“We are confident that our size, combined with the flexibility of our cost base and vertically integrated business model means that DFS is particularly well positioned to respond to economic headwinds and cost pressures while continuing to grow our share of the UK retail furniture market.
“Our expectations for profit before tax over the full year accordingly remain unchanged, and we believe that DFS continues to enjoy excellent prospects to deliver long-term profitable growth.”
