City Briefs: DFS, Proactis and Carclo
Doncaster-based DFS Furniture says it is trading ahead of its initial expectations both online and in its showrooms .
The furniture retailer stated that it has seen year-on-year order intake growth worth c. £70m over the last six weeks.
It believe that this trading performance reflects a combination of consumers currently spending more on their homes relative to other sectors, latent demand caused by the nationwide lockdown and also a strengthening advantage of its “hybrid digital and physical retail offering”. It also noted that consumers may be bringing forward spending decisions due to the “significant uncertainty related to COVID-19 on UK” and “the potential impact of Brexit”.
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Global spend management firm Proactis has provided a trading update for the financial year ended 31 July, which saw new business deal intake for the year at a record high.
This saw the business secure a 29% increase in the total contract value to £14.6m, with the board expecting this trend to continue as a result of a growing pipeline and “momentum building following the roll-out of the group’s new go-to-market strategy.”
As a result the business is expecting to report an encouraging performance in despite the challenges of Covid-19 with revenues of £49.2m for the year and an EBITDA of £11.8m.
Tim Sykes, CEO said, “We delivered an encouraging new business performance in the period against a challenging macro-economic backdrop, demonstrating the effectiveness of our strategy, the resilience of our business model and the ability of our teams to deliver despite a change in working practices.
“Moving forwards, we expect to make further progress in growing the rate of new business intake and we will continue to focus on retention and margin improvement to drive cash flow, whilst maintaining a measured level of investment to support our long-term growth ambitions.
“There can be no certainty about the impact that the pandemic will have on our markets. Demand has been marginally subdued through this period and sales processes have been more challenging because of competing priorities but the Group is well-positioned to continue to capitalise on the opportunities available to it. Accordingly, we expect to continue to make further progress and we remain confident in our ability to accelerate growth whilst further improving profitability and cash flow.”
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Global manufacturer of fine tolerance injection moulded plastic parts for medical, electronics, optics and automotive safety markets, Carlco has announced an increase in revenue for the financial year to 31 March.
The firm achieved £110.5m in revenue from continuing operations, a 4.9% increase on the previous year, which also saw an increase in profit from this activity to £7.3m.
The business has also successfully concluded its exit of the loss making LED division which has reduced debt by £5.5m and completed a new three year funding arrangement with HSBC and the pension scheme, securing both parties support t July 2023.
Joe Oatley, chairman of Carclo said, “Despite a challenging period for the Group, the continuing businesses performed strongly in 2020.
“Following the exit of the loss-making LED business and the completion of a three-year refinancing agreement with the Group’s lending bank and pension trustees, Carclo now has a more stable platform from which to develop the business.
“Whilst the Covid-19 situation creates some uncertainty over the near-term performance of the Group, the Board believes that the operating businesses within the Group have attractive long-term growth prospects, in particular within the medical diagnostics market where the CTP business is well positioned.
“Alongside investing to deliver its organic growth strategy, the Group is working closely with its pension trustees to reduce the relative scale of the Group’s defined benefit pension deficit. Delivering a reduction in the pension deficit over time will be a key element in translating the performance of the underlying business into value creation for shareholders.”
The firm also announced that Oatley would be standing down from his interim role as non-executive chairman after this year’s AGM, following the news that Nick Sanders would join as chairman-elect with the intention of taking over the role.
Sanders is an engineer by training with over two decades of experience at board level in UK and international businesses.
Looking ahead to the rest of the financial year the firm believes that the near-term performance is uncertain due to the impact of the global pandemic on the business. However, the businesses “have attractive long-term growth prospects and the capability to generate improved returns over time.”
