Furniture retailer’s trading ‘resilient’ despite showroom closures
DFS Furniture says it is performing robustly despite the pandemic meaning its showrooms have had to shut in Wales and in the most restricted tier four areas of England.
The listed Doncaster-headquartered business, which has issued a trading update for the first 24 weeks of the financial year ending 13 December 2020, says it is able to continue manufacturing and deliveries in tier four regions.
It says gross sales within this period were 19% ahead on the comparative prior year period, while the firm’s order bank remains strong.
Gross sales via DFS’s online channels were 76% ahead on the comparative prior year period.
DFS expects its full year profits before tax and brand amortisation will be within the upper half of the current market forecast range. The median forecast for these profits is £101.7m on an underlying IFRS16 basis, with a range of £81.2m to £118m.
DFS’s update explains: “Out of our estate of 212 showrooms, 52 showrooms in ‘tier four’ areas in England, all our seven showrooms in Wales and the six Netherlands showrooms are currently closed in line with Government guidance.
“Our showrooms in other areas are currently open and our retail websites, manufacturing sites and delivery operations continue to be operational nationally as has been the case throughout the first half.
“The Group continues to perform resiliently, with quarter two order intake over the first 11 weeks down approximately 5% year-on-year despite the impact of extensive showroom closures in the period.
“We believe the Group is achieving market share gains and benefiting from a shift in consumer spending towards the home.
“The Group has also yesterday signed an amendment and extension to its senior revolving credit facility with its existing syndicate of banks.
“This amended £225m facility has a December 2023 maturity (previously was August 2022) with options in place to extend for a further two years, subject to customary mutual agreement.
“As a result of the refinancing, the temporary restrictions on the ability of the Group to pay dividends and undertake acquisitions will be lifted.”
Tim Stacey, Group chief executive, said: “We are working all hours focusing on what we can control to look after our people and our customers.
“I want to thank our customers for their patience given the ongoing disruption to our deliveries due to port congestion and raw material shortages, as well as apologise to those that have experienced delays.
“While the current environment is clearly unpredictable, our business model is resilient and we are well set for medium term growth.”
