DFS confident on future
YORKSHIRE furniture manufacturer and retailer DFS said today it has “excellent” prospects for long term profitable growth.
For the 13 weeks ended October 26, the Doncaster-headquartered company saw sales of £142.5m (2012: £144.0m) while EBITDA came in at £7.2m (2012: £10.2m).
During the first quarter two new stores opened, Aintree in Liverpool and Ipswich, and a further new store will launch in Torquay before Christmas, taking the company to the milestone of 100 DFS stores in the UK and Ireland.
The company also agreed a new brand partnership with Sofa Workshop to “further increase appeal to aspirational consumers.”
DFS chief executive Ian Filby said: “Sales in the quarter were £142.5m (2012: £144m), whilst EBITDA was £3m lower at £7.2m, reflecting the unusually hot summer weather as mentioned in our annual report in October.
“The first three months of the year always make the smallest contribution of our four quarters to full year sales and profit.
“Cash generation remained very strong, with underlying cash flow in the quarter similar to 2012. Cash balances at the period end were £20m (2012: £42.2 million) following payment of a £20m dividend to our shareholders, and £9.8m of interest to bondholders.
“The dividend underlines our confidence in the long-term prospects of the group, and provides a further demonstration of DFS’s consistent ability to return surplus cash to stakeholders.”
He added: “Our brand partnership with Sofa Workshop will further broaden our customer appeal following our investment in this well-established premium brand. This builds on the success we have already achieved through the launch of exclusive ranges of high quality sofas handcrafted in the UK under the Country Living, House Beautiful and French Connection brands.
“Importantly we have now signed a further long-term contract with a second major financial institution to provide a facility for our customers’ interest-free credit. This provides additional security of supply for this important part of the DFS offer to consumers and the two contracts now cover in excess of our total requirement.
“Our first quarter results demonstrate once again DFS’s ability to deliver consistently excellent cash returns despite any short term fluctuations in trading. Whilst the marketplace remains challenging, and the softness in order intake has continued into the autumn, our most important trading period is still to come and we are better placed than ever before to maximise DFS’s market share.
“We remain confident that our proven strategy will deliver continued outperformance and that DFS enjoys excellent prospects for long term profitable growth as the UK market leader in upholstered furniture.”
