LONDON - DFS Furniture plc, a leading retailer of living room and upholstered furniture in the UK, has announced a positive trading update for the 26-week period ending December 29, 2024. The company reports an anticipated half-year profit before tax (PBT) of approximately £16-17 million, marking a significant increase from the previous year.
The growth in profits is attributed to a combination of increased market share, reduced operating costs, and improved gross margins. Despite a challenging market environment, DFS experienced a 10.1% year-over-year rise in order intake. The company's Sofology brand continued its upward trajectory with a notable 19.1% increase in order intake year-over-year.
Gross delivered sales are expected to rise by 1.4% compared to the same period last year, with the order bank closing higher year-over-year. This has been partly driven by ongoing shipping delays and a strengthening of order intake throughout the period. The company has also successfully managed to lower its net bank debt to £117 million, improving leverage to 1.7 times, down from 2.5 times at the end of the previous financial year.
Looking ahead, DFS remains cautious about the second half of the year due to uncertainties surrounding UK economic performance and the potential impact of increased operational costs. These include rises in national insurance contributions, the national living wage, and higher-than-anticipated interest rates. However, the Group is still expecting full-year profit and cash flow growth, with FY25 PBT projected to align with the current consensus of £22.7 million.
Tim Stacey, Group Chief Executive, commented on the results, stating that despite subdued market conditions, the company's strategic initiatives have strengthened its market leadership and financial performance. He expressed cautious optimism in the face of inflationary pressures and a less positive market outlook for 2025.
DFS Furniture is set to announce its interim results for the period ending December 29, 2024, on March 13, 2025. The information reported is based on a press release statement from DFS Furniture plc.
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