DFS reports strong H1 profits as sales surge

DFS has announced its interim results for the 26 weeks ended 27th December 2020.

The retailer achieved revenues of £572.6m (+17.3% YoY). Revenue excluding Sofa Workshop was up +18.7% YoY to £567.5m, driven by strong order intake in the period as a result of pent-up demand from the first lockdown, market share gains and a shift in consumer spending to the home. Online revenues were up 66.2% YoY.

Underlying pre-tax profit jumped up £59.9m to £76.5m. DFS’ order bank is currently over £65m higher in revenue terms YoY, with the £200m higher order bank at Christmas providing resilience through the H2 retail lockdown to date.

The group says that there is evidence that its market share increased by around +2%.

Strong progress (despite various operational challenges) included the roll-out of the Sofa Delivery Company, while new manufacturing investment is under consideration. Three new Sofology showrooms opened in H1 – and the FY21 target of 6-10 openings remains in place.

Group CEO Tim Stacey says: “This strong first half profit and cash flow performance is a true reflection of the supreme efforts put in by our teams right across the group since the start of the pandemic. I am hugely grateful to every colleague for their constant focus on the safety, health and wellbeing of all their colleagues and also our customers.

“Our business has proven to be resilient throughout the period despite showroom closures and a significant amount of external disruption in our supply chains. The investments we’ve made in our digital channels have generated exceptional revenue growth. Consequently our order bank remains well above normal levels and, subject to showrooms reopening by 12th April 2020, our central planning scenario is for an expected full year profit before tax outcome of approximately £105m, with further benefits to be realised in next year’s financial results.

“We’re committed to our strategy to lead sofa retailing in the digital age with our proven integrated retail model. We expect to see a good level of activity in the home market as Covid-19 restrictions ease and, having accelerated the execution of our strategy and grown our market share, we are well set for future growth.”

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