DFS sales and profits surge as it buys Spanish business to target expats
DFS has reported a surge in full-year revenues and profits as it buys a Spanish business to target the British expat community.
• Pre-tax profits jump to £10.7m as sales surge 7%
• The retailer has secured DFS trademark in Spain as it targets 800,000 expats
• DFS believes it has grabbed a larger share of the ‘aspirational customer segment’
The furniture retailer reveals pre-tax profits jumped to £10.7m for the year ending August 1, compared to a 53-week period a year ago.
Adjusted EBITDA increased 8.4% to £89.2m during the period, while gross sales jumped 7% to £913.1m.
DFS chairman Richard Baker believes there are “substantial opportunities” for DFS to build on the strong performance both in the UK and international markets.
On October 1 DFS acquired a “well-regarded” Spanish business branded ‘DFS Spain’, which has sold the expatriate community furniture from a single 5,000 sq ft store on the south coast of Spain for over a decade.
The UK furniture giant has also secured the registered DFS trademark in Spain, which will allow it to target DFS advertising to expats.
DFS says it has “no plans” to open more stores in Spain, but will use the acquisition to drive online sales among the 800,000 British expats currently living in Spain.
DFS’ trial store in Cruquius in the Netherlands “continues to perform encouragingly” and has provided the retailer the “confidence” to continue its international trial by opening more stores and increasing marketing spend.
DFS opened another store in the Netherlands in September at the Alexandrium shopping centre, and has plans for one more store in the country during the current financial year.
The furniture specialist is also pursuing a more “aspirational” customer through its Dwell and Sofa Workshop brands and selling exclusive branded products such as French Connection.
Orders for exclusive branded ranges grew by 75% in the year, while DFS-commissioned surveys found DFS has grown its presence with the ‘aspirational customer segment’ from 18% to 23%.
DFS chief executive said: “The group delivered a good overall performance in the full year to 2015, outperforming the broader furniture market.
“Furthermore we have made continuing progress across all strategic initiatives, giving me confidence that we will continue to deliver on our growth targets. The dividend we have recommended is a clear expression of our belief that we will continue to deliver both attractive earnings growth and cash returns for shareholders in the future.”
DFS has declared the payment of an interim dividend of 3.1p per share and recommended to shareholders a final dividend of 6.2p per share.