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DFS warns orders have slipped after strong previous half

DFS has warned that it has seen a drop in orders since the New Year as Brexit uncertainty deters shoppers.

‘Year on year order intake in the second half of the financial year to date has been lower than the first half. Assuming no further weakening of this environment, our profit expectations for the financial year remain unchanged,’ said Tim Stacey, DFS ceo.

In the 22 weeks to 30 December sales rose by 29.1% to £422.4m, as the DFS, Sofology, Dwell and Sofa Workshop brands all saw growth. Group pre-tax profits more than doubled to £14.1m.

Like for like sales rose by 6.6% across the group and online sales rose 22.6%.

‘We are pleased with the performance for the first five months of the financial year across the group, with all four of our brands achieving like-for-like revenue growth. The benefits of our investments in our online channels, delivery networks and the development of our brands help mitigate the impact of a market which we expect to remain particularly challenging in 2019 given the current political and economic uncertainty,’ Stacey said.

‘Gross profit margin for the group was diluted [from 59% to 58.7%] by the inclusion of five full months of Sofology trading compared to one month in the prior year, together with the growth in Sofa Workshop and Dwell. However, we saw a steady gross margin in the DFS brand with the benefit of improved foreign exchange rates offset by product cost pressure, while group synergy benefits and average order value increases contributed to Sofology’s growing gross margin.’

Sofology saw like for like sales rise 14.2% while Dwell and Sofa Workshop saw a total sales rose of 24.3%.