DFS sees sales jump
DFS has seen an underlying 7% increase in sales in the past year.
The chain says the increase allows for the purchase of Sofology and total sales were 14% higher in the year to 30 June. It says profits will be ‘slightly above’ £50m, compared with £38.3m in 2018 and in line with expectations.
‘We are particularly pleased that all group brands have recorded year-on-year like for like sales growth albeit, in part assisted by the weak comparator period in the prior year [28 July 2018]. Cash generation has also been solid in the financial period, leading as expected to a lower average closing monthly net debt over the last six months. Reported net debt at the end of June 2019 will however be higher than the end of July 2018 given normal trading seasonality.
‘We are pleased with the progress being made with our strategic transformation. In particular our omni-channel initiatives are performing well with strong online growth of 17%. The Sofology brand has continued to perform very well achieving strong like for like sales growth with profitability in line with our expectations and the brand is well positioned for the future.
‘Despite a solid trading performance, we remain mindful of the risk that the volatile political and economic backdrop may further impact on already low consumer confidence levels. Our progress in the near term will inevitably be somewhat dependent on this backdrop. In addition, as previously noted, the first half of our 2018/2019 financial year benefitted from additional demand from purchases deferred from earlier periods.
‘Whilst weak trading environments make it harder to achieve significant levels of revenue growth, our omni-channel consumer offer, showroom sales densities, scale of operations and portfolio of well-recognised brands provide some resilience. We also believe that we can continue to drive profit benefits and synergies from our previous capital investments and acquisitions.
‘We are executing our strategy of transforming our business to lead sofa retailing in the digital age. We believe the market will return to historical long-term growth rates in due course and that as clear market leader we are well-positioned to benefit, delivering strong levels of cash generation and attractive shareholder returns in the long term.’
It also announced that Mike Schmidt, interim cfo has been given the job on a permanent basis.