DFS has moved to solidify its balance sheet by cancelling its final dividend and halting marketing on non-upholstery sectors, such as beds.
It suffered a £1.7m loss in the 53 weeks to 30 June as sales dropped by £101.8m (9.3%).
Orders were down 1.8% in the period, delays to shipping continued to delay deliveries pushing sales into the 2025 financial year and it was hit by higher IFC costs.
‘Despite the challenges that the business has seen, we are optimistic for the future and see signs that market growth could soon return. We expect recent improvements in housing transaction data and strengthening consumer balance sheets to lead to increased upholstery market demand across the FY25 financial year. In addition, thanks to the success we have had growing our gross margin and improving our operational efficiency we expect to deliver profits in line with market consensus, weighted to the second half,’ says Tim Stacey, DFS group ceo.
‘Inevitably when performance is under pressure, hard choices have to be made on which strategic options to prioritise and this has meant that we have temporarily deprioritised our focus on growing our wider home offering. The board is determined to achieve the right balance between justifiable caution given the short-term environment and the need to ensure that the business continues to invest and improve for the future,’ says Steve Johnson, DFS chairman.
The final dividend has been cancelled. ‘Given the challenging trading conditions, the board concluded that it would not be appropriate to propose a final dividend. Whilst this may be disappointing for some of our shareholders, we believe it is in the best long-term interests of the group,’ says Johnson.
