Shares of Doncaster-based DFS Furniture rose about 9% after it said its revenue climbed 4.3% to £396.1 million in the half year to January 27, 2018, “reflecting increasing scale and relative market leadership following the recent acquisition of Sofology.”

DFS also said it expects modest growth in underlying earnings before acquisitions and generation of strong cashflow over the 2018 financial year.

Nonetheless, DFS said first-half profit before tax fell from £16.7 million to £7 million “stated after £4.6 million of non-underlying costs and the impacts of acquired businesses.”

DFS CEO Ian Filby said: “We have seen a strengthening trading performance across the first half of the financial year and through February into March.  

“We therefore remain confident that, despite the current challenging market conditions, the group will deliver modest growth in EBITDA and generate strong cashflow across this financial year, in-line with our expectations.”

Revenue before acquisitions fell 3.5% to £366.5 million.

In his outlook, CEO Filby said: “We have seen positive momentum in our trading across the first half of the financial year and the start of the second half despite a market that is continuing to be challenging, and remains susceptible to falls in consumer confidence. 

“We have accelerated our strategic development over the period, notably completing the acquisitions of Sofology as well as the Multiyork assets.

“Our online channels, together with our developing Dwell business, have once again grown strongly and we will continue our focus on making strong operational progress across all parts of our growth strategy.

 “The financial returns of strategic investments previously made are visibly feeding through into our results and we continue to expect benefits from the annualisation of product margin initiatives and operating cost efficiencies over the second half of the financial year.

“Accordingly, our expectations for profits remain unchanged, and we continue to expect modest growth in underlying EBITDA before acquisitions and generation of strong cashflow over the 2018 financial year.”