DFS profit slumps 48% amid ‘exceptional downturn’

Doncaster-based DFS Furniture said its revenue rose 14.1% to £870.5 million in the year to July 28 but reported profit before tax slumped 48.5% to £25.8 million amid an “exceptional downturn” in its market in the fourth quarter.

DFS has proposed a final dividend of 7.5p per share, maintaining total ordinary dividend at 11.2p for the year.

DFS CEO Ian Filby said: “We have continued working to develop the group’s strategic and market position; however financial results for the year reflected the exceptional downturn in market demand we saw in the fourth quarter. 

“We are pleased to note that the market has recovered since the start of the new financial year, with the group seeing like-for-like order growth across all brands over the first nine weeks. 

“We believe, however, we are benefiting from deferred purchases in the prior financial year and overall we expect the market to remain subdued into 2019, constrained by political risk and weak consumer sentiment. 

“Notwithstanding this we believe the group is well positioned to become stronger in this current environment, boosted by investment and acquisition benefits, and we have excellent prospects for profitable growth and attractive cash flow generation over the longer term.”

In his outlook, DFS chairman Ian Durant said: “The group continues to face a particularly uncertain UK consumer market in the run up to Brexit in March next year …

“The board considers that the group can look through short term market uncertainties and remain committed to the growth of the group with some confidence.”