DFS Furniture revenue tops £1bn for first time

Doncaster-based DFS Furniture plc said on Thursday its revenue exceeded £1 billion for the first time in the year ended June 27, 2021, despite problems in its supply chain and materials availability, including the effects of disruption in the Suez Canal.

Revenue reached £1.067 billion, up from £724.5 million in the last financial year and £996.2 million two years ago.

Reported profit before tax was £99.2 million compared to a loss of £81.2 million in the previous year and a £43.6 million profit two years ago..

DFS said its dividend will be reinstated with a proposed final payment of 7.5p per share.

DFS said: “Our revenue growth in FY21 was however constrained by sector-wide pressures on supply chains from raw materials availability, container shipping delays (including the effects of disruption in the Suez Canal) and Covid-19 disruption of factory production, particularly in the final quarter of the year.

“Consequently, the high demand experienced in the second half and in the new financial year to date has resulted in an order bank at the end of the year even greater than the elevated order bank that we started with, providing resilience for FY22.

On current trading, DFS said: “As detailed in our year end trading statement, strong customer demand in the final quarter of FY21 was already expected to underpin revenues and profits in the first half of FY22.

“Order intake has also remained strong in the current financial year to date, well ahead of our previous scenario of +7% growth on FY19, resulting in an order bank that continues to grow and which in absolute terms is very significantly ahead of normal levels. 

“This order intake provides significant resilience, and confidence in our outlook. 

“However the constraining factor on our reported short-term financial performance will be our pace of conversion of the order bank, which depends on both our supplier partner manufacturing capacity and also the capacity of our proprietary logistics operations. 

“We believe the group is well placed to achieve the medium scenario of our range of FY22 profit outcomes identified back in June.”

DFS CEO Tim Stacey said: “Despite numerous operational challenges during the pandemic, I’m proud that we have remained focused on our strategic agenda to lead sofa retailing in the digital age and are on track to achieve the incremental £40m of profit benefits set out in 2018.

“We also see further growth opportunities into the medium term derived from extending the reach of our retail brands and optimising our operating platforms.

“As we enter a new financial year, the group is very well positioned to build on its market leadership position in sofa retailing and to target further growth as we invest to strengthen our business platforms and extend our retail proposition into adjacent product categories.”