DFS H1 revenue slips to £544m, but market share up

Doncaster-based DFS Furniture plc reported that its revenue from continuing operations slipped 2.2% £544.5 million for 26 week period ended December 25, 2022, while profit before tax fell to £6.8 million from £22.8 million.

However, DFS reported a “record market share achieved with a c.2%pts increase from our FY22 position to 38%, extending our position as the clear market leader.”

DFS announced an interim dividend of 1.5p “reflecting an anticipated 4.5p total full year dividend, subject to H2 financial performance.”

DFS Furniture CEO Tim Stacey said: “I’m pleased to report that the group has extended its long track record of achieving market share gains in a challenging market to what are now record levels.

“We expect our profit for the year to be between £30m-£35m in line with external expectations.

The share gains have gone some way to alleviating the impact of the weaker market we have observed in 2022 overall.

“Those gains built throughout the period with the group delivering strong order intake growth in the second quarter. The order intake momentum has continued through the important winter sale period.

Profit margins have reduced over the last year due to a combination of significant cost increases and our commercial strategy to ensure that we continued to offer great value for customers in an environment where consumer discretionary spend was under pressure.

We have however improved our gross margins in the first half of this year from H2 of FY22 and further still in the second half to date through product innovation and selected retail price increases.

“Cost headwinds are reducing and in some cases reversing and we expect our upward gross margin trajectory to continue as we execute our margin build back plan.

At our capital markets day in March 2022 we set out our ambitions to grow revenues to £1.4bn and operate at an 8%+ PBT margin generating post tax free cash flows of 75%+.

“We continue to target that level of financial performance and have solid plans in place to deliver this.

Our disciplined approach to investment, data led innovation, entrepreneurial culture, scale advantages and strong operational execution will support a continuation of our long term trend of market share growth.”