17th Jul 2025 12:59
(Alliance News) - DFS Furniture PLC on Thursday said it anticipates reporting profit at the top end of its guidance range for its most recent financial year, driven by growth in order intake and cost mitigation efforts.
The Doncaster, England-based furniture retailer said it expects underlying pretax profit before brand amortisation for the year that ended June 29 to be "slightly above" the top end of a GBP25 million to GBP29 million guidance range.
This would be almost tripled from GBP10.5 million the year before, as a result of the firm's focus on "disciplined cost management" and efforts to improve its gross margins, DFS said.
Order intake was 10% higher during the year, "supported by volume and average order value growth", the company said. Both retail brands "performed well", with DFS orders up 8.7% and Sofology orders up 16%, "due to successful implementation of our growth initiatives".
Gross sales, which are recognised on the delivery of orders to customers, grew 5.8% from a year prior, which was lower than the level of order intake growth due to a shift in customer orders to ranges with longer lead times. In addition, financial 2024 was a 53-week trading period, while financial 2025 had 52 weeks.
"We are pleased to report that we expect profit for the full year to be slightly above the top end of our guidance. Our excellent first half performance set the foundation for our success, with strong trading through the rest of the year with both our DFS and Sofology brands outperforming the market," said Chief Executive Officer Tim Stacey.
"We have continued to maintain a strong focus on disciplined cost management and improved our gross margins, leading to significant year on year profit growth. In addition, cash flow was healthy and our balance sheet is strengthening as we progress towards our target leverage range."
Net bank debt excluding capitalised leases has reduced to around GBP107 million from GBP165 million at the end of financial 2024. Leverage was lower at 1.4x against 2.5x, as DFS targets a return to a leverage range of 0.5x to 1.0x.
DFS will release its full-year results on September 25.
CEO Stacey continued: "Whilst the macro environment remains challenging, our business is in great shape...Looking forward, we are confident that the group is well positioned to drive attractive returns for shareholders as the market recovers and we remain focused on delivering our medium term ambition of GBP1.4bn revenue and 8% [pretax profit] margins."
Shares in DFS Furniture were up 6.4% at 175.63 pence in London on Thursday afternoon. The stock has risen 51% over the past year.
By Emily Parsons, Alliance News reporter
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