11th Jul 2019 08:11
(Alliance News) - DFS Furniture PLC warned Thursday that business conditions in the UK remain weak, though sales growth for the sofa seller has remained solid.
DFS also has made interim Chief Financial Officer Mike Schmidt's role permanent, effective immediately.
The "volatile" economic and political backdrop in the UK could lead to already-poor consumer confidence deteriorating further, DFS said, with progress in the near term "somewhat dependent on this backdrop".
"Whilst weak trading environments make it harder to achieve significant levels of revenue growth, our omnichannel consumer offer, showroom sales densities, scale of operations and portfolio of well-recognised brands provide some resilience," said DFS.
"We also believe we can continue to drive profit benefits and synergies from our previous capital investments and acquisitions."
For the 52 weeks to June 30, DFS achieved 7% underlying gross sales growth on the year before, with like-for-like growth registered in all brands. Online sales have climbed by 17%.
DFS has guided for underlying pretax profit to be "slightly above" GBP50 million, from GBP38.3 million a year prior, meaning a rise of at least 30%.
"Cash generation has also been solid in the financial period, leading as expected to a lower average closing monthly net debt over the last six months. Reported net debt at the end of June will, however, be higher than the end of July 2018 given normal trading seasonality," added DFS.
DFS shares were 3.8% lower on Thursday at a price of 228.50 pence each.
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