4th Oct 2018 08:51
LONDON (Alliance News) - DFS Furniture PLC on Thursday said sustained market slowdown in the fourth quarter led to a sharp drop in annual profit and overall market is expected to remain subdued in 2019 due to political risk and weak consumer sentiment.
"Our financial results for the year reflect a solid trading performance over the first three quarters, and the impact of the sustained market slowdown we saw in the fourth quarter. This sudden change in market environment was caused by the combination of very hot weather and the distraction caused by major public events," said outgoing Chief Executive Ian Filby.
"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," Filby added.
DFS Furniture in May said Filby will retire as chief executive at the end of October and will replaced by Chief Operating Officer Tim Stacey.
The furniture retailer's pretax profit reduced by half to GBP25.8 million in the 52 weeks ended July 28 from GBP50.1 million reported for the same period a year earlier.
Selling and distribution costs came in higher year-on-year at GBP380.6 million compared to GBP328.0 million, while administrative expenses grew to GBP60.1 million from GBP38.1 million.
Meanwhile, sales improved to GBP1.13 billion from GBP990.8 million the prior year, resulting in revenue for the period up 14% to GBP870.5 million from GBP762.7 million.
However, revenue excluding this acquisitions was down 2.0% to GBP747.7 million from GBP762.7 million. At the end of November last year, DFS Furniture bought sofa retailer Sofology for GBP25 million.
DFS Furniture declared a final dividend of 7.5 pence per share, maintaining total dividend at 11.2p.
The stock was down 0.3% on Thursday morning at 209.40 pence per share.
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