25th Sep 2024 11:15
(Alliance News) - DFS Furniture PLC on Wednesday said it is seeing "increasing reasons to be optimistic" after two years of revenue decline sent the retailer into loss.
The Doncaster, England-based living room and upholstered furniture store chain swung to a pretax loss of GBP1.7 million in the financial year that ended June 30 from a profit of GBP29.7 million the year before, as revenue fell by 9.3% to GBP987.1 million from GBP1.09 billion.
Revenue had fallen by 5.2% in financial 2023 from GBP1.15 billion in financial 2022, when DFS had benefited from pandemic-related buying by homeowners.
Restructuring costs required to make reductions in annual spending was part of the reason for the swing to loss. These totalled GBP6.5 million in the recent year, out of GBP10.8 million in non-underlying costs in total. On an underlying basis, DFS recorded a pretax profit of GBP9.1 million, down from GBP29.2 million in financial 2023.
DFS said it reduced its operating costs and cost of goods by GBP27.5 million in the recent year and is on track to deliver at least GBP50 million in annualised savings by financial 2026.
Even so, DFS decided against paying a final dividend, saying the 1.1 pence interim dividend it already paid had assumed a better full-year outcome. Without a final dividend, the full-year payout for financial 2024 was 1.1p, down from 4.5p in financial 2023.
Looking ahead, DFS said trading in financial 2025 so far is in line with expectations, with annual growth in order intake. It expects profit to grow in line with market consensus for GBP23.2 million in underlying profit before tax and brand amortisation.
"It is clear that the upholstery market has a long road to recovery given the 20% decline on pre-pandemic levels that we have seen," said Chief Executive Officer Tim Stacey. "Despite the challenges we have faced, we remain confident that the business is well positioned to capitalise on market recovery."
DFS shares were up 1.2% to 116.42 pence in London on Wednesday morning.
By Tom Waite, Alliance News editor
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