26th Sep 2019 10:02
(Alliance News) - Sofa retailer DFS Furniture PLC held its annual dividend Thursday on warnings of a "subdued" start to the new financial year, despite a "good" full-year performance.
For the 48 weeks ended June, pretax profit narrowed 13% to GBP22.4 million from GBP25.8 million reported for the 52 weeks ended July 28, 2018. This was despite revenue rising 3.5% to GBP901.0 million from GBP870.5 million the period before.
Profit performance was hurt by costs rising to GBP456.5 million from GBP430.8 million the year prior.
In October, DFS announced it was changing the end of its financial year to June from July previously.
On a pro-forma basis, pretax profit - excluding brand amortisation - for the 52 weeks ended June widened 68% to GBP45.1 million from GBP26.9 million for the 52 weeks ended July 28, 2018. This was after revenue rose 14% to GBP1.29 billion from GBP1.13 million the year before.
Excluding one-off items, underlying pro-forma pretax profit widened 31% to GBP50.2 million from GBP38.3 million the year before.
"Our trading performance for the last financial year was good overall, as we continue to execute our new strategy to lead sofa retailing in the digital age," DFS Chief Executive Officer Tim Stacey said. "Like-for-like growth across all brands and all channels, especially online and in Sofology, has enabled us to grow our market share and we believe that our group is well positioned for the long term."
DFS proposed a 7.5 pence final dividend per share, unchanged on the year prior. This resulted in the full year payout also remaining flat at 11.2p. The firm left the dividend unchanged "in light of the political and economic backdrop and the intention to reduce gearing".
"Recent trading conditions have reflected the increasingly uncertain political and economic backdrop and we have seen reduced levels of footfall across our brands, which we attribute to lower levels of consumer confidence and housing transactions, the two key drivers of the upholstery market," Stacey added. "Although we have had some success in driving conversion to mitigate this trend, we note that over the first twelve weeks of financial year order intake levels have been subdued.
"Our financial performance in the year ahead will inevitably be dependent on broader political and economic developments and at this stage it is difficult to predict what will happen specifically within the upholstery market," Stacey continued. "However, we remain focused on those variables that we can control and on executing our strategy, which we believe puts us in a strong position in the market over the long-term."
DFS said it has promoted Non-Executive Director Alison Hutchinson to senior independent director. This move was ahead of current Senior Independent Director Luke Mayhew preparing to stand down from DFS at its annual general meeting in November.
Shares in DFS were 1.3% lower at 223.53 pence in London on Thursday.
By Ahren Lester; [email protected]
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