11th Aug 2016 08:19
LONDON (Alliance News) - DFS Furniture PLC on Thursday said it expects to deliver a record performance for its full financial year and pay a higher dividend, after achieving good growth in revenue.
Shares in DFS were trading up 9.4% at 245.00 pence on Thursday morning following the announcement, making it the best performer in the FTSE 250. Earlier, the stock hit a high of 255.99p.
The furniture retailer said revenue in the year ended July 30 grew by 7% year-on-year, and in light of this expects full-year results to be at the upper end of market expectations.
DFS attributed store expansion, development of the omnichannel offering, retail space conversion and enhancement of its product ranges as reasons for revenue growth. Its subsidiaries Sofa Workshop and Dwell added 1% to overall growth, DFS said.
DFS added that it anticipates announcing a progressive final dividend in line with guidance of an overall payout for the whole year of 45% to 50% of post-tax profit. DFS will announce this with its full annual results on October 6.
"The board recognises that, following the EU referendum, retailing of furniture in the UK faces an increased risk of a market slowdown with additional cost pressures from foreign exchange movements, whilst it is likely that the retail environment will remain intensely competitive," DFS said in a statement, although it noted that it has not yet seen any weakening of demand in the six weeks following the Brexit vote.
"Overall the group remains very well positioned to mitigate economic headwinds with resilient features in its operating model giving it the potential to achieve continued growth in its share of the UK retail furniture market were such adverse conditions to arise and persist," DFS added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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