Join our community of smart investors

Comfy first year for DFS

Sofa specialist DFS has sealed its first year as a public company with a pleasing set of maiden full-year results.
October 9, 2015

Most newly listed stocks underperform the market, but so far DFS Furniture (DFS) has proved an exception. The shares are up more than a fifth from the IPO price of 255p in March, and these maiden annual results go a long way towards justifying that performance. Most eye-catching was the 9.3p dividend, which included an unexpected interim dividend of 3.1p a share. Chief executive Ian Filby said the company was "extremely cash-generative in its own right" and the emphasis will remain on "great returns for shareholders". The dividend is twice covered by underlying earnings.

IC TIP: Buy at 313p

Gross sales rose 7 per cent in the year to 1 August, driven by a mix of like-for-like sales - up 4.7 per cent - and strong contributions from the Dwell and Sofa Workshop brands, which were acquired in the previous year. Gross margins dipped by 120 basis points due to high levels of investment, but this was offset by other cost-saving initiatives, leaving adjusted cash profit margins 10 basis points higher at 12.6 per cent. The upshot was an 8.4 per cent improvement in cash profits to £89.2m.

To continue reading...
REGISTER FOR FREE TODAY
  • Read 3 articles for free each month
  • Educational articles and topical investment guides
  • In-depth podcast episodes by our writers and industry professionals
  • Interactive live webinars on investment themes that matter
Have an account? Sign in