The vast majority of first-half numbers from furniture retailer DFS (DFS) had been pre-announced, so there were few surprises left in the official report. As expected, the group reported a 4.4 per cent improvement in like-for-like sales and a 12.3 per cent rise in cash profits to £31m. Two new stores opened in the UK and Republic of Ireland during the period, as did a second store in the Alexandrium shopping mall in Rotterdam last September. Chief executive Ian Filby said a third store in the Netherlands is already in the works.
Although finance director Bill Barnes is due to leave the company at the end of the current financial year, to be succeeded by commercial financial director Nicola Bancroft, he's focusing on bringing the group's leverage down to a more manageable level. If net debt falls below 1.5 times cash profits by the end of the year, there might be enough surplus cash for a special dividend. However, Mr Barnes emphasised that the board would have to decide what the best use for spare cash is at that time.
Analysts at Numis expect pre-tax profits of £62.5m and EPS of 23.2p in 2016, compared with £50.2m and 18.5p in 2015.
Click here to watch our site visit at the DFS store on Tottenham Court Road.
| DFS FURNITURE (DFS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 311p | MARKET VALUE: | £662m | |
| TOUCH: | 310-315p | 12-MONTH HIGH: | 352p | LOW: 252p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 106p* | NET DEBT: | 70% | |
| Half-year to 30 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 333 | -14.4 | -46.2 | 3.1 |
| 2016 | 356 | 16.2 | 10.6 | 3.5 |
| % change | +7 | - | - | +13 |
Ex-div: 2 Jun Payment: 22 Jun *Includes intangible assets of £490m, or 230p a share | ||||
