It is hard to predict the impact of recent political events on the furniture retail market, said DFS (DFS) chief executive Ian Filby in his results statement, but he added that the group has not seen "any weakening of demand to date". That didn't stop the sofa seller's shares falling 2 per cent on these numbers, as Mr Filby admitted the business was bracing for "additional cost pressures from foreign-exchange movements". According to analysts at UBS the pro-forma impact of sterling devaluation should be around £12m, although roughly two-thirds of this has been mitigated by changes to the supply chain, the cost base and sales mix.
Talking to the IC, Mr Filby said the company sources "a lot less" in Asia - and crucially in US dollars - than some of its rivals and that further actions on supplier pricing to be taken this year should bring the impact to earnings down. During the period, three new stores in the UK and Ireland helped push up gross sales and profit.
The company has scheduled a special dividend for next year, although management warned the payout will depend on the company's financial position at the time of half-year results in March 2017.
Analysts at UBS and Peel Hunt held their forecasts. UBS expects EPS of 23.4p for the year ending July 2017, compared with 23.5p in FY2016.
| DFS FURNITURE (DFS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 271p | MARKET VALUE: | £573m | |
| TOUCH: | 270-271p | 12-MONTH HIGH: | 352p | LOW: 177p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 118p* | NET DEBT: | 55% | |
| Year to 30 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012** | 568 | 13.6 | na | na |
| 2013** | 614 | 10.1 | na | na |
| 2014** | 657 | 3.6 | na | na |
| 2015 | 706 | 10.7 | 4.3 | 9.3 |
| 2016 | 756 | 64.5 | 28.3 | 11.0 |
| % change | +7 | +503 | +558 | +18 |
Ex-div: 8 Dec Payment: 28 Dec *Includes intangible assets of £491m, or 232p a share **Pre-IPO figures | ||||
