The UK retail sector has been under pressure for some time, made worse by Brexit-induced fears and sweltering weather. It's perhaps unsurprising, then, that Britons have had other things on their minds than buying sofas, in turn giving DFS Furniture (DFS) a rather challenging year. Adjusted cash profits contracted 7.6 per cent to £76.1m, falling slightly short of brokerage Peel Hunt's forecast, on sales which also dropped 2 per cent excluding acquisitions. Online fared a bit better, with sales up 15.1 per cent.
In the nine weeks since the July year-end, things have seemingly eased up. All brands reported better sales, although chief executive Ian Filby warned recent growth could be the result of pent-up demand following a quieter summer. What's more, he says, the wider retail market will remain subdued going into 2019.
Mr Filby is retiring at the end of the month. His successor, Tim Stacey, intends to stick to the growth strategy laid out at IPO but wants to focus on growing the group's 'omnichannel' model, as well as squeezing efficiencies and cost savings out of the Sofology, Dwell and Sofa Workshop acquisitions.
Brokerage Peel Hunt forecasts adjusted pre-tax profits of £50.6m, giving EPS of 18.6p for the year ending July 2019, rising to £55..9m and 20.8p in FY2020.
| DFS FURNITURE (DFS) | ||||
| ORD PRICE: | 203p | MARKET VALUE: | £429m | |
| TOUCH: | 202-205p | 12-MONTH HIGH: | 250p | LOW: 170p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 63% | |
| Year to 28 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014** | 0.66 | 3.6 | na | na |
| 2015 | 0.71 | 10.7 | 4.30 | 9.30 |
| 2016 | 0.98 | 64.5 | 28.3 | 11.0 |
| 2017 | 0.99 | 50.1 | 18.7 | 11.2 |
| 2018 | 1.13 | 25.8 | 8.90 | 11.2 |
| % change | +14 | -49 | -52 | |
| Ex-div: | 6 Dec | |||
| Payment: | 27 Dec | |||
| *Includes intangible assets of £537m, or 254p a share **Pre-IPO figures | ||||
