DFS (DFS) has observed a recent slowdown in footfall across all of its brands, which the furniture business attributes to reduced levels of consumer confidence and housing transactions – these are “the two key drivers of the upholstery market”, DFS says. Over the first 12 weeks of its current financial year, order intake levels have been subdued.
These trends go beyond the past three months, however, and DFS has battled them with some success. It achieved like-for-like growth across its brands and channels, highlighting particularly strong performances online and at Sofology, the sofa business it acquired in 2017. Its manufacturing facilities, which had previously only produced DFS-branded items, is now making a limited number of Sofology products – this, the company says, is helping DFS to grow its margin and improve quality and lead times.
DFS has also resolved supplier lead time issues and technical disruption at the Felixstowe port experienced in the summer of 2018, which had weighed on first-half deliveries. Revenue growth was bolstered over the period by the unwinding of these deliveries.
House broker Peel Hunt forecasts full-year 2020 pre-tax profits of £46m and earnings per share of 17.1p, rising to £50.5m and 18.8p in FY2021.
| DFS (DFS) | ||||
| ORD PRICE: | 223p | MARKET VALUE: | £473m | |
| TOUCH: | 223-226p | 12-MONTH HIGH: | 259p | LOW: 178p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 70% | |
| Year to 30 Jun** | Gross sales (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.71 | 10.7 | 4.3 | 9.3 |
| 2016 | 0.98 | 64.5 | 28.3 | 11.0 |
| 2017 | 0.99 | 50.1 | 18.7 | 11.2 |
| 2018 | 1.13 | 25.8 | 8.9 | 11.2 |
| 2019† | 1.17 | 22.4 | 8.6 | 11.2 |
| % change | +4 | -13 | -3 | - |
| Ex-div: | 05 Dec | |||
| Payment: | 27 Dec | |||
| *Includes intangible assets of £539m, or 254p a share **Previously year to 28 July †48-week period | ||||
