Nearly three months of closed showrooms, manufacturing sites and distribution facilities pushed DFS (DFS) into a statutory loss for the year, with the retailer estimating a revenue loss of around £270m during its shutdown. DFS has been busy with its online custom, recording a 77 per cent year-on-year increase in online orders from the start of lockdown until 12 July across its core brand and nascent Sofology business. But it admits that most customers still prefer to visit stores in order to undertake that all-important “comfort test” before buying.
DFS is now concentrating on growing two brands. Having bought the more premium Sofa Workshop and the Dwell business out of administration in 2013 and 2014 respectively, DFS decided that it was unable to reverse the former brand’s decline and sold up in August. Dwell, meanwhile, is now selling its homeware products more directly to DFS customers. Around £16.6m in restructuring costs were linked to the two brands over the year.
DFS is expected to add up to ten Sofology stores as it takes advantage of a favourable rental environment. The group will also share its existing retail and logistics infrastructure to help support this growth and improved returns on capital.
Broker Peel Hunt forecasts full-year 2021 adjusted pre-tax profits and earnings per share of £94m and 29.5p, respectively, falling to £50m and 15.7p in 2022.
| DFS FURNITURE (DFS) | ||||
| ORD PRICE: | 173p | MARKET VALUE: | £ 442m | |
| TOUCH: | 172.6-173p | 12-MONTH HIGH: | 302p | LOW: 102p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 79p* | NET DEBT: | £694m | |
| Year to 28 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 | 0.90 | 22.4 | 8.6 | 11.2 |
| 2020 | 0.73 | -81.2 | -31.4 | nil |
| % change | -20 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £533m, or 209p a share | ||||
