DFS confident about the future

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Sofa specialist DFS Furniture said it has “excellent prospects” after reporting strong growth in sales and a recovery in profits.

The Doncaster-based firm said the significantly improved trading that began with the launch of its winter sale last December continued through to the end of the financial year on August 2.

The group said gross sales in the second half grew by 6.6 per cent, delivering a 2.8 per cent increase in gross sales to £827.0m for the year to August 2.

Adjusted earnings in the second half showed a “satisfactory increase” of 8.1 per cent, making up the majority of the shortfall reported in the first half.

Full year adjusted EBITDA came in at £81.4m, down from £84.6m last year, after adding back non-recurring exceptional legal and professional expenses of £2.4m.

DFS CEO Ian Filby said: “I am pleased to report continued momentum in our second half results.

“During the year we have made good progress in the implementation of our strategy, which seeks to build on DFS’s well-established strengths as one of the UK’s best-known brands, a major British manufacturer and the country’s leading retailer of upholstered furniture.”

He said that the group’s strategy is to broaden its appeal, enhance its service and make its products more accessible to customers.

The group has launched a number of aspirational brands through its partnerships with Sofa Workshop and Dwell. The firm wants to broaden its appeal to more upmarket shoppers who previously considered the brand to be too down market and promotions driven.

Following three new store openings at Aintree, Ipswich and Torquay during the first half, the group said it reached the significant milestone of 100 DFS stores in the UK and Ireland.

“We plan to continue our retail expansion at the rate of three to five new stores per year, and have three new UK stores at York, Ayr and Basingstoke scheduled to open in the early part of the current financial year. We also plan to launch our first trial of the DFS concept in Continental Europe with the opening of a new store at Cruquius in The Netherlands later in 2014,” said Mr Filby.