DFS sees a big surge in orders as people celebrate lockdown ending

Sofa specialist DFS Furniture has announced strong trading with orders in its fourth quarter up 92 per cent compared with the same period in 2019 before the pandemic struck.

People have lavished money on their living rooms during lockdown periods

The Doncaster-based firm has benefited as more people lavished money on their living rooms during lockdown periods when they were forced to stay at home.

The group said the surge in orders was driven by customers waiting for showrooms to reopen post lockdown and increased consumer spending on their homes, reflecting both the growth in remote working and also a reduced leisure and travel spend.

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Online order intake during the third quarter, when almost all showrooms were closed, leapt 223 per cent on the previous year.

The group is continuing to steal market share with gains of 2 per cent in a growing upholstery market.

DFS said it is now on course to achieve 2021 underlying pre0tax profits of at least £105m and it intends to recommend a final dividend of 7.5p, underpinned by robust cash generation.

However, the firm said that revenue growth has been constrained by sector-wide pressures on supply chains from raw materials availability, container shipping delays (including the effects of disruption in the Suez Canal), and Covid-19 disruption of factory production.

DFS Furniture's chief executive, Tim Stacey, said: "This performance once again reflects both the underlying resilience of the group and the tremendous support from our colleagues who have worked with huge dedication and commitment throughout the pandemic.

"Our aim is to lead sofa retailing in the digital age by building a truly integrated retail model that allows us to drive market share gains ahead of the competition."

Looking ahead, he said the group will continue to invest in key strategic initiatives such as its digital channels, showrooms and its Sofa Delivery Company final mile logistics capability, along with new investment in UK manufacturing and capacity and expansion into other home categories.

"Despite short-term supply chain challenges and a macro environment that's hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner," he added.

"Given our overall financial position and outlook it is our intention to recommend a full year dividend of 7.5p in September."