This is why DFS plans to have opened around 70 Sofology showrooms by the end of 2026

DFS, which has announced its interim results for the 26 week period ended 26 December 2021, said its business was more than 15% larger than it had been before the pandemic.

In a statement, DFS said: "We intend to continue the accelerated rollout of the Sofology showroom estate. Sofology now operates 54 showrooms, following the opening of six new showrooms in the first half in Glasgow, Orpington, Poole, Ipswich, New Malden and Birmingham.

"We also have plans to open one further new showroom in Bristol before the end of the financial year. The new showrooms are powered entirely by renewable electricity and we are investing in latest retail technologies to manage our energy consumption, reduce unnecessary waste and lessen the showroom's impact on the environment.

"We continue to see the opportunity to grow the Sofology brand by in the region of four showrooms per year (each delivering c.£4m of annual revenue) to c.70 showrooms by FY26, therefore giving total annual revenues of c.£300m."

Sofology has increased its showroom base from 42 showrooms at the end of 2019 to 54 showrooms by the first half of 2022, with each new showroom typically driving more than £4m of incremental annual revenue.

The statement added: "From November 2020 onwards, the DFS brand has also been accelerating plans to refurbish DFS showrooms, focusing on its 50 largest showrooms initially.

DFS said it had overcome operational pressure to deliver reported PBT (profit before tax) in the half year of £21.6m, an increase of 35.8% on the pre-pandemic two year comparator of £15.9m.

DFS said this had been achieved despite Covid-related supply chain challenges impacting net margin and operating costs by around £21m in the half year.

The company said it had begun consultation with staff on the potential closure of its Netherlands operation, which would allow for increased focus on higher returning activities.

DFS said the ongoing development of its home proposition and internal manufacturing capabilities created an opportunity for future profit growth.

Tim Stacey, Group Chief Executive Officer said: "We delivered a strong performance in the first half of the year, with market share gains and strong revenue growth on the pre-pandemic comparators. This was in spite of significant logistics and supply chain challenges and once again I would like to thank all of our colleagues across the group for their hard work and resilience in achieving this result.

"Trading across H2 (the second half) to date has started strongly, again emphasising the increased scale of the business and demonstrating the success of our approach to mitigating the impact of inflationary pressures on our profit expectations.

"Our expectations for total profits across FY22 and FY23 remain unchanged, with our confidence supported by our significant order bank and strong trading in H2. We narrow our scenario range for FY22 to recognise that manufacturing and logistics disruption may affect H2 throughput, however our resilient order bank should mean any such in-year disruption will cause profits to shift into the next FY23 reporting period.

"We are therefore pleased to be able to reward shareholders with a special capital return that will deliver a total return to shareholders of approximately £80m over a twelve month period.

"Looking forward, whilst the macro-economic environment remains uncertain, we believe that our scale, brand strength and integrated retail strategy will continue to drive market share gains ahead of the competition. We will continue to invest in our digital platforms, our showrooms, our delivery networks and our UK manufacturing capacity, as well as expansion into other home categories which we believe will continue to drive long term growth and profitability."