So far so good for DFS

​The Doncaster-based furniture retailer said it expects the benign market conditions to provide a supportive environment for the furniture sector over the coming months.

​The group’s chief executive Ian Filby said: “​We believe that the group is well positioned relative to its competitors and we have confidence that the business is in a strong position to sustain its track record of gross sales growth and furniture market share capture in 2015/16, albeit our performance will now be measured against the strong comparators of the financial year under review.

​“The business enjoys excellent prospects to deliver long-term profitable growth, strong cash generation and a progressive dividend policy as one of the UK’s best-known brands, a major British manufacturer and the country’s leading retailer of upholstered furniture.”

In its first set of annual results since returning to the stock market in March, DFS posted an 8.4 per cent increase in underlying earnings to £89.2m for the year to August 1 after total sales rose seven per cent.

The ​firm said sales growth slowed slightly in the final six months as it came up against strong comparatives from a year earlier.

But it said there was strong demand for “big ticket” items, spurred on by increasing numbers of house moves and as consumers have been boosted by cheap credit and low inflation.

Sales have also been helped by new store openings as DFS added another six in the UK and Ireland, while also growing its Dwell and Sofa Workshop brands.

On a bottom line basis, pre-tax profits trebled to £10.7​m from £3.6​m a year earlier.

Chairman Richard Baker said there ​a​re “still substantial further potential opportunities” as it looks to expand further in the UK and the Netherlands, while also rolling out smaller stores.

The group added there was strong potential to keep growing as the furniture market remains around 20​ per cent​ below its peak before the financial crisis.

DFS​ ​was valued at over £540​m when it floated in the spring and shares have since risen by more than a fifth.

Shares ​rose ​three per cent​ after the annual figures.

Analysts at Jefferies said the results “reassure DFS can deliver growth on several fronts”.

DFS said orders of its exclusive branded ranges leapt by 75​ per cent​ as its new luxury leather ranges under the Iconica brand have proved popular.

Online sales rose 17​ per cent​ over the year.

DFS was founded by Lord Kirkham from a single store in Doncaster in 1969.

The group was listed on the London market between 1993 and 2004 before Lord Kirkham took it back into private hands.

It was then sold to private equity business Advent International for £500​m in 2010.

The firm sold a 38​ per cent​ chunk of the business to new investors in March, raising £98​m​, which it ​is using to pay off debt and secure cheaper financing.

The majority of the retailer is still owned by Advent International, while its directors hold a 3.2​ per cent​ stake.