DFS has reported a further year of record results, with sales up 7.4% to £670.8m, and EBITDA up 4.9% to £86.0m.
According to the retailer's report for the year ending 27th July 2013, its strong cash generation has continued, with a year-end cash balance £38.0m (£27m in 2012), after £34.4m net expenditure on bond refinancing and dividends.
DFS chief executive officer, Ian Filby, says: “I am pleased to report another year of progress in which we again achieved record sales and profits, and improved our market share in a challenging marketplace. This performance underlines once more the growing strength of the DFS brand and the success of our strategy to broaden our appeal, enhance our service and make our products more accessible to customers than ever before, both through new store openings and our expanding multi-channel offer.
“The group achieved a 7.4% uplift in sales to £670.8m, continuing the strong trend in performance over the last 18 months. The 4.9% increase in EBITDA for the year to £86m was after a further £2.6m investment in expansion of the business, including new store pre-opening and website relaunch costs.
“We have continued to focus on ensuring that DFS offers something for everyone and addresses all sections of the upholstered furniture marketplace to enhance our position as market leader. We have been pleased with the positive response to the launch of our new, exclusive ranges of high quality sofas hand-crafted in the UK under the Country Living, House Beautiful and French Connection brands, which is strengthening our appeal to more aspirational consumers.
"The performance of our new stores, new products, innovative marketing and expanding multi-channel offer enables us to remain confident that DFS will continue to deliver long-term profitable growth as the UK market leader in upholstered furniture"
“We opened a total of eight new stores during the year, including a second store in the Republic of Ireland. This increased our portfolio to 97 DFS stores at the year-end, in line with our plans. We also continued to enhance our successful online offering, enabling us to provide a fully multi-channel customer experience.
“The group remains highly cash generative, with cash balances increasing to £38m (£27m in 2012) at the year-end despite net expenditure on bond refinancing and shareholder dividends totalling £34.4m during the period.
“The business has an efficient capital structure going forward, following the successful refinancing through a £310m bond issue in March 2013, enabling us both to invest the cash we generate in further development of the business and to return surplus cash to our stakeholders.
“Since the beginning of the current financial year we have opened new stores in Aintree and Ipswich, and launched a new website with improved functionality, designed in particular for the
growing number of customers who access our online channel through tablets and mobile phones.
“This year, the unusually hot summer weather resulted in a decline in footfall and order intake over that period. This will be reflected in our results for the first three months of the current year,
which traditionally make the smallest contribution of our four quarterly reporting periods to the full-year results.
“Important recent developments include signing a further long-term contract with a second major financial institution to provide a facility for our customers’ interest-free credit. This provides additional security of supply for this important part of the DFS offer to consumers and the two contracts now cover in excess of our total requirement.
“Our proven strategy and outstanding team of people are the key to DFS’ strong trading record and continued success. The performance of our new stores, new products, innovative marketing and expanding multi-channel offer enables us to remain confident that DFS will continue to deliver long-term profitable growth as the UK market leader in upholstered furniture.”
