DFS has posted its HY results today ( to 30th January 2016), proclaiming "record results". Group gross were sales up 7% to £461.3m, with EBITDA up 12.3% to £31m, while cash flow was up 7.1%, at £37.7m. The business has remained highly cash generative, allowing it to pursue the dividend policy it set out at the time of its IPO.
DFS chairman Richard Baker comments: "These record results confirm the success of our strategy and the quality of the DFS team at every level. The creation of the executive committee further strengthens our already strong operating management, while our CFO succession ensures continuity in this vital role. Our unique, flexible business model combines vertical integration, market-leading scale and omnichannel capabilities with the culture of a family business, providing us with an excellent platform to develop the many further opportunities available to the group in the UK and internationally with a view to continued long-term success."
Two new stores were opened in UK and Republic of Ireland during this period, and DFS reports that both its Sofa Workshop and Dwell brands are performing well. In addition, a second store opened in The Netherlands.
A seventh customer distribution centre was established, releasing further retail space, while web sales continued to grow well.
DFS CEO Ian Filby says: "I am pleased to report continued good sales growth through the first half of our financial year, reflecting the success of our growth initiatives and the current health of the furniture market environment. Given broadly stable general macro-economic trends in the UK, we have confidence that our strong competitive position and strategic initiatives mean that the Group is well placed to sustain its record of sales growth, market share capture and cash generation over the year as a whole."
Finance director Bill Barnes – who will be succeeded by Nicola Bancroft, currently commercial financial director, on 1st August – highlighted stabilised margins on goods sold following planned investment in price points last year, and the spread of marketing costs across a wider store and online base, reducing marketing costs as a proportion of sales.
David Cheetham of CFD and FX broker XTB.com comments: "These half-year results for the 26 weeks ended January 30th have come in at the upper end of analysts' estimates, and in doing so have beaten many of the key financial performance indicators compared to the same period last year. Marked increases in turnover, EBITDA and operating profit illustrate an all-round positive report and the 12.9% increase in the interim dividend will only add to the attraction of this company to potential investors. All-in-all this earnings report demonstrates continued strong performance for the furniture retailer and will bring additional cheer to current shareholders who have already enjoyed a 20% appreciation of the stock price over the past year."