DFS Furniture has reported LFL sales growth across all its retail brands – DFS (which is celebrating its 50th year), Sofa Workshop, Dwell and Sogology – for the 22 weeks ended 30th December 2018.
Revenue grew by +29.1% to £422.3m – adjusted to include the acquisition of Sofology on a pro-forma basis, it rose by +9.9%. Underlying pro-forma EBITDA was up +23.8% to £32.8m, while underlying pro-forma profit before tax and brand amortisation was up +83.9% to £16m. Reported profit before tax more than doubled, to £14.1m.
The group admits that this performance was assisted by deferred purchases from Q4 of the prior year (given the hot weather at that time) and port-related issues which delayed delivery of goods into the current financial year.
The period saw a net opening of three showrooms, while continued investment in its web platform, operational technologies and digital engagement tools supported strong online growth of +22.6%. DFS says that over 85% of potential customers research their sofa purchase online – but that the primary reason for selecting a sofa is comfort, and over 90% of its customers still visit one of its showrooms to test the products before ordering.
Tim Stacey, group CEO, says: "We are pleased with the performance for the first five months of the financial year across the group, with all four of our brands achieving LFL revenue growth. The benefits of our investments in our online channels, delivery networks and the development of our brands help mitigate the impact of a market which we expect to remain particularly challenging in 2019 given the current political and economic uncertainty.
"Notwithstanding a softer start to 2019, and assuming no weakening of this environment, our profit expectations for the financial year remain unchanged."
The development of Sofology to become a national chain remains a clear priority for the group, which sees the potential to increase the existing estate of 42 stores to 65-70 in the medium term, in some cases co-locating these with existing group assets.
According to independent market research, the group has at least a 31% share in the upholstery sub-sector of the living room furniture market, and is over three times the size of its nearest competitor.
