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DFS Furniture PLC - Dunstable, England-based sofa retailer - DFS says it continues to win UK market share in a ‘very tough market’ during its recent financial year, which ended on June 25, as it outlines a path to improving margins. Pretax profit drops by 49% to £29.7 million from £58.5 million the year before, as revenue from continuing operations declines 5.2% to £1.09 billion from £1.15 billion. Underlying pretax profit before brand amortisation is £30.6 million, which is in line with its interim guidance though also down 49%, from £60.3 million. DFS expects underlying pretax profit before brand amortisation to improve by a low single-digit percentage in financial 2024 to a £30 million to £35 million range. This assumes market volumes fall 5%, DFS notes. ‘We are confident the market will recover; however, we can’t predict how quickly that will happen. We have a clear route to a 5% [profit before tax] margin without market recovery, supported by further margin improvement, new cost efficiencies, and continued growth in Home [category],’ DFS says. When market volumes recover, DFS expects to achieve £1.4 billion in annual revenue and an 8% pretax profit margin.
Cuts final dividend to 3.0 pence from 3.7p, giving a full-year dividend of 4.5p, down from 7.4p.
Current stock price: 115.00 pence, up 7.3% in London midday Thursday
12-month change: down 8.2%
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