DFS boss Ian Filby vowed that stores would be “heavily invested in” over the next few years as EBITDA and sales improved in its third quarter.
However, EBITDA for the year to date dropped from £48.3m to £41.8m, which he said was due to the higher cost base associated with its investment plan for growth.
Filby said most of its investment was going into refurbishing its stores.
Filby declined to comment on speculation that DFS is plotting a return to the stockmarket. He said: ““What I’m confident of is that my owner Advent is going to continue investing in the business.”
DFS opened its 100th store over the year. It has opened 25 stores over the past four years. Filby said there was opportunity to open further shops and it was planning three to five over the past year.
DFS sales advanced 5.1% over the quarter to April 26 helped by improving macro-economic conditions.
Filby said: “There was 1.2m housing transaction in 2006; the current run rate is around 600,000 to 700,000. However, it is a bit higher than last year which gives the market a bit of growth. Consumer confidence is a more significant driver and we’re seeing the early signs of that coming through.”
He said that its strategy of partnering with brands such as Dwell and French Connection to broaden its range was paying off and he would be eager to form more tie-ups. “If there’s a well-known equity with a disparate positioning then I’m always happy to talk,” he said.
Filby said that trading over the important Easter trading period was good for the retailer and it is confident of delivering a “satisfactory result” for the full year.
In its year to date, sales have edged up 1.1% to £487.3m. DFS continued to boost its cash balances with £40.7m in its coffers compared to £15.4m last year, despite a £20m dividend payment.