DFS to beat guidance following ‘strong trading’

DFS said that a strong trading performance in the first half continued into the second. Group order intake in the second half was up 10% year on year, “demonstrating significant outperformance of the market that remains subdued”. Gross sales – which are recognised on delivery of orders to customers – were up 5.% year on year.

Profit guidance of between £25m-£29m for the year to June 29 compares to £10.5m the previous year.

Chief executive Tim Stacey said: “We are pleased to report that we expect profit for the full year to be slightly above the top end of our guidance. Our excellent first half performance set the foundation for our success, with strong trading through the rest of the year with both our DFS and Sofology brands outperforming the market.

“We have continued to maintain a strong focus on disciplined cost management and improved our gross margins, leading to significant year-on-year profit growth. In addition, cash flow was healthy and our balance sheet is strengthening as we progress towards our target leverage range.

“While the macro environment remains challenging, our business is in great shape…looking forward, we are confident that the group is well positioned to drive attractive returns for shareholders as the market recovers and we remain focused on delivering our medium term ambition of £1.4bn revenue and 8% [pre-tax profit] margins.”