DFS profits plummet 22.3% in challenging environment

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DFS profits

DFS has said ongoing consumer uncertainty and the slump in the value of the pound since the Brexit vote has adversely impacted its full-year profits.

In its 52-week period ending July 29, the  furniture retailer’s profit before tax plunged 22.3 per cent to £50.1 million while EBITDA fell 12.7 per cent to £82.4 million.

However, gross sales climbed 1.1 per cent to £990.8 million and revenue edged up 0.9 per cent to £762.7 million.

DFS said the furniture market environment in the second half was a challenging period.

“Continuing uncertainty in the economy led to a significant deterioration in the consumer market which impacted sales in the second half of the year,” chairman Ian Durant said.

“The continued weakness of sterling against the US dollar has also created a headwind for gross margins, some of which we have been able to mitigate.”

Chief executive Ian Filby also acknowledged the challenging marketing, but said DFS “continued to make good strategic progress across all our key areas of growth”.

In August DFS has penned a £25 million acquisition deal of rival chain Sofology that will see it takeover its 37 stores.

“Historically DFS has been able to build its market leading position and generate strong cashflow for shareholders in all environments by leveraging its fundamental strengths,” Filby said.

“Our recent strategic investments and operating efficiency programme support our confidence in our ability to deliver modest profit growth and cash returns in the current financial year and we continue to have excellent prospects for the long term.”

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