// DFS reports a dip in sales and profits as Covid-related supply chain challenges cost the business £21m
// Despite the hit, DFS’ profit expectation for the year remains unchanged
Profit at DFS have dipped in the its first half to December 26 as the sofa maker blamed Covid-related supply chain challenges on the fall.
The supply chain woes hit DFS’s net margin and operating costs by £21 million.
Pre-tax profit plunged 70% to £21.6 million in the six months ended December 26, however, this comes against tough comparatives as there was significant pent-up demand following lockdown last year. Profit was up 35.8% on a two-year basis.
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Revenue fell 2.0% on the previous year to £561.1 million, but was 15% higher than pre-pandemic levels.
Shareholders will also be rewarded with a special capital return that will pay out £80 million over a 12 month period.
DFS group chief executive Tim Stacey said the company had delivered “market share gains and strong revenue growth on the pre-pandemic comparators.”
“This was in spite of significant logistics and supply chain challenges,” he added.
Stacey said the retailer’s profit expectations for 2022 and 2023 remained unchanged, thanks to “strong trading” at the moment.
However, DFS narrowed its scenario range for the current year “to recognise that manufacturing and logistics disruption may affect the second-half throughput.”
The company’s “resilient order bank should mean any such in-year disruption will cause profits to shift into the next 2023 financial year reporting period,” Stacey said.
“Trading across the second-half to date has started strongly, again emphasising the increased scale of the business and demonstrating the success of our approach to mitigating the impact of inflationary pressures on our profit expectations,” he added.
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