DFS posts full year loss in preliminary results

Sofa retailer DFS has reported losses before tax of £56.8m, in the group’s preliminary results for FY20.

For the FY period ending 28 June 2020 the retailer also revealed that revenues decreased by 30.2% to £724.5m.

DFS said that the losses were driven by “reduced margin from lower revenue levels”, although they had been “partially offset by mitigating actions,” such as its equity issuance proceeds of £63.9m.

In addition, net debt amounted to £169.2m, down by £7.1m from the previous year.

As a consequence of these results, the furniture group reported that no final dividend has been proposed this year, in order to “maximise resilience” in the face of “macroeconomic uncertainty.”

However, the group noted it had experienced a “strong” online order intake since March, as well as in showrooms following their reopening. The group said that moving forward, its strategy would focus on “digital and showroom investment” alongside a “relentless” focus on customer service.

DFS were optimistic that c.£226m of additional revenues will be realised in this financial year, following the group’s “year-on-year” order intake growth over the last 12 weeks, in combination with their “higher opening order book.”

Tim Stacey, CEO of DFS group, said: “While the reported decline in profit is undoubtedly disappointing in headline financial terms, a significant proportion of this profit has already been recovered in the current year as we resumed customer deliveries.

“The current year has started very strongly with all showrooms now open and our digital channels continuing to grow. We believe that this growth is due to a combination of pent up demand from lockdown, consumers spending relatively more on their homes and the strength of the DFS and Sofology propositions in particular.”

He added: “We remain focused on executing our strategy, with agility and pace, and believe that the Group is well placed to further strengthen our market-leading position in the medium term.”

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