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DFS profits have halved in its latest full-year results, falling by 49.2% to £29.7m, down from £58.5m the year before, as the group contended with a “very tough market” over the period.
Revenues from continuing operations were also down by 5.3%, falling to £1.09bn Nonetheless, this was still 13.8% ahead of the pre-pandemic FY19 pro-forma period.
Despite the fall in sales and profit, the group welcomed a “record” market share of 38% despite the tough market conditions, extending its upholstery market leadership by 2%.
Looking ahead, the group said it expects a low single digit improvement in its next full-year profits, with a guidance range of between £30m and £35m, as it anticipates more market share gains and margin improvements in the future.
The group added it is “confident the market will recover”, though said it “can’t predict how quickly that will happen”. Nonetheless it said it has a “clear route” to a 5% PBT margin without market recovery, supported by further margin improvement, new cost efficiencies and continued growth in its Home division.
Tim Stacey, group CEO, said: “I want to sincerely thank our colleagues for their truly outstanding and consistently high level of determination and dedication to deliver at their best for the group, and for their help in getting us to the strongest position we have ever been in terms of market share.
“The group is operating in one of the toughest economic climates we have experienced. Whilst we are confident the upholstery market will recover, forecasting the specific timing and pace of the recovery is challenging.”
He added: “We do, however, expect to generate a modest year on year increase in profit before tax in FY24 despite a relatively weak market in which we expect volumes will continue to decline across the next 12 months.
“Looking to the future as market volumes recover, we remain confident in achieving the financial performance set out at our Capital Markets Day in 2022 of £1.4bn of revenues at an 8% PBT margin.”
