DFS sales and profits rise in H1 amid market share gains

DFS has reported strong trading in its half-year results, largely driven by market share gains, lower operating costs and gross margin improvement, adding it was “cautiously optimistic” for the year ahead, despite inflationary pressures and a tough market outlook. In the half-year ended 29 December 2024, its profits are expected to be between £16m and £17m, up by £7m-£8m against the prior year. 

It comes as group order intake rose by 10.1%, supported by growth initiatives and higher than expected market share gains for both DFS and Sofology, with Sofology’s orders soaring 19.1%. 

The group said these higher sales, as well as operating cost savings and gross margin improvement, helped drive its profits and more than offset inflationary increases.

Looking ahead, DFS said it continues to expect full year growth in profits and cash flow, with FY25 profits set to be in-line with current consensus.

It added that profits will likely be weighted to the first half in light of a “cautious view” on market demand in H2 based on UK economic performance post-budget.

In addition, it warned of an increase in operational costs in H2 due to the rises in national insurance contributions, the national living wage and higher than anticipated interest rates.

CEO Tim Stacey said: “While the market remains relatively subdued, we are continuing to deliver on our self help initiatives having strengthened our position as the clear market leader, improved our gross margin and reduced our operating costs, all of which have helped us to deliver year on year profit growth.

“We remain focused on executing our plan, and are cautiously optimistic despite the increased inflationary pressures and less positive market outlook for 2025. 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 8% PBT medium-term target.”