DFS Furniture PLC Trading Statement (1540F)
July 11 2019 - 2:00AM
UK Regulatory
TIDMDFS
RNS Number : 1540F
DFS Furniture PLC
11 July 2019
11 July 2019
DFS FURNITURE plc ("DFS" and the "Group")
PERIOD END TRADING UPDATE & CFO APPOINTMENT
Good strategic progress and profit in line with expectations
DFS, the UK's leading retailer of upholstered furniture,
provides the following update for the trading period.
-- Good underlying Group gross sales growth of 7%*
-- Like-for-like gross sales growth across all brands with strong online growth of 17%*
-- Strategic transformation making encouraging progress;
Sofology and our omni-channel initiatives performing well
-- Underlying profit before tax* expected to be slightly above
GBP50m, relative to GBP38.3m in the prior year
-- Appointment of Mike Schmidt as Chief Financial Officer
*52 week period to 30 June 2019 compared to the 52 week period
to 28 July 2018
Solid trading performance
On an underlying basis (adjusted to include the acquisition of
Sofology on a pro forma basis) gross sales grew by 7%*. Reported
gross sales growth was 14%*. We expect to deliver underlying profit
before tax slightly above GBP50m for the 52 weeks to 30 June 2019,
relative to GBP38.3m in the 52 weeks ending 28 July 2018, in line
with our expectations.
We are particularly pleased that all Group brands have recorded
year-on-year LFL gross sales growth in the 26 weeks to 30 June
2019, albeit, in part assisted by the weak comparator period in the
prior year.
Cash generation has also been solid in the financial period,
leading as expected to a lower average closing monthly net debt
over the last 6 months. Reported net debt at the end of June 2019
will however be higher than the end of July 2018 given normal
trading seasonality.
Strategic Progress
We are pleased with the progress being made with our strategic
transformation. In particular our omni-channel initiatives are
performing well with strong online growth of 17%*.
The Sofology brand has continued to perform very well achieving
strong LFL gross sales growth with profitability in line with our
expectations and the brand is well positioned for the future.
We continue to drive forward on all other elements of our
strategy and will provide detail on the progress being made in our
final results.
Outlook
Despite a solid trading performance, we remain mindful of the
risk that the volatile political and economic backdrop may further
impact on already low consumer confidence levels. Our progress in
the near term will inevitably be somewhat dependent on this
backdrop. In addition, as previously noted, the first half of our
2018/2019 financial year benefitted from additional demand from
purchases deferred from earlier periods.
Whilst weak trading environments make it harder to achieve
significant levels of revenue growth, our omnichannel consumer
offer, showroom sales densities, scale of operations and portfolio
of well-recognised brands provide some resilience. We also believe
that we can continue to drive profit benefits and synergies from
our previous capital investments and acquisitions.
We are executing our strategy of transforming our business to
lead sofa retailing in the digital age. We believe the market will
return to historical long-term growth rates in due course and that
as clear market leader we are well-positioned to benefit,
delivering strong levels of cash generation and attractive
shareholder returns in the long term.
Appointment of Chief Financial Officer
We are pleased to announce the appointment of Mike Schmidt
(currently Interim Chief Financial Officer) as Chief Financial
Officer and as an Executive Director with immediate effect,
following a rigorous selection process. A brief biography is
included below.
There is no information regarding Mr Schmidt that is required to
be disclosed under paragraph 9.6.13R of the Listing Rules of the UK
Listing Authority.
Enquiries:
DFS: (enquiries via Tulchan) Tulchan
Tim Stacey (CEO) James Macey-White
Mike Schmidt (CFO) Jessica Reid
Liz McDonald (Group Company Amber Ahluwalia
Secretary)
investor.relations@dfs.co.uk dfs@tulchangroup.com
Mike Schmidt Biography
Mike Schmidt joined DFS in March 2014. Prior to his appointment
as Interim CFO, Mike served as DFS's Chief Development Officer with
responsibility for property, strategic development and investor
relations activities. He led the acquisition of Sofology in 2017
and more recently has also served as Chair of Sofa Workshop and
Dwell.
Prior to joining DFS Mike previously spent 13 years working for
a number of leading investment banks including UBS and Citi, where
he gained experience advising a wide range of consumer-facing
companies.
Mike has a MA (Hons) in Economics and Management from Cambridge
University.
About DFS Furniture plc
The Group is the clear market leading retailer of living room
furniture in the United Kingdom. We design, manufacture, sell and
deliver to our customers an extensive range of furniture products.
The business operates a retail network of living room furniture
showrooms in the United Kingdom and Europe, together with an online
channel, trading through four leading brands. The Group has been
established and developed gradually over 50 years of operating
history. We attract customers to our showrooms and website through
our substantial and continued investment in nationwide marketing
activities and our reputation for high quality products and
service, breadth of product ranges and price points and favourable
consumer financing options.
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END
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