DFS cheers sales bounce back
Furniture chain DFS swung to a big annual loss but reported a strong bounce back in trading over the last three months.
The company posted a £81.2m pre-tax loss for the year to the end of June, compared with a profit of £22.4m for the same period last year.
Revenue declined to £935m from £1.17bn a year earlier, driven by the forced closure of its showrooms during the height of the crisis.
However, the sofa retailer said it had seen strong online orders since March and in its showrooms since reopening. This robust performance has continued into its current financial year, which has started "very strongly" with all its showrooms now open.
The company now expects to deliver additional sales of around £226m this year, given sales growth of 7.6pc in the past 12 weeks and a higher opening order book.
But the retailer struck a cautious note, warning of a slowdown in the autumn as the furlough scheme comes to an end on Oct 31 and ahead of the Brexit deadline.
It said trading in October may be "significantly weaker" in the event of mass job losses across the country and consumer uncertainty.
Chief executive Tim Stacey said: "This has been an extraordinary year, unprecedented in the challenges posed by the closure of our showrooms, manufacturing and delivery capabilities for almost three months of our peak spring trading period.
"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.
"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."
The board declared no final dividend to preserve cash.
Analysts at Peel Hunt said the company's stronger balance sheet should allow it to expand, adding that they expect DFS to open 10 new Sofology stores this year.
Shares rose 2.7pc to 172.6p.
