Member Article

Newly-floated DFS remains ‘confident’ despite losses

Doncaster-based sofa retailer, DFS, has reported financial results ‘in line with market expectations’ just weeks after its IPO.

The retailer, which generally sees a stronger performance in the second half of the year, has reported a pretax loss of £14.4m for the six months ending 31st January 2015, compared to £14m for the same period last year.

For the year ending 2nd August 2014, the company reported a pretax profit of £3.6m, the retailer said: “Our first half is typically seasonally the smaller half for revenue and we have historically seen an improved EBITDA margin for the full year compared to the first half.”

The group saw sales for the first half increase by 10.5% to £431.2m (2014: £390.1m), reflecting a 9.1% increase in DFS sales as well as increased contributions from subsidiaries Dwell and Sofa Workshop.

DFS successfully completed its IPO and the company’s ordinary shares were admitted to trading on the main market of the London Stock Exchange on 11 March 2015.

In connection with the IPO the Group’s capital structure was reorganised and its borrowings refinanced. The retailer’s £310m senior secured notes were repaid on 12 March 2015 and a new senior bank facility of £200m drawn down at a significantly reduced interest rate, together with an undrawn revolving credit facility of £30m.

In addition, previous shareholder loans and accrued interest of £192.7m were converted into ordinary share capital, thus significantly reducing the group’s net debt and its future finance expenses.

DFS chief executive officer, Ian Filby said: “Our recent IPO strengthened our financial position and provides an excellent platform from which to fulfil our vision of taking DFS from being a great British business to a world class business.

“Our continued momentum in the first half of the current financial year has built on the strong performance of the second half last year to deliver a record last twelve months’ result for the Group.

“Although our performance will be measured against stronger comparatives in the second half, we are confident that DFS will deliver in line with market expectations for the current year and enjoys excellent prospects for long term profitable growth as one of the UK’s best-known brands, a major British manufacturer and the country’s leading retailer of upholstered furniture.”

This was posted in Bdaily's Members' News section by Ellen Forster .