DFS shares wobble after pre-tax profits almost halve in full-year results
Sofa firm DFS said the summer heatwave caused profits to fall this year, despite an uptick in revenue, causing shares to tumble by an initial nine per cent before recovering in early morning trading.
Pre-tax profit was nearly cut in halve as it fell a massive 48.5 per cent in the 52 weeks up to 28 July 2018, to £25.8m.
This is despite revenue including a number of new acquisitions, like Sofology in February, rising 14.1 per cent to £870.5m.
The company held its final dividend of 7.5p per share, maintaining the total ordinary dividend of 11.2p for the year.
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Why it's interesting
DFS said that economic uncertainty for consumers, combined with extremely hot weather in summer led to sales taking a battering during key trading periods.
But the company will be hoping its new acquisitions will give it a strong market share to see out what could be a difficult winter for retail.
The company remained cautious about its prospects for the future, as it said it still expected conditions to remain challenging for at least the next year.
What DFS said
DFS chief executive Ian Filby said:
We are pleased to note that the market has recovered since the start of the new financial year, with the group seeing like-for-like order growth across all brands over the first nine weeks. We believe, however, we are benefiting from deferred purchases in the prior financial year and overall we expect the market to remain subdued into 2019, constrained by political risk and weak consumer sentiment.
Notwithstanding this we believe the group is well positioned to become stronger in this current environment, boosted by investment and acquisition benefits, and we have excellent prospects for profitable growth and attractive cash flow generation over the longer term.
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