DFS navigates lockdowns and supply chain disruption to land profit
DFS is set to make at least £105m in underlying profit before tax for its 2021 financial year, despite Covid-related disruption and and supply chain issues.
In a market update this morning ahead of its full year results, the sofa retailer said total order intake for its fourth quarter was up 92 per cent against the same period in 2019, the most recent pre-lockdown comparable period.
Online order intake over the group’s third quarter, when almost all showrooms were closed, was up 222.5 per cent on the previous year, with intake totalling £178.5m.
DFS said its online growth was increased by the forced closure of showrooms, but also through prior investment in its online business.
Soon after the market update DFS was trading up 9.28 per cent.
DFS was hit by two lockdowns in its 2021 financial year, which will end on 27 June, as well as issues surrounding sector-side pressures on supply chains from raw materials availability, container shipping delays – including the effects of disruption in the Suez Canal – and coronavirus-related disruption of factory productions.
As a result, DFS said, the majority of profits and revenues from the fourth quarter will be recognised in its 2022 financial year.
Group chief executive Tim Stacey said: “Our aim is to lead sofa retailing in the digital age by building a truly Integrated retail model that allows us to drive market share gains ahead of the competition.
“Looking ahead, we will continue to invest in key strategic initiatives such as our digital channels, our showrooms and our Sofa Delivery Company final mile logistics capability, along with new investment in UK manufacturing and capacity and expansion into other home categories.”
The company intends to recommend a full year dividend of 7.5p in September.