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DFS Furniture PLC on Monday said profit in its recently completed financial year was within the range it had previously guided, and it achieved a record UK market share of 38%. However, DFS warned that it expects market volume to shrink by a mid-single digit percentage in the year ahead. The Doncaster, England-based retailer sells sofas and other upholstered furniture from 118 DFS showrooms in the UK and Ireland and 55 Sofology showrooms in the UK. DFS stands for Doncaster furniture store, and the current company started trading in 1969 as Northern Upholstery. DFS said underlying profit before tax and brand amortisation was slightly above £30 million in the financial year that ended June 25. This is halved from £60.3 million in financial 2022. At the halfway stage in the recent year, underlying pretax profit was £7.1 million, down from £23.3 million. Gross margin continued to improve in the past 12 months, as freight costs returned to pre-pandemic levels, DFS said, but market volumes were down about 15% to 20% across the year. Gross sales were down 4% from financial 2022 but up 15% from pre-pandemic financial 2019. DFS will release full annual results on September 21. Financial 2024 has started in line with company expectations, DFS said, with declining market volume amid economic uncertainty. However, by means of cost cuts and reduced capital spending, DFS expects to boost underlying profit ‘slightly above’ financial 2023. ‘We are in the strongest position we have ever been as a group in terms of market share,’ said Chief Executive Tim Stacey, ‘and when the market recovers, we will be well placed to deliver our strategy and grow our earnings and cash flows towards our longer-term plan.’ The stock was up 0.9% at 114.80 pence on Monday morning in London. It is down 25% over the past 12 months. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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