(Alliance News) - DFS Furniture PLC on Thursday reported a "strong trading performance and outlook" as orders almost doubled pre-pandemic levels in the final quarter of 2021.
The Doncaster, England-based sofa seller said total order intake in the fourth quarter to Thursday last week was up 92% on the same period in the 2019 financial year, driven by pent-up demand as furniture showrooms opened post-lockdown. Showrooms reopened early in the fourth quarter, the company said.
Strong sales in the final quarter bring DFS Furniture's order intake in the second half of its financial year, ending June 27, up 14% compared to the same period two years prior. Meanwhile, online sales of GBP178.5 million in the third quarter were triple those of the year prior.
The company also credits its "leading online and physical presence" for boosting sales and driving market growth in the home product category.
DFS Furniture said it is on course to achieve underlying pretax profit of at least GBP105 million in the 2021 financial year, compared to an underlying pretax loss of GBP63.1 million the year before.
The company guided next year's underlying pretax profit at between GBP66 million and GBP96 million, with a medium-case scenario of GBP85 million. The decline in profit from the GBP105 million in financial 2021 is expected despite DFS saying revenue and profit from the recent strong order intake will be recognised in financial 2022.
In its statement on Thursday, DFS didn't directly explain the reason for the lower profit guided for next year. However, it said retail margins are expected to be lower in financial 2022. This is due to manufacturing cost inflation, caused by constrained output capacity and rising raw material costs. At the same time, indirect cost increases will include higher UK rates taxes, the operating costs of a larger showroom network, and investment in digital channels and its supply chain.
The retailer said it intends to recommend a final dividend for financial 2021 of 7.5 pence in September, supported by its recent cash generation. The company did not offer a dividend for the previous year.
"Despite short-term supply chain challenges and a macro environment that's hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner," said Chief Executive Tim Stacey.
DFS Furniture shares were trading up 12% at 305.00 pence each in London on Thursday.
By Scarlett Butler; scarlettbutler@alliancenews.com
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