The acquisition of Sofology helped to boost profits and revenue at furniture retailer DFS in the first half, but the company warned on Thursday that order intake in the second half has slowed.
In the 22 weeks to 30 December 2018, reported pre-tax profit more than doubled to Â£14.1m from Â£6.2m the year before as revenue rose 29.1% to Â£422.3m. Earnings per share surged 126.1% to 5.2p and the interim dividend was unchanged at 3.7p a share.
Adjusting the results to include Sofology, underlying pro-forma earnings before interest, tax, depreciation and amortisation increased 23.8% to Â£32.8m and underlying pro-forma profit before tax and brand amortisation was up 83.9% to Â£16m. Meanwhile, revenue adjusted to include the acquisition of Sofology was up 9.9% to Â£422.3m.
All brands delivered like-for-like revenue growth during the half, with LFL revenues across the group up 6.6%. DFS said the online channels continued to perform strongly, with revenues 22.6% higher, benefiting from the company's sustained investment and development focus.
“Whilst we believe trading in the period was bolstered by deferred purchases from the final quarter of the prior year (given the hot weather at that time) and to a lesser extent from port related issues which delayed delivery of goods into the current financial year we are still pleased with our top line performance,” it said.
The company also said that year-on-year order intake in the second half of the financial year to date has been lower than the first half. However, assuming no further weakening of this environment, DFS's profit expectations for the financial year remain unchanged.
Chief executive officer Tim Stacey said: “We are pleased with the performance for the first five months of the financial year across the group, with all four of our brands achieving like-for-like revenue growth.
“The benefits of our investments in our online channels, delivery networks and the development of our brands help mitigate the impact of a market which we expect to remain particularly challenging in 2019 given the current political and economic uncertainty. Notwithstanding a softer start to 2019, and assuming no weakening of this environment, our profit expectations for the financial year remain unchanged.”
Peel Hunt stuck with its 'buy' rating on the stock as it said slower current trading is to be expected given wider economic and political uncertainty.
“We make no changes to forecasts today and whilst others may, there is no reason to question the strategy or the momentum of the business: quite the opposite in fact: this is a well-run business with a strong, defensible market leading position and the shares have only recently even started to vaguely reflect that.”
At 1030 GMT, the shares were down 1.7% to 231.50p.