Sofa chain DFS has announced bumper half year results on the back of pent-up demand from the first coronavirus lockdown as consumers stuck at home spent lavishly on their living rooms.
Despite showrooms being closed, group revenue jumped 17.3% to £572.6m in the six months to December 29 last year as a result of market gains and the changes in people’s spending habits during lockdown one.
Online revenues leapt by 66.2% year-on-year, while underlying pre-tax profits at the Doncaster-based firm rose £60m to £77m, primarily as a result of the strong revenue growth.
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DFS’s order bank is currently more than £65m higher in revenue terms than the prior-year equivalent date. A £200m higher order bank at Christmas time is providing resilience through the still ongoing retail lockdown.
The group – which sells from stores branded DFS, Sofa Workshop, Dwell and Sofology – has also seen its market share rise by 2%.
Despite the ongoing impact of the pandemic and external supply chain disruption, DFS has been able to continue taking orders, leveraging investments made in its online capabilities, as well as manufacturing and delivering safely to customers.
Tim Stacey, group chief executive officer said: "This strong first-half profit and cash flow performance is a true reflection of the supreme efforts put in by our teams’ right across the group since the start of the pandemic.
“I am hugely grateful to every colleague for their constant focus on the safety, health and wellbeing of all their colleagues and also our customers.
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“Our business has proven to be resilient throughout the period despite showroom closures and a significant amount of external disruption in our supply chains. The investments we've made in our digital channels have generated exceptional revenue growth.
“Consequently, our order bank remains well above normal levels and, subject to showrooms reopening by April 12, our central planning scenario is for an expected full-year profit before tax outcome of approximately £105m, with further benefits to be realised in next year's financial results.”
Mr Stacey added that DFS is committed to its strategy to lead sofa retailing in the digital age with its proven integrated retail model. The firm – which currently features Wallace and Gromit in its advertisements after partnering with the Aardman animation studio – believes a combination of digital and physical is the right long-term approach to address consumers within the sofa market.
It says its market research shows that more than 85% of consumers research online prior to purchasing their sofa.
Mr Stacey said: “We expect to see a good level of activity in the home market as Covid-19 restrictions ease and, having accelerated the execution of our strategy and grown our market share, we are well set for future growth."