Furniture chain DFS says profits are likely to be at the top end of previous guidance after sales grew by 5.8% in the last year.
The Yorkshire-based firm is expecting profit before tax to increase by around £20m to £29m in the year ending June 29. In a trading update, it said its DFS brand had seen orders increase by 8.7% while Sofology was up 16.2% year-on-year.
The company said it was entering its new financial year with a health order book while a focus on cost management had improved margins. Debt had fallen significantly, it said, and the company had grown market share in the specialist upholstery sector.
Tim Stacey, group chief executive, said: "We are pleased to report that we expect profit for the full year to be slightly above the top end of our guidance. Our excellent first half performance set the foundation for our success, with strong trading through the rest of the year with both our DFS and Sofology brands outperforming the market.
“We have continued to maintain a strong focus on disciplined cost management and improved our gross margins, leading to significant year on year profit growth. In addition, cash flow was healthy and our balance sheet is strengthening as we progress towards our target leverage range.
“Whilst the macro environment remains challenging our business is in great shape and I would like to thank our amazing colleagues for their support and commitment as we relentlessly focus on delivering against our strategy together. Looking forward, we are confident that the group is well positioned to drive attractive returns for shareholders as the market recovers and we remain focused on delivering our medium term ambition of £1.4bn revenue and 8% PBT margins."
DFS is one of the country’s largest furniture manufacturers and retailers, with more than 5,000 staff and stores around the º£½ÇÊÓƵ. It operates mainly through the DFS and Sofology brands.
