Furniture group DFS today broke the £50m profit mark for the first time after racking up another set of strong sales.
The Doncaster-based company said its ability to react quickly to changing fashions on the high street gave it an edge in a competitive market.
Sales in the year to 28 July jumped £44m to £401.9m with like-for-like growth, which strips out new selling space, at 4.3%.
The growth pushed pretax profits up 8.5% to £50.1m, which chairman Lord Kirkham said was a “considerable achievement” given its store base of 58.
DFS runs three manufacturing facilities in Yorkshire and Derbyshire and said this allowed it to keep pace with the latest trends.
More than 60% of DFS’ product range was replaced with new models during the year and Lord Kirkham said the group had the widest selection in the sector.
He added that DFS now had a cash pile of £97m but said the group had decided against a special dividend payout to reward shareholders.
The retailer has made four such payments since floating in 1993 and had been expected to announce a £12m windfall today.
Lord Kirkham said the move had been considered but the cash would instead be used to buy up to 20 freeholds as DFS looks to continue its expansion.
“We had considered it, but the word special means what it says,” he said.
“We have paid so many, people were beginning to think it wasn’t all that special. The priority is to use it in the business at the moment.”
The total dividend payout will nevertheless go up 11% to 20.6p.
Like-for-like sales across DFS have increased by 3% since the year-end and Lord Kirkham said it was an encouraging growth rate given tough comparables.
He added the tragic events of 11 September and the economic uncertainty in the UK “has not affected consumer confidence in any noticeable way”.
The group’s shares were up 3p at 393.5p after the update.
EGi News 11/10/01
