Investors in DFS sitting pretty as sofa sales soar

SHARES in sofa specialist DFS have recovered some of their pandemic losses thanks to a trend for home improvements.

Strong demand in the past six weeks handed it £70m in revenue, a year-on-year jump of 40pc.

DFS, which also owns Sofa Workshop and Sofology, culled jobs last month after lockdown forced it to pause furniture deliveries, contributing to a £58m yearend loss.

But since lockdown was lifted consumers have ‘invested in their homes rather than fashion or holidays’, bosses said. Homeware sellers are also benefiting from office employees preparing for many months working from home.

Analyst Clive Black described the update as a ‘surprise’, but said it must be seen against a ‘gloomy macro-economic narrative’.

Shares jumped 10.7pc, or 16p, to 166p, but are 42.5pc down compared to the start of the year.

The wider London markets lurched into the red as early positive sentiment was wiped out by downbeat economic data, including disappointing retail figures.

The CBI’s monthly survey showed retailers have slashed jobs at the fastest pace since the height of the financial crisis. The FTSE 100 fell 1.11pc, or 67.72 points to 6037.01 while the FTSE 250 fell 0.61pc, or 107.18 points, to 17577.89.

There was also disappointing news in the US where consumer confidence dropped to a more than six-year low in August as households worried about jobs and incomes.

Shares in Astrazeneca edged up 0.2pc, or 16p, to 8627p, as the drugs giant said it had begun testing a potential medicine for the coronavirus. It is also developing a Covid-19 vaccine, and believes the antibody-based cocktail AZD7442 could prevent the virus and treat those who have it.

It has launched a study that will involve up to 48 adults aged between 18 and 55, to see if the drug is safe. If the study is successful, Astra will move on to phase two and three studies to test how effective it is in patients.

Housebuilders were a drag throughout the session with Persimmon (down 1.4pc, or 38p, to 2650p), Barratt Developments (down 3.1pc, or 16.2p, to 509.8p),

Taylor Wimpey (down 3.1pc, or 3.75p, to 117.8p) and Berkeley

Group (down 0.9pc, or 40p, to 4520p) all under pressure.

CMC Markets analyst David Madden said: ‘Keep in mind that last week Persimmon hit a fivemonth high so it seems a bit of profit taking is doing the rounds.’

Cruise operator Carnival managed to keep a hand on the rudder as it announced yet more cancellations for customers due to the coronavirus. The firm said several voyages planned under its British brand Cunard would be taken off the calendar, including trips on its Queen Elizabeth, Queen Mary 2 and Queen Victoria liners.

Carnival had already paused operations at Cunard until November, and in an update said it would be extending the suspensions until March 25, April 18 and May 16 for each respective ship.

Investors seemed prepared, however, as shares dipped just 0.8pc, or 8p, to 977.2p.

But other travel stocks fared better with British Airways owner

IAG up 2.5pc, or 4.9p, to 202.2p while Intercontinental Hotel Group gained 3.4pc, or 145p, to 4448p on hopes that a Covid-19 vaccine will be found.

Cineworld, another stock laid low by the outbreak, rose 7.1pc, or 3.86p, to 58.5p. And Ocado stormed to fresh highs, adding 2.2pc, or 53p, to close at 2500p. The stock has gained 95pc so far this year, making it one of the stand out performers of 2020 as it cashes in on the online shopping boom brought about by the pandemic and lockdown.