Strong start for furniture firm

DFS Furniture said it has seen a strong star t to its financial year as customers in the UK are prioritising investment in the homes they were confined to for months.

In the last six weeks, the furniture retailer has received orders for £70 million more than during the same period last year, it said in a trading update yesterday.

The results, which are well ahead of what the company was expecting, will add to its already strong order book which DFS believes will result in a further in-year revenue benefit of £100m.

“We believe that this trading performance reflects a combination of consumers currently spending more on their homes relative to other sectors, latent demand caused by the nationwide lock down and also a strengthening advantage from our hybrid digital and physical retail offering, which is particularly relevant in this consumer environment,” DFS said in a statement to investors.

The company added that there could still be some risks, citing uncertainty around coronavirus and Brexit.

“The financial year has started strongly. However, we do note that significant uncer - taint y related to Covid-19 on UK consumer confidence and the potential impact of Brexit exists and it is exceptionally difficult to assess the outlook beyond the short term,” it said.

“While po sit iv et radin gm omen tum currently remains we do note that some consumers may be bringing for ward spending decisions and this may impact trading later in the financial year.”

The business added that despite these risks, its momentum means that earnings are more resilient and the company has more financial headroom.

It is also “well-positioned to capitalise on opportunities as its markets recover”.

Analyst sat Shore Ca pital noted: “All in… we deem this statement as good news. It does suggest scope for upgrade potential for FY2021.”