DFS Furniture PLC on Tuesday slightly lowered its annual outlook, but looking further out, the sofa seller outlined its aim to reach £1.4 billion in annual revenue by four years from now.

In the first half ended December 26, the company’s revenue fell 2.0% to £561.1 million, from £572.6 million a year earlier.

Pretax profit dropped 70% to £21.6 million from £72.1 million.

However, on a two-year basis, revenue was up 15% and pretax profit was 36% higher.

‘We delivered a strong performance in the first half of the year, with market share gains and strong revenue growth on the pre-pandemic comparators. This was in spite of significant logistics and supply chain challenges and once again I would like to thank all of our colleagues across the group for their hard work and resilience in achieving this result,’ Chief Executive Tim Stacey said.

DFS slightly lowered its annual guidance. It expects annual pretax profit, also before amortisation, between £66 million and £85 million. The upper end of that range was previously £96 million.

However, DFS said its expectations for combined profit for the current year and the next are unchanged.

‘We narrow our scenario range for FY22 to recognise that manufacturing and logistics disruption may affect H2 throughput, however our resilient order bank should mean any such in-year disruption will cause profits to shift into the next FY23 reporting period,’ the company explained.

Looking further out, the company eyes £1.4 billion in annual revenue by financial 2026. It will achieve this through its ’Pillars and Platforms’ strategy’, which will ‘lead furniture retailing in the digital age’. Revenue in financial 2021 amounted to £1.07 billion.

DFS declared a 3.7 pence dividend, having not made an interim payout a year earlier. It had recently resumed dividends with a 7.5p final payout. It will also pay a 10p special dividend.

In addition, it plans a £25 million share buyback to be executed over the next 12 months.

The dividends and buyback form a £80 million special capital returns plan, DFS explained.

Stacey added: ‘Looking forward, whilst the macro-economic environment remains uncertain, we believe that our scale, brand strength and integrated retail strategy will continue to drive market share gains ahead of the competition. We will continue to invest in our digital platforms, our showrooms, our delivery networks and our UK manufacturing capacity, as well as expansion into other home categories which we believe will continue to drive long term growth and profitability.’

DFS shares were 0.7% lower at 196.20 pence each in London on Tuesday afternoon.

Copyright 2022 Alliance News Limited. All Rights Reserved.