Shares in living room furniture purveyor DFS Furniture (DFS) surged 12% to a new five-year high of 303.5p after saying its fourth quarter order intake for the 10 weeks to 6 June was up 92.1%, driven by increased consumer spending.
In an unscheduled pre-closing trading update ahead of the financial year ending 27 June, the company said it continued to take market share, gaining 2% in a growing upholstery market.
The firm said it was on track to report at least £105 million of full year underlying pre-tax profit, which is slightly above the ‘medium’ scenario discussed in the interim results.
Second half order intake for the 23 weeks to 6 June was up 14% on fiscal 2019 which the company said demonstrated ‘the strength and resilience of our integrated retail model.’
UPGRADE TO 2022
The strong order intake will be recognised in the 2022 financial year which will lead to adjusted pre-tax profit being ‘materially ahead’ of current analysts’ consensus of £61.4 million, according to estimates provided by the company.
The company provided three scenarios with expected pre-tax profit ranging from £66 million-to-£96 million in the ‘high’ case scenario. Each scenario assumes no further disruption from Covid-19 to manufacturing or deliveries.
In the high case scenario, the firm assumes it will be able to secure additional manufacturing capacity or deliver increased levels of non-sofa home category orders, which drive higher revenues.
Strong cash generation means the group expects to be able to recommend a final dividend of 7.5p per share when full year results are announced on 23 September.